Hair and Beauty Sector: Government Policy Debate
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Cat Eccles
Main Page: Cat Eccles (Labour - Stourbridge)Department Debates - View all Cat Eccles's debates with the Department for Business and Trade
Hair and Beauty Sector: Government Policy
Cat Eccles Excerpts(1 day, 13 hours ago)
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Cat Eccles (Stourbridge) (Lab)
It is an honour to again serve under your chairship, Ms McVey. I thank the hon. Member for Hornchurch and Upminster (Julia Lopez) for securing this important debate.
I was recently contacted by the owner of a local, international-award-winning hair salon in my constituency. Tim Scott-Wright runs a salon in the village of Wollaston and prides himself on training the next generation of hair stylists. Sadly, Tim does not think that he will be able to take on any apprentices this year due to the increased NICs and the increase to the national minimum wage.
It is important to say that Tim and others are more than happy to contribute a bit more to get Britain’s economy growing. However, he did not realise that it would impact his business so drastically. Tim told me about salons forced into the self-employed model to reduce costs, which can have the unintended impact of forcing workers into accidental tax avoidance. It also reduces training opportunities for the next generation. Salons are already operating on slim profit margins, and the current VAT rate places an unsustainable burden on these labour-intensive businesses. Unlike other sectors that benefit from lower VAT rates or exemptions, hair salons must pass those costs on to customers, making services less affordable and reducing demand.
A proposed reduction in VAT to 10% would provide immediate relief, allowing businesses to plan for the future and keep contributing towards our economy. I have already written to the Treasury and the Department for Business and Trade to urge the Government to consider a targeted reduction in VAT for hair salons, bringing it down from 20% to 10%. Many salons are facing severe financial difficulties due to a combination of rising operational costs, reduced consumer spending and the long-term impacts of the covid-19 pandemic. The hair and beauty industry is a vital contributor to the UK economy, supporting over 250,000 jobs and generating billions in annual revenue. Let us back our hair and beauty industry, make sure revenue is not lost in self-employed models and keep the sector thriving.