Beauty and Wellbeing Sector Workforce

Seema Malhotra Excerpts

Wednesday 23rd June 2021 Westminster Hall

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Sir Roger. I thank my hon. Friend the Member for Swansea East (Carolyn Harris), who co-chairs the all-party parliamentary group on beauty, aesthetic and wellbeing, alongside my hon. Friend the Member for Bradford South (Judith Cummins). I congratulate her on securing this debate and on her excellent opening speech on the lack of sufficient support for the beauty and wellbeing industry through the pandemic. She talked of the challenges it faced, many of which were echoed by other hon. Members who have spoken. I thank those who have made contributions, including my hon. Friends the Members for Bradford South and for Newport East (Jessica Morden), the right hon. Member for Romsey and Southampton North (Caroline Nokes) and the hon. Member for Strangford (Jim Shannon), and others who contributed in discussions with us who were unable to speak today.

Many important points have been made. My hon. Friend the Member for Newport East spoke about the support provided by the Welsh Labour Government. The right hon. Member for Romsey and Southampton North highlighted that this is a women-led sector—as well as, in many ways, a BAME-led sector—that employs women and serves men and women, young and old, across the country. It is one industry that serves almost everybody in the country at some point. She outlined the arguments, as others have done, for a reduction in VAT. That point was also made by former hairdresser Maria Evangelou in an article on PoliticsHome before the Budget this year.

The hon. Member for Strangford made a powerful point about the sector being highly skilled, but it is often not seen as such. That is the same stereotype we seem to apply in our minds to women-led sectors—to see them as low skilled—which is often connected to them being low paid. We have to check and challenge ourselves.

There is nothing greater than the contribution of lockdown to understanding that point. We saw the rise of lockdown haircuts—I, too, had to learn how to use a barber set—and we really appreciated how much skill goes into making us all look and feel as good as we can and should. The point was made that it is very important to appreciate the industry for its wider contribution to health and wellbeing. I hope that the House will take that on board and we will see that in future debates.

The contribution of the beauty and wellbeing sector must not be overlooked, as I think we have all come to feel that it has been during the last year by the Government. The sector contributes so much to our wellbeing, but it also contributes economically to our high streets, to our communities and to our economy. I think my hon. Friend the Member for Bradford South used the phrase the lifeblood of the high street, which is powerful and no understatement.

A report by Oxford Economics found that the beauty industry, which employs around 600,000 and has done so for some time, contributes about £28 billion to UK GDP annually and supports £7 billion in UK tax revenues. That is equivalent to the combined salaries of 250,000 nurses and midwives. The numbers speak for themselves. This is a vital industry for our country,

As we have heard, the sector—hairdressers, salons, barbers—makes a huge contribution to our personal wellbeing and mental health, as well as to our community spirit. If someone wants to know what is going on, or wants to share their stories, we should look at how much people do that at the hairdresser. We all have that experience of a moment away from frenetic, everyday life and I think we underestimate that social contribution.

During the pandemic, the industry has certainly been one of the most acutely hit by the restrictions, because it is a close-contact industry. The product is often a one-to-one service. One stylist does not serve 10 clients an hour, which might happen in a restaurant. That has been very much affected by social distancing. There are also the extra costs involved in maintaining safety for staff and customers.

There has been a sharp increase in permanent closures of hair and beauty businesses—around 20% have had to shut their doors so far. The numbers employed as hairdressers or in related services have also fallen by 20%. Of those, more than 60% were self-employed. We have heard in the debate about how people who are employed go on to be self-employed and then become owners of businesses and employers of others. They take the risks themselves, every step of the way. Many have experienced issues accessing the self-employment income support scheme. Being self-employed is often a journey to becoming an employer. We need to understand the issues that are faced in that context, too.

Looking ahead, the future remains far from certain for the industry, which is one reason why it is an important time to have this debate. I believe it was my hon. Friend the Member for Newport East who said that six out of 10 salons started this year with no cash reserves, and many businesses are now described as acutely vulnerable to failure. Sixty-two per cent. of salon owners surveyed by the National Hair & Beauty Federation were not confident that they will remain solvent by the end of this year. There are also projections of further redundancies of over 15%.

Luke Hersheson, a globally renowned hairstylist backing the Save Our Salons campaign, said earlier this year:

“In March this year my salons will have been closed for 260 days out of 365… running a business for more than two thirds of a year with no income at all is incredibly challenging. When the tap is turned off salon businesses are still paying landlords, they’re still paying utility bills, insurance costs and subsidising furlough pay. It’s a huge strain on the entire industry.”

Although barbers, hairdressers and beauty salons have been allowed to open since 12 April, huge concerns remain about the gap between the revenues they can generate and their overheads. Our principle since the start of the pandemic has been that public health measures must be matched by fair economic measures. The Chancellor of the Exchequer once promised that he would do “whatever it takes”, and Labour’s position continues to be that these businesses must be supported so that they can recover and thrive after the pandemic.

The furlough scheme has helped so many, but we know that employers still have to pay national insurance contributions, and beauty companies have been paying full rent during lockdown, despite making little or no income. They still have fixed insurance costs and utility bills to pay while revenues are depressed.

I therefore ask the Minister why the Government will not delay the increased employer contribution to furlough, given that most of the 1.8 million people remaining on furlough are employed in sectors affected by the ongoing restrictions. On business rates relief, why will the Government not learn lessons from the Labour-led Welsh Government, who have given the vast majority of businesses 100% business rates relief for this financial year? Can the Minister tell us what assessment has been made of business rates costs for those in the hair and beauty industry? Finally, on debt repayment, where is the Government’s flexible plan to help businesses pay back their loans in a sensible way when they are generating profit and back on their feet?

There currently appears to be no credible strategy to ease the burden of debt that affects many businesses across the country, including in the beauty and wellbeing sector, which have racked up debts due to the long periods of closure. Forcing businesses to start making debt repayments—whether they are profitable or not—will squeeze the amount that they have to invest, to grow, or to take on new staff. For some, it could mean complete closure.

Campaigners say that their salons typically operate on a wafer-thin 2% to 5% profit margin in normal trading conditions. With social distancing requirements still in place, the average salon can often operate at only around 50% of their previous capacity. That is why Labour would give businesses flexibility to repay debt they have taken on during the crisis and link it to what they are making. Such measures would be invaluable to helping beauty businesses to survive.

There have been clear warning signs that the sector is in difficulties. Further closures would have a far greater impact on women’s income, as almost 90% of those employed in the industry are female. We also know that women have experienced a worse economic hit throughout the last year across all sectors. It is important to know from the Minister what further steps are being taken to ensure that those in the beauty sector do not continue to be disproportionately affected by the economic impact of this pandemic.

I pay tribute to the hair and beauty salons across our country. They play an enormous role, as has been mentioned, at the heart of our communities; I have seen this in my constituency of Feltham and Heston. I have also seen a large proportion of black and ethnic minority communities in my constituency affected—for example, BAME-led hairdressers such as His & Hers Beauty Salon run by Israr Rao and family that is at the heart of Hounslow West. When we go along the parade and talk to the shop owners, they come out and say how much they are still struggling. As we think about the economic recovery we face, that voice is still not heard sufficiently. I thank them for what they continue to do and for continuing to share their stories with us all.

It is right that there are new grants available as part of the restart grant scheme, but we have no idea how well these are supporting the beauty sector. In answer to a parliamentary question, the Department released a breakdown of the restart grant funding allocations and payments, but it does not hold sector-level data. As the Government point to the restart grants as a key support measure for the beauty industry, will the Minister now publish how much of the spending is reaching beauty and wellbeing businesses?

On skills, we know that there have been almost 30% fewer apprenticeship starts in hair and beauty in the first six months of this academic year, compared with the last. The Save Our Salons campaign group estimates that nearly four in five salons will not recruit any apprentices this year. If the salons struggle to take on new trainees and to hold on to staff who are leaving for other sectors, how will the Government ensure that they retain the skill sets needed to thrive in the future?

These businesses make a vital contribution to our economy. We know the Government’s approach to the crisis has failed to appreciate the importance of the sector and provide support to the extent needed. Businesses have done right by our country during the crisis and the Government must now do right by them. The health, wellbeing and beauty sector is a skilled and creative sector at the heart of our communities that absolutely deserves our support.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to see you back in the chair, Sir Roger, and to serve under your chairmanship. I congratulate the hon. Member for Swansea East (Carolyn Harris) on securing today’s important debate, and I congratulate her and others, including the hon. Member for Bradford South (Judith Cummins) and other members of the APPG, on the work that they are doing in support of this important sector.

Today’s debate is important because the beauty and wellbeing sector is so important. It is important because of its contribution to the economy, its pivotal role in high streets and communities in every corner of the UK, its showcasing of female entrepreneurship, as we have heard, and its role in improving our health and wellbeing. We have heard a little about high streets. We have to remember that high streets are an ecosystem. It is not just about retail, hospitality or the beauty and wellbeing sector; they all work together to make our high streets vibrant. It is important that we protect all of that as we reimagine the future of the high street.

I was keen, as we looked to the end of this lockdown and at the Prime Minister’s road map, that we should secure the reopening of the beauty and wellbeing sector at an earlier stage than last time. The sector was last to open after previous lockdowns, but among the first to open this time. That is testament to the appreciation that we were able to get across to the Government and the understanding that people’s wellbeing is so important, as well as the economic situation and the recovery. Today’s debate has highlighted the key role that the sector plays in our economic society and I hope it will go some way to strengthen the perception of the sector as highly skilled, entrepreneurial and accessible.

As we have heard, the personal care sector consists of over 280,000 businesses employing about 561,000 people and adding £21 billion to the economy. Over 95% of the businesses are small or medium sized. As for levelling up, 30% of all hair and beauty enterprises are based in local authorities that fall into the ninth and tenth deciles of multiple deprivation. Although its economic contribution is significant, what is arguably even more valuable is its impact on society and its role in communities. It plays a key role in supporting jobs, as was eloquently shared by my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), especially jobs for women and young people. Some 82% of hair and beauty businesses are female owned, 60% of workers are self-employed and around 20% of hair and beauty workers are under the age of 25.

The pandemic has had a major impact on our mental health and we need to recognise how the sector can help the nation’s recovery by improving people’s physical and mental wellbeing. Whether it is feeling fresh after a new haircut, catching up with the local beauty therapist or getting a massage to relax, as the hon. Member for Swansea East said, the beauty and wellbeing sector provides the services needed to make people feel better.

The sector tells us that 68% of British adults who get their hair done professionally agree that having their hair done supports their mental health and wellbeing, and it is interesting to hear the hon. Member for Feltham and Heston (Seema Malhotra) tell us about how she had to bring out her hairdressing skills. There was no way that I was going to try that. I know that some people thought that I was taking my loyalty to our Prime Minister to the nth degree with the hair that I sometimes brandished in the Chamber, and I am glad that I have been able to get it cut since.

As we have heard, the sector also plays a key role for some people with serious medical needs, such as those with cancer. We therefore allowed treatments to continue during lockdown for those with health issues when they could not be deferred—for example, some people undergoing cancer treatment were able to visit spas and salons to receive specific treatment tailored to their comfort. Throughout the pandemic, I have worked really closely with the sector to understand the issues, so that I can best represent its interests within Government. Although it has always been represented in Government, we had a dedicated personal care sector support team back in January, and we look forward to working with organisations within the sector, the APPG and other interested parties in the coming months and years.

However, this has been a really tough year for personal care businesses, which have been closed at various points of the year and faced restrictions for the remainder. That is why, in recognition of the impact that the pandemic and the restrictions have had on the sector, we put in place an unprecedented package of support worth £382 million. That is the largest peacetime support package in history, and it included the job retention measures that we have talked about, support for the self-employed, access to the highest grants, the restart grants of up to £18,000 and loans. Indeed, the restart grants are a testament to the sector. Although it was able to restart at an early stage of this part of the road map, the restart grants are a testament to the extra costs that the sector had to bear by getting the PPE and other mitigation measures in place. As we have heard, we have also provided business rates relief and a moratorium on commercial rent evictions.

The business support programmes have helped many businesses and protected many jobs, but they cannot substitute for operating in an open market. The road map that I have talked about has always been cautious and gradual, but it has to be irreversible. To help the sector reopen, we developed guidance that could get it to reopen safely. Through compliance with that, it has been able to operate since 12 April. The road map laid out the timing for easing restrictions, and it is an approach that is being led by data, not dates. We have obviously had the announcement by the Prime Minister that we are taking a four-week pause at step 3, meaning that restrictions, including social distancing measures, are still in place. That will still have an impact on the beauty and wellbeing industry, because operating at reduced capacity is extremely challenging—not only for revenue, as we have heard, but by making certain roles in the workforce redundant—but by pausing step 3, we will further improve protection in the population and reduce the need for stringent restrictions to control the virus.

[Seema Malhotra]

The Minister has just mentioned the extension of the restrictions in line with the required public health measures, based on the data. Can he explain—the Government have not explained this—why furlough support has not been extended in line with public health measures? There seems to be a mismatch, and there is no explanation that does not leave the most vulnerable businesses continuing to pay and having a greater gap between their revenues and costs.

[Paul Scully]

I will cover support in a bit more detail in a few minutes. In his Budget, the Chancellor essentially went long by extending furlough to September, which allowed a cushion within the road map. It was about data, not dates, so it was never on the June date specifically—it was not before the June date. That is the essential thing, but I will cover support in a second, including the VAT request that has been made by number of hon. Members.

Over the next few weeks, we obviously want to ensure that the pause allows us to get more people vaccinated, but I hope that our unprecedented package of financial support will continue to go some way towards reducing the impact of the pause. As I say, we erred on the side of generosity, as well as going long, in the Budget in March, specifically to accommodate short delays to the road map. Most of the schemes do not end until September or after in order to provide continuity and certainty to businesses. It is fantastic that the sector is looking at ways to boost consumer confidence to maintain the high demand—for example, the Oh Hello Beauty campaign, which I have supported.

Until then, it is critical that we all continue to follow advice on safe behaviours, including social distancing, wearing a face covering when required, washing hands, and letting fresh air into indoor spaces. It is so important that hands, face, space and fresh air are really there, because we will not get to that July date to find that suddenly the baddie has been killed and it is the end of the film—roll credits. We will still be living with covid for some time, but we want to ensure that the social distancing measures can melt away, in order to allow capacity to increase in the personal care sector and others.

[Seema Malhotra]

May I probe the Minister a bit further? He will know that quarterly rents, for example, are due today and that other support measures, such as furlough, are being reduced from next week. From 1 July the level of grant will be reduced and businesses will have to pay a contribution to those wages. Those decisions were made assuming that lockdown measures would be lifted on 21 June. That has not happened, yet there has not been a corresponding change to the economic measures. Nothing that he has said so far has answered that question, which is a matter of real concern to employers across my constituency. I am sure that employers across the country have raised the same concern with their MP.