Beauty and Wellbeing Sector Workforce

John McNally Excerpts

Wednesday 23rd June 2021 Westminster Hall

[John Mc Nally (Falkirk) (SNP) [V]]

It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Swansea East (Carolyn Harris) for having secured today’s debate, and for the work that she and the hon. Member for Bradford South (Judith Cummins) have done and are doing in the beauty and wellbeing sector. I declare a 50-year interest in that sector.

During the pandemic, all of us MPs recognised the hardship that the beauty sector and wellbeing industry workforce have had to deal with. In particular, the timings of financial support information from the UK Government in initial covid-19 lockdowns, the details of furlough, and the support to business owners—including on how to support their staff mentally—were woefully inadequate. I have to say that financial stress owing to the delayed announcements about self-employment grants in many cases caused salons to close or cease trading—basically, to shut up shop.

Employers felt pressured to immediately try to foster a pastoral care role for their staff outside the salon, and to many employees, that contact with their employer was of paramount importance for their wellbeing. The support required for that role well exceeded normal employer duties and experiences. For example, in normal times, there might be one employee at a time with an issue to deal with, but this was absolutely different—it was all the staff at one time. Thankfully, for many, support was found on Facebook, social media forums and industry-led webinars where thousands of beauty salon owners sought information and one-to-one support. I attended many, hearing at first hand the stress, confusion and anxiety that all parts of the sector were going through.

Along with other MPs we have heard from, I supported calls for a temporary VAT cut for personal care businesses, in recognition of the unique challenges that these salons faced with covid. Although not all salons are VAT-registered, this temporary cut would have made a huge difference to all those salons that are, and would have been a crutch for a recovery period after opening. It is simply easier to keep people in employment and to support the businesses that already employ, thereby ensuring continuity, rather than starting new pilots, projects and incentives for already damaged, struggling businesses that probably cannot afford to take on any incentive schemes.

For certain, controlling the virus is key to keeping the economy open, and proper advice is needed for all workforces when moving forward into the recovery from the impact of the virus. The UK Government’s last-minute turnarounds on furlough did not and do not help; certainty was and is required wherever possible. Imagine the stress levels for employers and employees as deadlines approached for furlough payments to stop—they went through the roof. Yet again, there was little reassurance and no information on what would happen next. The constantly changing furlough regulations were difficult enough for accountants doing payroll to deal with, never mind for salon owners completing their own applications. This was yet another cost and burden for salons to bear in ensuring that furlough was completed correctly.

Close-contact businesses such as those in the beauty and wellbeing industry are known to carry increased risk of transmission due to proximity to the client, particularly to their face. As the Minister will know, the talent pool for massage therapists has been absolutely decimated, meaning fewer qualified professionals will enter the profession at a time when demand will surely exceed supply. The beauty industry has now returned in Scotland, but new, more transmissible variants mean continued adherence to effective mitigations remains highly important to protect clients and the practitioners themselves. It is pleasing to note that the vast majority in this sector know and take seriously and professionally their responsibilities.

We recognise just how difficult the restrictions have been for the beauty and wellbeing workforce; the Scottish Government have worked to provide all the support they can, but in recognition of the greater risk of exposure to covid, restrictions were necessary to protect clients and the workforce. Research shows that more than 10% of Scottish businesses in the industry had ceased to trade by December last year, and that number has obviously grown. As has been said, in April, across the UK, 46% of respondents to that consultation were unsure whether their business would survive until the end of social distancing. Salons were simply not earning enough to cover outgoings such as rent, stock, overheads and staff costs. The research also found that only 38% were just about breaking even. On the whole, two in five businesses across the entire hair and beauty sector were making any kind of profit. I will read from an email from a salon owner in Falkirk:

“No VAT reduction. Delayed and last-minute changes to financial support. No PPE cost support. No UK Government awareness of the huge impact on business i.e. you losing 200 clients from your business may set you back two years in growth and achievement. To sustain your current business cost, you must find a way to replace these lost clients within six months or you will be running at a loss. I am not sure the support is there for these scenarios and not in six months’ time when businesses will not have the buffer of the re-start grants and potentially most salons will close or staff will be let go. There is an urgency to support the reopening and sustaining of businesses trying to keep going. Appreciation of the business owners’ efforts in these times of extreme business difficulties is absolutely paramount.”

In Scotland, we recognise this serious problem. Therefore, in addition to furlough, retail beauty businesses with premises were supported by the strategic framework fund. The mobile and home-based close contact services fund supported those not eligible for the UK Government’s self-employment income support scheme, and alleviated business rates. Additional restart grants were available for those that got the strategic framework fund. Fellow MPs and I have worked with the Save our Salons campaign, calling for a VAT reduction in the March Budget. As others have said, that the UK Government did not take that easy step or listen to the sector’s suggestions was a body blow to their self-worth and value.

Controlling the virus is key. Scottish Government officials are working with local authorities and other regulators to renew focus on ensuring that workplaces are operating and reopening in a safe and compliant way. We recognise that each workplace is different and individual organisations work with trade unions or workforce representatives to determine how best to apply safe workplace guidance to meet all relevant requirements. Guidance is reviewed on a regular basis with the priority of containing the spread of the virus, saving lives and safeguarding the NHS. This partnership working is key to establishing a shared confidence in the safety of returning to workplaces, protecting public health and supporting Scotland’s recovery.

For all workforces, proper advice is needed. The UK Government’s last-minute turnarounds on furlough have added to the uncertainty. The furlough scheme is due to end on 30 September, but from 1 July the Government are due to pay 70% of the wages, with employers obliged to make up the remaining 10%. From August, the Government are due to pay 60%. Around 3.4 million people are still on furlough—a tenth of the workforce—and 553,000 fewer people are in payrolled employment. Now is not the time for the Conservative Government to withdraw support. Business trade federations and trade unions alike have urged the Chancellor to extend furlough. All last summer we urged the Chancellor to extend furlough and give firms the chance to plan. Unfortunately, the UK Government did not heed us, which led to another last-minute reversal. There is no reason to suggest that they will act faster this time.

The Chancellor should now invest in recovery and employment by providing the £350 billion to firms, and allow those who have already borrowed to convert the debt into grants or equity to avoid the debt time bomb and investment recession. The self-employment income support scheme still excludes 3 million people from any support at all.

This industry is undervalued, under-consulted and often overlooked by the UK Government. Financial uncertainty for this unique sector’s future cannot continue. The UK Government should value the sector, as Scotland does, and bring some peace of mind to all parts of the beauty and wellbeing workforce.