Hairdressing industry reactions to the autumn 2017 budget

Chancellor Philip Hammond presented his Autumn Budget yesterday, which included a rise in the National Living Wage and change in business rates. Here's a Quick Recap of the Main Points

• Chancellor Philip Hammond announced the National Living Wage for over-25s is to rise by 4.4% from £7.50 to £7.83 an hour from April 2018.
• A change in business rates includes increasing the frequency of revaluations from five years to three, and bringing forward a plan to use the main CPI measure of inflation for calculating increases rather than the higher RPI measure, so potentially reducing bills in future.
• Increases announced in National Minimum Wage rates, as recommended by the Low Pay Commission, including the biggest increase in youth rates for a decade.

We spoke to key players in the industry to get their initial reactions: “We are disappointed the government has seen fit to push ahead with such big minimum wage increases. Salons and barbershops are already under intense pressure – prices are rising, and consumer confidence appears to be slipping. These increases will cause real pain for many small business owners. Our only consolation is that the increase in the National Living Wage is less than we had feared, and is a sign the government was prepared to listen to our warnings on this at least.” National Hairdressers Federation chief executive Hilary Hall “I think the change from basing business rates on the Retail Prices Index to the Consumer Prices Index is just smoke and mirrors. It’s still an increase. Most businesses were hoping for a freeze or a reduction. Business rates are an outdated tax. The world is a different place to a few years go and many businesses don’t have physical premises anymore, so businesses like salons are at a disadvantage to those operating digitally. The extra help introduced for first-time home buyers is a great thing for young people, especially those living in a city and will hopefully make it easier for young people to stay in London and work for companies like ours. Recruitment is a big issue for the hairdressing industry and anything to help people afford to live in a city will be welcome. I was hoping the VAT threshold would come down. We are currently competing at a disadvantage to those salons that have ‘self-employed’ staff. I would like to see a flat rate of 10% for VAT for all businesses, whatever their turnover.” Jamie Brooks, Brooks & Brooks, London “The 4.4% rise in the National Living Wage could impact on businesses like ours. Because finding school leavers to come and work for us as apprentices is proving increasingly difficult, we are having to employ older people to do jobs like shampooing. However, paying people for doing such simple jobs almost the same as stylists who are actually bringing money into the salon could create resentment amongst the team and impact on a salon’s bottom line.” Mikaela Martin, co-director, Spirit Hair Company, High Wycombe “The change in new business rates is great news for SMEs, any savings has to be an added bonus when it comes to our overheads. Running a business is getting more and more expensive and entrepreneurs need looking after as we are the backbone of the economy. However, I’m disappointed there is no change in VAT as that is a real issue for small businesses.” Junior Green, Junior Green, London Stay tuned for a deeper analysis of the Autumn budget in the coming weeks.