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Change Starts Now: What the New Labour Government Means for British Beauty

Published July 11, 2024
Published July 11, 2024
Troy Ayala

After fourteen years of a Conservative Party government in the UK, change is on the horizon for Britain with the newly elected Labour Party government winning 411 of a total 649 constituency seats. Regardless of political beliefs and personal feelings of whether it will be positive or negative, this change is inevitable. But what does the new party in power mean for the British beauty industry?

Under Conservative Rule 

During Tory reign, the cost of living crisis soared, and Brexit changed the way businesses had to trade. This heavily impacted the industry and those working within it. To name just one example of many, after the pandemic, 94% of salon owners were struggling due to a considerable increase in business utility rates. As well as when the National Hair & Beauty Federation found that 77% of hair and beauty businesses were paying more for energy than ever before, leaving three-quarters of companies either partially or wholly reliant on government support.

To help tackle the financial impact of the pandemic, the British Beauty Council fought for a larger amount of money to be granted to the personal care sector from the previous Conservative government's Restart Grant, increasing the initial sum of £6,000 ($7,600) to £18,000 ($23,000). This move was imperative, as according to Millie Kendall OBE, CEO of the British Beauty Council, 95% of Britain's hair and beauty businesses are small to medium enterprises, with a majority having less than ten employees. As of 2021, it was estimated that the government's Restart Grant had paid around 1,000 new employees' wages in the beauty industry.

“The past year and a half has taught us that the beauty industry is an essential service because what it provides is things that can't be measured on financial spreadsheets,” former Prime Minister Rishi Sunak said back in 2022. “It's a sense of confidence and esteem or well-being, and that's why when we reopened the economy, we ensured that beauty was right at the beginning of that process."

Change Starts Now

However, despite the efforts made by the Conservative government to patch up the economy, the Labour “landslide win” evidences that the country was indeed not happy with the way things were panning out and decided to put their faith in a new government body.

Led by Sir Kier Starmer, ex Socialist Lawyer contributor and previous Chief Director of Public Prosecutions for England and Wales, the new Labour government comes into power with the manifesto “change begins now.”

The most notable pledge from the new government is the introduction of the “New Deal for Working People,” which is set to be imposed within the first 100 days of the party being in government. On its website, Labour outlines that this legislation plans to boost wages, make work more secure, and “support working people to thrive,” delivering a genuine living wage, banning zero hour contracts, and ending fire and rehire.

Labour has also pledged to cap corporation tax at the current level of 25%, as well as retaining the annual investment allowance for small businesses, which will hopefully allow beauty businesses to continue to get back on their feet after a grueling few years. Apprenticeships are also pledged as a priority in the party’s plans, with intentions to introduce a growth and skills levy to replace the current apprenticeships levy—especially in the creative industries where the new Prime Minister believes all young people from all backgrounds should be given a fair shot.

Starmer has expressed reducing energy bills as another key government target, with the intention to introduce Great British Energy, designed to equip businesses and homes with sustainable energy prices, while putting tougher regulations on existing energy companies.

Since Brexit, the size of the British economy has reduced by 2%-3%, with this impact predicted to rise to 5%-6% by 2035. However, the newly appointed Prime Minister is determined to prevent this and intends to create fairer and more workable trade deals with the EU after the turbulence of the Conservative Party’s Brexit deal struggles.

Lesley Blair MBE, CEO of the Confederation of International Beauty Therapy and Cosmetology (CIBTAC), commented on the recently elected government. “While a change of guard can bring uncertainty, it also presents the perfect opportunity to align and offer our extensive expertise and experience. We will ensure we offer our support to the incoming Labour government to assist them in delivering on their manifesto promises—especially those identified as being beneficial to our industry and members—as well as advising them on additional important matters affecting our sector directly.”

External Pledges

Prior to the election, the British Beauty Council outlined its intentions for the newly elected government to consider. These included:

Tax and Spend

  1. Tax reform including a reassessment of VAT policy, specifically focusing on tapering the current VAT threshold cliff edge
  2. A wholesale review of the business rates system to create a more level playing field between high street stores and e-commerce platforms
  3. An increase in the Employment Allowance for SMEs to reward businesses that grow their workforce
  4. The introduction of an internationally competitive, tax-free shopping program  for international visitors
  5. Tax-deductible business training in new areas of business such as AI and sustainability
  6. A commitment to review the classification of SPF30+ to an "essential" rather than an "cosmetic" item.

Trade and Regulation

  1. Targeted investment incentives that prioritize business reshoring and increase UK manufacturing and innovation, particularly in relation to sustainability
  2. A closer and more positive working relationship with the EU in respect of trade and export policy 
  3. A commitment to maintain a sector-specific, risk-based approach to any regulatory reform relating to UK Cosmetics Regulation in order to ensure long-term stability
  4. A commitment to proceed with licensing regulation as secondary regulation under the Health and Care Act 2022 in the aesthetics sector 
  5. A closer and more positive working relationship with the EU in respect of trade and export policy, addressing the barriers that have resulted in resulted in £852M ($1B) drop in sales to Europe since the Brexit vote

Education and Growth

  1. An updated skills and apprenticeship education system that works for a modern Britain, managed under the remit of the Department for Business and Trade to ensure the qualifications are fit-for-purpose for UK business
  2. Greater flexibility regarding the use of apprenticeship levy funds to build on and develop skills in the areas both large and small businesses need
  3. The reintroduction of Child Benefit for families of under 18-year-olds who undertake apprenticeship
  4. A focus on resources to ensure improved access to funding for typically disadvantaged groups such as women and ethnic minorities and greater representation at all levels of business and enterprise

ESG

  1. Support and incentives for companies to implement carbon reducing, circular, nature positive, and environmentally sustainable business practices
  2. An implementation strategy in relation to Extended Producer Responsibility regulation that works with industry to ensure a commonsense approach to execution e.g., utilizing digital labeling etc.

According to the British Beauty Council, Labour has assured its intentions to work alongside them cohesively to achieve such goals.

“As leaders in legislative change, the British Beauty Council is looking forward to collaborating with policy makers, civil servants, and industry representatives to support growth, influence, and resilience of all sectors,” said Victoria Brownlie MBE, Chief Policy and Sustainability Officer of the British Beauty Council. “As the organization enters its next phase, with a new roadmap imminent, we are committed to working with the government to secure policy change that is in the best interests of businesses within our dynamic industry and those who work within it.”

The new Labour government is facing significant pressure to implement meaningful changes that address the public's demands for reform. Amid these challenges, there is hope that its policies will positively impact the beauty industry. By fostering innovation and ensuring fair regulations, the government could create a more vibrant and competitive market, benefiting both consumers, businesses, and the overall British economy. The new government will need to demonstrate its commitment to the beauty industry by delivering on its promises and enacting policies that support growth and innovation. Whether for better or worse, one thing is for sure—things are about to change in Britain. 

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