3 mins
"Have You Felt the Impact of the Autumn Budget?"
Three business leaders share how the Autumn 2024 Budget has affected their business
EDWARD JAMES, FOUNDER EDWARD JAMES LONDON
1 “Yes – it’s been brutal. My initial reaction was pure disbelief. Once again it showed how disconnected the government is from service-based industries like hairdressing. We’re always lumped in with the beauty and cosmetics sector which is primarily retail. But we’re not just selling shampoo. We’re creating the service. It’s people-powered, highly-skilled, and labour-intensive. We can’t automate our service, so it’s bad news for employment. Over 50% of our cost base is simply employing people. Compare that to a retailer who only sells boxed goods. They aren’t dealing with the same overheads. Yet we’re shouldering VAT, PAYE, National Insurance and business rates -it’s relentless. The Budget offered no break, no reform, and no recognition that we're delivering a luxury hair service that takes hours and a team of trained professionals. We’ve had to rethink everything: staffing, opening hours, even how we can continue offering apprenticeships. It feels like we’re being punished for creating jobs and contributing to the local economy. The rise in National Insurance alone makes it feel like being an employer is a liability. If this continues, we’ll see fewer high street salons, training opportunities and the talent drain out of our industry. It’s demoralising. Not just for owners, but for our teams, who work hard every single day. We don’t want subsidies, we want fairness. Right now, it feels like we’re being taxed out of existence.”
KERRY MATHER, OWNER KJM SALONS
2 “My initial reaction was a bit of panic because there was a lot of talk and speculation. We've got four apprentices and they work really hard so you don't begrudge them the increase in minimum wage. Everybody in the salon pulls their weight and we have a very strong team ethic. I had to relook at business in 2008 and during Covid-19, so you just sit and do your numbers again, and you make sure that you know where you’re at and if you can make cuts. It's never been a case of cutting staff down – they're the ones that bring all your money in, so that's counterproductive. Thankfully I do make enough profit to absorb it, but it will have a tough effect on my business. One immediate change I made was to have a price increase -not a huge one because we want to manage our client's expectations and be reasonable about what we charge. Initially the stylists were worried because they genuinely can't do as much work without the apprentices -they are the lifeblood of the salon. They make everything work. Financially yes, we’ve felt an impact. But other than that, it's very upbeat. I like people to come into a buzzing salon with a good vibe. There’s always a silver lining. My corporation tax bill will be down because we'll be making less profit. I'm an optimistic person, but hopefully it's not misplaced optimism. We are the heart and soul of the high street. We are the thing that everybody always wants.”
PHIL SMITH, OWNER SMITH ENGLAND
3 “Absolutely, the impact of this Autumn Budget has been devastating. In my 35 years of business, I genuinely think it's the worst budget we've ever faced, and even tougher economically than the 2008 financial crisis. It’s forced us into having to adjust our business, not to go forward, but just to stand still. I don't understand the government’s thinking. I really feel for business owners who can’t adapt quickly enough – it’s a very tough climate right now. The National Insurance increase was completely unnecessary, especially for smaller businesses turning over under a million pounds – the real backbone of employment in this country. The government has slashed the COVID-era subsidies that were a lifeline for so many. Businesses that borrowed to survive the pandemic are now crushed by higher interest rates on those loans due to inflation. On top of that, the rise in minimum wage is making business owners rethink how they bring on apprentices – the future of our industry. It's about more than just paying a wage; it’s about investing in training and passing on lifelong skills. I’m passionate about hairdressing but these changes have meant we can no longer afford to take on the number of assistants we need. We’ll keep our two current assistants and only replace as one qualifies, but we should really have four or five. In short, two words sum it up: disastrous budget.”
