The first Labour Budget since taking office was presented today, 30 October 2024, by the first female Chancellor, Rachel Reeves, in the Commons.
Responding to the Budget statement, Caroline Larissey, Chief Executive of the National Hair & Beauty Federation said:
‘We asked the government for support for employers to counteract rising wages so we’re pleased that they have listened and responded with a rise in the Employment Allowance which will benefit some sector businesses, despite the rises to employers National Insurance contributions.
However, with 16%+ rises in the youth wage rates there was nothing on interim support for businesses training young people. The only ‘youth guarantee’ for our sector will be that small and micro employers won’t be able to afford to take on apprentices. This makes it even more vital that Skills England is responsive to the needs of our sector and the new Growth & Skills levy channels major support to incentivise small and micro businesses training apprentices.
We will engage constructively with the consultation around business rates reform and the decision to keep at least some support through a 40% Retail business rates discount and freeze of the small business multiplier is welcome and important in the interim. The government was silent on VAT but we will continue to push for reform which is the sector’s number one issue
While the Employment Allowance increase offers some breathing room, the dramatic rise in apprentice wages threatens to disrupt the traditional pathway into our Sector. Without targeted intervention, we risk creating a skills gap that could take years to bridge. The government’s approach to retail business rates shows they’re listening, but more comprehensive support is needed to ensure the sustainability of apprenticeships in hair and beauty.”
The summary of the Budget:
- Wage rates; 6.7% increase in National Living Wage, 16.3% increase in 18-20 rate, single adult rate ‘over time’
- Freeze on fuel duty in 2025 for another year
- Employers National Insurance contributions (NICs) increased by 1.2% to 15% from April 2025
- Reduce NICs threshold from £9,000 to £5,000
- Increase Employment Allowance from £5,000 to £10,500
- Business rates: 40% relief for Retail and hospitality in 2025/26 and small business multiplier freeze
- Cap on corporation tax for the duration of this parliament
- National Insurance thresholds: No extension to freeze on personal tax thresholds from 2028-29; will rise in line with inflation in the future
- Largest real-term funding increase since devolution; £3.4 bn to Scotland through the Barnett formula, £1.7 bn to Welsh government and £1. 5bn to Northern Ireland in 2025/26
- £1.3 billion investment into connectivity in regional transport