Rachel Reeves and Labour ‘crippling’ the industry keeping UK high streets alive

Barbershops and hairdressers are among the only high street businesses bucking the closure trend, but staff are worried that soaring costs could soon take their toll. While conversations about the increasing financial struggles of retail and hospitality businesses – exacerbated by tax hikes and energy costs – have abounded in recent months, a crucial cornerstone of the UK high street has been missing from the conversation. Unlike their brick-and-mortar counterparts, barbershops and hairdressers have grown in number in recent years, with the former up by 50% since 2018 to 18,411, and the latter rising by 110% since 2010.

The businesses have capitalised on empty units left vacant by banking firms and retailers pivoting to online sales, but mounting costs could force the sector’s growth into retreat. Claire Blackwood, who owns Park Lane Beauty in Chippenham, highlighted the issue while calling for the Labour Government to introduce business rates relief and VAT reductions to ease pressure on the industry and prevent a wave of closures. “The 20% VAT rate on our turnover is crippling,” she said.

“That relief could help fund apprenticeships and sustain employed business models. But for years, our sector just hasn’t been prioritised, and that has to change.

“We bring people to the high street – they come for treatments and visit coffee shops or other stores nearby. If salons disappear, it’ll impact entire town centres.”

A rise in self-employed beauty professionals – not subject to the same taxation as businesses like Park Lane – could also deal an existential blow to some of the only firms consistently welcoming in customers on high streets across the country, Ms Blackwood suggested.

“As a business owner, I have to compete with those offering similar services while operating on a different tax model,” she told Greatest Hits Radio. “This makes it hard to grow and has serious repercussions for the future of salons on the high street.

“It’s somewhere for women to come and be listened to and have a sense of community. It’s like a man going to the pub after work … Sometimes I’m the only person [elderly clients] will speak to all day or even all week.”

The National Hair and Beauty Federation’s (NHBF) 2025 State of the Industry survey found that while 40% of participants were managing to turn a profit, 21% reported losses and 74% had been forced to raise prices in response to changes in wage rates and National Insurance thresholds.

Chancellor Rachel Reeves hiked employer National Insurance to 15% last April, lowering the point where employers pay it to £5,000 annually, while boosting the National Minimum Wage to £12.21 per hour. The latter is set to increase by a further 50p in spring 2026.

Caroline Larissey, chief executive of the NHBF, said: “Despite considerable pressures, it’s clear that many hair and beauty businesses are showing real resilience. But they cannot do it alone.

“With the right support – from VAT reform to practical help with apprenticeships and energy bills – we believe this sector can not only recover, but grow. We urge the government to act decisively to unlock the full potential of this vibrant industry.”