
An unmistakable theme has recently revealed itself in my casework. Countless female business owners have been getting in touch for the first time, in a state of distress.
I have been an MP for seven years. Let me tell you, these are the type of people who never email. They are busy juggling businesses and family with exhausted determination, avoiding politics if they can. Capable, unfussy, utterly reliable. The kinds who keep shows on roads – now reluctantly turning to their MP for help.
The numbers had been crunched, and a fear of the new financial year had begun to set in. These women’s businesses, built on years of graft and grit, were about to be hammered by Labour.
One woman running a small after-school club for two decades has seen her Employer National Insurance Contributions leap from £10,851 to over £26,000. A nursery provider is now facing £30,000 in extra payroll costs every month, thanks to minimum wage hikes and National Insurance changes. A hair salon has seen its business rates rocket from £7,500 to over £18,000. The owner asked, “How much money does the Government think we make?!”
The October Budget was deeply pernicious. Due to the lowering of employer national insurance thresholds, the jobs tax is hitting hardest sectors where profit margins are tight, where staff are often part-time, and where wages make up the lion’s share of costs.
Since women often run people-facing services that employ small platoons of female staff – care homes, nurseries, salons, after-school clubs – they are especially vulnerable to Labour’s tax changes.
On top of that come other sector-specific issues. Many high street salons saw continued business rates relief – now cut – as a lifeline. They also face a challenge with the VAT regime. A salon that employs its staff directly is pulled into VAT, which cannot be reclaimed on the biggest cost it faces: wages. Yet those operating entirely with self-employed stylists can often sidestep VAT. Two businesses that appear identical to a customer operate under completely different tax burdens. The looming Employment Rights Bill is encouraging more salons down the self-employed avenue, ironically giving stylists fewer rights.
And while salons that are not PAYE-registered cannot take on apprentices, those which are now cannot afford to keep them.
It is not just happening in hair and beauty. Construction firms – a vital route for young people entering the workforce – are shedding apprentices rapidly. Two traditional routes into skilled employment for working-class girls and boys are quietly collapsing under the weight of bad policy. Is this the future Labour promised? A generation of working people priced out of trades?
As small firms shut up shop, they are leaving empty units behind on our high streets. Those spaces are too often being filled by businesses that skirt the rules; shadow operations exploiting workers and avoiding tax. Legitimate, tax-paying firms simply cannot compete as dodgy barbers, nail salons and vape shops fill the void. Customers lose high quality services they rely on and the skilled people who give a town soul and identity.
The Chancellor’s Budget is also colliding disastrously with the Education Secretary’s childcare reforms. Private nurseries, overwhelmingly run by women, have effectively seen a cap placed on the fees they can charge parents, while the Government’s own funding for so-called “free” hours fails to cover their costs. Meanwhile the state is opening rival provision in schools, which will likely fail to offer the vital non-termtime care many working parents need. The childcare scaffolding that supports mums in returning to work is being kicked away.
What is happening in early years mirrors the chaos being wreaked by Labour’s introduction of VAT on school fees. As Government destroys business, the pot shrinks to fund new state nurseries and school places for those pushed out of the collapsing private sector. Socialism at work.
The women approaching me are not activists. They are not political operators. But they are asking difficult questions. Why is a supposedly pro-worker Government making it harder to employ people? Why should they keep playing by the rules when the system punishes them for doing so?
I worry equally for every small businessperson – man or woman – who is fighting to stay afloat. But tomorrow, I will lead a parliamentary debate focused on the hair and beauty industry – where over 80 per cent of the workforce are women, 86 per cent of businesses are female-owned, and 40 per cent of employees work part-time.
I find identity politics utterly loathsome. However, I must point out the impact – not just the irony – of a Chancellor celebrating herself for being the first woman to hold that office, while simultaneously hammering the sectors that employ, serve, and are typically led by women.
What we are seeing is not a pro-growth strategy. It is a slow, grinding squeeze on the people who quietly exhaust themselves to make our country work.