Paving a Positive Path for the Lucrative Fashion Industry Post Brexit
The fashion sector contributes more to UK GDP than the fishing, music, film and automotive industries combined; the fishing industry contributes around £1.4 billion, the UK automotive contributes £18.6 billion, the music industry contributes £5.2 billion and the film industry contributes £6.1 billion. Overall, those industries contribute £31.3 billion to UK GDP.
Yet, the fashion industry has not been considered an industry of importance throughout the Brexit trade negotiations. This needs to change to ensure that ensure the fashion sectors continued economic success.
Fashion Roundtable have issued the following short briefing note on the Trade and Cooperation Agreement and the impact of Brexit on the fashion sector. This concerns us all and contains key suggested points where we can all get proactive:
Brexit and the Fashion Sector Briefing Note 30tht December 2020:
Fashion is a highly sophisticated, multi-billion-pound sector that contributes significantly to the UK economy. According to data collated by Oxford Economics and released by the British Fashion Council (2020), the British fashion industry contributed £35 billion to UK GDP 2019.
In terms of trade, the European Union was the UK’s biggest export market for textiles and apparel in 2016, accounting for 74% of UK exports. UK apparel and textile exports to the EU have risen by 36% over the past five years and now stand at £6.7bn and £8.3bn of fashion and textiles are made in the UK. Fashion is the largest of the creative industries and accounts for significantly larger sums of exports than many other sectors in the creative industries. For example, the UK music industry generated £2.9 billion in exports in 2019, a 9% increase from £2.7 billion in 2018.
The industry continues to be a major UK employer with 817,034 jobs supported across the industry, according to data published by Office of National Statistics for March 2020. Over 236,000 (29%) of those jobs are located in the nation’s capital and UK employment figures rank fashion as almost as large as the financial sector. Concerning the retail sector, the British Retail Consortium estimates that approximately 120,000 EU nationals are employed in the UK retail industry and the fashion sector employs a high percentage of EU workers overall. In areas such as London where there are 13,650 manufacturing employees, making clothing for both the high-end and the high street, it has been estimated that 70% of the workforce is from the EU.
A key concern, among several others, for the sector is a recent policy decision by the Government that threaten to undermine the industry’s attractiveness to an international audience. According to a report from the Centre for Economics and Business Research, a Government plan to end VAT Retail Export Scheme from 1 January 2021 would result in up to forty-one thousand job losses, reduce non-EU visitors to the UK by 7.3 per cent, and result 30 December 2020 in an estimated total decrease in spending by tourists by up to £1.8 billion.
The independent Office for Budget Responsibility (2020) confirmed that scrapping the scheme will save the Exchequer an average of £360 million a year over the next five years, rather than the £500 million that the Treasury has claimed. The Office for Budget Responsibility also stated that the Government’s costings are based on a “highly uncertain estimate” of how international visitors will react to the tax-free shopping incentive ending, and that “there will also be costs as the UK become less attractive for affected tourists relative to alternative EU destinations such as Paris or Milan”.
The international nature of the fashion industry means businesses have had to prepare for the challenges of Brexit this year – from movement of goods and people to the protection of our designers’ IP – as the UK moves to exit Europe. With Covid-19, the fashion sector will face the most economically damaging crisis in a generation. An inability to work and trade with the EU because of restrictions will seriously damage the British fashion industry’s ability to remain a large employer and contributor to the economy.
What can you do?
● Urge the Government to add garment workers to the Shortage Occupation List;
● Urge the Government reinstate the VAT Retail Export Scheme;
● Encourage the Government to reconsider visa requirements for fashion creatives;
● Call on the Government to support greater onshoring of textile manufacturing;
● Ensure the Government puts sustainability at the forefront of trade negotiations;
● Ensure the Government builds a strong IP framework into all trade deals;
● Ensure the Government maintains workers rights;
● Urge the Government to subsidise or scrap ‘passports for goods’ or carnets;
● Encourage the Government to make creative visas available that are similar to or better than the US O-1 Visas;
● Urge the Government to bring forward the introduction of the Craft and Design T-Level in order to top up the shortage of technically skilled workers after Brexit;
● Encourage the Government to reconsider its decision to leave the Erasmus programme.