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British Fashion Council calls against a no deal Brexit

By Danielle Wightman-Stone

2 Sept 2019

Business

The British Fashion Council (BFC) is appealing to the government to avoid a no deal Brexit, claiming that it would have a “negative impact” on the fashion industry.

In an open letter, the BFC states that based on export figures from 2018, it is estimated that switching to World Trade Organisation (WTO) rules would cost the UK fashion industry between 850 and 900 million pounds, according to research by the UK Fashion & Textile Association.

“The UK leads the world in creativity, innovation and business and we need to retain this reputation,” states the BFC.

With an industry worth 32 billion pounds to the UK GDP and employing more than 890,000 people – almost as many as the financial sector, the BFC is urging the Government to consider its terms around fashion trade and talent.

It is calling on the government to seek a deal with the EU that would guarantee the healthy and steady growth of the fashion industry, as well as give access to funding that would help “create stimulus” to ensure British designer businesses continue to remain competitive internationally through trading agreements, access to finance, free movement of talent and support for promotion.

BFC address impact of a no deal Brexit for UK fashion industry

In addition, it adds that the government needs to advise on all the different scenarios and translate them into what they mean to the fashion industry and the best way to navigate global trade challenges.

“Fashion SMEs are international from day one, with first sales often taking place outside of the UK. Driven by the need to achieve high artistry and creative pieces, designers adopt a global approach in all elements of their business; from sourcing the perfect fabric, through to finding the best pattern cutter in the world to work with that fabric,” explains the BFC. “Fashion is component goods which traverse borders multiple times before becoming a finished product, and in order to sell, samples are taken during selling season to a variety of international markets and shows. This adds a level of complexity not dissimilar to other component goods industries such as the automotive industry.”

In the case of a no deal scenario, the BFC is questioning whether businesses or consumers will take on the additional costs caused by WTO tariffs, and the logistics surrounding the definition of samples, for instance, what paperwork will be needed, as it claims that businesses are already being stopped and asked for paperwork, although not currently required, in addition, tariffs and VAT will apply to samples.

Also, the understanding of timeframes, as it stresses that it will be impossible to give 24 hours’ notice to HM Revenue and Customs around goods being shipped, “to compete internationally, goods need to be shipped immediately” and then there are the VAT issues, with businesses having to do claims across 27 member states rather than to the EU as a whole.

No deal Brexit will impact fashion talent, states BFC

The BFC is also concerned how a no deal Brexit will impact talent and the proposed changes to the immigration system, where the government’s white paper did not cover skilled, lower-paid workers from machinists, to language experts, leaving concerns about skills gaps for the industry.

Of particular concern is the recommendation that the Tier 2 visa has a 30,000 pounds minimum threshold on salary, with the BFC adding that, “skilled roles in fashion manufacturing typically earning less than this”. Similarly, the shortage occupation list does not cover any roles required by the high-end fashion industry.

Concluding its open letter to the government, the BFC said that addressing its trade and talent issues were a “matter of urgency” and it is “essential for the UK to retain its leading position in attracting global talent”.

“It is very important that communications to international students and talent is clear and highlights the fact that the fashion industry still wants them to study here, start businesses here and work here,” added the BFC.

The BFC’s appeal came ahead of London Fashion Week, which is set to take place from September 13 to 17.

Image: courtesy of the BFC/London Fashion Week

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BRITISH FASHION COUNCIL