Nothing Will Come of Nothing, Speak Again, Or What A No Deal Brexit Looks Like.
One of Dominic Raab’s key pledges following his appointment as Brexit secretary, was to make the Brexit process more transparent. David Davis was criticised throughout his tenure for seeking to shield Brexit’s delivery from the public eye. Whilst in some cases there was a strong argument to support this approach, with the change of leadership came the opportunity to reinvigorate the public’s trust in how the Government is delivering Brexit, and this is an important step in that.
Today marked the commencement of transparency 2.0, as DExEU released 24 documentsdetailing assessments of the impact of a ‘no-deal Brexit’ on individual sectors in the British economy. The results were not the glorious warm image of sun-kissed British countryside evoked by the backbencher chant of “NO DEAL IS BETTER THAN A BAD DEAL”. Far from this, the reports offered a quite shocking insight into the immediate reality of life without a codified new relationship with Europe.
Although not a view of what post-Brexit Britain would look like forever, the reports can be used to gauge a sense of the potential damage that could be inflicted in the 6-18 months following our ultimate departure. As expected, the gravest scene is of the farming and medical sectors. Of the many takeaways from the documents, one quite shocking highlight was the insight that following departure, organic food producers would be unable to sell their products (as accredited organic produce) to the EU, for up to 9 months. It is also all but guaranteed that they would also be subjected to tariff arrangements ,should Britain find itself outside of the Common Agricultural Policy. Whilst they would have the ability to sell at a lower price point without the demand incentive the ‘organic’ description delivers, the eye-wateringly tight margins already enjoyed in the farming sector would likely leave many unable to compete or exist.
This example is one which exposes the multiple layers of challenge, within a no-deal scenario. Of course, the tragedy of many farms and producers going out of business would be immense, but consider for a moment the reality of organic farming no longer being economically viable. Quickly, the market would regress and rather than needing to buy it from America, chlorinated chicken would be our only way of generating revenue in the sector, abroad. As Britain and the world takes important steps towards improving the treatment of animals, such a step-back would be colossal and deeply sad.
And so the story is the same across the economy, summarised as ‘1 step forward, 10 steps back’.
For the fashion sector, which like farming operates on low margins for most of its products and services, ongoing competition looks increasingly challenging, under these no-deal terms. Whilst the exact landscape for goods exported and imported remains largely unknown, it is the services arm of the sector which is likely to face the greatest punishment.
With the costs and administration of visas, misaligned rules about intellectual property, data sharing and increases to the cost of cross-channel transport, the ability for a designer, start-up brand, or stylist operating on 15% (or less) income survival margin to compete with a French or Italian equivalent talent, appears impossible.
The chance to change the future within these no-deal predictions remains, but is quickly evaporating. The founder of fashion brand Superdry Julian Dunkerton has recently committed £1m to the People’s Votecampaign. This is unprecedented in the public affairs work of this industry, but reflects fashion's 95% Remain voter stance, which we highlighted in our Brexit Paper this Spring.
Sir Keir Starmer told BBC Radio 4's Today programme that a new referendum on the final Brexit deal "should be on the table." The Brexit temperature is, it would seem changing. For those concerned about the future of their business margins, global reputation and opportunities to strike deals freely with Europe, now is not the time to wait and see.
Julian Dunkerton's money alone, will not stop the chance we have now of rectifying this No Deal Brexit mess from disappearing above us. The UK is now the slowest growing of the G7 nations, and the information from the NO Deal Papers highlight this will only worsen if that were to happen with even the cost of basic card payments between the UK and Europe likely to increase. If you are worried, you need to let us know. It was always the intention of Fashion Roundtable to work with the industry on effective campaigning and public affairs and this intention remains. We are planning something in partnership with a key fashion advocate over the next few weeks, more information on this very soon.
The coming months are crucial, quite literally, to the survival of the fashion industry in the UK and its global reputation. More than any one political party, they will define the next 100 years and we need your voices to join with ours' to ensure the needs of our creative world leading fashion sector are heard and protected.