Press Release On The Eve Of London Fashion Week And London Modest Fashion Week
Fashion Roundtable Press Release 15/02/2018
With London Fashion Week starting tomorrow, we at the recently launched NFP Fashion Roundtable are excited to attend the shows and watch the best in British talent reveal their collections and promote sales which help generate the top end of our £28bn UK industry. An industry which grew 11% in 2015 – 2016 and a sector where growth is at 4x others. Fashion Roundtable are also excited to attend shows at London Modest Fashion Week this weekend, a slice of the fashion market which Reuters Thomson put at $243bn in 2015 and is forecast to grow by 51% to $368 by 2021. However, these markets are all at risk from a Brexit which fails to understand the core working mechanisms of this international supply and talent chain industry.
At our roundtables with policy makers and industry stakeholders, Fashion Roundtable have lobbied for clarity on Brexit and the transition phase. A clarity we are yet to hear from the UK Government, while the EU Commission have made their position clear. Only yesterday, the Foreign Secretary Boris Johnson made a case for future regulatory divergence from the EU, an intention which could jeopardise the supply chain and trade deals for the UK fashion industry, the majority of whom are either freelance workers or part of our thriving SME fashion businesses. A single garment can travel through multiple countries: sometimes up to 12, from design to shop or online sales platform. Any delay on logistics will increase the likelihood of our global leading fashion tech businesses relocating their headquarters and logistics onto mainland Europe. World leading names such as Amazon, whose European base is here in Shoreditch, or Farfetch, whose business grew 73% last year and are headquartered in Old Street, or Net-A-Porter, which runs out of Westfield, Shepherd's Bush.
UK fashion talent are the global leaders in this market: go to any fashion house or high street brand HQ across the world and you will meet Creative Directors, designers and CEOs from the UK. At the freelance end of the spectrum – itself a growing and vital part of our economy – many of our UK domicile talent travel weekly across numerous territories, but pay their tax here. Make their lives or international reputation in anyway lessened by poorly conceived Brexit and transition plans, and many of those talents will relocated, taking their taxes and creative brilliance with them.
We have this week, lobbied cross party our UK Parliament, based upon our survey and roundtables. Our survey of fashion industry stakeholders highlights that 56% would change their voting pattern if the political parties discussed the fashion industry more and made policy promises which would improve their businesses. 96% of our survey respondents voted Remain, 27% said they will relocate their business if the Brexit trade terms do not support their business and 80% believe that Brexit will be bad for their business. This is not purely down to ideology, this is down to the realities of a global market, where we lead in innovation, tech and reputation, all at risk, from loss of these rights and access to the EU markets – our core business.
These concerns translate as:
1) The Customs Union: The fashion industry needs full membership at least until the end of 2020. In the EU (currently) there is no concept of partial membership. There are customs agreements, as the one with Turkey but that is not a membership and is restricted to a certain number of products. These Turkey-type customs agreements are tailor made for the specific country and is focused on the most commonly traded goods while protecting the interests of the internal market (that is why for example agricultural products are not part of the agreement). Even if the UK Government would like to have an agreement like that it would take more time than the remaining 10 months to draft it. Any one garment can have components travelling back and forth and be between up to 12 countries from design to delivery. The UK leads on online platforms, fashion tech and our retail offer is world class. Any cost or delay impact of materials or logistics, will see businesses taking their headquarters elsewhere. Portugal are offering 5 years tax free to fashion businesses and offers are coming thick and fast from many European nations to entice our global leading creative fashion brands to add value and reputation to their existing domicile talent.
2) Remaining within the Single Market is key to our industry. 71% want to stay in the SIngle Market, while the majority of other respondents want to stay in the SIngle Market and make other non EU trade agreements. We have a fashion economy based on ease of movement for goods and services. Should the UK decide to leave the Single Market through these trade deals with the EU, not only must Freedom of Movement for creatives at all levels of the industry be factored in, so we can continue to build and grow our trade while exploring new non-EU trade deals. We have signed up to the #FreeMoveCreate http://freemovecreate.org) campaign and we add our support to this concern.
3) The need for EU nationals to be welcomed into the UK to continue to expand our international presence, reputation and value, is inherent to our growing our domestic, international and tourism trade markets. As is the clear need for freedom of movement for UK nationals who work across Europe within the fashion industry. Only 8% of respondents felt there was a need for a skills based immigration system.
4) Easy Visa Access: will the UK government agree to recognition of this, or of members of Fashion Roundtable, to allow for freedom of movement for fashion workers: many of whom are in insecure freelance work and need ease of access to the EU to make their business profitable and for whom many are last minute confirmations on work and therefore income. This kind of 21st Century way of fluid work,is not in line with hard borders and expensive carnet, red tape and visa cost procedures from another less economically fluid age.
5) New Importer/Exporter Status: if the UK does leave the customs union the Government needs to be aware of the fact that businesses will need help in adapting to their new exporter/importer status with the EU. What will you do to ensure that this takes place?
A) What are the UK Government doing to ensure that UK businesses familiarise themselves with the EU`s combined nomenclature. This annually updated document includes product classifications and accompanying tariff rates which will need to be declared when goods are sold to EU member states. As UK companies will become exporters/importers the price of imported goods will increase with the tariff rate and the additional VAT, which is calculated on the duty-inclusive value of the imports. Given that fashion is comprised of many supply chains for any single garment, this is something which we need to be aware of when it comes to pricing our products.
B) What are the UK Government doing to inform UK businesses to attain an Authorised Economic Operator (AEO) status (both UK companies exporting to the EU as well their EU counterparts wishing to export to the UK). This provides access to custom simplification procedures and ensures faster transit procedures. What plans are in place from the UK Government to implement mutual recognition of AEO status with the EU and other important markets this for status after April 2019? What plans are there to raise awareness of the importance of AEO amongst UK businesses and will the Government mitigate the costs of meeting the requirements of an AEO status?
C) Will the UK authorities adopt freely available EU online support tools such as the binding tariff information (BTI) system? This will support ease of travel for products through customs. If exporters would like to have legal certainty that they are applying the correct product classification (and tariff rate) to their goods they can either ask through the BTI website customs authorities to confirm the right product category and tariff rate or search the BTI database for previous decision on goods similar to theirs. A BTI decision is, as its name suggests, binding for both the exporter and the authorities for a period of three years. That means that once customs authorities grant a product classification number, exporters must use that.
D) Will the UK be also implementing TARIC, the integrated online Tariff database of the European Union? As this includes the codes of the products, their tariffs, any other levy attached, restrictions etc. It gives all economic operators a clear view of all measures to be undertaken when importing into the EU or exporting goods from the EU.
E) We would like to understand what plans the UK government has in place to ensure that illicit transfer of products and counterfeit goods will not increase and endanger the UK economy during the ‘transition period’? The fashion industry is concerned that at a time when UK-EU business transactions will become exports/imports burdening the customs infrastructure counterfeit operations can take advantage of this increased export/import flow and infiltrate the UK market.
F) Does the UK Government plan to adopt the new anti-dumping policy of the European Union or is considering an alternative approach towards dumping of products?
G) Will European Union Trade Marks (EUTM) and Registered Community Designs (RCD) be converted into equivalent UK national rights automatically without additional fees? Does the UK Government have a plan for mutually recognition of IP and trademark registrations with the EU?
H) What plans, if any, does the Government have for a UK-EU bilateral agreement on access to Horizon2020 (and follow-up programme) participation and the future programmes post 2020? 78% of survey respondents felt the Government had failed to recognise these programmes and the value of our own UK fashion colleges and the global reputation and reach they add to our growing fashion economy.
I) We would like assurances from the UK Government that they are working on a proposal to allow UK businesses duty draw back to refund the duty paid on imported EU goods.
For an industry worth so much to the UK economy, our needs must be acknowledged, our economic value recognised and our concerns heard.