The Fashion Industry After Brexit
Overview
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.
To put this figure in context, 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 automotive industry 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 - a few billion short of fashion.
In terms of trade, the EU was the UK’s biggest export market for the fashion sector, accounting for approximately 80% of UK textiles and design exports annually.
Yet, the fashion sector has not been widely considered an industry of national importance throughout Brexit and other trade negotiations. This is inexplicable and inexcusable.
Beyond the industry’s direct economic contribution to the economy, 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. In fashion retail, approximately 120,000 EU nationals are employed in the industry and fashion employs a high percentage of EU workers.
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 the international audience. According to a report from the Centre for Economics and Business Research, a Government plan to end the 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%, and result in an estimated total decrease in spending by tourists by up to £1.8 billion.
The independent Office for Budget Responsibility notes that this decision could prove costly for the fashion sector: “there will also be costs as the UK become less attractive for affected tourists relative to alternative EU destinations such as Paris or Milan”.
Overall, the international nature of fashion means that Brexit will prove challenging for those operating within this highly lucrative but vulnerable sector.
How can the Government best support the fashion industry post-Brexit?
Add garment workers to the Shortage Occupation List;
Reinstate the VAT Retail Export Scheme;
Reconsider visa requirements for fashion creatives;
Support greater onshoring of textile manufacturing;
Put sustainability at the forefront of trade negotiations;
Build a strong IP framework into all trade deals;
Maintain workers rights;
Subsidise or scrap ‘passports for goods’ or carnets;
Make creative visas available that are similar to or better than the US O-1 Visas;
Bring forward the introduction of the Craft and Design T-Level in order to top up the shortage of technically skilled workers after Brexit;
Reconsider its decision to leave the Erasmus programme.
Fashion Roundtable’s Brexit and the Impact on the Fashion Industry paper, 2018.