GENERAL ELECTION: SPECIAL EDITION NEWSLETTER
Credit: Dan Kitwood
Our policy researcher at Fashion Roundtable, Michelle Kazi, provides an in-depth overview of Labour’s proposed policies and their potential impact on the fashion industry. Below is an analysis of what to expect from the new government, including insights from Sir Keir Starmer’s first speech as Prime Minister.
In an unprecedented landslide victory, Labour has clinched 412 seats in the General Election, ushering in Keir Starmer as Prime Minister. With Rachel Reeves as Chancellor and Lisa Nandy as Secretary of State for Digital, Culture, Media and Sport (DCMS), this new administration brings hope and anticipation for transformative changes across the UK’s fashion and creative sectors.
Stood on the steps of Number 10 for the first time as Prime Minister, Sir Keir Starmer delivered a poignant and unifying speech, acknowledging the nation's "lack of trust" in politics and promising a government that will put "country first, party second." Starmer expressed gratitude for the outgoing Prime Minister, Rishi Sunak, recognising his historic achievement as the first British Asian Prime Minister and his dedication to leadership. Starmer emphasized that the country's decisive vote for change signals a desire for national renewal and a return to politics as a force for public service.
In his address, Starmer highlighted the widening gap between the sacrifices made by the public and the service received from politicians, leading to national weariness and a loss of hope. He pledged that his government would work tirelessly to rebuild trust through actions, not words, and to serve all citizens with respect, regardless of their political affiliation. Emphasizing the need for a "bigger reset" and a rediscovery of the nation's strengths, Starmer committed to addressing the challenges facing nurses, builders, drivers, and carers, promising that their lives would no longer be ignored. He assured the public that his government would begin the urgent work of change immediately, with a focus on rebuilding Britain, securing the NHS, and creating opportunities for all.
Market Reaction: Stability and Optimism
Labour’s landslide win has elicited a notably positive response from the financial markets. UK stocks, bonds, and sterling edged higher following the election, reflecting investor confidence in the prospect of a period of political stability. The calm in Britain’s financial markets contrasts sharply with the turmoil seen elsewhere in Europe, particularly in France, where political uncertainty has spooked investors.
The pound, notably the only G10 currency to rise against the dollar this year, further strengthened in the wake of Labour’s victory. Analysts attribute this to a growing belief that Keir Starmer’s resounding win signals an end to the political volatility that has plagued the UK since the Brexit referendum. This newfound stability is expected to make UK assets more attractive to investors, with many viewing the country as a political safe haven amidst global uncertainties.
Lindsay James, an investment strategist at Quilter Investors, commented, “With political turmoil hitting other developed economies at the same time, this huge majority may present the UK to investors as somewhat of a political safe haven — a known quantity that should give businesses confidence in the environment they operate in.” This sentiment is echoed by Vivek Paul, UK chief investment strategist at the BlackRock Investment Institute, who noted that the substantial majority increases the likelihood of a two-term government, enabling long-term policy implementation.
Economic Measures: A Foundation for Growth
Labour’s economic strategy, cantered around the establishment of a National Wealth Fund with £7.3 billion, is designed to support growth and clean energy missions. This fund aims to attract private investment, with a target of three pounds of private investment for every pound of public funding. The focus on green energy and infrastructure projects promises to drive job creation and sustainable economic development, providing a fertile ground for the fashion industry to thrive, particularly in areas of sustainable fashion and eco-friendly manufacturing practices.
Labour’s plan to boost investment from pension funds in UK markets further solidifies their commitment to economic stability and growth. By ensuring that pension schemes are geared towards productive investments, the government aims to channel substantial financial resources into sectors like fashion, where innovation and sustainability are paramount. This initiative is expected to provide the necessary capital for fashion businesses to scale up their operations, invest in new technologies, and enhance their global competitiveness.
Industrial Strategy: Creative Industries at the Forefront
Labour’s mission-driven industrial strategy places a significant emphasis on the creative industries, recognizing their potential to drive economic growth and innovation. The formation of the Industrial Strategy Council, tasked with providing expert advice and ensuring that industrial policies are aligned with long-term economic goals, marks a pivotal step towards a more structured and strategic approach to industrial development.
The creative industries sector plan, a key component of this strategy, promises to unlock numerous opportunities for collaboration, funding, and innovation within the fashion sector. By providing targeted support to fashion designers, manufacturers, and retailers, Labour aims to foster a vibrant ecosystem where creativity and commerce can flourish. This initiative is expected to generate thousands of jobs, stimulate economic activity, and position the UK as a global leader in fashion innovation.
Furthermore, Labour’s commitment to reducing energy costs and decarbonizing industries through policies like the carbon border adjustment mechanism will have a profound impact on the fashion industry. By incentivizing the adoption of sustainable practices and technologies, these policies will help fashion businesses reduce their carbon footprint, enhance their environmental credentials, and meet the growing consumer demand for eco-friendly products.
Education and Skills: Cultivating Future Talent
Labour’s focus on education and skills development is integral to their vision for a thriving creative economy. The introduction of free breakfast clubs in primary schools and the recruitment of 6,500 new teachers in shortage subjects underscore Labour’s commitment to ensuring that every child has access to high-quality education. This initiative is crucial for nurturing the next generation of creative talent, providing young people with the skills and knowledge they need to succeed in the fashion industry and beyond.
In addition to primary education, Labour’s plans to enhance arts and music education will play a vital role in cultivating future talent. By ensuring that creative subjects are accessible to all students, regardless of their background, Labour aims to create a diverse and inclusive pipeline of talent for the fashion and creative industries. This focus on education and skills development is expected to drive innovation, enhance the UK’s creative workforce, and support the long-term growth of the fashion sector.
Climate Action: Leading the Way in Sustainability
Labour’s ambitious climate action plan, including the introduction of a carbon border adjustment mechanism and the implementation of the Warm Homes Plan, underscores their commitment to sustainability. These initiatives are designed to reduce the UK’s carbon emissions, promote green technologies, and create a more sustainable economy.
For the fashion industry, Labour’s climate policies present significant opportunities and challenges. The carbon border adjustment mechanism, which imposes tariffs on carbon-intensive imports, is expected to drive the adoption of more sustainable practices and materials within the fashion sector. By incentivizing the use of eco-friendly materials and production processes, Labour aims to reduce the environmental impact of the fashion industry and promote a circular economy.
The Warm Homes Plan, which focuses on upgrading homes to improve energy efficiency, will also have a positive impact on the fashion industry. By reducing energy costs and promoting sustainable living, this initiative will support the development of eco-friendly fashion products and services. Additionally, the plan’s emphasis on green finance and regulatory frameworks will provide the necessary support for fashion businesses to invest in sustainable technologies and practices.
Housing Development: Building for the Future
Labour’s commitment to addressing the housing crisis is evident in their plan to build 1.5 million new homes and update the National Policy Planning Framework. By restoring mandatory housing targets and supporting local authorities with additional planning officers, Labour aims to ensure that everyone has access to affordable and quality housing.
The immediate update to the National Policy Planning Framework and the focus on brownfield-first development will not only address the housing shortage but also support the creative workforce. Improved infrastructure and affordable housing are essential for attracting and retaining talent within the fashion industry. By ensuring that planning authorities are well-resourced, Labour’s policies will facilitate the development of vibrant, creative communities.
Public Services: Strengthening the Foundation
Labour’s plans to address recruitment and retention in public services, particularly in the NHS, are crucial for the overall well-being of the creative workforce. The implementation of new Regional Improvement Teams to support schools will enhance the quality of education and ensure that all students have access to high-quality learning opportunities.
For the fashion industry, a strong public health system and quality education are essential for maintaining a healthy and productive workforce. By addressing the challenges faced by public services, Labour aims to create an environment where creativity and innovation can thrive, supporting the long-term growth and success of the fashion sector.
Impact on the Fashion Industry
Labour’s economic and trade policies are poised to have a transformative impact on the fashion industry. By aligning procurement and trade policies with industrial strategy priorities, Labour aims to support innovation and growth within the sector. This alignment is expected to enhance the competitiveness of British fashion manufacturers on the global stage, driving exports and creating new market opportunities.
The creative industries sector plan promises direct support for the fashion industry, fostering collaboration, funding, and innovation. This initiative will enable fashion businesses to access new markets, develop cutting-edge products, and enhance their global reach. By providing targeted support to designers, manufacturers, and retailers, Labour aims to create a vibrant and dynamic fashion ecosystem.
Labour’s sustainability initiatives, including the carbon border adjustment mechanism and green finance regulations, will drive the fashion industry towards more eco-friendly practices. By promoting the use of sustainable materials and production processes, these policies will help fashion businesses reduce their environmental impact and meet the growing consumer demand for sustainable products.
Impact on the Wider Creative Industry
Labour’s creative industries sector plan is expected to create numerous jobs across film, music, gaming, and other creative sectors. By fostering economic growth and innovation, this plan will support the development of a vibrant and dynamic creative economy, driving job creation and enhancing the UK’s global competitiveness.
Ensuring access to arts and music education is a key component of Labour’s strategy to cultivate future talent. By providing high-quality education and training in creative subjects, Labour aims to ensure that the creative industries have a skilled and diverse workforce. This focus on education and access is expected to drive innovation, enhance the creative workforce, and support the long-term growth of the creative sector.
Labour’s commitment to improving access to cultural assets and launching a National Music Education Network will support broader cultural engagement and development. By increasing loans from publicly funded national museums and galleries, Labour aims to enhance the cultural landscape and provide new opportunities for creative expression.
Constructive work with public service broadcasters like the BBC to support the creative economy is also a key component of Labour’s strategy. By commissioning distinctively British content, Labour aims to promote cultural diversity and enhance the global reputation of the UK’s creative industries. This initiative is expected to benefit the broader creative sector, driving innovation and supporting the development of high-quality content.
Fashion Roundtable’s Perspective
At Fashion Roundtable, we see Labour’s victory as a pivotal moment for the UK’s fashion and creative industries. As the only think tank dedicated to reimagining a responsible, inclusive, and sustainable industry, we are heartened by the alignment of Labour’s policies with our core values. The new administration’s focus on long-term economic stability, education, environmental sustainability, and public health offers a promising pathway to a thriving creative economy.
Fashion Roundtable congratulates the Labour Party on their historic victory, securing 412 seats in the General Election. We look forward to collaborating with Prime Minister Keir Starmer, Chancellor Rachel Reeves, and Secretary of State for Digital, Culture, Media and Sport Lisa Nandy to drive forward our shared vision for a sustainable, inclusive, and thriving fashion industry.
Key Proposals from Fashion Roundtable's Sector Vision Report
Movement and Trade: We advocate for restriction-free movement for UK talent in Europe and reduced red tape for the transportation of goods between the UK and EU. This is crucial for maintaining the competitiveness and fluidity of our industry post-Brexit.
Sustainability and EPR: We support the UK’s commitment to Extended Producer Responsibility (EPR) to transition the fashion industry's annual carbon footprint of 3.3 billion tonnes CO2e to net zero by 2050. This includes incentivizing sustainable practices and providing additional support for UK businesses exporting to the EU.
VAT Retail Export Scheme: Reinstating the VAT Retail Export Scheme could boost the economy by an estimated £10 billion annually. This would make the UK a more attractive destination for international shoppers and support the retail sector.
Regenerating High Streets: Proposals include amending Section 172 of the Companies Act to ensure businesses protect workers, customers, and the environment, and tackling vacancies to support local businesses and communities.
On-shoring and Public Procurement: Greater support for on-shoring and a commitment to British-made products are essential. This includes adding garment workers to the Shortage Occupation List and encouraging local procurement for workwear.
Decent Work for Garment Workers: We call for the creation of a single enforcement body for worker rights, mandatory human rights due diligence, and the establishment of a Garment Fair Purchasing regulator to ensure ethical practices.
STEAM Education and Inclusivity: Returning to a STEAM curriculum, supporting initiatives for working-class individuals to access creative industries, and improving inclusivity in the fashion sector are pivotal. This includes specific support for people with disabilities and more comprehensive data on their employment within the sector.
Artificial Intelligence and IP: Developing a robust policy framework for AI, ensuring transparency, and protecting creative intellectual property are crucial steps to safeguard the future of the fashion industry.
Food and Fibre Sovereignty: Strengthening government procurement rules to prioritize healthy, sustainable food and fibre, and supporting regenerative farming practices, are essential for a resilient local economy.
Creative Wellbeing Economy: Promoting access to meaningful and rewarding work, valuing craft and creativity, and supporting community and inclusivity are key to a thriving creative economy.
We are excited to work closely with the new government to implement these recommendations and ensure the UK fashion industry remains a global leader in innovation, sustainability, and inclusivity.