Urgent Call to Address Brexit's Impact on the UK Fashion Industry
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The Guardian recently published alarming data revealing that UK exports of clothing and footwear to the EU have dived from £7.4bn in 2019 to £2.7bn in 2023. his drastic decline has fueled an 18% drop in non-food goods exports to the EU, largely due to the complex regulations and red tape introduced post-Brexit. Small and medium-sized enterprises (SMEs) are disproportionately affected, facing a larger relative burden compared to multinational firms. booming European e-commerce market, UK brands have been unable to capitalize on this growth due to Brexit-related trade frictions.
The Brexit Impact
Brexit has fundamentally altered the trade landscape for the UK fashion and textiles industry, which was previously the largest of the creative industries, generating more income than automobiles, film, music, and pharmaceuticals combined. The new post-Brexit trade regime has introduced several challenges, including increased costs and delays at the border, additional customs expenses, and fluctuating exchange rates. Our survey earlier this year found that 59% of respondents had been negatively impacted by Brexit, with 77% expecting to feel the effects imminently.
Brands and retailers have faced significant disruption to their supply chains, and the pandemic has only exacerbated Brexit preparation efforts. The fashion and textiles industry, heavily reliant on export revenues and raw materials from abroad, is grappling with the complexities of new regulations. Many UK firms have had to set up distribution centers in the EU to avoid these issues, a costly and time-consuming process that is not feasible for most SMEs.
The impact of these trade frictions is evident in the drastic drop in UK exports to the EU. The Retail Economics and Tradebyte report highlights that many UK firms have had to reorganize their supply chains by setting up offices within the EU to bypass border regulations. This strategic shift, however, has come at a significant cost to UK jobs and skills. For example, a Leicester-based sock-maker moved production to Italy, ending over 100 years of manufacturing in the Midlands.
Fashion Roundtable: Leading the Charge
At Fashion Roundtable, we anticipated these challenges and have been at the forefront of addressing them. Our Brexit Follow-Up Report and continuous advocacy have underscored the urgent need for targeted policy changes to mitigate these detrimental impacts. Here are the key proposals from our extensive research and stakeholder engagement:
Key Proposals from Fashion Roundtable
Reinstatement of the VAT Retail Export Scheme: Boost the economy by an estimated £10bn annually and restore UK brands' competitive edge in the EU market.
Simplification of Visa Requirements for Fashion Creatives: Ensure the free movement of talent to maintain the UK's status as a global fashion hub.
Addressing Rules of Origin Issues: Provide clear guidelines and support to ensure UK products qualify for tariff-free access.
Support for On-Shoring and British Manufacturing: Implement tax incentives and add garment workers to the Shortage Occupation List to bolster domestic production and preserve UK skills.
Easing Trade Frictions: Subsidize or eliminate ATA Carnets for traveling creatives to reduce costs and bureaucratic hurdles.
Fashion Roundtable Ahead of the Curve
Fashion Roundtable has been proactive in addressing these challenges. Our continuous engagement with industry leaders and stakeholders through surveys and roundtable discussions has provided a comprehensive overview of the current landscape and the key challenges faced by UK-based manufacturers. We have been advocating for policies that promote a greener, more sustainable levelling-up agenda and support UK fashion businesses to build back better.
What We Need to See in Manifestos
As we approach the general election, it is imperative that UK political parties prioritize these recommendations in their manifestos. The future of the UK fashion industry is at stake, and bold, strategic policies are essential to navigate the post-Brexit landscape effectively.
Our Call to Action:
Reinstate the VAT Retail Export Scheme and provide clear trade guidelines to boost economic growth.
Simplify visa processes to attract and retain international talent.
Implement robust support for on-shoring and domestic manufacturing to safeguard UK jobs.
Ensure ethical work conditions and establish a Garment Fair Purchasing regulator to protect workers' rights.
Incorporate comprehensive intellectual property protections in all trade deals to secure the industry's future.
Fashion Roundtable remains unwavering in our commitment to advocating for these critical changes. The time for action is now. We must work together to create an industry that not only leads in creativity but also sets the standard for ethical and environmental responsibility.
Let's not let Brexit derail the progress of our fashion industry. We need decisive, forward-thinking policies that will secure a sustainable, inclusive, and resilient future for UK fashion. Join us in this urgent call to action and make your voice heard.