Our Response To The Brexit White Paper From The UK Government.

A key element of the Prime Minister's Chequers Brexit strategy was to wrap up dialogue quickly before the weekend, to prevent elongated Parliamentary analysis taking place. Similarly, the White Paper supporting the discussions was released less than a week after the discussions and was issued only minutes before DExEU questions. Videos of panicked opposition MPs running in with boxes full of papers from the vote office, during the questions session, gives a good visualisation of the degree of Parliamentary scrutiny currently undertaken.

The principle area of contention emerging from the White Paper is the 'common rulebook' component, on certain primary sectors of the economy. The paper also suggests close alignment on goods, not services. This could translate into a far more 'business-as-usual' experience for fashion buyers and retailers although the impact on services like photography, styling, designing and fashion consultancy is more unclear. The response from the City of London has been direct and the deal does not appear to guarantee protection for the most valuable components of the economy. 

Operating under small margins already, this could be particularly damaging for the services focused component of the fashion industry. Our analysis detailed in our Brexit Report, in conjunction with Assay Corporate Finance places the risk to fashion of a Hard Brexit at 38% loss to GDP, or equivalent to £10bn lost each year to the UK economy. Added to this, the White Paper once again reinforces the UK's stance of moving away from freedom of movement.

The fallout from this White Paper has largely been realised, MPs voted 307 to 301 to overturn the rebel amendment to the trade bill under which Britain would be forced to join a customs union with the EU if no agreement were reached on frictionless trade by 21 January 2019. Twelve Tory remainers, backed the proposal, which they claimed offered a safeguard in the event of there being no trade agreement with the EU in the run-up to Brexit on 29th March. Sources claimed more Tory MPs would have rebelled if government whips had not threatened to pull the third reading of the bill and table a no confidence vote in May themselves if the vote was lost, raising the spectre of a general election. Since the announcement of the White Paper, at least one member of the Government has resigned each day, although the most significant resignations took place in bulk last Monday. This is an ongoing threat and correlates with the threat of the 1922 Committee's (the governing body of the Conservative Party) letters of no confidence.

The greatest unknown remains however, as it is likely the EU will not accept the terms of the Chequers proposal, having clearly stated previously that they would not accept piecemeal access to the Single Market - you are either in or you are out. Tony Blair recently described the proposal as the worst of both worlds, as Leavers and Remainers unite in their opposition to the proposal. The next week will prove deeply insightful, as negotiations resume again under the new steer of Dominic Raab. The only certainty we have at the moment is that all current proposals contain major areas of concern for the Fashion industry, once again reinforcing our decision to enter the role Fashion Roundtable now fulfil.