BFC urges PM to avoid hard Brexit, could cost industry up to £900m

By

Sandra Halliday

Published
Sep 2, 2019

The British Fashion Council (BFC) on Monday issued a strongly worded plea to the government to avoid a no-deal Brexit, outlining the downsides that would be the result if the UK’s trade with the EU (and with other countries with which Britain has had EU-brokered trade deals) were to be disrupted.

The BFC “continues to emphasise that a no-deal Brexit is a scenario that should be avoided,” it said, adding that based on export figures from 2018, “it is estimated that switching to World Trade Organisation (WTO) rules would cost the fashion industry between £850 million and £900 million,” according to figures from the UK Fashion & Textile Association.

“The UK leads the world in creativity, innovation and business and we need to retain this reputation,” it said. “As an industry worth £32 billion to UK GDP and employing more than 890,000 people – almost as many as the financial sector,” it urged the government to do everything it can to achieve a deal.

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But with the worst-case-scenario still a possibility, ahead of this month’s London Fashion Week, the BFC held a seminar for designers specifically around preparing for a no-deal Brexit, helping them identify the risks and challenges to their business and help them prepare for WTO rules in the event of no deal being reached October 31.

The BFC also said Monday that its main concerns around the impact of Brexit on designer businesses are centred around trade and talent.

“Fashion SMEs are international from day one, with first sales often taking place outside of the UK,” it explained, focusing on trade. “Driven by the need to achieve high artistry and creative pieces, designers adopt a global approach in all elements of their business; from sourcing the perfect fabric, through to finding the best pattern cutter in the world to work with that fabric.

“Fashion is component goods which traverse borders multiple times before becoming a finished product, and in order to sell, samples are taken during [the] selling season to a variety of international markets and shows. This adds a level of complexity not dissimilar to other component goods industries such as the automotive industry.”

And that means a long list of complications, extra costs, additional and unexpected paperwork, logistics issues, and the need to claim VAT across 27 different countries rather than via the EU as a whole.

As far as talent is concerned, the BFC said it has been working with the Home Office to tackle existing known immigration issues. But despite having secured “a new route for exceptionally talented designers and fashion sector individuals to work in the UK,” and other  concessions for models, proposed changes to the immigration system “would not cover skilled, lower paid workers from machinists, to language experts, leaving concerns about skills gaps for the industry.”

It said that “of particular concern is the recommendation that the Tier 2 visa has a £30,000 minimum threshold on salary, with skilled roles in fashion manufacturing typically earning less than this. Similarly, the shortage occupation list does not cover any roles required by the high-end fashion industry. The BFC asks that the salary threshold and shortage occupation list are reviewed as a matter of urgency.”