Theresa May is on a collision course with the fashion industry over her Brexit plans, with emerging British brands fearing a “doomsday scenario” despite the Prime Minister’s Chequers compromise.
The Vogue-reading PM is preparing to host a drinks reception at Downing Street for leading designers on Tuesday afternoon as part of London Fashion Week.
But disquiet among fashion chiefs about the prospect of a no deal Brexit is growing, with many ambitious design houses concerned their ability to hire talent, travel and import high-quality textiles would be hampered.
Small luxury fashion labels face “a doomsday scenario”, some believe, while a Creative Industries Federation survey said 74% of its members fear restricting immigration will hit business prospects.
Helen Brocklebank, chief executive of Walpole, the luxury goods trade body, which represents British brands such as Burberry and Mulberry, told HuffPost UK she is “deeply worried about the next six months”, as the government enters the final stages of negotiation with Brussels.
The government is also guilty of a “persistent lack of clarity” and May’s Chequers deal would not stop up-and-coming fashion firms from going to the wall, Brocklebank added.
“Large UK luxury fashion businesses have the bandwidth to do scenario planning and some have moved distribution centres to Europe, for example, but this isn’t the case for the emerging luxury fashion businesses who don’t have the resources to do that kind of planning,” she said.
“A hard no deal Brexit would deliver a fatal blow to the smaller, entrepreneurial luxury fashion houses whose margins are typically too narrow to survive the financial impact of WTO [World Trade Organisation] tariffs when importing raw materials or finished product from Europe and then exporting it out again.”
Should Brussels sign up to a deal close to May’s Chequers plan, the UK would be part of a customs arrangement with the bloc and a common rule book on goods.
But the blueprint does not go far enough on ease of trade, Brocklebank said.
“Even the Chequers deal is small comfort to businesses for whom the administrative burden of a more complex customs process combined with the increased cost of materials purchased in Euros but sold in pounds looks untenable,” the fashion chief added.
Brocklebank said products made in Britain are “increasingly important to a millennial customer”, and added: “But the best quality raw materials – textiles, leather and so on – are imported from Europe.
“The huge decline in the value of sterling has made buying from Europe hugely expensive – if hard Brexit adds tariffs and additional customs costs, plus the risks of not being able to fulfil orders if goods get stuck at borders to a poor exchange rate, you potentially have a doomsday scenario for the smaller businesses which are the signature of creative Britain.”
Adam Mansell, chief executive of the UK Fashion and Textile Association, which represents a wide range of design brands and outlets, shared Brocklebank’s concerns.
“All of the industry needs clarity on the way forward,” he told HuffPost. “While we are interested in the opportunities for trade deals with markets such as the USA, 74% of our fashion and textile exports goes to the EU, so it is vital that we get a trade deal with zero tariffs and very simple border controls.”
Mansell said small businesses need access to EU talent “from designers to models and students to seamstresses”.
He added: “Our industry is dominated by micro businesses employing less than 10 people and we need the government to help ensure that that the amazing creativity and innovation of these companies is supported.”
The creative sector - which includes advertising, architecture, art, design, fashion, film, music and gaming – is responsible for one in 11 jobs.
It is worth £92bn to the UK economy – more than oil and gas, life sciences, automotive and aerospace industries combined.
Samuel Young, deputy head of policy at the Creative Industries Federation, made a direct appeal to ministers over easing immigration rules.
“The creative industries will desperately need a post-Brexit immigration system that guarantees them similar flexibility and ease of movement that exists today,” he said.
“The end of freedom of movement poses a huge risk to this crucial sector, as losing access to important international talent will seriously harm our ability to produce the work that makes the UK’s creative industries truly world-leading.
“We stress the importance that UK government ensure the ease of movement of international talent, ensure creative industries can bring in international workers on both a short-term and permanent basis, ensure reciprocal access to the EU for UK talent and ensure creative freelancers from across Europe and internationally can set up in the UK.
“In the event of a ‘no deal’ or ‘bad deal’ Brexit, coupled with the UK’s highly restrictive non-EU immigration system, the necessary talent stream would be dramatically reduced and exacerbate our already-existing domestic skills shortages.”
On Tuesday, ministers were told EU citizens should not be given preferential treatment in a post-Brexit immigration system by the Migration Advisory Committee.
But in its long-awaited report, order by former home secretary Amber Rudd, the committee said it should be made easier for high-skilled workers to move to the UK.
Responding to the criticism from designers, a government spokesman said trade ministers were aiming to boost fashion exports.
“We are committed to supporting the thriving UK fashion industry to ensure it continues to go from strength to strength through Brexit and beyond,” he added.
“We have already expanded our exceptional talent visa to fashion industry applicants and are establishing a new creative industries Trade and Investment Board with the goal of boosting exports by 50% by 2023.
“Our proposal for our future relationship with the EU would preserve the UK’s and the EU’s frictionless access to each other’s markets for goods, protecting jobs and livelihoods on both sides. It would also see the UK step out into the world, driving forward an independent trade policy by striking trade deals with new friends and old allies.”
The government said it has “always been clear” that it would continue to welcome “the brightest and best talent to the UK”.