What we'd like to see in tomorrow's Spring budget for fashion and textiles
Image from a recent Fashion Roundtable event at The Design Museum with Kate Hills from Make It British and Sir Chris Bryant MP, Shadow Culture Minister, photo Steve Watson.
Tomorrow marks the announcement of the Spring Budget and what many anticipate to be the last fiscal event before the general election, which we’re pegging for Autumn. As such, this might be the final opportunity for the Conservatives to set policies prior to an election.
After collating both qualitative and quantitative data over recent months, in time to share our Sector Vision in Parliament, we have been advocating for a number of sector recommendations which we have presented cross-party.
Our recommendations encompass many facets of the sector from farming through to academia and are focused on the long-term, however there are two recommendations that we’d like to see taken up immediately in tomorrow’s budget.
The reinstating of the VAT Retail Export Scheme with an estimated economy boost of £11 billion a year according to current data.
On the 31st December 2020, the UK ended its tax-free shopping schemes for non-EU visitors and did not extend the schemes to EU visitors after the UK left the EU. With the cost-of-living crisis and lack of overseas visitors, due to the VAT Retail Export Scheme, the UK is being overlooked and places such as Paris are now being chosen to open Flagship stores, leaving the UK lagging behind in its ability to create a competitive marketplace. One such casualty is British accessory business, Mulberry, who closed its iconic Bond Street store after 27 years, citing the abolition of the VAT-free shopping scheme.
Data supplied in a roundtable by Sylvie Freund-Pickavance who is the Global Strategy and Business Development Director at Value Retail / The Bicester Collection highlighted that this is a key opportunity for luxury fashion in the UK as this will help the segment by reinstating the VAT res offer to non-EU tourists and extending it to EU tourists.
Sylvie highlighted that the luxury sector in the UK was worth £48bn to the economy in 2019, and 156,000 direct jobs.
Sylvie highlighted that the GDP in 2023 could have been £11.1bn higher according to a CEBR Jan 2024 study.
Recommendation:
The Government should back down on its refusal to reinstate VAT-free shopping for international tourists.
Tax Incentives for Sustainable Businesses
The scope for incentivising businesses to onshore their production and manufacturing in the UK, while simultaneously combining this opportunity with the Government’s ambitions to drive innovation and the UK towards net zero, and more environmentally visionary objectives, is extremely compelling. It would provide the UK with a tangible opportunity to show real global leadership post COP26. The UK excels at green tech innovation and sustainability. Adding incentives to support this will boost opportunities for inward investment, growth and support the levelling up agenda across the country.
The European Clothing Action Plan (ECAP) released a report in 2017 aimed at creating a circular approach to the procurement of workwear. The report showed that in 2015 across Europe there was over €8.6 billion of public sector textile and workwear procurement, equivalent to around 93,000 tonnes of workwear consumption. The report suggested that economic incentives such as lower Value Added Tax (VAT) rates were seen as a progressive form of fiscal incentives and when combined with Extended Producer Responsibility (EPR) policies, had the ability to extend as an instrument to encourage greater uptake of greater circularity through stewardship, particularly in closed-loop systems. France and the Netherlands had particularly good uptakes of public procurement in this space.
The UK’s film industry has previously benefited from the Government’s decision to offer tax incentives for productions making all, or a part of their film production here. In 2019, the tax relief-supported screen sectors resulted in £13.48bn in GVA) for the UK economy and generated 156,030 full-time equivalent (FTE) jobs. Primarily because of this, we have seen on-going inward investment, with key global players choosing the UK to headquarter their operations and build new studios, employing a wealth of workers. Incentives clearly work and given the scope for the UK to lead on the global drive toward sustainability and green innovation, we hope that the Government will look closely at these opportunities and appreciate this is a tangible and lucrative opportunity.
Further, Sweden has introduced a VAT reduction from 25% to 12% on the repair of goods, including clothes, to stimulate the repair industry and reduce the amount of waste. In July 2021, the EU imposed a border VAT applicable to all goods imported to the EU. Implications could include a reduction in consumption of fast fashion products that are produced abroad where environmental and labour regulations are more lax.
Recommendation:
Tax incentives for B Corps and companies with proven positive social and environmental contributions who commit to manufacture in the UK (c.f. The tax incentives enjoyed by HETV and film who make scripted productions in the UK).
From the front row: Our Fashion Director Karen Binns attends Paris Fashion Week
Karen Binns, Fashion Roundtable’s Fashion Director loved the Vivienne Westwood AW24 show at PFW. She loved the reference to the countryside and its culture and felt that the shoulder pads and draped atmosphere connected with Vivienne herself.
Is regenerative fashion possible? Designer Harriet Fletcher-Gilhuys unpacks
Designer Harriet Fletcher-Gilhuys attended last week’s Conduit event: ‘Is Regenerative Fashion Possible?’ supported by the Farmer’s Footprint. Here she delves into the complexities and explores the panellists discussion exploring the transition to a fashion system that ultimately sets out to benefit nature and society.
Whitepaper: Filtration as an effective and near-term solution to reduce the release of microplastics in the environment
The United Kingdom has already taken major steps to reduce plastic pollution. Despite this progress, the potential environmental impacts of all plastic pollution, including microplastics, remain a source of concern. MP Alberto Costa has proposed a Microplastic Filters (Washing Machine) Bill that would require manufacturers to install microplastic-catching filters in new domestic and commercial washing machines. Click through below for more.
The Great Fashion Share
Teachers do not require previous knowledge of the fashion industry to conduct these lessons, as the resources include all the necessary information for them. These enquiries encourage students to explore the lifecycle of clothing and understand fashion's environmental consequences. Specifically:
Ages 5-7 will investigate the materials our clothes are made from and why.
Ages 7-11 will examine how various materials decompose and their environmental effects.
Ages 11-14 will explore greenwashing and assess the reliability of published information regarding sustainable fashion.
EAC publishes BBC Panorama correspondence following its programme on ‘Boohoo’s Broken Promises’
Photo by J Williams on Unsplash. Black and white photo of sewing machine stitching denim.
Last week, the Environmental Audit Committee (EAC) published a letter from Leo Telling, Executive Producer at BBC Panorama, following its programme ‘Boohoo’s Broken Promises’, broadcast on 6 November 2023.
In January, the EAC published a letter from the Chief Executive of Boohoo Group plc, John Lyttle, in response to the BBC Panorama programme, and a subsequent response from EAC Chair, Rt Hon Philip Dunne MP.
The letter from Mr Telling makes observations on several points raised by Mr Lyttle in his letter to the Committee including clear timestamps in relation to the programme.