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UK Fashion Industry

Volume 814: debated on Wednesday 13 October 2021


Asked by

To ask Her Majesty’s Government what support, if any, they intend to provide to the United Kingdom fashion industry, in particular to support its work in European Union member states.

My Lords, the Government are fully committed to supporting our world-leading fashion industry. We are operating export helplines, running online seminars with policy experts and offering business support through a network of 300 international trade advisers. We are also investing millions of pounds in customs intermediaries and have launched the export support service for UK businesses. We engage closely with the fashion industry, including through the DCMS-led working group on touring, to support the sector to extend its international impact.

My Lords, I welcome the noble Lord to his new post. The fashion industry is hugely valuable culturally and economically, yet it faces serious Brexit-related concerns in manufacturing—garment workers should be added to the shortage occupation list—the debilitating cost and red tape of importing materials and exporting goods, and immobility. With visas, work permits, carnets and cabotage, it shares many of the same problems as the music industry. Is the Minister aware that there are now real difficulties getting models to shoots in Europe, the most valuable market, fast enough? How are the Government addressing this multiplicity of concerns, knowing that freelancers and smaller companies will be the first to suffer?

The DCMS-led working group is addressing the multiplicity of issues which the noble Earl mentions. The shortage occupation list is of course a matter for the independent Migration Advisory Committee. When it last looked at this, it found that occupations in garment manufacturing did not warrant inclusion, but it will be for that body to keep that under review. The working group on touring includes representatives from across the creative sectors, including the chief executive of the British Fashion Council. We have addressed a number of the sector’s concerns already, such as by confirming that fashion professionals from the UK will not be double-charged for social security contributions, but that engagement and work continues.

My Lords, the challenges of Brexit for the fashion sector and the wider creative industries have been clearly enumerated in my noble friend’s Question, but we are repeatedly told that the agreement is a done deal and that unpicking one part would unravel the rest—ironically, an image drawn from fashion. Can the Minister explain why it is now possible for government to demand changes to one part of the UK’s agreement with the EU but not possible to reopen a considerably less contentious part and thereby protect the contribution of the creative sectors to UK jobs and to economic success?

My Lords, the European Union was very clear in its negotiations and, alas, did not accept the proposals which the UK put forward during them. That is why we are discussing bilaterally with member states these matters and the implications which she and the noble Earl mentioned and providing as much clarity as we can to the industry, including through specific landing pages on GOV.UK to help it navigate the new arrangements.

My Lords, people working in the fashion sector, as in the creative industries more generally, often have irregular working patterns. Do the Government appreciate that and how have they taken this into account in the visa rules they apply to people working in these important fields?

My noble friend makes an important point. On Monday, we launched a dedicated temporary worker route for creative workers, meaning that creative and sporting workers are no longer grouped together in one immigration route. The temporary work route permits a gap of up to 14 days between engagements. In April, the Home Office introduced a mechanism to stop the clock when calculating that 14-day period, so that any time spent outside the UK is not counted towards it. That new arrangement better reflects the working practices of people in the creative sector and, I am glad to say, has been well received.

My Lords, the Government were silent on the impact of Brexit on UK services. The sin of omission means that service professionals were not given the full picture. The fashion industry is worth £35 billion and has been seriously impacted, as outlined by the noble Earl, Lord Clancarty. Will the Government try to reach an agreement or a declaration with the EU on visa waivers? As has been said by the noble Baroness, Lady Bull, this would not require a renegotiation of the TCA. Finally, will the Government get a move on with creating craft and design T-level courses to help fill the thousands of vacancies at UK factories?

Regrettably, my Lords, we do not believe that a visa waiver is viable. During the negotiations last year, the European Commission argued that EU-wide visa arrangements would have to include binding non-discrimination clauses committing us to waiving visit visas for current and future member states of the EU, which is not compatible with the commitment in the manifesto, on which the Government were elected, to take back control of our borders. Of course, our new immigration system allows us to have and to continue our very generous offer to people working in the creative industries from all around the world—they are very welcome here in the UK.

On T-levels, I am pleased to say that the content for the craft and design T-level has been developed by employers. The appointed awarding organisation is now developing the technical qualifications and assessments, and it will be available for first teaching from September 2023.

My Lords, I too congratulate the Minister on his appointment. He will be well aware that the Government are currently considering introducing an international rather than a national intellectual property exhaustion scheme. Many of our very successful exporting creative industries, including fashion, believe that this move could be devastating, some even describing it as an existential threat. Do the Government share their concerns?

Sadly, the negotiated outcome which the UK proposed with the EU was not something it was willing to agree in the negotiations before we left the European Union, but the Intellectual Property Office is considering concerns such as those which the noble Lord raises to see whether any changes can be made to the UK’s design systems to address the issue in the future.

My Lords, I echo the congratulations offered to my noble friend on his new appointment on the Front Bench. We look forward to seeing him on the front row of many fashion shows at London Fashion Week next week, where he will be an adornment and perhaps even a distraction.

My noble friend will know that many highly successful domestic fashion companies manufacture in this country. They depend on high-net worth foreign individuals coming here and buying their stock. They used to come here because they could reclaim their VAT. The Chancellor has of course got rid of this scheme. Will my noble friend brief himself on the impact this has had on domestic fashion companies and keep engaged with the Treasury, as does our Business Secretary, on this important issue as it develops?

I thank my noble friend for his warm words of welcome. He knows better than most how lucky I am to have the job I have just begun.

The issue of VAT is one that my noble friend has campaigned on, both in your Lordships’ House and in another place. We did not have the choice of maintaining the VAT retail export scheme as it was; the choice was between extending it to EU residents, at significant cost to the UK taxpayer, or removing it completely as WTO rules mean that goods bound for different destinations must be treated the same. I will of course look into this further, as he suggests, but my understanding is that fewer than 10% of visitors to the UK use the VAT retail export scheme and that extending it to the EU could increase total costs by up to £1.4 billion a year.

My Lords, following on from the question from the noble Lord, Lord Vaizey, would the Minister inquire whether it was the ability of HMRC to deal with the extra paperwork that it felt would be generated by extending the scheme that actually put paid to it, and whether that is why 40,000 jobs are under potential threat?

I will certainly follow up with HMRC the point that the noble Baroness raises. I should add that tax-free shopping is still available in store when goods are posted to overseas addresses. People can still avail themselves of that.

My Lords, I welcome the Minister to his place and wish him all the very best. While the fashion and textile industry is a leading contributor to our economy, an engine room for jobs and a standard-bearer for British style and reputation, one could be forgiven for thinking it has been overlooked. Following the warning issued by ASOS and others about the impact of supply chain issues, how would the Minister ensure urgent support to the industry to overcome HGV driver and skilled worker shortages? Looking to the future, what plans are there for a major skills boost, so that we can see more and better clothing made for sale both here and abroad?

The sector certainly has not been forgotten. We continue to work very closely with the fashion industry to understand the challenges it faces and to identify new opportunities to develop it. It is a world-leading sector, of which we are very proud. I mentioned the working group which includes the chief executive of the British Fashion Council; that is just one of many ways we have engaged with the sector. My noble friend Lord Frost chaired the Brexit business task force on fashion and textiles in May, we have two trade advisory groups from DIT, and we have hosted a number of online seminars. We continue to engage with the industry, and I look forward to working with the noble Baroness and others as we do so.