Skepticism and promises of stability: Can the governments please the UK and France fashion industry, amidst the 2024 elections?

The very real prospect of a far-right government coming to power has shaken France, including the key players in the fashion industry, who are trying, so far without success, to form a unified stance.

Marine Le Pen’s far-right National Rally (RN) party led the first round of?France’s?parliamentary elections (June 30-July 7, 2024), taking it closer to the gates of power than ever before.

After an unusually high turnout, the RN bloc clinched 35.15% of the vote, while left-wing New Popular Front (NFP) coalition came second with 27.99% and President Emmanuel Macron’s Ensemble alliance slumped to a dismal third with 20.76%, according to final results published by the Interior Ministry.

The UK general election on July 4, 2024, has come at a crucial time for the fashion industry.?Globally, but particularly in the UK, market conditions remain tough for the fashion businesses. They face challenges of new trading relationships with suppliers and customers in Europe. Rebuilding businesses after the shock of the pandemic is another factor for consideration. While promoting responsible growth, they are striving to promote independent British businesses, in a global market, which is experiencing a great deal of uncertainty.?

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Why the France fashion industry fears impact of the far right, during the elections?

The French fashion industry, like many other sectors, fears the impact of the far right during elections for several reasons, enlisted here:

1. Economic uncertainty: Far-right policies often advocate for protectionist measures and economic nationalism. This could lead to trade barriers, tariffs, or restrictions on international trade, which would directly impact the fashion industry that relies heavily on global supply chains and markets.
2. Cultural and social policies: Far-right platforms may promote conservative cultural values and policies that could affect the fashion industry's freedom of expression and creativity. This could include restrictions on certain types of fashion or artistic expressions that do not align with their ideologies.
3. Diversity and inclusivity: The far right may have policies that are perceived as less supportive of diversity and inclusivity. The French fashion industry prides itself on diversity in design, models, and cultural influences. Policies that undermine these values could hinder the industry's ability to innovate and cater to diverse global markets.
4. International reputation: Fashion is a global industry, and France is known for its fashion houses and luxury brands with a global clientele. Policies perceived as isolationist or xenophobic could harm France's international reputation, and potentially reduce the attractiveness of the French fashion brands in global markets.
5. Labor and immigration policies: Far-right policies often focus on stricter immigration controls and labor market regulations. The fashion industry in France relies on skilled labour from diverse backgrounds, including artisans, designers, and craftsmen. Restrictions on immigration or labor policies could impact the availability of talent and workforce diversity.
6. Environmental and sustainability initiatives: The fashion industry is increasingly focused on sustainability and environmental responsibility. Far-right policies may prioritize economic growth over environmental concerns, potentially rolling back regulations, that promote sustainable practices in fashion production.

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The UK fashion industry unveils its resilience strategy

The British Fashion Council (BFC) has identified five priorities, for the new government, to support economic and social growth, employment, and opportunity in the fashion sector:?

1.?Restore the VAT Retail Export Scheme (also known as “Tax-Free Shopping”) and reform Business Rates to boost growth in the fashion retail sector

·??????? Tax-free shopping?

In Q4 of 2023, retail spending in London’s West End was down 15%, despite international visitor numbers being level with the same period in 2019. Comparatively, in France and Spain, international visitor spending has nearly tripled amongst certain nationalities since 2019.?

The UK is now the only major economy in Europe not to offer tax-free shopping to overseas visitors. This places UK fashion designers, retailers and manufacturers at a significant competitive disadvantage compared to other markets.?

Whilst HM Treasury is unwilling to look beyond its own projections, on the impact of reinstating the VAT RES scheme, an independent research suggests that reintroducing the scheme would, in fact, deliver additional revenue of ￡2.3bn, rather than represent a loss to UK Plc.?The scheme must be restored to ensure competitive parity with neighbouring nations.?

·??????? Business rates and taxation?

Currently, the physical and omnichannel fashion retailers face significant competitive challenges against the online-only retail, which is able to operate at reduced margins, and with significantly fewer employees.?

The incoming government should develop a long-term, dynamic business rate, and business taxation strategy, that incentivizes growth and employment in brick-and-mortar retail, drives activity on the high street, and deepens business engagement with local communities.?

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2. Greater trade and export investment for UK fashion designers

The BFC is calling for greater investment in the London Fashion Week (LFW) international buyers and press programme, financial support for designers to access international market weeks and trade shows, more targeted trade missions and a strategic approach to reducing trade barriers with the European market post-Brexit.?

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3. Support UK’s world-leading fashion education sector with a commitment to STEAM, not STEM

A global study by the Business of Fashion in 2019 showed that 6 of the top 37 undergraduate fashion design courses and 3 of the top 16 graduate fashion design courses are in the UK.?

With the right support, the cultural and creative industries could create an additional 1 million jobs by 2030. To do this, we need to ensure that the UK remains the world leader in creative education by supporting creativity in our schools and maintaining funding for arts, design, and craft subjects in higher education. In practice, this means greater investment in Arts subjects alongside Science, Technology, Engineering and Maths.?

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4. Develop a new generation of businesses and skilled workers in the fashion sector

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5. Introduce legislation to activate sustainable business practices, to meet decarbonisation and net-zero targets

The BFC and Institute of Positive Fashion stand ready to work with the government to develop a practicable regulatory framework to activate better business practices addressing sustainability concerns, harmonized with international standards and regulations in other global markets, particularly the EU.?

?Making policymaking a healthy business

The French government faces little trouble in passing laws when the president and majority in parliament belong to the same party. When they don’t, things can grind to a halt. While the president determines the country’s foreign, Europe and defense policy, the parliamentary majority is responsible for passing domestic laws, like pensions and taxation. A far-right government could spell a financial as well as constitutional crisis.?With one of the highest deficits in the Eurozone, France may need to embark on a period of austerity, to avoid falling foul of the European Commission’s new fiscal rules.?

Going forward, the government should collaborate with fashion industry in a manner, where they can fund research initiatives that focus on technological advancements, sustainable materials, and circular economy practices. Next, they should provide incentives for fashion companies to adopt sustainable practices, such as tax breaks or grants for green initiatives. Finally, they should advocate for trade agreements, that facilitate the movement of fashion goods and reduce trade barriers.

Politics is not just about power and money games - it can be about the improvement of people's lives, and promoting the creativity and diversity of the fashion industry. May the best politician be granted the position, to serve the country!

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