Drapers asked a cross-section of industry players what the main political parties should prioritise in their election campaigns and potential first year in power.
As the UK gears up to elect its next government in just 10 weeks’ time, the fashion industry has raised its voice to highlight the key issues it wants to see prioritised to ensure the sector continues to prosper.
This year’s election battle is going to be closely fought, with smaller parties such as Ukip, the Green Party and the Scottish National Party all in the running to secure a slice of power in either a coalition or hung parliament, making it difficult to second-guess policies that could impact the industry from May.
With Ukip ruffling feathers over the UK’s inclusion in the European Union, the in-out debate is key for retailers with international businesses - with the Tories offering a referendum by 2017 and both Labour and the Lib Dems pushing to stay in the union - as is unofficial talk of a potential VAT rise and how to adequately reshape business rates.
While full campaign manifestos will not be published until closer to the election, a few major battlegrounds are already emerging that will affect fashion companies.
On business rates the Tories have pledged a review before the 2016 Budget, alongside the extension of the doubling of small business rate relief for another year from April and the 2% cap on any tax rise. Labour will “cut business rates for 1.5 million small firms” with a rateable value of less than £50,000, while the Lib Dems propose to reform the system, setting rates on site values rather than rental values, meaning the tax would hit owners, not occupiers.
In terms of pay, Labour plans to raise the minimum hourly wage to £8 by 2020 from £6.50 today, with increased fines for firms failing to pay this and tax breaks for those paying a living wage (currently £7.85). The Lib Dems will require companies of more than 250 employees to declare the number of people they employ on less than the living wage and will consult on how to set a fair living wage.
Zero-hours contracts are also in the spotlight, with the Tories planning to scrap them. Labour is promising to introduce new rights for employees consistently on these contracts to automatically receive fixed hours, work for other firms and compensation if shifts are cancelled at the last minute, and the Lib Dems will “clamp down on any abusive practices” in this area.
Labour has also pledged to create an extra 80,000 apprenticeships a year in England by the end of the next parliament by guaranteeing one for every school leaver who gets good grades, while the Tories plan to create 3 million apprenticeships by 2020, and the Lib Dems say they will offer an extra £1 an hour to the lowest-paid apprentices.
Meanwhile, the British Business Bank is expected to be extended by all three parties to provide smaller businesses with greater financial support.
When Drapers asked those in the industry to highlight their own election manifesto for the fashion sector, their policies spanned a comprehensive overhaul of business rates, taxes on turnover rather than profit, more effective financial support for small businesses, greater funding for overseas trade fairs, more support for British manufacturing, and the cutting of employment red tape.
What the industry wants: a wishlist for the next government
Chief operating officer and group finance director of The Dune Group
[Business] rates would be top of the list, but certainly not increasing VAT rates. Government intervention would also be helpful to clarify the EU rulings around holiday pay, commission payments and the working time regulations [following a number of landmark cases last year that have caused uncertainty].
Without wanting to be too political, we benefit from a relatively open stance on immigration [from a staffing perspective] and I would want this to continue. We also favour a more relaxed stance on visa applications, particularly from China. You would think that another runway [either a third at Heathrow or a second at Gatwick] and large infrastructure projects [like HS2/Crossrail] will help retain London and the UK’s position as desirable destinations, and hence we should want to hear firm commitments and early delivery.
Owner of the eponymous menswear label and retailer
Whichever government comes in, they should restore TAP grants [the grants based around the Tradeshow Access Prog-ramme, which were reduced for autumn 15]. It has been yo-yos and seesaws for the past few years and it is an incredibly short-sighted approach. I don’t think any government is going to substantially lower the business rates - if they did it would be great but it would just mean they would try and squeeze the money from consumers, which would cause us problems in other ways.
Co-founder of five-store womenswear and lifestyle indie Aspire Style in the Midlands
There needs to be much more support for the high street. There was a lot of talk from the government a couple of years ago with the Portas Review, but it felt like a lot of talk and nothing concrete came from it for most towns and cities. The high street is facing serious challenges from out-of-town shopping centres and online growth so there needs to be a real focus on how costs can be reduced and customers encouraged to come back into town and city centres. One real benefit that they could make quickly is to support local councils in reducing parking charges or having times when parking is free. One of our shops is in Stratford-upon-Avon, and in the past couple of years we’ve struggled to compete with an out-of-town development - Maybird Shopping Park - that has taken many high street brands out of the city centre and customers can park there for free. This has all come at the same time the council has put up parking charges in the town centre and reduced the length of time people can stay.
Founder, product and brand director at SuperGroup
I believe it is now time to consider a tax on turnover rather than profit. With globalisation and European tax havens playing such a huge role, this would benefit retailers who play by the rule book - each sector having a tax based on historic margins achieved. Tax could be paid quarterly like VAT. This would benefit the chancellor by giving transparency and would end foolish business decisions based on tax efficiency.
Director of three-store footwear independent Tower London
Over-regulation and skills shortages are not helped by the continuous additional red tape. This needs to be scaled back for SMEs, allowing for a more liquid labour market with smaller employers receiving tax rebates for employing further staff potentially through a deduction in PAYE. The process of letting underperforming staff go should also be simplified for smaller employers to give them the flexibility and bandwidth to make mistakes. A less long-winded and expensive sponsorship licence system for employing non-EU nationals would also help address the increasing skills shortage, especially in high-growth areas such as tech.
Meanwhile, access to bank financing at commercial rates for investment for SMEs should be increased. This is consistently the biggest issue for SMEs in the UK despite the political rhetoric in support of it.
Chief executive of menswear brand Pretty Green
While there are a number of schemes in place in the UK to support start-ups and small businesses, there is a need to have greater support in place for funding. This is a critical part of fostering a culture of entrepreneurialism and innovation, which helps to ensure a stronger more sustainable economy in the long-term across the whole of the UK. In addition, business rates for small and medium-sized businesses need to be looked at to reduce the cost burden on smaller retailers, encouraging them to open new stores and increasing their chances of turning those stores into a success.
Co-owner of menswear brand Percival
Percival is a small business but rapidly growing - those growing pains are accompanied by constant cash-flow issues, which can stunt our growth in vital areas. I’d like to see the new government make small business loans more accessible with less bureaucracy. We personally find getting a business loan near-impossible and peppered with red tape. Keeping every area of garment creation a UK-based story is something we work hard for. Textiles are a rich UK heritage and it would benefit the UK’s economy and our cultural heritage to see the new government investing in it somehow. Incentives might include tax breaks, special import/export rates and subsidising rents.
Online retail publisher and networker
I find it odd that people think exiting the European Union would hamper our ability to trade with European countries. We trade with countries around the world without being part of a political union that has precedence over our laws, which the EU does. I very much support Ukip’s position, which is to trade with Europe but not be run by it.
While we are in the EU the only way governments can reduce migration to the UK is to pick on the very people we need - those from outside the EU with professional skills. Why should it be easy for an eastern European builder to come to Britain but expect an American retail executive to jump through visa hoops?
Director of fair-trade clothing supplier Earth Squared
I would love to see a reduction in the VAT rate - such a move would instantly boost the economy and reduce the tax burden on businesses and consumers alike. And, of course, a reduction in corporation tax would always be welcome, particularly for SMEs. This issue is likely to come to the fore should tax become a devolved issue - will we see competition between Scotland and the rest of the UK? We hope to continue to supply more businesses in Europe and beyond, and to do this we believe that remaining in the EU assists greatly, particularly with regards to freedom of trade. Hopefully we will hear more parties coming forward to promote the benefits of EU membership.
One thing I feel passionately about is the lack of exhibition space for major trade events in the UK. These events present massive opportunities for employment and boost the local and national economies. The demolition of Earls Court and the sale of Birmingham NEC to private investors leaves the UK with very few sizeable venues in public ownership to host international quality events. I would lobby any new government to look at the current provision and make serious efforts to improve the UK’s offering.
Founder of accessories brand The Cambridge Satchel Company
While the internet has opened up so many opportunities, it has also opened up a world of risk. Fraudulent and counterfeit websites cost retailers a huge amount to police and shut down. We would like to see some external measures to help control this digital fraud. If the government could create an online database of empty high street properties where the landlords would be willing to look at short-term pop-ups that could only be a benefit for the high street and for retailers.
Managing director of online retail association IMRG
The UK is a global leader in ecommerce and we would like to see the next government focus on extending that status. Much of our capacity to achieve that will be dependent on ensuring the available talent pool for digital industries grows substantially, as recruiting the right people has been a key issue for online retailers in recent years. A good start has been made in education - with digital skills added to the national curriculum for primary school children - and we would like to see this momentum continue to ensure future generations are fully equipped for the digital economy. Supporting the roll-out of regional tech hubs to go alongside those already thriving in east London and Gateshead would help ensure opportunities are available nationwide.
Deputy chief executive of the British Independent Retailers Association
I’d like to see real commitment to bringing the [business rates] system back into some semblance of contact with the real economy: making small business reliefs permanent; banding charges so that two thirds of properties are removed from rating and the need for revaluation; and enabling more frequent revaluations of the remainder, where the bulk of the money comes from. Ministers should be determined to make sure that the review about to start actually leads to positive permanent reform. Secondly, the government must make the planning system work, particularly the Town Centre First principle which, as the Department for Communities & Local Government’s select committee pointed out, is not working as intended: it’s continuing to help out-of-town development at the expense of our high streets. Finally, I’d like to see further moves on national insurance breaks for employers, along the lines of the discount currently in place, but with bigger incentives. Retail - and particularly small shops - is continuing to create new outlets and new jobs. Helping employers to do that will help the whole economy.
Founder and director of not-for-profit clothing manufacturer Fashion Enter
The Regional Growth Fund [a £3.2bn government fund to help businesses create jobs] has not been ring-fenced for London - unbelievable. We British manufacturers need a level playing field and there is a real manufacturing cluster in north London that vitally needs investment in plant and machinery. Also there are changes being rumoured for the [government’s] highly successful fashion apprenticeships programme, to make it more employer-led. This will allow employers greater control over setting standards, which may not mean the same thing to everyone. It’s currently brilliant; it works so well for employers and apprentices. If it’s not broken, don’t fix it.
Group chairman of supplier Prominent (Europe) and Quantum Clothing
Made in Britain is a big winner for exports but we need investment and tax breaks, not funding cuts. Increased training funding and government-supported apprenticeships would develop and educate the workforce and create jobs, while unpaid internships over three months should be banned.
Legislation is also required to outlaw retrospective discounts and marketing contributions levied on contracted suppliers. The Tesco scandal has revealed this practice, but government action has been ineffective to date.
As a leader of a Europe-wide business, I firmly believe in remaining in Europe, but a healthy debate and a better deal are needed. Walking away would be a disaster.
Founder of picture-led shopping app Snap Fashion
The in-store clothes shopping experience is becoming increasingly outdone by today’s online offering. I believe this could be addressed through initiatives to bolster in-store infrastructure - improving internet connectivity in stores, and offering schemes for subsidised purchasing of enhanced Wi-Fi systems and user-facing hardware. Not only would this improve the high street’s efficiency and open avenues to explore new technology in-store, it would also allow users to share information and broadcast information through social networks with ease, promoting their purchases and increasing brand awareness.
It’s a common problem for SMEs to deal with extended payment terms from larger corporates, with 90-day payment cycles crippling cash flow. Support in endorsing shorter payment terms for SMEs would greatly ease this pain-point for young businesses, as well as de-risk working with SMEs for the corporates.
Made in Britain is as appealing as ever and, although we make some great products, I still feel there is even more opportunity within the clothing sector. I would like to see the government more involved with initiatives that bring together textiles, design, training, etc. At the moment they are focused on one of these sectors. There should be an even closer partnership with businesses because, if we are to make good products, then we need routes to market. Maybe we need to look back to the past when we had more vertical businesses, where each element complements the whole.
Chief executive of menswear chain Blue Inc
The disproportionate effect of business rates on traditional retail and the relative advantage provided to online-only operators that have no such additional tax burden requires redress for the future health of employment, retail spending and local and national economies.
No other issue is as essential right now to the sector given this is the largest uncontrollable cost affecting retail today, being larger than all other taxes combined for many retailers. Furthermore it is completely unrelated to the underlying profitability or sales generation of the stores, thereby forcing empty units and town centre job losses on otherwise viable and profitable stores.
Chief executive of nightwear, beachwear and lingerie supplier Haddow Group
A new government can assist SMEs with focused, responsible and cost-effective bank loans. Continued and ongoing support of centralised grants to help UK manufacturers and greater publicity of their availability would assist SMEs to employ apprentices, graduates and other skilled people. In terms of employment law, we are opposed to zero-hours contracts as they are not beneficial for the long-term growth of the business, and don’t provide a stable structure for either employers or employees.
Managing director of the eponymous footwear chain
Business rates need to be reassessed as soon as possible to reflect the reduced rentals we are paying in several locations and maintain the current policy on capital allowance treatment to encourage further investment. Whoever gets in power needs to build on the economic strategy as things are still fairly fragile. We have got to maintain austerity measures and not give it all away again.
Managing director of menswear brand Luke
My wishes for a new government are no more subsidised charity shops on the high street, which are a levy for clothes disposal. With the demise of this loophole this might get insurance companies, landlords and councils to re-evaluate and support a new independent wave to include reduced rates and rents. This support would breathe life into our high streets and encourage diversity, giving the independents an advantage over the supermarkets and superstores for a change.
Joint managing director of manufacturer AMA Group in County Durham
Up to now we’ve had no direct financial support from government bodies as we’re classed as a ‘start-up’, even though the team of directors has more than 100 years’ experience in the sector. It would appear there is financial support for training providers, consultants and non-profit making businesses. However, there is no direct support available to entrepreneurs like ourselves who are investing personal funds to grow the business and offer a sustainable long-term future. A change of approach is required to provide direct support to businesses that can utilise the funds available.
Chief executive officer of virtual fitting room technology firm Fits.me
UK government set asides [investment that is ringfenced for smaller businesses] should be an area for focus. For example, 10% of government procurement should go to SMEs or prime contractors should subcontract a minimum amount to SMEs, while larger retailers should be encouraged to support SMEs with accelerated payments. Rather than seeking 60- to 90-day payment terms, there should be government incentives to pay in 30 days or even in advance for SMEs. The government should also allow start-ups and SMEs to pay employees and consultants some pay in shares without incurring PAYE/NI until the shares are sold. This works better than stock options as the employee owns the shares, not merely options, increasing the incentive. There should be more provision for fashion and fashion tech incubation support, so under-utilised government office space could provide basic services to start-ups (for up to 10 to 20 employees) with free office space for one to two years. The government could allow start-up fashion brands or ecommerce sites to have a VAT holiday for up to one year to help them launch, but this must be limited in duration, otherwise it will unfairly impact established players.
Head of fashion, textile and knitwear design at Nottingham Trent University
I would like to see parties develop policies that focus on investing in great British design, allied to developing and innovating British manufacturing. To truly support the future British design talent there needs to be an innovative British manufacturing base for them to work within. That is why I want to see a strong recognition from the political parties of the vitality and economic power that fashion and textiles bring to the British economy.
Within its first year, the government needs to demonstrate that recognition by offering incentives to companies to employ graduates and through support for budding entrepreneurs - think Vivienne Westwood, Alexander McQueen, Orla Kiely and Laura Ashley. I think more specifically that it would be great if there could be tax benefits for companies to employ graduates so they can avoid the endless round of internships [unpaid].
Director of policy and public affairs at the British Council of Shopping Centres
‘Infrastructure’ is understood to mean the facilities, services and installations needed for the functioning of a community or society. It’s time that definition was extended in a funding context, as well as a lexical one, to include the ‘infrastructure of places’ - ensuring the redevelopment of town centres is considered for public, and private, infrastructure funding and in particular by Local Enterprise Partnerships.
Such a classification would allow town centres to benefit from existing funding avenues currently unavailable to them, such as the Infrastructure Guarantee Scheme, Local Growth Deals or any future round of the Local Infrastructure Fund.
A large number of towns and cities need reshaping on a scale not seen since the building programmes of post-war Britain in order to survive and thrive. This will not be possible without new funding mechanisms that address development viability.
Owner of young fashion independent Chocolate Clothing in Derry
More support for small business lending from banks and the ever-growing new form of lending, crowd funding, needs to be in the manifestos of all major parties, to further assist new and established fashion businesses to open and expand. Parking in small town and city centres also needs to be relaxed as this is the trump card that the out-of-town shopping centres have over our town centres.
Co-founder of swipe shopping app Grabble
Any government should be promoting fashion technology, as the UK should be leading the world in this area but it doesn’t get enough support. We tend to fall between the fashion sector that can be slightly dubious of new technology and the technology sector that really doesn’t get fashion at all. Britain should set up a team to support this sector by bringing in mentors and supporting participation in global events for companies that have large potential.
There needs to be clarification between work experience and internships that are illegal. One helps young people gain the skills they require to take a paid job, the other is taking advantage of a weak job market in fashion. Also there should be national insurance breaks for small companies employing young people in their first job to encourage them to make more hires.
Director of international business development at the UK Fashion & Textile Association
UK businesses want to see a larger share of government funding made available to help them to export and attend events. Many would like us to be able to do more in the way of trade missions, particularly to Japan where they pay a high price for high-quality merchandise, as well as the US. Some of our competitors - Italy, Germany and France - spend more on this than us.
Owner of womenswear boutique Ambiance of Colchester
VAT on a small business is horrendous, so a review of that, while radical, would merit attention. Out-of-town centres continue to leach footfall from high streets and this is not due to a dearth of talent there - parking fees are prohibitive despite seasonal promotions.
Daliah Simble, founder of Daliah Simble Fashion Consultancy
Currently [the fashion industry’s] main source of funding is the Regional Growth Fund [RGF], which the Alliance Project has accessed via bidding. However, currently RGF funding is only available to factories in Manchester and Northern regions and we would like to see some funding made available to London. There are more than 150 factories in London and currently demand exceeds capacity at those businesses, so the funding would be useful to help them grow, develop and access vital technology.
Professor Frances Corner, head of London College of Fashion and pro vice-chancellor, University of the Arts London
The main parties need to take fashion seriously and look at the multitude of ways it can invest in entrepreneurial young designers and support the creative industries through education. The UK creative industries generates £71 billion in revenue each year and supports 1.71 million jobs yet funding from the UK government in this sector lags behind more traditional STEM subjects by a significant margin. This has got to change.
The main parties need to learn from examples such as the Centre for Fashion Enterprise which invests in young designers and fledging businesses; policies need to reflect what a huge impact support of this kind can have on small businesses.
I would also like to see the main parties prioritising programmes that help students from all backgrounds into the fashion industry. Here at London College of Fashion we have invested heavily in our widening participation programme which supports students from diverse backgrounds. Not only must the government back initiatives like this with more funding but they also need to start promoting the creative industries as a viable and exciting career option.