Fashion industry sources hope a snap general election would create “some certainty for UK businesses”, as ongoing political manoeuvring delays Brexit and continues to distract from wider market concerns.
This afternoon, prime minister Boris Johnson is making his fourth attempt to get the Commons to approve a general election. He was expected to ask MPs to vote on a 12 December election through a one-line bill, which needs the support of fewer MPs than the previous attempt, on Monday.
Industry insiders told Drapers an election could ease the prolonged uncertainty in the market.
“A general election would at least pave the way for some decisions to be made,” the managing director of one supply company said. “If Johnson got back in, he’d have a better majority and that could create some certainty for UK businesses.
“An election could also bring with it a new referendum – especially now we have more information in the public domain. Polls indicate that Remain would win currently and therefore the country would get the result it actually wants.”
One footwear supplier agreed: “Anything that has the opportunity to turn Brexit around is a positive because [Brexit] is the worst thing the country could be doing. A general election would push the Brexit problem down the road even further. Although it might look like it would just be extending the problem, it would actually give MPs more time to come up with a concrete answer and plan – or even hopefully lead to its annulment.”
Another supplier said: “If there is an absolute guarantee of a Conservative majority, that might bring certainty and in turn [consumer] confidence.”
However, Jenny Holloway, chief executive at London manufacturer Fashion Enter, said a general election could lead to further turmoil for business: “Adding an election into the ‘Brexit mix’ and in the middle of peak trading adds to the uncertainty. Consumer confidence is shaky at best.”
On Monday European Union leaders agreed in principle to extend Brexit again until 31 January 2020. Retailers and suppliers told Drapers they are concerned a further Brexit delay will distract the government from wider economic concerns.
The UK retail sector lost 85,000 jobs between the third quarter of 2018 and the third quarter of 2019, the British Retail Consortium has reported. The Deloitte Consumer tracker reported consumer confidence fell one percentage point to -9% between the second and third quarter of this year.
In October, retailers’ stock levels in comparison with expected sales were at their highest point since 1983, the Confederation of British Industry’s latest Distributive Trends Survey found.
The managing director of one premium womenswear retailer said: “From a trade perspective, the delay will mean another three months of uncertainty. It will mean wider economic concerns will continue to be ignored. It is also going to knock consumer confidence, which is already low.”
“Domestic issues have been pushed aside and have certainly suffered,” the footwear supplier agreed. “The House of Commons is all consumed with Brexit. Very little else is being looked at. Brexit is a major reason for the issues on the high street and the whole economy. There are going to be three more months of uncertainty and lack of consumer confidence.”
The managing director of one high street retailer said: “Whether it’s delays to Brexit or the threat of a general election, whether it’s retailers who don’t know how to deal with forthcoming delays because of imports, exports, duty, port delays, tariffs or customers not knowing how it will impact cost of goods, the current impasse is really painful. It is affecting current spend, future buys and sourcing decisions. Everyone is in limbo.”