Fashion businesses in Scotland fear the possibility of rising taxes and tariffs, and the impact it could have on consumer spending, if the country secures independence later this year.
Scotland votes on September 18 to decide whether it should become independent from the rest of the UK – but companies spoken to by Drapers are concerned it could mean increased taxes, interest rates and regulation.
Recent opinion polls have shown the gap between the yes and no votes narrowing, with one published this week by the Scotland on Sunday newspaper showing those in favour are now just five percentage points behind those against. Small business network Ingenious Britain also published a survey, suggesting 48% of small business owners in Scotland thought independence would be detrimental. Just over a third – 37% said it would be a positive step.
Conservative MSP Cameron Buchanan, who is a textile entrepreneur and former managing director of woollen merchant Harrisons of Edinburgh, has been an active ‘Better Together’ campaigner. He said breaking up the union was “crazy”, adding the Scottish textile industry would be hit hard by rising material prices and import tariffs.
“Taxes would have to go up; we would be out of the EU and would have to regain entry. That would mean tariffs and duties would go up. Yarn would be more expensive, affecting tweed, tartan and cashmere. It would be bad news for anyone who’s in the trade,” he said.
Victoria Stapleton, founder and creative director of Scottish cashmere brand Brora, highlighted increasing costs as a concern. “Any alteration to Scotland’s policy on areas such as taxation or employment costs could adversely impact margins and the ongoing uncertainty is unhelpful.”
She added: “However, customers have always been attracted by the heritage, quality and traditional skills used in Scotland’s cashmere knitwear industry and we don’t see this changing if the vote is yes for independence.”
Arthur Rennie, brand director at cashmere label Hawick Knitwear, agreed. “I’d be very surprised if there is any difference [to trade] but even those who are pro-independence are saying that we need to look at the figures. If taxes go up there will be less disposable income available and that may affect consumer spend,” he said.
Blair Daniel, manager and buyer at men’s young fashion independent Concept Clothing in Aberdeen, said it could affect local shopper spend in the medium-to-long term: “We don’t know how much oil the northeast of Scotland has left. If we go independent and the oil dries up it’s not good for us as most of our customers are guys working on the oil rigs.”