Written evidence submitted by the Fashion Roundtable (FRE0052)

The fashion industry has been one of the success stories of the UK economy almost in spite of the attention and support it has received. Growing year on year at 11% for the past several years, employing 890,000 (pre-lockdown) and worth over £32bn, it is the largest of the creative industries. Please see our map of the value of fashion here for more information.

Our work on Brexit has been extensive and shown the issues facing the sector since our inception. You can see our report on the impacts of Brexit on the fashion industry here.

In support of the sector post Brexit we have engaged with government and policy makers at various roundtables, evidence sessions and via the All-Party Parliamentary Group for Textiles and Fashion (for which we are the secretariat), we have engaged with stakeholders and government to address the needs of the industry. Our work on the Shortage Occupation List which you can see here has been addressing these issues over the past 18 months, including our submission last week to the MAC to advocate that both garment workers and fashion creatives are added to the list. This is particularly pertinent as the T’Level qualifications for garment workers, which are launching in September, while welcome, will take 2 years to complete, effectively leading to 5 seasons of a trading for the fashion industry, where the majority of manufacturers we have spoken to, already have vacancies and are concerned about a potential talent shortage with their predominantly European workforce seeking the security of work at factories on mainland Europe.

Please see our submission to the MAC here:

Evidence Submission by Fashion Roundtable to the Migration Advisory Committee in response to the open consultation on the Shortage Occupation List 24 June 2020 Executive Summary In this document, Fashion Roundtable, the secretariat of the All-Party Parliamentary Group (APPG) for Textiles and Fashion, and of the APPG for Ethics and Sustainability in Fashion, submits evidence received from the fashion industry between 1-22 June 2020 to advocate for textiles, garment, footwear and other fashion occupations on the Shortage Occupation List, as a result to the call for evidence launched by the Migration Advisory Committee, appointed by the Government.

The evidence added by the 21 participants in the Fashion Roundtable survey represents an estimated min. 2,500 employees from fashion design, manufacturing, trade and other related fashion services, with operations in the UK and overseas. The results of the survey show a highly-skilled industry with a shortage of occupations. The businesses require governmental recognition of both of these aspects. This evidence submission is meant to help for a better-informed decision in regards to the inclusion of fashion occupations, as described in this document, on the Shortage Occupation List. Fashion Roundtable welcomes any support to and engagement with the Migration Advisory Committee for a comprehensive Shortage Occupation List scheduled in September 2020. Fashion Roundtable advocate for long term strategic and sustainable growth for the entire fashion industry in the global marketplace. The unique team of experts drawn from fashion, business, economics and politics consult on transformative solutions and strategies. Fashion Roundtable supports the diverse voices of the industry, creating the potential for long-term, inclusive, sector growth through policy, political intelligence, consultancy and events. Fashion Roundtable is a non-partisan, independent voice and a recognised business representative organisation for the support to the fashion industry through Covid-19 crisis. Migration Advisory Committee call for evidence on the Shortage Occupation List In March 2020, the Home Secretary has commissioned the Migration Advisory Committee (MAC) to compile the UK Shortage Occupation List (SOL), which will cover all occupations in 2 the RQF3-5 bracket (medium skills). As a result, the MAC has launched the "Shortage Occupation List: Call for Evidence" open until 24 June 2020, end of the day, to hear organizations’ views on: ● The roles that are being filled by migrant workers; ● The salaries they are paid; ● The implications of the potential changes. The MAC will report their recommendations to the Government in September 2020 and it will be for the Government to decide on the SOL following the MAC recommendations. Fashion Roundtable advocacy for fashion occupations on the SOL Fashion Roundtable and the All-Party Parliamentary Group (APPG) for Textiles and Fashion have urged the fashion industry to submit answers to the MAC consultation on the SOL, thus to highlight the importance of the EU migrant workers for the UK businesses and the need to include fashion industry’s job profiles on the SOL. The UK has left the EU and in consequence, from January 2021, EU-citizens willing to work in the UK will have to comply with the new points-based immigration system. Adding textiles, garments, footwear and jewellery occupations on the SOL will enable the development of the fashion sector in the UK through more flexible access to the skilled-workers for occupations in shortage in the UK when the transition period ends in December 2020. Submission of evidence by Fashion Roundtable to the Migration Advisory Committee From the 1st of June to the current date, the 22nd of June 2020, Fashion Roundtable and the APPG for Textiles and Fashion have launched a survey to gather evidence from the fashion businesses and professionals in support to advocate for adding the fashion occupations on the SOL. The survey is meant to facilitate adding fashion’s voice for this matter in a short survey that covers the main points from the original MAC call for evidence: ● The rate of turnover in the employment of garment workers; ● The numbers of workers who are from the EU and EEA; ● The time needed to train workers and typical salaries (workers will not qualify for sponsorship without being on the SOL); ● Salary information, since the quota to obtain 20 points in the point-based immigration system is £25,600; ● What actions were taken to meet shortages by training domestic workers and to give an indication to the MAC of an expected timeline for shortages being able to be potentially met with domestic labour after a role has been added to the SOL. 3 The 21 responses to the current date, the 22nd of June 20202, to Fashion Roundtable and the APPG for Textiles and Fashion survey on the SOL survey are summarised below and are meant to serve as evidence from the fashion industry for the MAC consultation on the SOL: Q1: What does best describe your business? 43% of respondents are fashion designers 19% do all the following: fashion designer, manufacturing and trade 19% offer other fashion-related services 14% do only trade with fashion products 5% of respondents do solely fashion manufacturing Q2: Are you a UK textile, garment, footwear and fashion manufacturer? 29% responded they are a UK manufacturer 9.5% are both and UK and overseas manufacturer 1% responded that are solely an overseas manufacturer Q3: How big is your organisation? 62% are 0-10 employees 19% are 10-100 employees 9.5% are 100-500 employees 9.5% are more than 500 employees Q3: Would you consider sourcing workers from the EU from 1st of January 2021, under the new points-based immigration system, at a starting salary rate of £25,600 per year? 43% have responded YES 38% have responded NO 19% don’t know Q4: Would you consider sourcing workers from the EU from 1st of January 2021, under the new points-based immigration system, if workers are on the SOL, and therefore at a starting salary rate of £20,480 (minimum)? 71% have responded YES 14% have responded NO 14% don’t know Q5: Which of the following occupations you think should be on the Shortage Occupation List? *The survey used SOC2010 Vote of participants: Examples of occupations: 4 86% SOC 5419 Textiles, garments and related trades *marked RQF3/lower-skilled in Immigration Rules Clothing manufacturer, Embroiderer, Hand sewer, Sail maker, Upholstery cutter 81% SOC 5414 Tailors and dressmakers *marked RQF3/lower-skilled in Immigration Rules Cutter (hosiery, knitwear mfr), Dressmaker, Fabric Cutter, Tailor, Tailoress 71% SOC 5413 Footwear and leather working trades Cobbler, Leather worker (leather goods mfr), Machinist (leather goods mfr), Shoe machinist, Shoe repairer 67% SOC 8113 Textile process operative *marked lower-skilled in Immigration Rules Hosiery worker, Machinist (rope, twine mfr), Process worker (textile mfr), Spinner (paper twine mfr) 52% SOC 5411 Carpet weavers Carpet weavers, Knitter, Knitwear manufacturer, Weaver 52% SOC 3422 Product, clothing and related designers Design consultant, Fashion designer, Textile designer 43% SOC 8137 Sewing machinists *marked lower-skilled in Immigration Rules Overlocker, Seamstress, Sewing machinist, Stitcher, Upholstery machinist 38% SOC 5412 Upholsterers Curtain fitter, Curtain maker, Soft furnisher, Trimmer (furniture mfr), 38% SOC 7125 Merchandisers and Window Dressers (closest for Fashion Stylist found on SOC2010 by ONS) Fashion Stylist, Personal Fashion Stylist 29% S0C 5449 Other skilled trades Diamond mounter, Engraver, Goldsmith, Silversmith, Wig maker Q6: What is the number of workers who are from the UK, EU and EEA in your organisation? Range: 0-5 employees 13 have UK employees in this range 15 have EU employees in this range 19 have EEA employees in this range Range: 5-20 employees 3 have UK employees in this range 2 have EU employees in this range Range: 20-100 employees 3 have UK employees in this range 4 have EU employees in this range 2 have EEA employees in this range 5 Range: 100-500 employees 0 responses Range: More than 500 employees 2 have UK employees in this range Q7: From 1 to 5 how would you rate the skills-level required for textiles, garment, footwear and fashion workers? (1 being lower-skilled and 5 being high-skilled) 57% have responded highly-skilled 38% have responded skilled 5% have responded medium-skilled Q8: Is it rather difficult or easy to recruit talent in your organisation for the occupations mentioned above? (Difficult being more than 6 months for recruitment) Recruiting designer workers 11 have responded it is difficult finding talents 6 have responded it is easy finding talents Recruiting footwear workers 5 have responded it is difficult finding talents Recruiting tailors and dressmakers 8 have responded it is finding talents 3 have responded it is easy finding talents Recruiting textiles and garment workers 11 have responded it is difficult finding talents 3 has responded it is easy finding talents Recruiting other skilled trade (jewellery) workers 1 has responded it is difficult finding talents Recruiting textile process operative 7 have responded it is difficult finding talents 3 has responded it is easy finding talents Recruiting sewing machinists 5 have responded it is difficult finding talents 1 has responded it is easy finding talents Recruiting fashion stylists 4 have responded it is difficult finding talents 10 has responded it is easy finding talents 6 Q9: How many months are needed to train a worker at the required skills level in your organisation? Please mention the occupation (job). Answers without specifying the occupation: 1 month, 2 months, 3-6 months, 12 months, 12+ months, 18+ months, 36-48 months. Answers specifying occupation: 36 months: textile machinist 6-12 months: young stylist assistant 6 months: designer developer 3 months: machinist from basic to a high standard Several years for any role - especially workers making products, it requires a lot of practice and the exposure to all the different types of skill needed to fully be able to manufacture even just a few different products in a specific category to the required standard. Q10: How do you manage recruitment challenges in your organisation? 76% Keep the vacancy open until finding the right person 14% Employ someone that does not have skills for the job 9.5% Other Q11: Do you feel your costs for training new staff have increased due to a lack of skilled workers? 71% have responded YES 19% have responded YES 9.5% don’t know Q12: Yearly salary rate per ENTRY-level worker in your organisation? (without bonus) 43% up to £20,480 29% up to £18,500 14% between £23,480 to £23,039 14% between £23,040 to £25,599 0% for £25,600 or above Q13: Yearly salary rate per EXPERIENCED-level worker in your organisation? (without bonus) 57% for £25,600 or above 24% between £23,040 to £25,599 14% up to £20,480 Q14: Would you like to add anything else? Responses quoted below: We are also based in the south of the UK which has even less Skilled garment machinists. 7 The fashion industry also includes skilled PRs, marketing, branding and consultants at an advisory level none of whom are listed here but are very important to the industry. Gaining experience at big European houses often means that these people themselves are European. A creative industry thrives on global collaboration and a skilled, experienced workforce. Observations from the Survey Most of the respondents 43%, are from the design segment which reflects the UK fashion industry’s reality overall and fashion in the education system. There are world-famous fashion design courses in the UK but not sufficient talent development in textiles and fashion manufacturing. Most of the respondents 62%, are micro-enterprises with 0-10 employees meaning they are less resilient to the increasing training costs of new employees that lack the necessary skills, which was felt by 71% of the respondents in the survey. The majority of respondents 71%, would employ EU workers in the new points-based immigration system if the salary rate is at £20,480 (SOL route salary threshold to gain 20 points), compared to 43% of participants if the salary rate is at £25,600 per year (skilledworker route salary threshold to gain 20 points). If the occupations are not on the SOL, it could risk decimating the fashion industry development opportunity by almost half. The majority of respondents 57%, consider their workers as highly-skilled to be fit-forpurpose in their job. This observation highlights disparities with the Immigration Rules Appendix J understanding of the skills needed in the fashion occupations. The majority of respondents 76%, would keep a vacancy open until finding a worker with the required set of skills, compared to 19% that would employ a worker not having the required set of skills. This demonstrates the existent limitations for development and scaling-up of most businesses in the fashion sector, to which the constraints to access workers in the new points-based immigration system would add additional challenges. Quoted evidence from the fashion industry informs that it takes between several months to several years to train textile machinists and workers making products. The industry’s insights demonstrate that textile, garment jobs are skilled and require long-term training.

In terms of a future relationship with the EU, the UK fashion industry requires that the relationship is as fluid as possible, with zero tariffs and ease of travel for both goods and services. This is vital for us to remain global leaders and ensure we are competitive against the high fashion markets of Paris and Milan and the streetwear market of Holland, as well as the high street /fast fashion markets of Portugal and Spain. Tariffs, carnets and delays to market, will not only quicken the growth of our competitors as businesses relocate to mainland Europe to avoid these - some already have set up subsidiary offices to ensure they do not lose business post Brexit. The impacts of this would be seen across the whole market: from the high end designer fashion level, which in the UK not only generates income from London Fashion Week, it also adds value to tourism, with London, Bicester and other key destinations adding retail revenue to the tourist spend, right through to the high street mid point and fashion fashion levels of the sector, which we can see on the high street has already been impacted by Austerity, Covid-19 and the impacts of Brexit on GDP. We worked closely with Centre for Towns on the impacts to retail and their information on this with well worth reading here. We need to ensure there are robust regulations in place to support the continuance of our high streets without a loss to market to fast fashion brands where the possibility of workers being at risk of modern day slavery are heightened. Please see here for reference. This is why the SOL and as much transparency in wages, supply chain and ease to market as well as relations with the EU are vital if we are to grow the business in the right way post Brexit. Austerity, Covid-19 and then Brexit cannot be underestimated as potentially calamitous for the sector, all falling so quickly in conjunction with one another.

There is also the growth of the online fashion technology sector, with FarFetch, Matchesfashion and YNAP all based here, worth millions to HMRC. All of whom are global leaders in the fast paced and burgeoning fashion tech industry, which is a fantastic win for the UK fashion industry, with each holding their HQs in the UK, currently. However, since the EU referendum, FarFetch who are owned by a Portuguese owner, YNAP by an Italian company and Matchesfashion by UK owners, have all boosted their mainland Europe hubs, with a view to potential relocation. This would not only be a loss of earnings, it would also be a loss of talent, global recognition and the combination of tech and fashion expertise and prominence which the UK currently enjoys. The global reputation and value of our UK fashion industry, with the subsidiary revenues this brings to HMRC.

There is a potential opportunity to look at how businesses are taxed, with a policy which supports sustainable and Made in the UK businesses to allow some form of tax relief post Brexit, which would not only support the on-shoring strategy which we at Fashion Roundtable support, it would also boost the local economies, the growth of the creative clusters strategy by the UK Government and also mitigate against the headquartering of brands in the Republic of Ireland, such as ASOS, as well as the offer of golden visas to numerous brands we have spoken to from Spain and Portugal, which would allow several years tax free if they headquarter there. The loss of talent, recruitment and income cannot be underestimated. Where fashion leads, other subsidiary businesses often follow, such as tourism, entertainment, hospitality and construction.

Lastly we also want to flag the need for on-shoring as a post Brexit policy. We need to radically invest in UK manufacturing, education and support. This needs to be a coherent strategy supporting all levels of the sector across the UK. Success stories such as the Fashion District in East London need to be replicated across the UK, ensuring we can build domicile talent and supply chains, which would not only reduce emissions and boost local economies - something sorely needed in a post Covid-19 business landscape - it will also ensure that UK talent is not faced with a talent shortage, brain drain and the only viable option being relocation post Brexit. The creative clusters strategy is good, but it misses the organic hubs which the fashion industry has built of its own accord, such as Margate and Ramsgate, where many from the sector, thanks to good transport links to London have relocated and opened creative and flourishing SMEs, thereby boosting the local economy.

We worked closely with Make It British and the Cabinet Office on PPE and on-shoring capabilities for PPE during the lockdown and it is clear that this is in need of government will, attention and redress, if we are to build British manufacturing up to the potential and opportunity it could be.

June 2020