I’m sure you’ve heard this term more than you would have liked over the last few years if you have been listening. It’s all anyone in the UK talks of, whilst it divides families and heightens tension in workplaces. Aside from the detriments it has brought to the UK, like the rise in racially motivated attacks and terrorism by 21%1, the projected impact of Brexit on small companies in the UK is not positive. Far from it.
How will Brexit affect the UK’s economy and small businesses?
Well, this entirely depends on whether Boris Johnson will come to make a deal for the EU and UK’s partnership, or whether we leave with a Hard Brexit – that’s a no deal Brexit for those not clued in on the terminology – and in turn these actions will have severe consequences.
Should we leave with no deal for the continuation of EU trade, small e-commerce businesses that rely on the shipping of goods will suddenly see their prices of trade skyrocket and also have customs charges added onto their already expensive invoice. Customers will also have to pay towards customs fees for receiving the package, indicating that international customers will go elsewhere for their goods, for cheaper prices where no additional charges apply3. Trading within the EU will also become significantly more expensive for UK retailers, especially those within the fashion industry who have built their business on the reliance of shipping across the EU and internationally4.
“Particularly for small and medium size retailers, the cost of exporting to the EU will hinder their capacity to thrive, especially given that they will not be able to form strategic partnerships or retail co-operations easily, as some of the bigger brands can. As a result, imports to and exports from the UK will suffer”5
Those who are attracted to the results of Brexit inflating their economic status - as UK customers will be drawn to purchase on UK soil alone - should be aware of the restrictions and hinderance that Brexit brings to the possibilities of growth and expansion in the event that their business should develop.
How will Brexit affect the fashion industry?
“A no-deal Brexit would cost the UK fashion industry as much as £900 million ($1.1 billion) because of tariffs, and other expenses could raise the figure even higher”6
A Hard Brexit would leave designers, retailers and manufacturers having to pay to trade with the EU and subsequently costing them over £1 billion more each year. For a Brexit in which we leave with trade deals, this would more than likely have conditions that are hard to predict, therefore businesses are unable to prepare for these incremental charges and changes to their business7.
With the nature of the fashion industry working months in advance, many fashion designers and retailers are struggling to anticipate the affects of Brexit on their companies and to prepare their new lines for the coming months. Fashion designers as a result are campaigning for a second referendum and to revoke article 50 and this is even spilling into their clothing, as designer Katharine Hamnett has sold thousands of her ‘Cancel Brexit’ and ‘Fashion Hates Brexit’ slogan t-shirts8. Fashion in the UK is advancing further into minimalism and black trousers as our clothing subconsciously reflects our attitudes towards our country, with Katharine Hamnett herself stating that she wants to give up most days and wear a blanket over her head because she is embarrassed to be British9.
Well?
The official date of Brexit was postponed until the 31st October 2019 and so with a month and a half to go, no deals created and in effect, Boris Johnson shutting down parliament and pining for a snap election, what is the future for the fashion industry and small businesses in the UK in light of Brexit? The unfortunate answer is that it is entirely impossible to predict and with this uncertainty, comes upheaval, daily protests, activism groups marching in every city and families growing further apart. This can all be expected further into the transition period following the official Exit of Britain regardless of the type of Brexit that is invoked, and is expected to last two further years post Brexit. In total, roughly 6 years of failed preparation in the UK will culminate in economic struggle and uncertainty as we go into the next decade. Only time will be able to evaluate the true extent of damage that Brexit will have brought upon UK businesses, as any predictions of our future are exactly that, a prediction.
Sources
- http://www.lse.ac.uk/economics/Assets/Documents/job-market-candidates-2018-2019/JobMarketPaper-ClaudioSchilter.pdf
- https://www.bbc.co.uk/news/uk-wales-48692863
- https://business.trustedshops.co.uk/blog/brexit-damage-european-market/#changes
- https://business.trustedshops.co.uk/blog/brexit-damage-european-market/#changes
- https://business.trustedshops.co.uk/blog/brexit-damage-european-market/#changes
- https://www.businessoffashion.com/articles/news-analysis/no-deal-brexit-may-cost-the-british-fashion-industry-1-billion
- https://www.standard.co.uk/lifestyle/esmagazine/how-will-brexit-impact-the-uk-fashion-industry-a3931611.html
- https://www.standard.co.uk/lifestyle/esmagazine/how-will-brexit-impact-the-uk-fashion-industry-a3931611.html
- https://www.vogue.co.uk/article/how-brexit-will-affect-fashion