the value of fashion

London Fashion week justifies its funding with a document called "The Value of Fashion", written for them by Oxford Economics. Flicking through the pdf pages, it becomes obvious that they're about the value of clothes shops like the ones that sponsored the document. A bit like writing a report called "The Value of Banks". Another odd thing about the document is that it got some public sponsorship from UK Trade and Investment, who pay for some visitors to go to London Fashion Week, and the bit of the Greater London Authority that was then London Development Agency. I don't think taxpayers got good value from the report. For example you can't claim that Sports Direct is part of some specially useful or beneficial industry that deserves government encouragement and subsidised trade shows.

Meanwhile, if clothes shops really do contribute a lot to the economy, some of them find ways of not paying tax. Monsoon Accessorize PLC have called for clothes shops not to be taxed if they use the word "ethical" occasionally (this is from a firm that pays its UK suppliers late and breaks minimum wage law in both India and the UK) and Arcadia Group pays its tax in the boss's wife's name, at the Monaco income tax rate of zero.

https://web.archive.org/web/20140414223637/http://www.ukuncut.org.uk/targets/3 has some background:

The Value of Fashion: Sir Philip Green

Philip Green is a multi-billionaire businessman, who runs some of the biggest names on British high streets. His retail empire includes brands such as Topshop, Topman, Dorothy Perkins, Burton, Miss Selfridge and British Home Stores.

Philip Green is not a non-dom. He lives in the UK. He works in the UK. He pays tax on his salary in the UK. All seems to be in order. Until you realise that Philip Green does not actually own any of the Arcadia group that he spends every day running. Instead, it is in the name of his wife who has not done a single day’s work for the company. Mrs Green lives in Monaco, where she pays not a penny of income tax.

In 2005 Philip Green awarded himself £1.2bn, the biggest paycheck in British corporate history. But this dividend payout was channeled through a network of offshore accounts, via tax havens in Jersey and eventually to Green’s wife’s Monaco bank account. The dodge saved Green, and cost the tax payer, close to £300m. This tax arrangement remains in place. Any time it takes his fancy, Green can pay himself huge sums of money without having to pay any tax.

Before the election, the Lib Dems liked to talk tough on tax avoiders. But as soon as they entered the coalition, this pre-election bluster became just another inconvenient promise they quietly forgot. In August David Cameron appointed the country’s most notorious serial-tax avoider to advise the government on how best to slash public spending. Not a single Lib Dem minister uttered a word of complaint. A Guardian editorial denounced this as “shameful”.

Philip Green’s £285m tax dodge could pay for:

• The full, hiked up £9,000 fees for almost 32,000 students
• Pay the salaries of 20,000 NHS nurses

And if that’s not reason enough to take action against Sir Philip, it is worth noting that he has built his £5bn fortune on the back of sweatshop labour, using Mauritius sweatshops where Sri Lankans, Indians and Bangladeshis toil 12 hours a day, six days a week, for minimal pay.

Arcadia Group isn't singled-out for being a bad company like its rival, Sports Direct, but the practice of using minimum wage zero hours contracts is common in retail.


More than 1 million British workers could be employed on zero-hours contracts, new figures released on Monday reveal, suggesting that British business is deploying the controversial employment terms far more widely than previously thought.

The Value of Fashion: Sports Direct

Sports direct admit that 90% of UK staff are on zero hours contracts.

Three staff at the department for business are trying to think of an answer according to the minister. Oh and Sports Direct make no statement about the conditions in their Vietnamese factory suppliers. Oh and no badness is meant towards the lawyer who got IP work for sports direct and volunteered for a few board meetings at Ethical Fashion Forum after offering free IP surgeries to UK business at a neighbouring project called own-it.

The Guardian have a page about Sports Direct
One of the articles lists accusations, but leaves one out: the company is less hypocritical than others. It offers fake markdowns and says that's legal. It pays less than the minimum wage and maybe that's not quite legal but it has a defence in saying that some hours are spent waiting to be haranged and searched. It has a staff handbook which states you can be sacked for more or less anything, and, if no reason can be thought of, most of the staff are from two rival temp agencies anyway so a word can be had with the agency. This again might not be quite legal but is common enough. Most of us have had jobs a bit like this, but Sports Direct forces politicians to think about it, rather than hiding the facts in detail and denying them as adult social care providers do for your granny's weekly visit from a care assistant.

Here is the quote:

Ashley’s Sports Direct chain has made him the 22nd richest man in Britain, estimated by the Sunday Times Rich List to be worth £3.5bn. Temporary workers at his warehouse, by contrast, get paid hourly rates that work out below the minimum wage and suffer the kind of indignities – including rigorous harangues over the public address system to work faster – that come straight from a dystopian novel. Ashley, as well as being very rich, is also the unpopular owner of Newcastle United. The items he sells are made cheaply in east Asia. His warehouse depends on cheap eastern European labour. Few individuals so neatly encapsulate the fortunes, in both senses, of modern Britain.

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To do list and note to self: try to catch-up with this stuff. Those who read more newspapers and belong to trade associations probably find them a year earlier, but hey.

http://www.policyconnect.org.uk/apmg/events/launch-alliance-report-repatriating-uk-textiles-manufacture

The Alliance Report - repatriating UK textiles manufacture

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http://www.policyconnect.org.uk/apmg/home

All Party Manufacturing Group

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High End Designer Manufacturing

A report on Protecting Existing Resource and Encouraging Growth and Innovation

Report commissioned by the British Fashion Council, UK Fashion & Textile Association, Creative Skillset and Marks & Spencer Research by Oxford Economics and Glasgow Caledonian University

Steering Group
Introduction by Caroline Rush p4
Executive Summary p7
Key Findings p8
part 1
Introduction p10
CASE STUDY 1: Mulberry p14
part 2
Background Context p16
CASE STUDY 2: John Smedley p28
part 3
Survey Results p30
CASE STUDY 3: Sourgrape p34
part 4
Modelling Results p36
CASE STUDY 4: Private White V.C. p40
part 5
Conclusions, Challenges & Recommendations p42
part 6
Methodological Appendix p46
part 7
Acknowledgements p50

Update: last year the British Fashion Council commissioned a new report, with the usual bias towards people who talk about fashion, and high fashion, but with two sets of economists instead of one and some attempt to contact real manufacturers among the list. One of the sets of economists work at a college that runs London fashion courses, rather than factory training, but at least the use of two should encourage them to spot each others' special effects. There are even a couple of shoe factory people interviewed on the list from - Norman Walsh and Grenson.
Note to selt: read the report, which is called High End Designer Manufacturing
http://britishfashioncouncil.com/uploads/files/1/BFC%20Initiatives/manufacturing%20report.pdf

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Planb4fashion is a blog by Veganline.com which is a vegan shoe shop

We pay several times for each badly-run country

We pay several times for each badly-run country.

We benefit once, or I do, because I'm wearing Primark's cheapest jeans.

♦ We pay in having fewer jobs, because there's less rag trade here.

♦ We pay in having fewer taxes for the same reason.

♦ We pay because our politicians send our army to those poor and unstable parts of the world that have no secondary education or welfare state.

♦ We pay in having unstable desperate parts of the world that refugees and economic migrants leave, overcrowding parts of the UK.

♦ We probably pay in the spread of disease - thinking more about African governments which choose not to set-up a health service.

♦ We pay 0.7% of our GDP, out of our taxes, towards the social services bills of badly-run countries like Bangladesh. Pakistani taxpayers pay less than that for their own few state hospitals, and many Pakistani MPs do not even bother to pay Pakistani tax. It's probably the same in Bangladesh or India.

So we have all paid six times for my pair of trousers and politicians' failure to write a proper tariff against goods from badly-run countries. That's before any ultuism towards people in Bangladesh. My jeans are beginning to feel a bit special now!

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Planb4fashion is a blog by Veganline.com which is a vegan shoe shop

plan B 4 fashion manifesto

4-point manifesto from the blog at https://facebook.com/planB4fashion .
Points 1 & 2 are about fashion production in the UK.
Points 3 & 4 are about reducing poverty in the far east - for example Bangladesh.

1.
UK government can help UK factories compete, by releasing tax data to say what factories exist.

Data could be made-up into trade directory by anyone who wanted to do the work as happens already with simlar data. Some companies would find ways of covering their costs and cross-selling other services. If not, perhaps a small grant of a volunteer effort could get good directories written.

Better trade directories are a very cheap way of re-balancing the UK economy so that it begins to pay enough taxes and employ enough people. Factories help money circulate around the UK, bringing taxes back into government, and creating jobs in run-down areas. Factories also have to be very lean to pay the costs of paying for a democratic welfare state with a UK living-standard and rents. They don't all have staff for sales or PR or tendering for contracts or submitting entries to competitions. Some don't even have office or reception staff. They need terse orders from well-informed customers who know exactly what the factory makes, the technique used, and maybe the minimum orders for free set-up or free UK delivery.

2.
UK government can change the fashion week that we pay for in taxes (through Greater London Authority and Department for Business' UK Trade and Investment).  It can insist that exhibitors are nominated by UK or European factories & display the names of the factories. This would get better value for UK taxpayers' money: UK taxpayers pay to promote employment amongst other UK taxpayers. UK taxpayers promote a clothing brand and a factory for the same budget that just paid to promote a clothes brand in the past; it's two results for the price of one.

Factory-vetted designers are probably reasonable to work with, from a factory's point of view.
At the moment London Fashion Week pays for extra coaching for designers who aren't businesslike - even some in the past who didn't have a way of making the clothes they put on show! There is an export guarantee system that insures their bad debts from overseas buyers,  who sometimes take advantage by not paying. So, in the worst case, a fashion week and UK Trade and Investment subsidy can promote a designer who is hard to work with, then pay the bad debts when the designer isn't paid, and put rival producers out of work because they're not in the PR business and get overlooked. An example is Equity Shoes of Leicester who were overlooked as ethical footwear producers while Terra Plana, who bought shoes from China, got the PR. Both are now closed.


For a long time there was only anecdotal evidence that London Fashion Week helped taxpayers. Now they have a 50 page "Value of Fashion" report in very small print which seems to show huge returns. We know from the Olympics' effect on London tourism that these reports are partly a sales pitch; they are not impartial. Read closely, the report admits the opposite of what the headline summaries say. Estimates of how money circulates are based on decades-old data about how many shoe factories existed in the UK, including many like Equity Shoes that have now closed. Most of the money circulates amongst people who could get other jobs in PR and fashion journalism. And no estimate is made of the cost of crowding-out UK apparel suppliers from the market.

3.
Bangladeshi, Pakistani, Indian & Chinese governments can reduce poverty.
The methods that worked in the UK 100 years ago were universal schooling and national insurance. Schooling for girls helped them become more assertive and reduced the rate of child birth. Pensions helped parents plan for old age without having to have as many children as they possibly could.

The first modern national insurance scheme was introduced in Germany, just before its industrial revolution.  It is not too early for Bangladesh to start one now.

The difficulty is how someone in the UK can effect government in Bangladesh, beyond a few factory checks or a fair-trade scheme. This is the next point.


4.
European and US government can change the tariffs that tax trade from countries without democratic welfare states like Bangladesh or China.
This helps people in Bangladesh as well as their cousins in Bolton. There is a consensus.
A formula for tariffs be worked-out over time.

• More democracy earns a lower tariff - there is already a democracy index that could help this one get started.


• More of a welfare state earns a lower tariff.


• More human rights earn a lower tariff. And the reverse could also be true, so a country with more expensive exports because of the cost of a welfare state can still compete on price with China; the worst country no longer sets the market price for garment production.

Western governments are already trying to help eastern ones become more stable and better governed, if only to prevent the tide of misery reaching Europe in the form of wars and refugees. Search "Bangladesh" on gov.uk and find this...

"we are working with Transparency International Bangladesh and other civil society organisations to generate more debate between the government and citizens about progress in improving the providing services like health, education and legal services, and to beat corruption."

Unfortunately, western governments are also paying Bangladesh to keep its poor, with grants, development work and tariff-deals that depend on there being a lot of very poor people in Bangladesh. The rich in Bangladesh do very well out of this system. Their government even has enough free cash to pay for an export subsidy in a country that gets aid from the UK. Factory owners now get some free training for their staff paid by the UK taxpayer. With luck, the firm consistent pressure of conditional tariffs would change their minds and the way they run government. If not, the tariff system would raise some money towards the 0.7% that UK taxpayers pay in aid, to pay for Pakistani healthcare when the Pakistan government only pays 0.8% on health.