Luxury sector warns of £6.8bn loss from No Deal Brexit
The British luxury sector has warned of a potential £6.8bn hit from a No Deal Brexit as MPs prepared to vote on Theresa May's revised EU Withdrawal Agreement.
New data from the international consultancy Frontier Economics, commissioned by Walpole, the official sector body for the British luxury industry, reveals that in the event of a No Deal exit, up to 20% of the current value of UK luxury exports could be at risk due by detrimental changes to market access driven by tariff and non-tariff measures that would come into effect in the event of No Deal.
In value terms, the effects of a No Deal exit on the luxury sector could be:
- reduction of around £6bn per year in exports to the EU
- reduction of around £0.8bn per year in exports to Asia Pacific
The British luxury sector is heavily export orientated with 80% of what it creates destined for overseas markets, the largest of which is Europe.
Despite the current uncertainty the sector is performing strongly and has experienced 49% growth in the four years from 2013-2017. The sector is a leading creator of long-term, sustainable employment in the key manufacturing hubs across Britain, with London acting as "the shop window" and retail hub of the sector. The sector also drives tourism to the UK through its luxury stores, restaurants and hotels.
Walpole’s counts 250 of the UK’s finest luxury brands amongst its membership, including Alexander McQueen, Burberry, Bentley, Claridge’s, Dunhill, Harrods, Glenmorangie, Net-A-Porter, Rolls-Royce Motor Cars and Wedgwood.
Helen Brocklebank CEO, Walpole said the UK risked losing some its most prestigious businesses and urged the Government to rule out a No Deal exit: “British luxury businesses are committed to staying in Britain, but we are losing patience with the government taking us to the knife edge of no-deal. The sector is thriving, but the cost to the UK economy in lost exports from British luxury will be nearly £7bn and we believe that money should be used to strengthen the country not diminish it. We urge the government categorically to rule out No Deal exit”.
Michael Ward, Managing Director, Harrods and Chairman, Walpole added: “Modern luxury is a true British success story; driving domestic employment, boosting tourism figures and showcasing the strength of our soft power on the world stage. We can now clearly see the devastating impact of a No Deal Brexit on the British luxury industry. The government must categorically take No Deal off the table to prevent further damage to this important sector, as well as end the uncertainty which continues to stifle businesses across the UK”.