The biggest supporters of English Manufacturers right now have to be our young designers. How they must have laughed, to hear George Osbourne’s Budget Speech cry of “Made in Britain, created in Britain, designed in Britain, invented in Britain,” when for the last 5 years that’s exactly what they have been quietly doing. Christopher Kane, Erdem, Meadham Kirchhoff, even Victoria Beckham are all in demand, by luxury stores all over the world, what do they have in common, their clothes are made in England.

When the Telegraph approached Victoria Beckham asking where are her dresses manufactured, she stated “I’m proud to say, they’re all made here in London”.  These designer clothes don’t come cheap and yet unknowingly, women from all over the world, Beijing, New York, Tokyo are snapping up the best these London based factories have to offer. Why do these designers work with English manufacturers and not the Italian or the French, who in recent years have been considered more prestigious? The answer is simple, without the language barriers and the distance it is much easier to manage those little details and quality control issues. Christopher Kane enjoys a very strong and close relationship with his manufacturer, his sister stated that "I was very aware when the recession hit that he could fold, so we strategically withdrew from other factories and gave him more orders on the condition he used profit to buy in more machinery and invest in better cutters and machinists". Meadham Kirchhoff says that we have the resources in Britain to make clothing “It's important that we find them and help them grow”. So our young designers are more than happy to work with English manufacturers, help them to grow, build strong relationships in these volatile times, rather than run off to China where they could ‘cut costs by doing things less laboriously.’ (Telegraph 2011)  It’s a shame the same thing can’t be said for our high street retailers.

You have to agree with Maurice Bennett, who controls specialist retailer Long Tall Sally, “We are one of the biggest exporters of fashion worldwide. We don’t export product all the time, but we are exporting retail fascias like Topshop”. Our high retailers have an increasingly growing presence abroad; it would be highly beneficial if they were to carry a larger number of ranges of products that were made in England. We should forget about mass marketing in England, however there are certain products that require expertise and specialist knowledge, they are the ones to concentrate on, products such as hosiery.

Thirteen years after M&S controversially moved all manufacturing overseas; it has now decided to increase manufacturing of hosiery in the UK. One factory that the retailer has increased orders with is a factory in Belper, Derbyshire, which was one of the worst hit when M&S moved overseas. One of the main reasons why M&S has increased orders is that they are innovative and it is quicker to get the products to market, with the factory being in England. Krishan Hundal, M&S’s Head of Sourcing told Drapers magazine that ‘innovation is the life blood of M&S, and our relationship with Courtaulds (owner of the Belper factory), particularly at Belper, helps us to continue to deliver first to market hosiery.’ This shows that England does have a skilled base of manufacturers, it’s up to English high street retailers to utilise them.

According to Ben Lewis (Chief executive of River Island), “The high street must take responsibility and keep production lines flowing at UK factories, if the manufacturing industry is to stand any chance of grasping the opportunities in front of it”. Retailers and manufacturers need to collaborate and develop stronger relationships, now so more than ever. With fashion being as volatile as it is and consumer confidence is low, whilst retailers need to be consistent with manufacturers, manufacturers need to understand as Lewis states “The needs of retailers and how those needs change”. Both retailers and suppliers are more likely to succeed if they are open and honest with each other.

By the high street retailers coming back to England for manufacturing, it will help manufacturers to grow and expand, but retailers must sustain that growth by providing the orders consistently. They have to be fair with their cost margins, and work with their manufacturers for the greater good, which is to provide jobs and provide for the economy, one can’t do without the other. Without the language barriers, cultural differences and distance, it should be much easier for retailers to be collaborative partners with their suppliers, both being adaptable to each others needs, making collaboration much more attainable. However these increased orders for English manufacturers will be pointless without employees to produce the goods and consumers to buy them. It is crucial that attitudes towards clothing manufacturing change, we need to encourage our children to research on all the available opportunities out there. These types of skills such as garment construction, pattern cutting, embroidery, are not to be ridiculed, these are skills for life, and could be highly sought after, if the government and English retailers are to capitalise on our manufacturing potential.

Next Part: Opportunities available to our future next generation and the potential of London Olympics 2012.             

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The first in a three part series compiled by one of our young English Radicals.

Many UK retailers are now discovering that clothing manufacture in the Far East no longer has the same attraction as it once did, due to rising labour charges and increased freight costs. The need to be reactive to the impatient and fast paced fashion industry is great, and the most suitable answer to the problem is to return to English and UK manufacturing. However this is not a simple solution, since retailers deserted English factories for low cost China, manufacturing went into decline, factories were left no option but to close, and universities and colleges put a greater emphasis on designing rather than learning how to technically construct garments. This has left England with a missing generation of skilled workers and artisans, and with the current employee base ageing considerably something has to be done.

This situation isn’t getting any better, it took another hit, when De Montefort University announced that they were axing their BSc Fashion Technology course, due to lack of government funding. This particular course has a 100% employment rate and is highly regarded, mainly due to the fact that their graduates are highly trained in a wide range of technical skills, which are greatly needed by many English retailers. Despite the fact that Ed Vaizey has been vocal about the importance of these skills and how he would like to see British manufacturing grow again, there doesn’t seem to be any action from the government. Which begs the question how supportive is the British government of the English manufacturing industry. And the answer is they’re not!

The Ministry of Defence had a very good opportunity to support the English manufacturers; instead they turned their back and gave to the multi million pound contract to produce camouflage gear to the Chinese. When questioned, the MoD spokesman stated ‘Our focus is on getting the Armed Forces the equipment they require, when they need it, at a reasonable cost to the taxpayer. In the last two years British companies have won 87% of clothing contracts.’ In the act of saving a few pence per camouflage trousers, surely they are depriving a perfectly good English manufacturer who employs many tens if not hundreds of workers a contract, which could give their current employees stability, and also lead them to create more jobs, which overall is highly beneficial to the economy and in the long run to the taxpayers. Not only this many manufacturers, including Lee Dawson, managing director of military uniform specialist Samuel Brothers have argued that by having uniforms manufactured in China could expose the Armed Forces to potential dangers. Lee Dawson goes on to say ‘If we are sourcing from China and something goes wrong with Anglo-Chinese relationships, we have a problem, China could withdraw supply,’ leaving troops with a lack of basic clothing, not an ideal situation on the frontline!

A UK retailer Mulberry has recently enjoyed great success in the last few years, mainly due to the Roxanne and Alexa style of bags. These bags are highly sought after by celebrities and women alike, with demand so great, Mulberry can’t produce enough of them. As result it needs to open another factory and increase the capacity of their existing factory in Somerset by 30%. However Godfrey Davis, the Mulberry Chief Executive, has spoken with Drapers Magazine (a renowned Fashion Business journal), and said that he has been put off opening a new factory due to the impact of rising National Insurance (NI, up to 13.8% from 12.8%) rates on operating costs. Davis stated that ‘a constructive approach would be to give some sort of tax break to encourage [businesses] to relocate. An employer NI holiday for a number of years [would work] and UK plc would benefit because we would be creating more employment.’ Davis is presenting the British government with a constructive solution, instead of giving tax breaks or NI holidays to those who don’t manufacture here in England, give it to those who do make the effort to contribute to our economy and job market. The Government’s reaction so far has been, at the Start Britain conference, Chancellor George Osbourne stated ‘We are considering tax breaks for capital investment, which we will be looking at ([in more detail], particularly for various manufacturing businesses.’ If the British government doesn’t support Mulberry, then they may be forced to invest in their other production bases in Turkey or Spain, another wasted opportunity for English manufacturing.

This is a real opportunity for the British Government to invest in something positive, by channelling some of the money they are saving elsewhere, into giving more manufacturing contracts to English manufacturers, tax breaks and NI holidays which will allow manufacturers to grow and expand more easily, this will help to kick start English manufacturing. In the long run it will create more jobs, taking the unemployed off the dole and into more skilled jobs, contribute to the economy and overall make England a more lucrative country to manufacture in. We have the reputation of great design and highly quality manufacturing now all is left is to prove it!      

In part two: Retailers have to step up to the mark, and support English manufacturers.   
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A Taxing Problem 01/19/2011
 

Our American “special friends” are stalking us like prey again – the US medical giant Johnson & Johnson are apparently trying to buy Hull-based Smith & Nephew for an estimated £7+ Billion, but the S & N board have been trying to keep this news quiet for some reason, despite Takeover Panel rules that require companies to keep investors informed of possible offers. Strange, that…..

If recent acquisitions by American companies are anything to go by, it will pan out something like this: a British bank bailed out by English taxpayers in 2008 will play the role of Judas and lend the Johnson gang the money – the Smith big-wigs will receive huge “golden goodbyes” - all production in England will be phased out and moved abroad - and finally the company will be re-registered in Switzerland where corporation tax is considerably lower than the 28% that the short-sighted British government insists on charging every company that wants to do business here. Everyone in England will suffer as another FTSE 100 company is swallowed up by global capitalists and moved abroad, along with all the revenue and employment it provided. Indeed, a steadily increasing number of British companies have already re-registered in Switzerland, and are saving millions in tax already.

Firstly, we see no sense in foreign companies being allowed to buy out profitable English companies, and English Radical policy would be to limit by law, any and all foreign holdings in English companies to 33%, to prevent these precious assets being stripped away from us. The only possible exception to that rule would be to rescue an English company in severe difficulties - and then only after the workforce had been given the opportunity to buy the company and run it themselves and the Government has considered purchasing a 'Golden Share' to keep the company in business and majority ownership in English hands.

Secondly, the 28% Corporation Tax – a tax on net profits – ensures that British and English companies will always struggle to compete against companies that use cheap labour. So, if you can't  match the labour costs, then you must reduce the tax overhead to attract investment. The English Radicals believe that all taxes on home grown income and profits should be lowered to encourage initiative and productivity (as long as that income and profit stays in England) - whether they be company profits, share dividend payments or worker’s pay -while taxes on consumption should be increased, especially on foreign made goods and services – these twin measures would encourage English production and jobs on the one hand, and encourage people to consume fewer imported products. We've said it before and we'll say it again: England is a massive market of fifty million people – if you want to sell here, make here. You bring the jobs, and we'll buy your products.

Thirdly. why do governments feel the need to charge such high rates of corporation tax in the first place? Because they need revenue like a junkie needs a fix, due to their inefficient, bloated, centralised nature. The “bigger” the government (as in dictatorial and controlling), the bigger the fix has to be. China's corporation tax is 30% - their government controls every aspect of Chinese life, and even in China that level of “big brother” control doesn't come cheap. So, if the British government could get used to the idea of taking a smaller role, and allow local government at county/regional level to take on more responsibilities, they could get by with much less money.

It is also interesting to note that EU aid to Ireland has been conditional on them raising their Corporation Tax rate from 12.5%, one of the lowest in the EU – whilst French, and German (if you add the national and local taxes together) corporation taxes are currently over 30%. Ironic and sad that Ireland fought so hard to gain independence from the chinless British aristocracy, only to have their sovereignty stolen by faceless European bankers a few decades later.

We are no lovers of global capitalism, but we are pro-business – and if we want to attract manufacturing (and therefore wealth creation) back to England, there has to be something in it for the manufacturer. These are our proposals:

Imported products into Britain/England from nations with whom we have large trade deficits to be taxed more heavily than at present. This would limit the present advantage of global capitalists producing in low paid sweatshop economies, and exporting to higher wage economies like our own. We are happy to trade with other nations, but there must be more balance.

Central government to keep 33% of this taxation revenue, the other 67% to be shared out fairly amongst the devolved local county/regional authorities of England.

Foreign owned companies producing in England (eg, Nissan) to pay only 20% CT. (split 50/50 between that local area and national government).

English owned companies producing in England to pay only 10% CT. (split 50/50 between that local area and national government).

English co-operatives producing in England to be exempt from CT altogether.

A tax regime such as the one we propose would once again make it viable for both home grown and foreign companies to set up shop here. Critics may argue that these proposals would result in less corporation tax revenue - but the British government is driving away tax paying businesses altogether, by charging more than it should! Imagine the British government as a landlord whose tenants have discovered cheaper rooms across the road – the Tory's beloved “free market” dictates that in such an event you should drop your rents to compete, or face having no rental income at all.  Which is better - some corporation tax and more employment, or no corporation tax and mass unemployment?
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