The British luxury sector could lose up to 6.8 billion pounds worth of exports a year as a result of a no-deal Brexit, new research reveals.
Data from the international consultancy firm Frontier Economics, commissioned by trade association Walpole, reveals that up to 20 percent of British luxury exports could be lost if the UK, which is currently the world’s fifth largest economy, crashes out of the EU without a deal on 29 March.
Walpole's 250 luxury brand members include Alexander McQueen, Burberry, Bentley, Dunhill, Harrods, Net-A-Porter.
The study indicated that there could be a reduction of around 6 billion pounds per year in exports to the EU, and 800 million pounds per year in exports to Asia Pacific.
In case of a no-deal scenario, exports could be affected by higher costs, delays at borders and changes to tariff and non-tariff measures. The study said that 80 percent of what the British luxury sector creates is currently destined for overseas markets - the largest of which is Europe.
No-deal Brexit would be 'devastating' for UK luxury
Commenting on the report in a statement, Walpole’s chief executive Helen Brocklebank said: “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 cost to the UK economy in lost exports from British luxury will be nearly 7 billion pounds and we believe that money should be used to strengthen the country not diminish it. We urge the government categorically to rule out a no-deal exit”.
Michael Ward, managing director at Harrods and Walpole chairman, 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”.
The news comes ahead of a fresh vote by MPs on Theresa May’s Brexit deal on Tuesday. In January, the PM suffered an historic loss on her deal which was voted down by a margin of 230.
Photo credit: Burberry, Facebook