In recent years, there have been significant developments in sustainability legislation introduced by the European Union (EU) and United States (US) which apply directly to the fashion and textile industry. Whilst there are a range of views on the effectiveness of this legislation, the United Kingdom (UK) still lacks a coherent fashion and textile regulatory framework of its own. On that basis, there is an urgent need for effective policy recommendations to inform domestic legislation and we can learn from experiences elsewhere to make sure UK legislation is an effective lever to incentivise sustainable, regenerative and circular business practices.  

This white paper builds on the excellent research that has already been done by a variety of organisations in the fashion and textile industry and has been encouraged by the recent establishment of the UK’s Circular Economy Taskforce. The hope is that this white paper will help to foster a more collaborative approach amongst stakeholders in the fashion and textile industry – and inform the CET’s decision-making.

We are proposing three key policy recommendations to help shift the fashion and textile industry onto a more sustainable and level playing field. We suggest that all of these should be enacted together as part of a holistic and systemic approach:

  1. The de minimis customs threshold on imported purchases should be reduced to zero. This is currently being used by overseas fast fashion brands as a loophole to avoid tax. It is prompting a race to the bottom in terms of pricing and is effectively pushing sustainability off the agenda for many British fashion brands. Further work should be undertaken on how to protect small and sustainable firms from being penalised by the removal of the de minimis threshold. For example, in the short term this could initially apply only to large companies based on number of employees or turnover. However, a more permanent solution lies in updating global tariff codes and aligning import duty to a ‘harm’ based taxonomy (see point 3). Customs or VAT relief could then be offered on those products that achieve best practice in ethical and sustainable production.
  2. The UK should mandate an Extended Producer Responsibility (EPR) for all textiles in the UK with fees tiered according to a product’s circular design, durability, fibre composition and production methods. The fees should be ring-fenced to fund the infrastructure needed to create a circular economy. The EPR system should be simple and flexible for brands to adopt. The monetary incentive should be significant enough to encourage brands to engage with circular design practices rather than to ignore it and/ or see it as a problem to circumvent. Fees should be used to fund a holistic range of solutions, including community clothing hubs in high streets across the country focused on educating and developing skills around the repair and reuse of clothes.
  3. The UK should mandate a Digital Product Passport (DPP) system. It should leverage its position as a global data and tech leader to drive standardisation of data and enable the easy flow of fashion related data internationally. This could ensure scanning a simple QR code could be all that is required to determine any EPR fee or customs duties to be paid on a product. We argue the data should be organised according to a ‘harm’ taxonomy/classification of clothing and textiles. Longer term, this information could be translated into a simple traffic light system for consumer labelling on clothing to drive better purchasing decisions and eliminate greenwashing.

Implementation of these three key policy recommendations would represent a significant step forward in transforming the UK’s fashion and textile industry into one that is more sustainable, circular and ethical.

By closing the de minimis customs threshold, mandating an Extended Producer Responsibility fee system and introducing Digital Product Passports, the UK Government can create an effective policy and regulatory framework that incentivises responsible business practices, empowers consumers, and contributes to a more circular and resilient economy.

These measures are essential if the UK fashion and textile industry is to reduce its environmental and social harms, and to reach a target of net-zero carbon by 2050. But they also provide the UK with a clear opportunity to become a world leader in the global fashion and textile industry’s just transition, creating opportunities for investment, jobs and new circular industries and technologies.

We encourage you to read the White Paper here in more detail. If you would like to discuss anything raised, please get in touch with Oliver Scutt or Louise Harman.