Tax fashion brands to fund circular economy for garments, MPs urge

A group of MPs is calling on the UK Government to introduce policies which would see fashion brands pay a producer responsibility charge of 1p for every garment they produce, in addition to lower rates of tax for companies minimising the environmental footprint of their products.

The call to action, published in a report from the Environmental Audit Committee (EAC) today (19 February), comes after the cross-party group of MPs conducted the nation’s first full-scale inquiry into the environmental and social impacts of the fashion sector.

The inquiry, which has been running since last June, has seen MPs receive evidence concerning some of the fashion industry’s biggest sustainability challenges from high street brands, independent designers, luxury fashion companies, academics and NGOs alike.

Corporates to have taken part include the likes of Stella McCartney, Marks and Spencer (M&S), ASOS and Boohoo, while evidence has also been given by SMEs and activists. The new report is an amalgamation of their insight.

Entitled ‘fixing fashion: clothing consumption and sustainability’, the 69-page document reveals that around 300,000 tonnes of clothing, shoes and accessories are sent to landfill or incineration in the UK every year - a trend which the EAC pins on the cradle-to-grave nature of the ‘fast fashion’ business model.

If fashion brands were made to pay a 1p extended producer responsibility (EPR) charge for every item they made, the report claims that £35m could be raised every year to pay for better garment recycling facilities, helping to recapture the £140m of value that is currently lost to the system annually.

To complement this EPR system and further incentivise ambitious sustainability actions from fashion retailers, the report also recommends that the Government introduces tax breaks for companies which are successfully lowering their waste and carbon footprint – by shifting from a sales-based model to a servitisation model, for example.

“Fast fashion means we overconsume and underuse clothes, and our insatiable appetite for clothes comes with a huge social and environmental price tag: carbon emissions, water use, chemical and plastic pollution are all destroying our environment,” EAC's chair Mary Creagh MP said.

“Fashion retailers must take responsibility for the clothes they produce. The Government must act to end the era of throwaway fashion by incentivising companies that offer sustainable designs and repair services.”

The report urges Ministers to introduce mandatory environmental targets – covering waste, carbon and water – for fashion companies with an annual turnover of more than £36m.

Make do and mend

The calls to action come after the EAC’s own research found that UK residents are consuming new clothing at a faster rate than their counterparts in mainland Europe, purchasing an average of 26.7kg every year.

Similarly, the World Wear Project estimates that the average household generates more than 35kg of waste clothing annually, with 85% being sent to landfill.

According to the Ellen MacArthur Foundation, the UK’s failure to create a circular economy for fashion is costing around £82m per year – the majority of which is lost by landfilling clothing. On a global scale, the Foundation estimates that $100bn is lost to waste garments annually.

In the face of this challenge, several big-name fashion brands are turning to repair, rental or resale models. H&M, for example, recently launched garment repair and customisation facilities across its stores in France, Germany and Norway, while VF Corporation is selling upcycled goods through its ‘The North Face renewed’ platform.

Both companies – along with 14 other brands - are members of the Ellen MacArthur Foundation’s ‘Make Fashion Circular’ initiative. Launched last summer, the scheme aims to scale up business models which will keep garments in use, utilise materials which are renewable and recycle old clothes into new products.

While progress in this area has gathered pace, academics have argued that a truly circular economy for fashion will not be achieved unless emerging, resource-efficient business models become mainstream and are complemented by wider cultural change.

Taking this stance into account, the EAC is recommending that a lower rate of VAT should be applied to fashion repair services, so that partaking in the circular economy is more affordable and accessible to the general public than simply buying new items. The Committee is additionally calling for garment care and repair lessons to be introduced to the national curriculum.

“Children should be taught the joy of making and mending clothes in school as an antidote to anxiety and the mental health crisis in teenagers,” Creagh added.

“Moreover, consumers must play their part by buying less while mending, renting and sharing more.”

Sarah George