I must stress that Morgana didn't do this artwork.
On Friday morning the UK officially announced that 52% of the UK wanted to leave the EU, and so, possibly, we're out. Except it's a bit more complicated than that.
Quite a few of you sent kindly messages wanting to know if we were ok, what the heck was even going on, and whether our returns policy remained the same. These are all sensible questions, but I especially thank you for the personal concern.
I fully expect this to be an ongoing topic, so, in line with the level of discourse and planning there's been on the national political level, we've created this incredibly well thought out graphic to help identify which posts are "how to make a business work when your country has gotten itself into a right muddle".
Join this small business then, as we wend our way through complex economics issues, exchange rates, import and export duties, consumer rights, logistics, supply trains, political activism, the fundamental interconnectedness of all things, and the ineffability of the UK right now, armed only with a sense of humour, lots of hats, and the ability to cobble things hastily together on photoshop!
Warnings: I am massively biased. Don't take my word on anything, go look it up for yourselves and think about stuff. I'm ok if you want to argue with me about things but also I WILL question you endlessly, especially if I'm procrastinating about some other spreadsheet I should be dealing with.
Also, because I am British, in spite of being pro-EU, I will say things like "it's not clear what improvements the Norway agreement offers on our current situation" and if you're not British, you might think that means that I'm a bit puzzled as to if there are any improvements. What I actually mean is "This is ridiculous, have you totally lost it, can't you see that that is a completely rubbish idea that offers no benefits whatsoever". It's tricky but you can get the hang of it.
So, onwards into chaos, and in no particular order, here's the totally none-comprehensive list of issues that have come up so far.
Does this mean you have left the EU?
No. * (see below for what was supposed to be a summary. It got long. It's complicated.)
From a practical point of view, we have not left. That means that when you buy something from us, it will be just the same as normal. We haven't changed ANY laws and also our infrastructure is still working, or at least the post office is, apparently we kinda effed up banking. Again. But the bit that's important to you is the post and couriers and the interwebs, and that's all functioning as usual.
So what about that returns policy then?
It remains the same. Whoever asked this is well informed; when we sell online our returns policy is actually standardised with everyone else in the EU by law. Laws that were passed by, if not mutual agreement, then at least mutual argument, by MEP's and politicians we can vote for.
The main difference between UK only law and EU law was that they extended the returns period to 14 days after receipt, gave you a year to complain about faults, 14 days to get a refund after retailers process the returned item, the onus is on retailers to pay postage unless we specifically state otherwise for returns, and we always have to pay it if we're asking you to send a faulty item back. There's more detail than that but those are the basics. As I understand it, these are considerably better terms than are standard outside of the EU. The EU; protecting your consumer rights.They will remain in place until at least Autumn 2018. Probably.
No legal changes whatsoever then?
Nope. We'll continue to create and label and pack products in line with our agreed EU standards. And, of course, also in line with the US and their obsession with how inflammable underwear is, and the Russian ban on lace knickers. We just didn't get to agree those things.
What about import and export? and moving people around?
That all stays the same for at least 2 years. Well, probably. There's a slight chance the other countries will get fed up and chuck us out for reasons, like, oh, our government plunging everyone into chaos for local political reasons. So, at the moment, we can get our EU supplies in without VAT or import duty, we can export to you in the EU without you paying import duty etc. At the moment our passports and health cards are working
Hang on, aren't some of your staff from outside the UK? Are they OK?
Yes, just worried.
Day to day is fine, we all just get on with the usual stuff.
But. Whilst no-one in power (yet) is suggesting that EU nationals, like Morgana or Maz, or settled immigrants and their children, families and communities will have to leave. And the majority of people who voted leave did so on the basis of a rather nebulus concept about independence, "laws that affect us should be made here" sort of stuff, not immigration. However. There were also people who voted because they want immigrants out, and/or Muslims out; most of them are in areas that don't have much immigration, or in odd pinch points where small amounts are a big issue for a variety of reasons (usually related to scarce resources, or the perception of scarcity; read up on Social Identity Theory and this all starts to make sense). Some of them clearly feel validated in these ideas, and there's evidence of a rash of verbal and physical aggression, and just outright attacks.
As a 20-somethingth generation Norman invasion descendant (the UK has no indigenous population), I have the privilege of being unaffected, at least directly, by this.
I am not the lingerie designer who passionately believes in making in the UK, using UK lace, who knows more than I ever will about the history of textiles, who has had to deal with an anti-muslim tirade from peers. I'm not the English-born, Polish heritage designer using English manufactured elastics and lace, who knows so much about vintage lingerie she is setting up a museum, who is seeing anti-Polish graffiti scrawled on walls and hearing people tell Poles they will have to get out of the country now. I don't have Nigerian heritage - I can't be instantly identified as "not British" simply because of the colour of my skin (in spite of the number of people of colour who have been here for decades or centuries as part of our trading, colonial and Commonwealth past), and risk one of these attacks.
I'm worried about the exchange rate. But imagine if you were worried about verbal abuse and physical assault if you didn't even know if you were welcome in the country you were born in or grew a business in, if there was even the slightest chance that someone might get the power to make you leave your home. Take a moment to really feel what that would be like.
Hate crimes like this are illegal in the UK, as is inciting racial or ethnic hatred. So please, if you take one serious thing from any of this, it's this. If you are not in the UK, and you see this stuff online, report it. If you are in the UK, and you see this happening anywhere, please, do what you can safely - record it, call the police, report it as abuse to providers, whatever you can. I would say "say something", but most of you are women, and I know that what happens after that is often just you end up hurt too. But we can tackle this, and we must.
And don't despair - the same weekend these happened, we had Pride. Yes, the rhetoric round the referendum has opened up a space for tensions to break out into racial, ethnic and religous hate crimes. But the overall trend is still socially progressive values. We can tackle this.
(The sign says "Gay muslim. I exist to broaden your mind". Picture kindly donated to us by Tania.)
But what about KMD itself? If the post is working and you're all still up and running, why did you say we needed to stay?
Because surviving crashing economies and falling currencies is really hard.**
I know that because we already did it a few times, mind. Also, I have a plethora of reasons, both pragmatic and philosophical, but right now, it's all about the exchange rates.
If you're outside the UK then now is *exactly* the time to buy this from our website. There won't be a better time. That's because right now, our stock is all priced at what it cost to make when the pound bought us more elastic for our pennies, but you can buy it effectively at least a 10% discount (Americans) or more like 15% (EU folks) simply because your money is buying more of our money than it used to.
Whooo massive expansion in export! say the leavers.
The problem with that is . . . the next time we restock it'll be proportionately more expensive. We're currently making in China (where prices are converted to their currency to US dollars to our currency), Europe (where almost everyone charges in Euro regardless of local variations, because it's just not worth the argument), and the UK. You might be thinking "but the UK is fine, right? I mean this could be good for making in the UK".
But no, because to make in the UK, we have to import stuff. Lots of stuff.*** And that stuff is going to cost us way more than it did last week. For example, I paid a Euro bill last week of 1000 EUR, and it cost 772 GBP. If I send 1000 EUR, it would cost 832 GBP. We have no idea what it will be next week. Banks seem to be predicting that it will settle at about 1 euro for one pound and about 1.3 for the dollar. Maybe.
A colleague who works in the tech industry and has to pay people in India has just told me their 10k bill there went from costing £9800 to £12,500 in less than a week
Businesses just don't want to have to deal with this level of erraticness. Our margins are based on earlier predictions of costs - currency fluctuations like this can wipe them out completely.
Now, hopefully, everything will calm down shortly and things will settle out a bit, but until they do that, of my 4 places that make KMD stuff I have one saying "don't know, ask again in a few days" (hopefully it won't affect the stuff that's in production right now because the fabrics were all bought a while back), one saying "its definitely going to be a problem but I won't be able to tell you any prices for a while. By the way, your new stock is arriving Wednesday", and one saying " I can guarantee the stock for August, but after that we're going to have to see. Do you have any more fx forecasts? Also let's talk about some radical changes". The other is our teeny tiny unit in the UK, which relies on corsetry supplies and fabrics from Germany and Italy who . . . charge in Euro.
If any of you can't see the problem here, pipe up and I'll do a visual to help. It's ok if you can't, currency stuff and supply lines fox plenty of people.
in 3 months time, the problem will be "what is the fecking plan!"
At the moment we have a lovely civil service who have done lots of research that politicians are somewhat belatedly reading and there are parliamentary committees forming (you can solve anything with a committee in this country. Probably). What we don't have is a government that's any use, a plan, any negotiations with the EU, or ANY FREAKING IDEA what trading conditions will be like in 3 months, 6 months, 12 months, or two years. There is a MASSIVE fight about whether to just boot us out for causing so much trouble, or if that would just make it worse (France v Germany I think?ish? Probably some of you know better), while our MP's are busy positioning and in-fighting and saying stuff like "actually we just want out of the ECJ" which is a totally implausible bargaining position, but I mean, points for trying. I'm not joking, they're seriously making their pitches without any reference to the fact that to get what they want the other 26 countries would have to agree to it. Also, imagine the biggest, messiest divorce you ever saw, and then multiply it by, oh, 3 billion people, and that's about how complicated this is.
We might get lucky and this all might work out fine for the UK (and us. and the rest of the lingerie/fashion/manufacturing/retail sectors)
We might get unlucky. Both the country, us, and various sectors.
And that extreme level of uncertainty is why you will see some people packing up shop, some people just raising prices, and some people just finding a nice stable country to move to because then we can actually plan our businesses because we'll know what the rules and costs are and what they're likely to be in the future.
Now! I can't stop and get a sensible job, because I'm too disabled to do what I qualified in, so obviously, if any of you have German passports and would like to propose, now would be the time. I've got all my own teeth and an awful lot of amazingly healthy hair with an unfortunate tendency to eat brushes and wrap itself round peoples necks, also, I come with a small business fitted as standard. I am quite annoying though. My snoring is so bad even I admit to it.
I did try proposing to Karolina, and whilst it went better than any other matrimonial endeavours on my part ever have done, it still wasn't a yes.
So that's us, for the moment. Check the most enormous footnote in the world for the complications after the cat, and I promise highly biased answers to any questions.
I feel like now is a good time for a picture of a cat. Pascoe wears a Karolina Laskowsa choker. Pascoe hasn't noticed the referendum because he's a cat, but he decided to protest in various ways, including hurling red food dye across my white kitchen, because he's 900 years old and just does daft stuff now.
* What the heck do you mean you haven't left? You've crashed the entire economy for no reason?
The referendum doesn't force anyone to actually start the process of leaving. No-ones ever left before. There's a clause in the laws and that's about as much as anyone's clear on right now.
We haven't even got started, partly because no-one actually knows the exact technically correct way to do this, and also there's a massive fight happening, and BOTH major political parties have epic in-fighting. The massive fight covers, but is not restricted to:
1) 52:48 isn't a convincing majority, we wouldn't change the voting system on that, why are we changing something this big because of that? Because it's democratic, say leavers, we got a majority, quit whinging. But then even the lead politician of the leave campaign has announced that it's not a solid majority so he doesn't want to go. Words cannot encompass how cynical I am about this latter bit.
2) People voted based on lies and were horribly misled. They thought leave-the-EU meant fund the NHS, or cut immigration, or fix schools, and now the leave campaign have said they can't promise ANY of those things, so shouldn't we re-run it? It's actually very plausible that we will end up re-running it, or something similar, but for entirely different reasons, as there's nothing in law here to stop people making promises they can't keep or are total rubbish. It's up to you to go read up on this stuff, or delegate to your parliamentary representative to decide for you.You emptored, they caveated.
3) People voted as a protest because they are used to their vote not counting and didn't realise it would this time! This is actually a real thing, though how widespread it was isn't clear. We have a first past the post system normally in the UK, in which most peoples votes don't count (like mine; I'm in a "safe seat", where the chances of my representative getting chucked out are minuscule). In a referendum, the maths is different, and everyone's vote counts equally. Some people definitely didn't realise this. Or, they thought the odds were SO stacked in favour of remain that they voted out not actually wanting to go. But no-one really can say if this is enough people to have made a significant difference, and also, people not learning about their own electoral system or playing the odds is not illegal, just poorly thought through.
4) People didn't realise this would be so badly handled, would immediately cause a financial crash, or mean that the United Kingdom was at risk, or any of the other things that have gone wrong in less than a week. Again, this isn't a legal basis for a re-run.
5) Voting didn't split down party lines (we try to keep it to two main parties here, but this is increasingly unsuccessful as historic British left/right values no longer really adequately capture things, which probably explains why we're going through leaders at a rate of knots). It also doesn't appear to have been as highly correlated with age or income or "class" (look, just don't ask, it'd take years to explain if you're not British) as some people insisted. I've seen one report that claimed it correlated with authoritarianism, but the data looked suspiciously tidy. Never trust a single item from a survey with a nice tidy line that's supposed to represent a multi-item-variable - they're likely to be p-hacking. What DID correlate was geographical area, which means that Scotland, a chunk of the North-West (the bit I grew up in! I was very surprised), the South East, Northern Ireland, and Gibraltar (look, also don't ask about the latter, just go Wikipedia it) voted remain, whilst the rest of The North, especially the north-east, plus Wales and Cornwall (the wet bit and the sunny bit). It is notable that many of these areas have been neglected and deprived in our increasingly unbalanced economy over the last few decades. Anyway, that means there's a big fight about the nature of party politics and geographical splits and all sorts.
6) That geography thing is important because this means: the Scottish leader is hustling for a new referendum on leaving the English because they agreed to stay because then they knew they'd be in the EU. The Northern Irish are just plain appalled because if we leave, they're a land bridge between the EU and the UK which will for various reasons be a massive security issue, and really, we're not that far gone from when we had guards and walls and army all over that. Plus, their peace treaty is based on EU stuff and could all go to hell in a handcart. That's bad because although we call it "the troubles", that's just the British way of saying "that small civil war we had for ages, you know, with all the bombs and the guns and stuff". The Welsh may use this as another reason to try for devolution or devo max, and the Cornish have quite possibly only just realised that the money they were getting from the EU because they're a very deprived area probably won't be matched by any future UK only administration. Especially not one that's currently losing money at a vast rate. So, leaving the EU MIGHT trigger the United Kingdom ceasing to exist and just being a very divided England, and it's very much not at all clear that anyone wanted that at all.
7) Mostly, though, our Prime Minister was in theory handed a mandate, however marginal or conflicted, to leave, and then he refused to take the next step. Or even to discuss the next step. Or to negotiate or plan. Effectively what he's done is put the whole thing off for 3-4 months while we find out who IS our Next Top Prime Minister (yes, we can have a prime minister we don't vote in. We didn't plan our democracy, it just sort of got cobbled together over time). Also, it increasingly looks like we'd need to trigger a thing called Article 50 AND revoke a bit of European law by getting a majority in the House of Commons; as MP's are majority remain, it's not obvious anyone could force them to do this. The referendum wasn't legally binding on them and no-one can make them do it. They could even hold a general election and promise to do it and we still couldn't make them. We'd have to wait 5 year or until they gave in and vote them out and try again.
Anyway, setting aside the ridiculousness of the referendum, in 3-4 months an awful lot can happen. People are going to have a much clearer idea of the short to medium term consequences of voting leave, plus, there's things like the Chilcott report, which is liable to be a spanner in the works. Or at least you'd hope so, if you're fussed about why we bomb other countries.
Historically, within the EU, populaces who do not vote the right way on the legislation are told to go home, think very carefully about what they've done, and then either to come back and do it all again, or just ignored, because dammit, you delegate to your representative because they can spend several years reading all the reports and you can't even make it half way down a huffpo article about cats in star wars outfits.
So no, we haven't left. BUT. We've really, really annoyed and upset most of the world, especially the bits closest to us, so they might chuck us out anyway, or at least threaten to. At the moment they are officially refusing to speak to us even unofficially. I'm not even joking, there's an official statement that they're not talking to us, not even unofficially. And I gather we've upset the US by taking out some of your economy with us, maybe? Sorry about that.
** Again day to day is fine, we just get on with stuff. Yesterday I dealt with eyelet issues (the eyelet press has broken), a print that had gone wrong, checked timelines on garter pockets, demi-corsets and FLG's, talked to suppliers, added another 25 items to the site and Lydia answered all the help queries, tackled some returns, reviewed what we'd need for a new factory, and also enjoyed photoshopping us into a boat.
*** On the importing lots of stuff note; we screwed our manufacturing base years ago, so although in theory a lower currency would mean people taking advantage of it to move here, as we don't have the skills or equipment or supply lines set-up to handle this. Also, no sensible investor moves into a country that doesn't know what its costs will be, in terms of things like "will there be import duty or export duty and what will the rate be and what's going to happen with basically everything", because again, how would you make a plan on how to make a profit that way? Did you know we even have to import considerable amounts of food? I've seen estimates from 40 to as much as 70%. The price increase on that will hit much faster than anything else (except maybe petrol; and when petrol goes up so does everything as it's intrinsic to the cost of goods).