What Andy Burnham's £80 T-shirt really tells us

There has, over the past few weeks, been a rather - how to put this? - lively conversation in the press about the sartorial choices of our new Prime Minister.

In brief, Andy Burnham has departed from the template laid down by most previous UK leaders and made it a badge of pride to wear casual clothes including, shock horror, T-shirts to some of his public events, instead of the jacket and tie sported by most of his predecessors.

That was shocking enough for some of the country’s stuffier political commentators. Then a few days ago, the Daily Mail found a hypocrisy angle on the scandal, fulminating that “‘Man of the people’ Andy Burnham’s down-to-earth outfits are all actually designer - including an £80 T-shirt… that’s more than he cut electricity bills by.”

Now in some respects all of this - the fuss about the T-shirts and then the fuss about how much they cost - is simply yet more evidence of what we here in the UK fondly refer to as the “silly season” - the period of parliamentary recess in the middle of the summer when newspapers are forced to fluff up minor stories into giant exposes, in the absence of much actual news.

But I think this story, of Andy Burnham’s expensive T-shirts and jackets, is actually rather more interesting than it probably seems on the surface - albeit not for the same reasons the Daily Mail thinks it is. Understand why Andy Burnham is paying so much for his casual-wear and you begin to understand rather a lot about the deep-seated problems we as a country and as an economy are facing right now. You begin to see how enormous is the challenge he faces as Prime Minister.

I know as much because it so happens I have spent the last few years diving deep into the rabbit hole of global supply chains, trying to understand how things are made, why they are made where they are made and how much it really matters. That much will become clearer when my new book Trade World comes out in September (plug over - but yes, please do pre-order from the link if any of the following piques your interest).

Anyway, one of the rabbit holes I disappeared down while researching the book concerned the seemingly simple question of who actually makes clothes. Have a look at the label on one of the items of clothing you’re wearing and, in particular, look at where it says it was made. The chances are, if it was a T-shirt or a pair of jeans it was Made in Bangladesh, or maybe India or China. Who knows, maybe it was even Made in England. Simple, right?

Well, not quite. Because that label actually begs far more questions than it answers. Consider the production of a standard T-shirt (something similar goes for jeans by the way but since I focus mostly on jeans in the book let’s do T-shirts here). Most of the world’s cotton is grown in China, India, Brazil and the US. Once plucked off the bush, the cotton has to be ginned, which means removing all the sticky seeds and oils. Then it has to be spun into yarn. After that it needs to be knitted into a fabric (most cotton is knitted though less stretchy ones are sometimes woven). The result of all this work is a long sheet of fabric, ready to be dyed and finished.

Only then is the fabric cut into the relevant shapes and sewn into the form of a T-shirt. And here’s the key thing: even if your T-shirt was made in Bangladesh it’s highly likely the cotton was picked somewhere else and then woven somewhere else altogether. Perhaps it was grown in China. Maybe in Pakistan. Most likely it was picked in one country and then spun in another one altogether.

But here’s the thing, all of this work (and there has been an awful lot to get to this stage) counts for absolutely nothing from the perspective of the label on your T-shirt. Because, according to international trade regulations, the only bit that counts for the label is where the T-shirt was cut and sewn. That, in the parlance of international trade regulations, constitutes the last major “substantial transformation” and so that’s where, officially, the T-shirt was “made”.

Except, of course, it wasn’t made there. It wasn’t grown there, it probably wasn’t woven there and it almost certainly wasn’t ginned there. The perverse magic of the modern trading system is such that invariably a T-shirt (or a jumper or a toy or a car or even a fish finger in your local supermarket) has quite plausibly travelled thousands of miles long before it reaches the country named on the label and, critically, the vast majority of those journeys happen entirely below the radar.

Today it is so cheap to ship stuff around the world on container ships so massive they can barely fit in most ports anymore that American leather producers often find it far more economical to send their leather to the other side of the world to be tanned and sewn before being sent back to America for a final processing step. If they’re really clever they can make that final processing step constitute a “substantial transformation” and henceforth the label can claim the wallet or belt was “Made in America”. But was it really Made in America? Well, perhaps now you see, this is actually quite interesting.

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All of which brings us back to Andy Burnham’s expensive casual-wear. By all accounts, much of it is made by a company called Private White V.C., a company established by James Eden, who left a career in the City to relaunch what was once the family business, making coats in a red brick mill on the banks of the River Irwell in Manchester. This is, says the company, the last surviving factory from the Industrial Revolution.

For a long time, Manchester was the centre of the textiles universe. A staggering industrial powerhouse, producing more cotton cloth than any other place on the planet. Most of the cotton itself was, mind, grown somewhere else entirely, for the most part the plantations of the American south. The raw cotton was ginned in America and then shipped over in bags and bundles to Manchester, where the mills were able to spin, weave and sew it into clothing cheaper and more efficiently than anywhere else on the planet.

By the way, the story of “Cottonopolis” - its rise and fall - is one of the most fascinating of all economic parables, with bracing relevance and lessons for the modern reader. But for the time being, the main thing you need to know is that once the rest of the world began to crack the nut of how to spin and weave cotton as efficiently as they did in Manchester, very quickly Britain’s pre-eminence in mass market textile manufacturing came to an end.

Fashion might just be the most brutal, cut-throat of all consumer markets. Folks just love cheap clothes. So the minute buyers from British retailers realised they could buy textiles and then finished clothing from overseas (mostly Asia), that’s what they did. One of the most fascinating untold stories from 20th century history (well, until this book comes out) is how a small band of intrepid fashion middlemen more or less invented offshoring, blazing the trail that would later be followed by everyone from smartphone manufacturers to trainer companies like Nike.

There were two consequences: First, the price of clothing stopped rising half as fast as the rest of the inflation basket. Second, a swathe of factories across the UK shut down. Once upon a time, they were mostly in competition with each other. Now mills in Manchester were competing with mills in Gujarat and Dhaka.

How did those Asian mills outcompete Manchester? In large part because they had far lower labour costs and because they could source their cotton, polyester, wool etc, from other countries with even lower costs. Everything was about cost - about putting price above provenance, labour standards, and often even quality.

What makes this phenomenon all the more discomforting is that it was, in large part, a consequence of consumer behaviour - in other words, us. People like cheap stuff. They might declare that they would much rather buy something of certain provenance and quality but all the evidence is that when asked to pay more for locally-made items than those that come from further afield (possibly sweatshops), they invariably opt for the cheaper option. One of the most depressing conversations I had while researching Trade World was with a senior fashion executive who had spent years building a truly transparent supply chain for a famous brand. It had to be shelved after it turned out consumers simply didn’t want to pay the extra pounds necessary to source the clothes from ethical, organic sources.

All of which is to say, the fact that Andy Burnham’s T-shirts and jackets cost far more than the stuff you buy in your local supermarket comes back to the fact that the vast, vast majority of fashion companies operate on a totally different business model to Private White. As its managing director Michael Stoll says, “90% of our raw materials are sourced within a 50 kilometre radius of our Manchester factory… Our wools are from Yorkshire and our cottons are from Manchester”.

But doing it this way is far, far more expensive than doing it the way we’ve done things for the past half century or so. And the more mills and weavers have closed the harder and more expensive it has become.

For decades, the global economy focused primarily on efficiency, on reducing prices and sourcing everything from clothing to steel to technology from wherever it was cheapest. That contributed to one of the biggest periods in global prosperity in modern history. Consumers in developed economies were able to enjoy cheaper products. Workers in Asia and beyond were able to climb the development ladder by making simple and then less simple products that would then be shipped to the other side of the world.

But all of this was dependent on the assumption that geography had been more or less eliminated: that where something was made was essentially irrelevant. So what happens in a world where, thanks to war, technology and tension, thanks to chokepoints being choked and shipping being under threat, geography does matter all over again?

The short answer is that stuff starts getting expensive all over again. Making stuff domestically is just more expensive. Now, I’m not positing the notion that the UK should be making its own clothes all over again. But Andy Burnham’s wardrobe, sourced mostly from Manchester, is a useful illustration of this quandary - a quandary that goes for everything from food to the steel and guns.

Now it so happens that the new Prime Minister and Chancellor have also signalled recently that they intend to source considerably more items from the UK than before.

In other words, this isn’t just about £80 T-shirts. This is about a bigger question: about the rights and wrongs of sourcing stuff from overseas, about whether we, as an economy, should be making stuff or buying it in. These are not new questions. They go back to the 19th century, to the Corn Laws and the very beginnings of the notion of “free trade”. They are bound up in moments like Brexit, in Donald Trump’s “America First” policies. They are key to understanding where the economy may be heading in the coming years.

So yes, this isn’t just about T-shirts. But maybe that’s a good place to start thinking about what I like to call the Trade World.