The government is being urged by a cross-party group of MPs to take urgent steps to fix throwaway ‘‘fast fashion’’ by supporting the development of fabrics with a lower environmental impact and boosting clothing recycling facilities. After Covid-19 exposed its “faultlines”, the industry needs to follow a more sustainable route to survive, recommends the report from the all-party parliamentary group (APPG) for ethics and sustainability in fashion. The pandemic has “significantly hit” the sector, the report – entitled Making the UK a Global Leader in Sustainable Fashion – warns, where “supply chains have broken, sales have dropped, unsold stock has built up, retail outlets have closed and companies have gone out of business. Consumer habits have shifted and so have attitudes – the public wants to see change.” Research carried out by the environmental charity Hubbub and released on Tuesday with the report reveals that 65% of UK residents agree that the government should urgently do more to reduce the negative impact of the fashion industry on the environment. MPs want the government to invest in more research and development to create more sustainable fabrics that have a lower environmental and social impact, and boost UK textile recycling facilities. They are also calling for a review of VAT rules which currently make it more cost-effective for companies to destroy unwanted clothing than give it away, and investment in skills to bring more clothes manufacturing jobs back to the UK. “Coronavirus has exposed deep inequalities and unsustainability in the garment industry” said Catherine West, chair of the APPG and Labour MP for Hornsey and Wood Green. “Creating a sustainable and ethical future for the fashion industry is an important but complex challenge for government, industry and the public and what is clear is that there is an appetite for this on all sides. We must seize this moment by pushing the government to be a global leader, helping to build a more sustainable and ethical fashion industry.” Even before the virus struck, the environmental and social impact of the industry was under public scrutiny, with fast fashion resulting in £140m worth of clothing being sent to landfill every year in the UK. Despite high charity shop donation rates, 300,000 tonnes of clothing ends up in household bins every year – 20% of which goes to landfill and 80% is incinerated – according to a recent report from the environmental audit committee. ONS figures show clothing sales plummeted by 34% in March while online shopping as a proportion of all retail reached a record high of 22% with retailers such as Boohoo – plunged into controversy over its treatment of staff as a result of a Guardian investigation – thriving. High street casualties, meanwhile, include Aldo, Cath Kidston, Debenhams, Laura Ashley, Monsoon Accessorize, Oasis, Quiz and the UK arm of Victoria’s Secret, all of which have fallen into administration. The market research company Global Data said in March the UK clothing sector would be the worst hit with a slump in spending by a fifth (20.6%). Sales of clothing and footwear in the UK alone are expected to decline by £11.1bn. Manufacturers are urged to “reassess and rebuild” their strategies, although among the UK brands highlighted for being quick to adapt their supply chains as a result of coronavirus are Mulberry, which ran up 8,000 hospital gowns for NHS hospital staff in Bristol, and Mackintosh, which gave up its Lancashire factory to produce nurses’ uniforms. • Sign up to the daily Business Today email here or follow Guardian Business on Twitter at @BusinessDesk.