The UK’s largest retail trade body has stepped up its demands for urgent government action to end illegally low wages among garment workers in the UK, arguing that more than 10,000 people have been denied £27m in pay since July.

The British Retail Consortium and MP Lisa Cameron, chair of the all-party parliamentary group on textiles and fashion, have written to Priti Patel, home secretary, to repeat demands for the speedy introduction of a licensing scheme for UK-based textile manufacturers to safeguard factory workers’ pay.

It follows resurfaced reports of many garment workers being paid as little as £3.50 an hour, well below the national minimum wage of £8.72. The scandal has shaken fast-fashion retailer Boohoo, the largest buyer from Britain’s garment hub in Leicester, which is now scrambling to convince stakeholders it can clean up its supply chain after evidence of illegal work practices.

Helen Dickinson, chief executive of the BRC, said the trade body had made similar calls in July backed by 50 cross-party MPs and peers as well as 40 retailers, which had not led to “any significant action from government to bring this injustice to an end — all the while garment workers are robbed of tens of millions of pounds in wages”.

The government on Sunday said it would respond to the BRC’s letter, sent on Friday, adding that it expected businesses to do “all they can to tackle labour abuse and exploitation in their supply chains”.

It said that it was “deeply concerned” by the reports of “illegal and unsafe working conditions for garment workers in Leicester”, and that perpetrators would face consequences “if evidence comes to light through the work of our new specialist task force, led by the Gangmasters and Labour Abuse Authority”.

Boohoo is not part of the BRC but has previously also urged the government to license factories that supply them and ensure they meet “their legal obligations to their employees”.

The BRC has proposed a “fit to trade” licensing scheme to protect workers from “forced labour, debt bondage [and ensure] payment of national minimum wage, VAT, PAYE, national insurance, holiday pay and health and safety”.

A licence to operate for clothing factories would encourage retailers to once again source from the UK, the organisation argued, after notoriously bad labour standards in manufacturing hubs such as Leicester have contributed to many companies shifting production abroad.

Last year, the HMRC investigated 3,400 businesses for underpayment of workers and identified more than £21m in wage arrears — less than the sum workers in Leicester have lost out on in the past three months, according to the BRC.

“Right now, we have an opportunity to create a more ethical and sustainable fashion manufacturing industry in the UK, providing better jobs and boosting the economy at a time when it is needed most,” said Ms Cameron.

“Without urgent action thousands more people face exploitation,” she added.

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