£20 Million a Year Stolen From Leicester City By Slave-Masters

Over the past six months the University of Leicester’s Centre for Sustainable Work and Employment Futures has been investigating working conditions in UK garment manufacturing industry here in Leicester. The results of this work, backed by the Ethical Trading Initiative, were published yesterday as “New Industry on a Skewed Playing Field: Supply Chain Relations and Working Conditions in UK Garment Manufacturing” and led to an article in the Leicester Mercury (see “2,500 Leicester textile workers paid half the minimum wage”).

min wage

The most horrifying statistic highlighted by this study was that the majority of garment manufacturing employees in Leicester were being paid less than £3 per hour. Furthermore the study’s conservative estimate was that in 2010 “the defrauded weekly wage sum in East Midlands apparel manufacturing is around £1 million a week; resulting in an estimated £50 million a year lost in underpaid wages.” * As about 5,000 of the East Midlands garment workers are based in Leicester this equates to small garment factory owners defrauding Leicester city out of around £400,000 a week, or £20 million a year in underpaid wages that could be spent by garment workers within Leicester on buying food and paying rising energy bills.

Yet bizarrely the Leicester Mercury somehow manages to twist this revelation, reporting simply that the study “found the average weekly household income of Leicester’s estimated 5,000 textile workers was £229.” This figure confuses the issue somewhat (to say the least) as what the report actually emphasized was that the average take home pay for garment workers grafting for an average 28.3 hours a week with a “near complete absence of employment contracts” was a measly £79. The slavery report goes on to observe:

“Throughout the Leicester case-study, most widespread is the under- or non-payment of wages at the National Minimum Wage (NMW), the absence of employment contracts, late payment of wages, and the official declaration of a portion of wages only. Employers often consider welfare benefits as a ‘wage component’ and force workers to supplement wages below the NMW with welfare benefits. These problems are endemic in the industry: reports consistently put the average wage at £3 per hour and state that this applies to 75-90% of jobs in the sector. A conservative estimate on the above evidence would put the underpaid wage sum in apparel manufacturing within the East Midlands at £1 million per week.” (p.10)

Finally one must remember that it is the HM Revenue and Customs (HMRC) that has operational responsibility for enforcing the minimum wage. The problem herein lies with the Government’s unfriendly relationship with the parts of the HMRC committed to collecting tax from business owners, combined with the Government’s open hostility toward PCS union representation within HMRC (see “PCS: Safeguarding its future in the face of vicious Tory attacks“). Moreover, as the TUC pointed out in a report released in 2008, “HMRC has around 5 per cent of the number of inspectors that are available to the Department for Work and Pensions (DWP) benefit fraud unit, and overall numbers remain at 89.5 inspectors nationally…” The TUC report then adds how…

“…inspection rates are significantly lower than those of the Wages Councils in the 1980s, and that since 1988 the number of wage-related on the very existence of the HMRC enforcement visits undertaken has fallen by 14,930 per year. Similarly, research undertaken for the Low Pay Commission has found that there are only half the number of compliance officers in post compared to the number of Wages Council inspectors in the 1950s, despite ‘the considerable expansion of ‘at risk’ populations such as part-time ethnic minority and women workers’.” (p.136)

When earlier today — via twitter — I asked local Labour MP Jon Ashworth to comment on the presence of modern-day slavery in Leicester he tweeted the following response: “this is shocking. I met Debbie Coulter some months ago on this issue; now I’ll be urging HMRC to investigate report findings”. Debbie Coulter being the head of programmes at the Ethical Trading Initiative.

This response is all well and good on a rhetorical level, but what is really important is what concrete actions has Mr Ashworth carried out in Leicester to stop such slavery; slavery that was the feature of a national TV documentary over five years ago now. So by way of a follow-up tweet I asked him why he had not publicized this critical issue in the Leicester Mercury. This question was all the more pertinent given that earlier last week he bothered to take the time to create a media event promoting the good work of British Gas, a corporate love-in that was dully reported in the Mercury.

Needless to say, a councillor committed to representing the British working-class would have used a visit to British Gas to highlight the need to nationalize this greedy energy giant, in order to bring down astronomical energy prices; likewise a working-class politician would attempt to use his influence upon the local and national media to help launch a campaign to stamp out slavery once and for all. Just “urging HMRC to investigate” the findings of the slavery report is simply not good enough. Especially because of the poor position that the HMRC is in to make a real difference without strong political support. Indeed this is something that the slavery report took up when it noted:

“Turning to [National Minimum Wage] NMW enforcement by HMRC, it is crucial to note that action in this area is dependent on worker-led complaints. By itself, this mode of enforcement is by design inadequate. Not only does it require a detailed complaint by a garment worker with extensive diary information on working times and work patterns, such complaints are further strengthened by similar information concerning the entire workshop. Such a complaint and the relevant evidence might then be considered by an employment tribunal and it is very likely that potential claimants will consider, both, the fees payable as well as the proceedings, prohibitive. .. Finally, if a claim were to be heard at an employment tribunal, it is easy to imagine how the claimants’ evidence might be evaluated against counter-evidence from a number of employees ‘loyal’ to the employer. In addition, frequent changes of ownership, as firms are wound up and immediately incorporated again under a new name, make this even more difficult.” (p.42)

Footnote
* “In 2010, there were 11,700 employees in the East Midlands apparel manufacturing industry (excluding working proprietors). Assuming that 75% of those workers are paid £3.50 below the NMW and assuming that the average working time is 30 hours per week, we can estimate that the underpaid weekly wage sum for the East Midlands is around £920,000. This might well be a conservative estimate as a number of respondents estimated that 90% of workers are paid below NMW rates, as the actual number of workers and average working times in the industry might be higher. Thus, we can proceed on the assumption that the defrauded weekly wage sum in East Midlands apparel manufacturing is around £1 million a week; resulting in an estimated £50 million a year lost in underpaid wages.” (p.35)

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