the pro-growth case for a single labour market enforcement body
policy isn't sexy #2
In November 2010, Channel 4 Dispatches aired a one hour long report about conditions in garment factories in Leicester. Journalist Tazeen Ahmad had spent three months undercover as a garment worker, in ‘sweatshop like' conditions, making clothing for British high street chains for less than half the legal minimum wage.
In January 2017, Channel 4 Dispatches aired a one hour long report about conditions in garment factories in Leicester. Undercover reporter ‘Belal’ had spent months working as a garment worker, in ‘sweatshop like’ conditions, making clothing for British high street chains for less than half the legal minimum wage.
Between 2017 and 2020, reporters for the Financial Times, the BBC, the Independent, The Sunday Times, and other major UK outlets conducted their own investigations into conditions in garment factories in Leicester. All reported ‘sweatshop like’ conditions, and workers making clothing for British high street chains for less than half the legal minimum wage.
It wasn’t until the midst of the Covid-19 pandemic in July 2020, when Leicester became the first city in the UK to be plunged into a second lockdown after cases in the city surged, that serious political attention turned to the problem.
The same garment factories reported on by many over the previous decade had stayed open in contravention of lockdown regulations, forcing low paid workers together in cramped conditions, contributing to the city’s surge in cases.
Public Health England found that men, aged 20 to 40, who worked in the city’s garment district, and food processing plants, were the primary vectors of transmission.
This wasn’t a hidden problem — the year prior, Parliament's Environmental Audit Committee had heard evidence that it was an ‘open secret’ that many of the 1000+ factories and processing plants in the city were requiring workers to work in unsafe conditions, and paying far below the legal minimum wage.
It also isn’t a geographically constrained problem — while the density of these workplaces in Leicester means it has often been the site of sustained activism and investigation, the ONS estimates that 1.3% of British workers are paid below the minimum wage - that’s almost 400,000 people nationally.
Yet consistently, in Leicester and beyond, the action taken by the Labour Market Enforcement Agencies responsible for enforcing these laws is slow and rare.
I say Labour Market Enforcement Agencies (LMEAs), plural, because there are so many of them — and in many cases, contrary to what one might initially think, it is this plurality that has lain at the heart of the problem.
There are three primary LMEAs in the UK — the HMRC (which enforces adherence to the national minimum wage), the Gangmasters and Labour Abuse Authority (which tackles labour exploitation, include forced labour and modern slavery), and the Employment Agencies Standards Inspectorate (which regulates employment agencies and bodies that provide temporary workers).
In addition to this, there are a series of smaller bodies with overlapping remits in the space — including the Health and Safety Executive, and Local Authorities (who often oversee environmental health and trading standards).
This patchwork like landscape has repeatedly been the cause of operational inefficiencies, and compounded further by under-resourcing in key agencies, has created the perfect storm that allowed garment factories in Leicester to continue to exploit workers for so long.
In the case of Leicester coordination between these organisations was poor, and they were severely underfunded and understaffed.
The GLAA had just 100 inspectors in 2020, to cover the entire UK Labour Market. The International Labour Organisation sets a minimum benchmark of one inspector per 10,000 workers to enable enforcement; the UK has just 0.29 per 10,000 — less than one third of the way there.
Repeated calls from these labour market enforcement bodies for the creation of a single enforcement body were ignored; the previous government's pledge to create one was abandoned shortly after it was made.
While Operation Tacit, the emergency cross-organisational investigation launched by the Home Office in response to the COVID-19 induced tipping point in Leicester, undertook one of the largest labour market enforcement investigations in the UK, and demonstrated the benefit of coordinated labour market enforcement, no serious steps were taken by the previous government towards setting these kinds of operations on a statutory footing.
This may be set to change however, under the steer of the still relatively-newly-elected Labour government.
On 10th October 2024, the government introduced the Employment Rights Bill to parliament, including provisions for the establishment of a ‘Fair Work Agency’, which is set to bring together existing state enforcement of labour rights, and additionally carry out enforcement of holiday and sick pay rights.
While questions remain regarding staffing and resourcing, and particularly regarding data sharing with other departments (a big concern amongst workers rights organisations is the prospect that such an agency might freely share data with a Home Office that no longer offers protections from deportation to victims of modern slavery), a move in the direction of a single enforcement body is one of the most promising aspects of these proposed workplace reforms for the most vulnerable workers in Britain.
But as is the case with all moves towards better protections for workers in Britain, a common refrain arises amongst detractors of these proposals, and of proposals to enforce labour market protections more broadly - won’t somebody, please, think of the bosses.
For these detractors, the cost that businesses are required to bear in order to pay and treat workers fairly are deemed to be too burdensome; stifling innovation and growth.
We see the outcomes of this kind of opposition in practice too. In Leicester, after large scale investigations had been launched, garment factory owners started large Whatsapp group chats to coordinate with one another; describing labour market enforcement agencies as their shared enemy; accusing ‘do-gooders’ of attempting to throttle their industry.
Amongst the capitalist anti-regulation opposition to these reforms, the basic principle that a business model that relies on exploitation isn’t viable or worth preserving is rarely considered.
These principles should be foundational to the DNA of Britain and its domestic politics - not just amongst the old Labour trade unionists to whom we most commonly attribute the refrain, but even in the old Conservative traditions.
When the British government set up trade boards in 1909, to set legally enforceable minimum wages in certain trades with historically low wages, then MP and President of the Trade Boards, Winston Churchill, stated that;
“It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil… where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst”
But opposition to this enforcement prevails regardless, and the simple fact of who is really responsible for undercutting the wages of workers across Britain remains obscured. Many of the most exploited workers in the country - in Leicester and beyond - are recent immigrants, those without fluency in english and low levels of qualifications, often unable to navigate the unequal power structures between themselves and their employers in order to report poor conditions to the necessary authorities.
This exploitation is not, as Reform UK and similar opportunists would have you believe, a result of ‘immigrants undercutting British workers’. Rather it is a result of employers - overwhelmingly British - exploiting some of society's most vulnerable, often at the additional external cost of British workers.
This wage suppression is employer driven, and is a result of structural failures to prioritise workers rights over corporate profit.
While the Fair Work Agency is a positive step towards reforming this, we must not allow business interests to throttle its efficiency under the guise of economic viability.
And in particular, those of us on the left concerned with notions of ‘growth’, must be especially careful to coherently refute this narrative.
Growth in the progressive sense is not an abstract concept - it’s not lines on a graph, or figures in a spreadsheet. Progressive growth is driven by, and should serve, people, not capital.
It prioritises the impact that economic growth has on the lives and living standards of people across the UK, rather than making the mistake we have watched so many make before, and assuming that a rising economic tide inherently lifts all ships.
The current wisdom would have us prioritise cheap meals over good jobs; and have us cater to the waited upon over the illegally underpaid waiter.
Economic growth should raise working conditions, not further perpetuate exploitation.
It should prioritise workers over the businesses that seek to exploit them.
Ineffective labour market enforcement isn’t an issue constrained to Leicester - it’s a national crisis. It has real and tangible impacts on the wellbeing, health, and living standards of hundreds of thousands of workers across the country.
A single enforcement body offers a serious potential step forward for workers rights in this country. And improving the living standards of workers, removing those employers hell bent on exploitation and unsustainable profit models, and replacing them with good jobs and good work, is a significant step towards making the lives of these workers and their families better.
For those who understand growth as the pursuit of capital, the positive externalities of such a policy will not be clear. But for those of who understand that any economic growth worth having must also benefit the working people of Britain, the establishment, resourcing, and funding of such an enforcement body is a no brainer.
Growth is for people, not for spreadsheets. The UK must decide: continue turning a blind eye to exploitation in return for short term GDP gains, or enforce a fairer system for all workers in return for long term and sustainable increases in living standards for working people across Britain?