The Weekly paper of the New Communist Party of Britain
Week commencing 12th August 2022
The Weekly paper of the New Communist Party of Britain
THE LOW PAY Commission last month produced a 40-page report with the self-explanatory title of Compliance and enforcement of the National Minimum Wage: the case of the Leicester textiles sector (hereafter Compliance). This was published following media allegations that the city’s textile industry was ignoring the National Minimum Wage (NMW).
The cotton factories of the north of England that powered the industrial revolution have long departed to sunnier climes. The Midlands city of Leicester is perhaps the only major textile manufacturing centre left in Britain. In the 19th century it was a major centre of hosiery and footwear, the latter produced by a Co-operative factory. It was a stronghold of the Chartist movement, and later of secularism. In the 1930s it was deemed the second richest city in Europe by the League of Nations.
new lease of life
Although its traditional industries declined after the Second World War, the arrival of a very large number of Asians expelled from Uganda in 1972 gave the local textile industry a new lease of life, as the expellees were both businessmen and workers.
Leicester’s rag trade is not Saville Row. It does not make £3,000 suits for Conservative Party leadership contenders. It makes cheap, stylish clothing for the mass market on the street.
Nearness to the customer and cheap non-unionised migrant labour give Leicester factories an advantage. Many remained open during the COVID‑19 lockdowns, putting workers at risk.
Manufacturers are involved in a race to the bottom and are at the mercy of a small number of fashion chains who pay little and slowly but demand speedy delivery in case clothes go out of fashion between ordering and arriving in the shops.
One of these chains is online retailer Boohoo, which was exposed this time last year for sourcing their garments from 50 Leicester factories where many workers were being paid as little as £3.50 per hour.
Below the Minimum Wage
At the time an anonymous worker displayed her official pay slips, which showed she was paid the minimum wage of £8.91. She also had a separate sheet of paper given to her with each payslip, however, detailing how much money she must pay back in cash to the company or get sacked.
Claiming they were unaware of this, Boohoo insisted on suppliers paying the legal NMW and said that now “suppliers are visited more frequently, sub-contracting has been removed, products can only be purchased from our approved supplier list, mandatory whistle-blower helplines have been installed at every supplier”.
But anti-slavery charity Hope of Justice says the factory owners were simply getting better at hiding their wrong-doing from official inspectors and the retailers.
The fact that some sweat-shops have gone out of business suggests that there has been some modest progress, but this can have bad side-effects. The report warns that reforms “would push other worse manufacturers further into the shadows, for instance selling to market stalls rather than high street retailers”.
It is clear that things are bleak for the workers. A recent survey of 108 workers carried out earlier this year on behalf of the Garment and Textile Workers’ Trust (GTWT) found that the majority of those surveyed were underpaid, with a variety of other abuses also reported. The GTWT has recently been founded with a grant from Boohoo, who are doubtless worried about their own reputation and share price. The Trust hopes to provide free English lessons and has called on Boris Johnson take action by creating his promised ‘Single Labour Market Enforcement Body’, but that is unlikely to be very high up the list of priorities for his successor.
on our radar
The Compliance report states that “Leicester’s textiles sector has been on our radar for a number of years”. Channel 4 took an interest in 2010, the Ethical Trade Initiative produced a report in 2015 and in 2018 even the Financial Times wrote on the problem, BBC documentaries came out the following year and Parliamentary committees have not been inactive.
Little, however, has been done on the union front. The Community union, which took over the knitwear union when the textile sector was in decline, seems to have nothing to say. The local trades union council is concerned largely with matters affecting staff at the local university. Unite does not appear to have made any effort and GMB is only noticeable by its absences.
In October last year, however, the TUC did actually produce a very modest Fixing Leicester’s Garment Trade report. The TUC suddenly discovered that “criminality and exploitative practices have been endemic for decades”. What a surprise, one would never have suspected that!
Exposures of this were bad because “it also undermines the garment industry in Leicester more widely”. Predictably the TUC answer was “a new ground-breaking partnership approach that aims to put worker voice at the core of the industry and binds brands and unions together to drive up standards”.
This seems to depend on the goodwill of retailers and suppliers allowing union health and safety inspections. Nearly one year on there seems to be little to show from the TUC apart from a glossy brochure.
Mutterings have been made that the local Labour Party is not terribly concerned about tackling Asian businessmen who just happen to be members, councillors and MPs. It is not unknown for some Asian businessmen to even complain of racism to head off suggestions that their working conditions could be improved.
Astonishingly, in this age of censuses, statistics and planning laws, the report admits the full extent of the industry is unknown. The local Council says the sector is a hidden one and it does not even who all the employers are.
Whilst there are a number of large factories, they do a lot of outsourcing to both small workshops and homeworkers. Seventeen new factories were set in local houses, which were discovered only by council officials tracing the hum of sewing machines.
The Low Pay Commission reports that mis-recording the hours worked is the commonest way of getting round the minimum wage laws, and it is clear that this is not simply the dodgy practice of an extra half hour of so-called “cleaning up time” after closing, as is common in the hospitality industry.
Apart from the fear of the sack for exposing these abuses, some workers go along with it because they can claim benefits on the basis of their under-stated hours. The report also says that when retailers insisted on biometric machines for workers to clock in and clock out, they were simply circumvented, by another machine or a separate paper record. That supplements the more brutal forcing of workers to hand back part of their wages. The GTWT say that about half the workforce do not get holiday and sick pay.
Compliance examines why, despite many exposures, nothing is done about the proper enforcement of the NMW. It claims that greater auditing from retailers has simply driven exploitative practices from the factory to the home. Non-unionised workers are fearful of speaking out and consider a poorly paid job better than none. This is not just a case of being frightened of the boss, they will also be aware that the sale of cheap goods depends on low wages. There is also a legitimate lack of faith in the regulatory authorities, who tend to record incidents of low pay but do little or nothing about them.
Last week Unite reported the results of a number of Freedom of Information (FoI) requests it had made about the number of Health and Safety Executive (HSE) inspections made in the construction industry. The results were that since 2013/14 to 2021/22 the number of unannounced inspections had declined by 31 per cent, from 11,303 to 7,793. The union also discovered that issuing of warning notices had declined even more, by 51 per cent, from 2,293 in 2013/14 to just 1,119 in 2021/22. It is unlikely that things will be any better in the garment trade once the headlines have gone.
says a great deal
One telling aspect of the report is that after “hundreds of visits to textile manufacturers in Leicester … enforcement bodies have concluded that “the scale of non-compliance in the sector is no higher than other sectors or parts of the country”.
That measured language says a great deal about the state of Britain’s workplaces.
The report points out Her Majesty’s Revenue and Customs (HMRC) very limited powers of access rely on permission from company owners. They can only request documents but not search for them and are not even allowed to say that records are misleading. No wonder detection is low. The police would never catch any bank robbers if they could only arrive at a suspect’s house by appointment.
On the matter of enforcing the NMW in Britain, Compliance said it “is undermined by low volumes of worker complaints” and that in the Leicester sweatshops “complaint volumes were even lower than in comparable sectors”.
Fear was clearly the main cause. Workers are afraid of losing their hours and incomes, and often simply “grateful just to have employment”.
So low are the number of complaints from workers in Leicester that one retailer claimed that most of the complaints to its whistleblowing centre made against its suppliers were false and came from other manufacturers seeking to blacken their competitors.
There were reports of bosses coaching workers about what to say to inspectors, and some saying it was simply a case of the worker’s word against that of the boss. That even an official government report complains that official inspectors cannot find hard evidence to back up the widespread lawbreaking that everyone knows is going on suggests that at the very least rules about factory inspections need to be tightened up.
There is also the question of ‘phoenixing’, when owners dissolve a company to avoid liabilities and set up a new company to continue the same business on the advice of clever lawyers. What documents HMRC discover are usually kept confidential, which means they are only (rarely) used to impose modest fines on individual companies and not used to deal with the wider issues.
What is to be done? Whilst it would be correct to say that a socialist revolution would solve the problems of low pay in the garment industry, that might take a while and it is perhaps best to focus on more modest solutions for the time being.
It should be obvious that workers cannot depend on an alphabetical soup of government agencies and charities. State agencies do need to be beefed up and adequately resourced, however, as can be seen in the case of the HSE mentioned above. HMRC definitely needs more inspectors to counter employers with highly paid lawyers.
As for the charity sector, they should not be dismissed entirely. In Leicester they seem to be doing some useful work that local and national government agencies do not do, and sometimes are more trusted than trade unions.
Workers simply cannot rely on retailers doing anything serious about low pay in factories. Any action they have taken has been forced upon them whenever sweatshops hit the headlines. The evidence that customers will refuse to buy from shops caught out sourcing from particularly bad employers is very slight. The best that happens is that after a particular scandal hits the headlines there is a slight and temporary fall in sales when customer switch to another shop, which is probably not much better.
Workers need to be properly organised and that takes time and effort, which some unions are unwilling to do. Too many unions think that a recruitment campaign begins and ends with a full-time official handing out leaflets outside a factory. It is also not a good idea for local trades councils to hold meetings for Asian women workers in public houses and then wonder why nobody turns up.
The rise of small street unions such as the IWGB, IWW and UVW are ample testimony to the fact that many migrant workers are not impressed by the efforts of the big guns of the TUC. But they have been active generally in the service sector and they’ve not turned their attention to factories.
Only the larger unions have the financial resources to make a sustained effort into organising and not just recruiting workers by printing leaflets in the appropriate language. More importantly, they are able to bounce back from inevitable failures and setbacks and have full-time officers who can speak out against bosses without fear of being sacked.