As allegations of sweatshop conditions in some Leicester garment factories continue to surface, the fashion industry has called for urgent government action to help stamp out exploitation in the UK supply chain.

Earlier this week, a consortium of powerful players including leading retailers, peers, and MPs penned a letter to home secretary Priti Patel backing the introduction of a statutory licensing system for garment factories in the UK. The letter was co-ordinated by the British Retail Consortium (BRC) and signed by retailers including Asos, Boohoo, Asda's George, New Look, Next, River Island and Very Group.

The proposed Fit to Trade licensing system would ensure all UK garment factories are meeting their legal obligations to employees, the group argues, and would stop rogue businesses from undercutting competitors by paying illegal wages. It could also incentivise retailers to invest more in onshore manufacturing, making the UK garment manufacturing industry world-leading, innovative, and ethical.

Concerns about exploitation in UK manufacturing have bubbled under the surface of the fashion industry for many years but have been propelled back into the spotlight following repeated allegations over recent weeks of poor working practices and wages as low as 3.50/hour in some factories in Leicester.

Existing legislation, including the National Minimum Wage and the Modern Slavery Act, should in theory prevent such exploitation from occurring in the UK. However, the dearth of sufficient checks under the existing system has made a licensing system necessary, argues Peter Andrews, head of sustainability at the BRC.

Were calling for a statutory licensing system for UK garment factories that would mean factories would need a licence to open, and their business wouldnt be allowed to trade and sell products without a licence, he tells Drapers.They would have to go through various checks to be allowed to operate, and would be checked again periodically.

"It is something weve seen work really well in the food industry. All labour providers to the agriculture and food industries must have a licence [as part of legislation introduced in 2006.] Under the current system, many businesses across the UK, including garment factories, are not being checked. It is the job of various enforcement bodies to follow up where there are issues, but they say they arent being given enough evidence to investigate cases and in some cases, they have the wrong powers and are denied entry to factories.

He adds: The current model is reactive because enforcement agencies have to have information about malpractice, whereas licensing is much more proactive because factories have to be checked before they can operate, preventing issues from arising in the first place. We dont want to put too much burden on responsible factories if they are regularly exceeding whats required, then they will have less and less checks. On the other hand, those that fail the checks will get a lot of attention.

Lisa Cameron, chair of the All-Party Parliamentary Group (APPG) for Textiles and Fashion, and one of the co-signatories of the BRC letter, adds: Under the current legislation, there are too many loopholes, and not enough adherence to the appropriate conditions and employment rights. A licensing system would mean factories have to show they are abiding by those standards. This is something the industry supports and believes is doable and would make a real difference.

The proposed licensing system has garnered widespread support from the retail industry other signatories include Joules, Marks & Spencer, Missguided, Morrisons, Mountain Warehouse and N Brown, as well as the UK Fashion and Textile Association and the Ethical Trading Initiative.

Mick Cheema, general manager of Leicester-based supplier Basic Premier, also supports the licensing system but stresses that it should be part of much wider government action to tackle the issues:A licensing system is a good idea, because it will help us get to grips with whats going on in these factories, but it is only a starting point. It should be part of a bigger instrument. To me, all the current heat and energy around this issue is being wasted by focusing on a few specific retailers and becoming a blame game.

"Retailers can only do so much, although yes, there are things they can do around compliance and teaching buyers about how to spot if something isnt right. But if youre going to blame anyone, blame the government. Authorities have known about these issues for a long time and there are laws in place already that mean the problems shouldnt be happening.

For a business like us, going through a licensing system would be straightforward. If we are going to have a licensing system, it should be focused on helping and assisting those manufacturers that have had problems in the past and helping them to move forward. It should say: 'The past is the past. Here are all the things going forward that you need to do to get a licence.

However, Jenny Holloway, CEO of London-based manufacturer Fashion Enter, raises some concerns:Will the licensing system be a cost just for factories or would retailers help pay for it? For us, it is also a question of how much more we can do, because we already comply with the Fast Forward audit scheme [a supply chain labour standards improvement programme] and have our own internal ethical compliance.

The current problem with factory checks announced or unannounced is that they only provide a snapshot of that moment. What we need is transparency. All the time and the technology that can do that already exists were using it at Fashion Enter. The future of UK garment manufacturing needs to be about working together, relationship and trust moving together as one.

Whether or not a licensing system gets the green light from government, retailers need to be preparing themselves for more legislation around transparency and human rights issues in their supply chains, argues Sam Eastwood, partner at law firm Mayer Brown.

Licensing can certainly help [with issues of human rights] but it is not the whole answer. Businesses can procure a licence fraudulently, for example, or simply ignore the need for a licence if they feel the reward is big enough to risk it.

My advice for businesses in the UK would be raise their eyes and look more broadly at what is happening, because it is very significant. The direction of travel is clear, and the message to companies is to get their skates on before laws are enacted. There is a European Union directive shaping up about mandatory due diligence throughout their supply chains on human rights. Businesses increasingly need to be sensitive about stakeholders expectations: investors are making it clear they want boards to tackle the issue of human rights and banks are worried about financing companies who arent taking action.

What really matters is that companies, the government and civil society have a strategy to address the underlying issues [behind exploitation.] There is no way one company or one organisation can address these issues alone it has to be about collaboration across various stakeholders.

Whether or not a licensing system is given the go-ahead, there is appetite from the fashion industry for more legislation to tackle the issue of exploitation. Action needs to be taken to ensure the UK has a garment manufacturing sector to be proud of.

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