The Government should consider a compulsory garment trade adjudicator following the failure of voluntary initiatives to stamp out labour abuses in the UK fashion industry, MPs have urged.

The Environmental Audit Committee (EAC) said it had been shocked by evidence over the last three years that underpayment of wages and poor conditions appeared to be rife in UK garment factories supplying fast fashion brands.

The committee said voluntary corporate social responsibility initiatives had failed to significantly improve pay and working conditions, and the Government should therefore explore the introduction of an adjudicator.

In a letter to Business Secretary Kwasi Kwarteng, the EAC wrote: “Purchasing a garment with a ‘Made in the UK’ label ought to be a guarantee that the workers who produced it are paid at least the minimum wage, in a workplace which is safe. We found that it is not.”

The British Retail Consortium estimated that garment workers in the UK are being underpaid by over £2 million a week in unpaid wages, while the campaign group Labour Behind the Label alleged that workers in some garment factories in Leicester were forced to work during the first lockdown, despite high levels of infection in those factories, the letter said.

There are also increasing concerns about the use of forced and prison camp labour in international textile supply chains, notably in chains which pass through the Xinjiang region of China, while Sedex, an organisation promoting responsibility in supply chains, told the committee about “significant risks of forced labour” in Bangladesh, Turkey and India.

Meanwhile, brands and retailers had delayed or refused payment to suppliers during the pandemic, pushing its negative impact on to workers in the UK and globally.

Fiona Gooch, of the fair trade charity Traidcraft Exchange, told the EAC that the UK was “among the worst” for cancelled orders, with around 80 UK retailers cancelling orders for finished items worth more than £750 million from Bangladesh alone by June last year.

EAC chairman Philip Dunne said: “The committee has been shocked by revelations over the last three years of labour market exploitation, under our very noses, in certain quarters of the UK’s garment industry.

“It is abundantly clear that voluntary corporate social responsibility initiatives are not leading to sufficient progress being made. Therefore, a compulsory initiative such as the garment trade adjudicator should be fully explored and consulted on.

“Brands and retailers often wield considerable economic power in comparison to the suppliers they source clothes from. A garment trade adjudicator could help to ensure undue economic pressure is not placed on suppliers to cut corners on pay and conditions. We suspect this would have more effect, more rapidly, than introducing a licensing system on garment suppliers who tend to be smaller entities with less bargaining power than their customers.

“Only when brands and supply chains know that there is zero-tolerance to labour market abuses can we have confidence that workers will be paid properly and have appropriate working conditions.”

A Government spokesperson said: “Exploiting vulnerable workers for commercial gain is despicable and the Government will not stand for it.

“A multi-agency enforcement taskforce has been operating in Leicester since July 2020 to respond to allegations of labour market abuses and we continue to engage with the sector to understand the systemic issues that lead to non-compliance and what measures ​can be used to tackle them.”