UK textile factories routinely fail to pay their employees the minimum wage, relying on a “culture of fear and intimidation” to enforce underpayment.

Thousands of textile factories across the UK are being investigated by HMRC for underpaying their staff, according to records sent by the body to the Environmental Audit Committee, which is examining the impact and sustainability of the fashion industry.

One in four HMRC investigations found that the factory in question had failed to pay their employees the minimum wage.

Since 2012, an average of £900 has been paid out to 126 factory workers.

Environmental Audit Committee chair Mary Creagh MP said: “‘Made in the UK’ should mean workers are paid at least the minimum wage.

“It has been 20 years since the introduction of the minimum wage but in our inquiry, we heard that underpayment is rife and goes hand in hand with a culture of fear and intimidation in the UK’s textile industry.

“This letter adds to the scandalous and growing evidence of workers being criminally underpaid in the UK. This must stop. We need Government action to end these 19th-century practices in 21st-century Britain.”

The committee was told that 14 investigations are still ongoing.