Construction union UCATT have revealed that attempts by employers to describe the proposed extension of the Gangmasters Licensing Act to construction as adding "a lot of cost for contractors" is without foundation.

A growing number of organisations including Oxfam and the Home Affairs Select Committee have called for the extension of the Gangmasters Act to construction in order to reduce exploitation in the industry. The extension of the Act was a central recommendation of One Death Is Too Many, Rita Donaghy's government commissioned report, into the high number of construction deaths.

The current costs of applying for a license to operate in the regulated sector (agriculture, food processing and shellfish collection) and an initial inspection is £5,500 for companies with a turnover of over £10 million while a company with a turnover of below £1 million would have to pay £2,250. Annual licence renewal fees range from £2,600 for the largest companies to just £400 for the smallest.

For a company with a turnover of £10 million, the initial fees would cost just 0.055% of turnover, while for a small agency with a turnover of £200,000, the first year costs would be 1.1% of turnover.

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Despite these modest charges some employers are claiming that extending the Gangmasters Act to construction would be too expensive. Last week. Stephen Ratcliffe Director of the UK Contractors Group which represents most of the large construction companies, told Construction News that when the government further discusses how to implement the Donaghy Report his organisation would argue against Gangmasters extension on cost grounds. Mr Ratcliffe, said: "There were some things that would add a lot of cost for contractors, like the extension of the Gangmasters Act. We would be very keen to engage with the DWP on these issues."

Alan Ritchie, General Secretary of UCATT, said: "Any increased costs to contractors for using respectable Gangmasters would be miniscule. However extending the Act to construction would force rogue operators who exploit workers out of business. The only increased costs would be that employers would not be able to save money by hiring exploited workers."

Last month two major scandals were revealed involving gangmasters. An investigation by The Observer discovered that a Gangmaster was able to hire out labour on the East London Line for £155 a day but only paid them £50 a day. Over the course of a year he is thought to have made an extra £300,000.

Also last month, 21 people were arrested in an alleged multi-million pound fraud involving criminal gangs setting themselves up as construction gangmasters and then disappearing without paying national insurance and tax.

Last year, UCATT revealed that workers on a PFI hospital site in Manchester were taking home just £8.80 due to excessive deductions.

Mr Ritchie, added: "There is growing evidence that unregulated Gangmasters in construction are making workers' lives a misery and that criminal gangs are also targeting the sector in pursuit of quick profits. By opposing the extension of the Gangmasters Act the UK Contractors Group is effectively condoning these nefarious activities."

(CD/KMcA)