London's Romanian and Bulgarian labour market exposed By Ed Davey and Guy Lynn

BBC London Published duration 28 January 2014

media caption Immigrant labourers gather each morning in Cricklewood and Tottenham

Evidence that some immigrant labourers are being paid significantly below the minimum wage is to be investigated, Business Secretary Vince Cable has said.

BBC researchers uncovered the evidence while joining mainly Romanian workers touting for labouring jobs in London.

The investigation was carried out in December, before Romanians had the full right to work in the UK.

Mr Cable said there was evidence of a "serious breach of the law".

During the BBC London investigation, two Romanian researchers joined labourers gathering at locations in Tottenham and Cricklewood each morning looking for work.

They were told by the workers that builders frequently promised to pay them a fair wage - only to refuse to pay them the full sum at the end of the day. One labourer in Tottenham claimed he had once been paid £10 for almost a full day's work.

image copyright Rita Monjardino image caption Jamal Syeed paid the lowest wages of all the employers filmed

One researcher was then employed by Jamal Syeed, a businessman.

Mr Syeed drove him to Birmingham to tile and plaster a shop. Skilled labour of this sort typically costs at least £100 a day but the researcher was only paid £40 for a nine-hour day - an hourly rate of £4.70. The current national minimum wage is £6.31 an hour.

When challenged by the BBC, Mr Syeed said the researcher had in fact worked six hours for £40, not nine hours. This claim is not borne out by footage secretly recorded by the researcher, however.

Mr Syeed added: "We agreed that the man will carry out the plastering job for me on [a] £40 basis.

"But later on we agreed that after the inspection of the workplace the plaster man could give the estimate price as labour."

Another researcher was paid £5.71 per hour - below the minimum wage.

Responding to the two men's experiences, minister Mr Cable said it was a "serious breach of the law".

He added: "Clearly that must be investigated.

"The minimum wage is a very important part of our system, it is a legal requirement, and employers must pay it.

"If they are found to have underpaid they will be fined up to £20,000."

He urged anyone who felt they had been taken advantage of by employers to come forward, saying: "The minimum wage is only credible if it is enforced."

"It is our aim to drive this off the streets, not just of London but throughout the country - this isn't just a London problem," he added.

During the investigation, researchers also uncovered scams and potentially criminal behaviour associated with the labour pick-up points.

One researcher was asked by a man to fly to Germany to pick up a suitcase full of "herbs" and return with it to the UK for money. Another man offered to buy the researcher's passport for £1,000.

Running battles also broke out at the Cricklewood site when tensions between two rival groups of labourers - Bulgarian and Romanian - boiled over.

The next day numerous labourers were seen with cuts, bruises, black eyes and visible wounds, and there was a heavy police presence on the streets.

'Illegal practices'

Ch Insp Andy Jones of Brent Police said officers had been "monitoring the situation very closely" since that incident and had "noted a reduction in people loitering in the area".

"We are aware that this may be related to casual work and may not be in compliance with work and taxation regulations."

At the time of the investigation - before Romanians and Bulgarians were given the full right to work in the UK on 1 January - there were typically 15 people waiting on the street at each site. However, last week the number of labourers at the Tottenham site had swelled to more than 50.

Matthew Pollard, executive director of Migration Watch UK, said the black market labour was driving down wages for legitimate builders.

image copyright Rita Monjardino image caption These builders told the researchers their wages should go "under the radar"

After viewing the evidence, he said: "This footage is terrible. It's unfair to decent employers who pay a proper wage and it's unfair to the migrant workers who are clearly being exploited.

"But also it's unfair to Londoners. How can Londoners compete when wages have been driven down this low?"

One potential employer told one of the undercover researchers he preferred employing foreign workers because they would work for less.

He said: "I don't have money to pay English people."

A different builder paid one researcher £50 for a day's work mixing cement at a house in London's exclusive Primrose Hill area - above the minimum wage.

However the labourer was told not to declare the money to the Inland Revenue.

The builder was filmed undercover saying: "Now we don't want to pay tax, so you just pocket that [the money] and keep it.

"Most companies that go to pick people up where you are just want to pay you cash, under the radar."

Only two companies have been prosecuted for not paying the minimum wage since the 2010 General Election.

Shadow Business Secretary Chuka Umunna said: "At a time when families are facing a cost of living crisis, it is crucial that the National Minimum Wage is properly enforced.

"That's why the findings of this investigation are so worrying.

"The authorities must urgently look into this matter and should come down hard on any rogue employers who do not pay the minimum."