The UK government must toughen measures to tackle modern slavery, including more penalties to compel businesses to ensure Uighur forced labour is not used in their supply chains, according to a report by MPs.

The hard hitting report by the business select committee was prompted by international concerns about treatment of ethnic minorities in the Xinjiang region of China. It says that government policy and modern slavery legislation is “not fit for purpose in tackling this serious situation” and government has been slow to make changes.

In an inquiry ahead of the report, MPs heard evidence that leading companies in fashion, retail, media and technology sectors were complicit in the forced labour of Uighurs in Xinjiang.

Nusrat Ghani, the Conservative MP for Wealden who led the committee’s inquiry into forced labour in UK company supply chains, said:“It is deeply concerning that companies selling to millions of British customers cannot guarantee that their supply chains are free from forced labour.

“Amid mounting evidence of abuses, it is deeply disappointing that the government appears to lack the urgency and commitment to take the tough action which is both necessary and overdue. Amid compelling evidence of abuses, there has been a sorry absence of significant new government measures to prohibit UK businesses from profiting from the forced labour of Uighurs in Xinjiang and other parts of China.”

The government introduced the Modern Slavery Act in 2015. While it was seen as a step forward in encouraging companies to increase knowledge about how goods are made it does not force them to tackle slavery issues. In theory a company could publish a statement saying it is doing absolutely nothing to prevent slavery at its suppliers and still be fulfilling its legal obligations.

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“The Modern Slavery Act is out of date, has no teeth, and we do not accept that businesses should be excused from doing basic due diligence to guarantee that their supply chains are fully transparent and free from forced labour and slavery,” the report said.

The inquiry found, for example, that the online fashion group Boohoo had only “minimal data” about its suppliers.

A spokesperson for Boohoo said the committee had “acknowledged and welcomed” its appointment of the retired judge Sir Brian Leveson to oversee an overhaul of its supply chain and MPs had called on other companies to follow in its lead in setting up an independent inquiry into its policies. The company said it would publish details of its UK supply chain next week and had made “extensive improvements to its supply chain practices” since a damning independent report by Alison Levitt QC was published in September.

MPs recommend the government assess options for targeted sanctions against Chinese and international businesses implicated in human rights abuses. The report also calls for the introduction of fines for those who do not comply with modern slavery reporting rules to try to reduce risks in their supply chains. Other suggested penalties include disqualifying directors of companies which are found to have benefited from slave labour.

The report also suggested the government create a “white list” of companies which had shown “clearly evidenced” actions to ensure their suppliers were not using slave labour in Xinjiang and a “black list” of those who could not provide such evidence or provide information about their sourcing. It said both lists should be updated every six months.

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