It establishes the Gangmasters Licensing Authority (s.1), which requires that all such agencies have a licence before they operate, and adhere to proper labour practice standards.

[3] The immediate cause of the legislation was the 2004 Morecambe Bay cockling disaster, where 21 Chinese immigrant labourers were left to drown by their employers (the racketeers were subsequently convicted of manslaughter, and some deported back to China) off the coast of Lancashire as the tide swept in around them.

However, the Deregulation and Contracting Out Act 1994, a wide-ranging measure designed to trim government, removed this requirement.

The 2004 Act requires licences for any business involved in labour placement in the agricultural and shellfish sectors (s.7) and they are contingent on the rules that the Secretary of State lays down (s.8), found in the Gangmasters (Licensing Conditions) 2006.

[4] To obtain a licence, the rules require payment of a fee linked to the agency's turnover (r.7) ranging between £250 and £4000 for businesses turning over under £1m to over £10m respectively.