Alec Shelbrooke (Elmet and Rothwell) (Con)
I beg to move, That the Bill be now read a Second time.
I have raised this matter in the Chamber on a number of occasions, not least when I presented a ten-minute rule Bill to ban unpaid internships on 13 May 2014. Despite a Division being called by the hon. Member for Huddersfield (Mr Sheerman), that motion passed by 181 votes to 19. Today, I am delighted, having been drawn in the private Members’ Bill ballot, to introduce a Bill that makes provision for the remuneration of individuals undertaking workplace internships.
The Bill will bring an end to a practice whereby employers regularly flout national minimum wage legislation by taking on unpaid interns to work for up to a year, often in London, for no pay but with the promise of experience and the hint of a future job. Unpaid internships are the acceptable face of unpaid labour in modern Britain today and should have no place in a meritocratic country that aims to work for the many, not the privileged few. This is a Bill to stop young people being exploited by those who gain from their unpaid endeavours. It sets about bringing an end to a new rise in the class society that means only those from a wealthy background can gain a privileged leg-up with an unpaid internship in their chosen profession. This is a Bill to level the playing field for many of my constituents in Elmet and Rothwell, who, like many parents across this country, cannot afford to pay for their child to work for up to a year with no pay.
Philip Davies (Shipley) (Con)
Will my hon. Friend set out how many of the current unpaid internships he objects to will become paid and how many will just not happen at all?
Alec Shelbrooke
I am grateful for my hon. Friend’s intervention, and if he will bear with me I will give several statistics as I go through my speech.
The starting point of today’s debate must be to define what a workplace internship is. It is already illegal under the National Minimum Wage Act 1998 to employ someone without pay, so, in principle, unpaid internships should not exit—but they clearly do. Let us look close to home as a starting point. A quick scan of w4mp, the work for an MP website, shows about 22 MPs advertising for unpaid interns, outside the politics and parliamentary studies scheme. As we are talking about 13 Conservative MPs and nine Labour MPs, among other parties, this is not a left-right argument; this practice takes place across this House, and it sends a message to businesses across the UK that exploiting the will of young workers is acceptable.
Mark Pawsey (Rugby) (Con)
What evidence does my hon. Friend have that employers, including MPs, are seeking to flout the legislation? Are they not simply trying to give some valuable experience to young people at a sensible time in their lives?
Alec Shelbrooke
I am most grateful to my hon. Friend for that intervention. I will elaborate on the argument as I move on, but a job is a job, and if work is adding towards an output, it should be paid for.
Philip Davies
My hon. Friend’s Bill does not distinguish between people who advertise seeking somebody to work for them on an internship and those who ask, “Can I come into your office to do some work experience?”, but I wonder whether he does. There is a massive difference between those two things, but the Bill draws no distinction between them.
Alec Shelbrooke
My hon. Friend makes an important point, which is that there is a difference between people advertising for unpaid internships and people coming in on a voluntary basis because they have taken the initiative to see whether they could do something. However, that still removes opportunity for others, because there may not then be the need to advertise for a paid role. I will address that issue later, because I have specific points to make about the voluntary side of this and the charity sector.
Many of the interns in this place, much like those who work in private businesses, are undertaking day-to-day activities similar to those that many of us employ staff members to help us with in our offices. The fact of the matter is that, despite your commendable efforts, Mr Speaker, working in Parliament has often been a matter of “Who you know, not what you know,” and young people who are eager to work here and with the financial means to do so for free will find that there are Members taking on interns and refusing to pay at least the minimum wage for their labour.
I remember an exchange of views in this Chamber with the former Member for Bolton West. When I pushed her during an Opposition day debate on the national minimum wage on whether she would accept unpaid internships, her response was
“I have volunteers—I do not call them interns—and I have no money in my budget to pay them.”—[Official Report, 15 October 2014; Vol. 586, c. 350.]
When Members have access to a staffing budget of more than £140,000 a year, it beggars belief that a Labour Member would stand in this place and defend a practice of workplace exploitation with a claim that she could not afford to pay her staff. Imagine the outcry if large multinational firms across the UK stopped paying their workforces because of similar arguments. It is the exploitation of this “volunteer” loophole that means young people are not being paid for their labour.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Is this not a very important point? What about those people who work for charities on a voluntary basis, sometimes doing so for decades?
Alec Shelbrooke
I am most grateful to my hon. Friend, who has pre-empted another section of my speech. If he will bear with me, I will address that issue specifically.
Mr David Nuttall (Bury North) (Con)
My hon. Friend the Member for North East Somerset (Mr Rees-Mogg) may well have pre-empted another section of the speech, but I hope that when my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) gets to it he will set out where the Bill makes any reference to volunteers, as that is what matters.
Alec Shelbrooke
I can answer that now. If my hon. Friend looks at clause 1, he will see that it defines what the internship is, not what it excludes. I will come on to deal with that in more detail.
Alec Shelbrooke
If I may, I will elaborate on my argument and then come back to my hon. Friend.
We are dealing with the exploitation of volunteers. This Bill does not concern itself with those who donate their spare time to support charities, for example, in helping to raise funds or deliver social activities. Those activities are a world away from interns being asked to work five days a week for long periods of time. Clause 1 defines what a workplace internship is, and it will ensure that those who undertake regular work and services will be paid the national minimum wage in return for their labour. The clause will close a loophole in minimum wage legislation.
Mark Pawsey
Does my hon. Friend have any evidence of interns having to sign contracts of employment setting out the same terms and conditions as for those people who would receive a wage? My understanding is that the majority of internships are provided on the basis of a gentleman’s agreement, and if the intern decides that they do not want to proceed, they are not subject to the same disciplines as would apply to an employee.
Alec Shelbrooke
I am delighted at that intervention and those from my other hon. Friends, as they show that we can often assess all these arguments with the same eyes, and I will deal later in my speech with every point that has been raised so far. This all shows a certain amount of probing from colleagues.
Philip Davies
My hon. Friend is talking about clause 1, which says that these provisions will apply to people who undertake “regular work”. Will he tell us what the definition of “regular work” is, because the Bill contains no such definition?
Alec Shelbrooke
My hon. Friend moves us on to a point about specifics and definition. To get the Bill to this stage, we have opted for a more general approach. If, as we hope, the Bill gets to Committee, we could get more into that detail, because he makes an important point. It is difficult to pin these things down, but this is where these loopholes occur and it is how they are exploited. In response to what my hon. Friend the Member for Rugby (Mark Pawsey) said, I am going to elaborate on the Bill and how, for example, the Institute of Directors showed a neat way to get around this issue.
This Bill simply brings interns in line with all other workers in terms of the right to be paid for their work. Importantly, it also removes the requirement for employers to pay national insurance, as is the case for apprenticeships, and therefore offers incentives for businesses to take on paid interns.
The loophole I refer to is regularly exploited, not only in this place, but in the world outside—a starting point is the IoD. Until shortly after the First Reading of my Bill, the IoD’s website included a helpful “model internship agreement” for its members, which said:
“This letter confirms the arrangements relating to your unpaid internship. The purpose of this letter is to describe reasonable expectations between us. This letter is not intended to be or give rise to a legally binding contract between us and your internship may be terminated at any time by either of us.”
I now come to the important part, which said:
“You will have no fixed hours of work, but we hope that you will usually be able to attend during our normal office hours on Mondays to Fridays.
We expect you to perform the activities and achieve the learning objectives to the best of your ability”.
That last bit is fair enough. It continued by saying that interns should
“maintain appropriate standards of behaviour at all times.”
Again that is fair enough. It continued:
“We also expect you to comply with our rules, policies, procedures, standards and instructions.”
Learned Members in the Chamber will know that all contracts are agreements, but not all agreements are contracts. That loophole is exploited by some companies that issue internship agreements under which it is expected that an intern will perform workplace activities, but that refuse to pay a wage because no formal contract of employment is signed. Under current legislation, an intern is not explicitly described as a worker and can therefore be exploited for their labour, but the law offers employers protection via this loophole.
Mark Pawsey
My hon. Friend sets out the contents of that letter. Would he prefer that there was no such letter from employers to those taking up work experience in an office? The arrangement would then be subject to different interpretations by both parties.
Alec Shelbrooke
My hon. Friend used the term “work experience”; I will come on to that later. The direct answer to his question is yes, I would rather that this form of contract did not exist; I would rather that there was no need for it to exist, and that things moved on.
Mr Nuttall
The Independent Parliamentary Standards Authority, which we have to deal with daily, has its own model intern agreement. Has my hon. Friend had the opportunity to compare the terms of its agreement with the one to which he referred?
Alec Shelbrooke
I am most grateful to my hon. Friend; I must admit that I have not looked into that. Perhaps he would like to elaborate on that later, when he comes to speak—at length, I am sure.
As I said at the start of my speech, this practice takes place in the House, and that sends the message to businesses across the country that we think that it is acceptable. I do not think it is, which is why I introduced the Bill. The broader societal issue is that interning is becoming a prerequisite for graduates looking to access their chosen profession. As was reported by the Social Mobility Commission, over 30% of newly hired graduates had previously interned for their employer. That rises to 50% in some sectors. According to the Sutton Trust, 31% of graduate interns are unpaid. Most of them are unable to claim jobseeker’s allowance or universal credit, as they are unable to accept offers of work by virtue of their internship.
That point about the ability to claim welfare is important and goes to the heart of the problem. The IoD’s model internship agreement establishes that companies expect their interns to be present during office hours; how can interns then be expected to look for work, let alone attend interviews? Although legally and technically an intern is able to leave, in reality the threat of a poor reference or the perception that leaving would create a bad impression and lead to the intern not being hired by the company at the end of the internship make that worthless. Even those who go on to work for a company are often unwilling to speak out, for obvious reasons, but when young people have taken employers to employment tribunals they have been successful: companies such as Sony and Harrods have been required to pay their former interns’ unpaid wages. However, is it right that the issue should have to go before an employment tribunal before people are paid?
I would describe myself as a trade unionist. Indeed, I was a member of the Unite union before it became more interested in internal Labour party politics than representing the interests of working people. The ordinary man or woman in the workplace is the reason I believe that representation is vital. We forget that a lot of people do not have the courage to put their head above the parapet. They may well fear for their livelihood and not want to be a target.
Alec Shelbrooke
If my hon. Friend bears with me one moment, I will come to him. I just want to build on this important point about representation in this place. All of us in this Chamber forget that we are very thick-skinned people. We have to be, given the nature of the job. We take abuse from many directions, all the time.
Victoria Atkins (Louth and Horncastle) (Con)
Sometimes from our own Back Benchers.
Alec Shelbrooke
Indeed. We have to stand up for our convictions and put our case, as I hope I am doing today. Many people in this country do not have the ability to do that, and that is why representation is important. As MPs, we should stand up for people. We can argue in this Chamber about the value of a Bill, but it is important to introduce this kind of Bill and to look at how we can change the law, because many people out there simply cannot find the courage to stand up and do so. That is why we have trade unions and Members of Parliament.
Mr Rees-Mogg
I make the rather pedantic point that unpaid interns cannot be fearful about their livelihood, because they are not earning their living.
Alec Shelbrooke
But they can well be fearful about their future livelihood.
The campaign group Intern Aware has long campaigned to encourage those who have had internships and experienced this problem to speak out. It remains the UK’s leading campaign group against unpaid internships, and I thank it for its support over the past three years.
It is right that we today attempt to give people the protection they need against hugely wealthy organisations such as Harrods and Sony. We must not forget that this is about young people submitting themselves to a process to increase their social mobility, and that their entire future is reliant on its success. It is fundamentally a Conservative principle that the state should encourage, and do all that it can to allow, people to better their lives. Successive Conservative Governments have used their time in office to allow people the social mobility to move forward, whether it be through the 1819 cotton mills and factories Act, the Factory and Workshop Act 1901, the Factories Act 1961, the Disability Discrimination Act 1995, policies such as right to buy and Help to Buy, universal credit or the national living wage. The key to social mobility is ensuring that everyone, regardless of background or affluence, has the same opportunities in the working world. The driver of many of our reforms and policies is, and has been, the idea that hard work should always be rewarded.
Philip Davies
I understand that my hon. Friend wants to level the playing field, but his philosophy appears to be that he would rather that no one had an opportunity than that somebody had it. That sounds rather like a socialist principle, rather than a Conservative one.
Alec Shelbrooke
Once again, my hon. Friend pre-empts me; I will give my justification for my stance later in my speech. I am sure that he has the grace to let me explore the argument.
Only those from wealthy backgrounds are able to do unpaid internships without fear, and in years to come that will mean that those who have the most influence on our society come from an elite minority. To quote from the Government’s May 2012 report on social mobility by the right hon. Alan Milburn, progress has been made on moving away from the top jobs being the preserve of those with elite backgrounds. The civil service is quoted as an example. In 2009, 45% of senior civil servants had been privately educated, but by 2012 the figure had been reduced to 27%, with 18% having attended comprehensive school, as I did.
In other professions, there have not been similar reductions. The legal profession, in which, as we all know, would-be barristers have to do a pupillage, is dominated by those whose parents could afford to send them to private school. The last figures that I had, from 2012, showed that 15 of the 17 Supreme Court judges were privately educated; 26 of the 38 lords justices of appeal attended private schools; and 43% of barristers went to fee-paying schools. It should be borne in mind that only 7% of the population are educated at private schools. The foreword to the 2012 “Fair Access to Professional Careers” report by Alan Milburn said:
“The exponential growth in internships in the professions adds up to a profound change in the British labour market. Access to work experience is a new hurdle that would-be professionals now have to clear before they can even get onto the recruitment playing field. Given their centrality to young people’s career prospects, internships should no longer be treated as part of the informal economy. They should be subject to similar rules to other parts of the labour market. That means introducing proper, transparent and fair processes for selection and reasonable terms of employment, including remuneration for internships.”
Victoria Atkins
I am extremely grateful to my hon. Friend for giving way, and for holding this debate. I had to do a six-month pupillage that was completely unpaid, as were travel and other costs. I was able, through part-time work and the help of my parents, to withstand that. Does he accept that the Bar has tried to mend its ways? It now funds the first six months of pupillages, in the hope of attracting people from a whole range of backgrounds, and not just those who can afford it.
Alec Shelbrooke
I am most grateful for that intervention, because it shows that these practices are slowly being addressed. In this debate, and through further legislation, I am seeking to accelerate that process. My hon. Friend makes a very important point: people want to address the fact that perhaps the talent pool is being restricted to those with financial means, because they want to pick from the largest pool.
In an updated report two years ago, Mr Milburn said that if nothing improved for interns, the Government should act to ban unpaid internships. From what I can see, there has been very little improvement. It is therefore my sincere hope that the Social Mobility Commission’s soon-to-be published “State of the Nation” report will formally support this Bill and urge a ban of long-term unpaid internships in the United Kingdom. As my wife put it to me when we were discussing this Bill, it is ridiculous that for those who do not take an academic route through education and instead opt for an apprenticeship there is provision within legislation requiring payment of a national minimum, yet for those who choose higher education we offer no such legislated assistance when they undertake an internship.
The Prime Minister said in her recent conference speech that we must start believing in “the good that Government can do”. A Government should act to
“tackle the unfairness and injustice that divides us”.
A Government should step up, right wrongs, challenge vested interests, take big decisions and do what it believes to be right,
“because that’s the good that government can do . . .To stand up for the weak and stand up to the strong… and to put the power of government squarely at the service”
of ordinary working people.
To re-emphasise exactly why unpaid internships are locking those with abilities out of the jobs market, I would like to share with the House a job advert that was recently shown to me. The advertisement offered a £45,000 base salary, plus bonuses, for a graduate trainee trader/asset manager. It sought only those who had a first-class degree from a Russell Group university with A grades, including A-level maths. So the application process appears to be open to anyone academically able, until one gets to the line that states “we would expect you to have a minimum of 6 months internship within a front or middle office role.”
Once again, a fantastic career opportunity for someone who demonstrates clear academic ability is limited by the affluence of their parents. This highlights a disparity of values in society today. We want our children to believe that their opportunities are endless as long as they have the ability and aspiration to reach them, yet the arms of the state are not acting successfully enough to ensure that this can happen.
I have often said that I want the children of today to feel that their future opportunities are a bit like going on “The X Factor”. I do not know how many of those here are fans, but I am a big fan. As we hear when we visit schools, most children recognise that people can go along for an audition for “The X Factor” and, if they are good enough, they progress to the next stage. They may then progress to boot camp, then the six-chair challenge, then judges’ houses, then the live shows until eventually the public elect a winner. In a nutshell, if they have the raw talent and ability they can go all the way, regardless of personal wealth or background. An unpaid internship is a bit like young people getting all the way through to the live shows, having proven their talent, only to be told that to reach the final they have to pay a large amount of money to proceed. With no income, they are expected to pay rent, travel and living costs to remain in the contest.
It is not just the professions that I referred to earlier that exploit the labour of young people with unpaid internships. As reported in The Mail of Sunday last weekend, a high-profile left-wing political activist in the fashion industry seems to advertise for unpaid staff on terms that can only be described as utter hypocrisy. While researching for this Bill I came across live advertisements for volunteer internships with Vivienne Westwood. I stress that those are volunteer internships being advertised. That answers the point that my hon. Friends made earlier about whether there is a difference between advertising an internship and people offering their services as volunteers. With an advertisement for a volunteer internship, we are getting into murky water.
The adverts explicitly state that “The roles will be for approximately 5 days a week, Monday to Friday, although as this is a voluntary position we are looking for a candidate with a can-do/proactive attitude to work”. It seems that Ms Westwood has not learned the lessons of previous media exposures. Despite a previous exposé of a similar scandal by The Mail of Sunday in 2011, it appears that this fashion house has carried on exploiting young people by taking on more unpaid internships. What makes this all the more unbelievable is that these adverts for unpaid staff are from the very same multimillionaire fashionista whom we have recently seen cosying up with the Leader of the Opposition, tramping around the streets of north London protesting against inequality. Ms Westwood also gave a keynote speech to the junior doctors’ strike, which makes me wonder what planet someone is living on when they protest that a 13.5% pay rise for junior doctors is not good enough, while blatantly refusing to pay her staff a wage.
Although it is my intention to highlight the sheer hypocrisy of these individuals, it is not my intention to degrade the wider workforce at Vivienne Westwood. It is not their fault that they work for an unscrupulous employer. Indeed, feedback from individuals who have undertaken unpaid internships at Vivienne Westwood describe positive experiences—for example, “Staff are amazing people”, “Great working environment”, “It is a great place to work.” But perhaps most notable is the very British way in which one former intern offered polite advice to the management. She said: “The interns at Vivienne Westwood work really hard and would greatly appreciate it if you paid them and maybe gave them a little more credit for how much work they do and how hard they try.”
This is 2016, yet in Britain today a young person has to ask their employer to consider paying them for the hours that they have worked. It is a scandal. It is a disgrace. It is a flashback to a Victorian Britain that most of us in the Chamber would not have thought believable. The more we investigate this shoddy workplace practice, the more it feels like the opening of Pandora’s box, and the worst culprits seem to be the high-end business, fashion or entertainment industries.
Following the First Reading of this Bill, a young man wrote to me about his experiences as an unpaid intern in the entertainment industry. He said he felt that taking an unpaid internship was the only way to get his foot in the door of this notoriously difficult industry. The internship was both enjoyable and worthwhile in terms of the contacts that he made during his time there, meeting people he would otherwise not have met, had he not taken it. However, he felt as if these opportunities, which he assumed would be a part of the day-to-day job, were more of a reward for doing repetitive menial tasks.
Mark Pawsey
My hon. Friend is giving valuable examples of the experience of young people. If his Bill were to proceed, how many youngsters does he think would be denied the very opportunities that he has spoken about?
Alec Shelbrooke
I am keen to make progress because in the course of my speech some of my hon. Friends’ points will be answered. I will come to the statistics that I have.
The young man who had worked as an unpaid intern was, for the most part, a spare pair of hands, and he noticed that there were several other interns and a high turnover rate. He called it “a conveyor belt of interns”. Working unpaid meant that he had to undertake extra paid work to support himself, as my hon. Friend the Member for Louth and Horncastle (Victoria Atkins) said she had done during her pupillage. The young man often worked a seven-day week, daytime and evenings, in order to make ends meet. Although he says it was an invaluable experience, he feels that the industry believes that interns should be delighted and grateful that they are there, and that the privilege of being among wealthy and successful people negates the need for pay. That is an appalling abuse.
I raise these examples to align this Bill not with the politics of envy, but with the basic principles of fairness and equal opportunity. There are many former interns who recognise that their wealthier backgrounds gave them interning opportunities that were not available to their less fortunate peers. One former intern in the arts told me that she took a year out in her third year of study at a London art college to take some internships to improve her CV and therefore her chances of securing a job after her studies. In one year she interned for five different businesses, none of which paid her. She felt that she had enough financial support through her parents and that she was able to take this year out unpaid. She admits, however, that some of her peers missed out on this opportunity through fear of not being able to fund it. She notes that there was a stark difference in the ability of those who had taken a year to intern and those who went straight into their final year of study. It is almost a pre-requisite to succeed in the art world.
Of course, in words at least, professional organisations representing the industries that I have commented on so far say that they are opposed to unpaid internships. The Arts Council, UK Music, Creative Skillset and the Royal Institute of British Architects all support a four-week limit on unpaid work experience but, as we have seen from the case studies that I have described, these are just statements, not policies.
Mr Rees-Mogg
My hon. Friend is being very generous. He mentions the four-week time limit that some consider justifiable. Unfortunately, his Bill does not set any time limit. That is one of its flaws.
Alec Shelbrooke
I am exceptionally grateful for that intervention from my hon. Friend, who has identified what I initially wanted to do with this Bill. However, my advice from the Clerks and from people who understand legal matters far better than I do was that it would be full of so many legal loopholes that it would be worthless. We therefore moved to the current position. I hope that is a matter that we could explore in much greater depth in Committee and reach a simpler and more robust legal definition. My hon. Friend has touched on an important aspect. I am a mechanical engineer, not a lawyer, so I have to take advice from those who are more learned.
Alec Shelbrooke
I am sure my hon. Friend speaks from experience.
The disparity between words and action is starkly highlighted by the Institute of Directors, which describes itself as an organisation that opposes long-term unpaid internships yet publishes a model contract for members to get round minimum wage legislation.
I come to some of the points that my hon. Friend the Member for Rugby raised.
According to YouGov, 39% of young people—almost two in five—have turned down an offer of an unpaid internship for financial reasons, and only 4% believe they could definitely afford to do one. That is an important statistic, because all the examples I have heard about the opportunities people have been able to exploit, and some of the interventions that have been made on me, have almost tried to paint a picture suggesting that I am removing opportunity and bringing forward just circumstantial evidence. However, almost 40% of people offered an internship have had to turn it down because they cannot afford to live. That is not an insignificant statistic, and it is not insignificant in terms of the value of this argument.
Some 43% of young people aged between 18 and 24 believe that the need to do an unpaid internship acts as a barrier to their career choices. I genuinely fear that the opportunities available to young people today are decreasing; they are certainly much harder to acquire than they were for me. Like most young people at our local comprehensive school, my sister and I were taught that hard work and determination would help us make something of ourselves in the world of work. Our supportive parents made us work part-time jobs around our education—something that taught us the real value of money, something that we had to do to run our first cars, and something that taught us how to budget, which was a valuable lesson for later life. Unpaid work was simply not an option for me or my sister. Had an unpaid internship been a prerequisite for access to our chosen professions, it would have been a barrier to our getting into the workplace.
The Sutton Trust estimates that expenses-only internships in London cost a young person around £1,000 per month, but there are still people who believe that they are being generous by offering lunch expenses. With 81% of law internships and 61% of PR internships in London, what example does that send to firms carrying out internship programmes?
It is not just those who cannot afford to do an unpaid internship who miss out; it is also businesses and, ultimately, the country. My hon. Friend the Member for Louth and Horncastle (Victoria Atkins) made it clear that the legal profession recognises that point as well. Essentially, creating a system in which only 4% of people feel they would face no financial restrictions to entering unpaid employment could mean that a talent pool of 96% of the rest of the market remained untouched.
It is well recorded that private schools in this country give a marvellous and privileged education to those lucky enough to attend, but in every job I have worked in so far it has been apparent that those with state educations have been just as capable as, and in many cases more capable than, those whose parents were rich enough to send them to a fee-paying school. I do believe there is a role for private schools in the UK, and I believe in parental choice, but it is also the responsibility of the state—
Mr Speaker
Order. We are all extremely interested in the views of the hon. Gentleman on fee-paying education and other, related matters. Given that he has been addressing the House for 33 minutes with an eloquence worthy of Demosthenes, to which we have been listening with rapt attention, and in the light of the fact that the Bill contains three substantive clauses and another formal clause on the short title, commencement and scope, I wonder whether he is going to proceed relatively soon to a description of one or other of the three substantive clauses. I am very eager to hear what he has to say on those important matters.
Alec Shelbrooke
Thank you very much, Mr Speaker, for your advice. Indeed, I am merely painting the landscape in which the Bill is meant to encourage change. The Bill makes an important argument: we in the House today cannot ignore the fact that some people, who can come from the poorest backgrounds academically and who can work their way up to be on a level pegging, can then see their opportunities cut off because others are getting around an Act that was brought in specifically to protect them.
That is what the first clause of the Bill addresses. It describes what a workplace internship is:
“For the purpose of this Act, a workplace internship is an employment practice in which a person…undertakes regular work or provides regular services in the United Kingdom for…another person…a company…a limited liability partnership…or a public authority; and…the purpose of the employment practice is…that the intern meets learning objectives or gains experience of working for the employer listed in section 1(a); and…to provide practical experience in an occupation or profession.”
What I hope I have done so far this morning is highlight how some companies are getting round that and how the existing National Minimum Wage Act allows that.
I think we would agree that defining the “volunteer” unpaid internship at Vivienne Westwood as involving working regular hours from Monday to Friday would mean it fell within the scope of the Bill, which would protect somebody who
“undertakes regular work or provides regular services in the United Kingdom”.
I think that gets to what I hope to achieve in the Bill. I am simply trying to close down loopholes in legislation that has been very useful in protecting people in the United Kingdom.
Mr Rees-Mogg
Does clause 1(b) not create a loophole in the Bill? If somebody took on a person to do unpaid work for the purpose of being a harmless drudge, to quote Dr Johnson on lexicographers, they would be entitled to do so, because it would not be for the purposes set out in subsection (b).
Alec Shelbrooke
The important distinction that needs to be drawn is that we are talking about deliberate, advertised, unpaid internships. My hon. Friend the Member for Shipley (Philip Davies) made an important distinction between people who come along, volunteer and want to work, and people who advertise for somebody to come and work for them for six months. When we see the perversion of the two words put together—“advertising” for “volunteers” to come and work—it is a bit like saying, “You need to go on a suicide mission, men. Who will volunteer?” and then telling them, “You’ve volunteered.” That makes a mockery of things.
I want the Bill to really bring these issues to the fore. I have heard the interventions from my hon. Friends, and some very reasonable points have been made, but that does not mean that we should turn away from doing anything, and I hope the Bill will start us on the route of trying to address this issue.
Mr Nuttall
If my hon. Friend’s concern is the advertising of these positions, why is that not mentioned anywhere in the Bill?
Alec Shelbrooke
The Bill refers to exclusions—people who are on internships that are part of an accredited degree course and who are “of compulsory school age”—and to employers not making national insurance contributions. That shows that a system is being developed whereby there are exemptions to the Bill, and there are opportunities for people to come along and do exactly the things outlined by my hon. Friend, but that does not mean that this should be a catch-all for everybody. Having been able to put those exclusions in place, we should be able to move things forward.
My hon. Friend the Member for North East Somerset (Mr Rees-Mogg) asked me very specifically why a period of 28 days was not included. As I said, that was my initial intention, but the legal arguments I have heard say that that approach was full of just as many loopholes. I very much hope that more learned colleagues than I may be able to explore those arguments further today. That could be taken on in Committee.
Alec Shelbrooke
I will give way very briefly, but I am conscious that you want me to make some progress, Mr Speaker.
Mark Pawsey
My hon. Friend makes a distinction between businesses that advertise their internships, and young people speculatively applying to organisations. If there is a restriction on advertising, how are the young people to know which businesses would welcome their application?
Alec Shelbrooke
I will come to some good examples of businesses that are very successfully making this system work in the way it should. It should be borne in mind that 66% of internships are paid; we are talking about the bottom third, which are very exploitative.
Let me come on to some of the arguments that have been made. Why exclude students? It is simply because they have access to student finance—it is a level playing field. Why exempt people of compulsory school age? I think everybody would agree that work experience makes an important contribution to people at a very early age. Probably—I do not think I am alone in this—a majority of people in this Chamber did at least one week’s work experience during their schooldays. That first step into the world of work is important.
Urban Outfitters is already within the scope of this Bill. It says:
“You must be a student at a UK university undertaking an accredited placement year as part of your sandwich year”.
That shows that the Bill does not reduce opportunity—that someone can work within the exemptions I have put into it, which ultimately bring fairness to it.
Craig Mackinlay (South Thanet) (Con)
My hon. Friend is painting a grand picture. We fully understand your concerns, and I agree with them—
Mr Speaker
Order. Let me say very gently to the hon. Gentleman that I have not expressed any concerns at all—the debate goes through the Chair. The hon. Member for Elmet and Rothwell (Alec Shelbrooke) may well have done so, and to judge from experience he may wish to dilate further on them before giving the hon. Members for Bury North (Mr Nuttall), for Shipley (Philip Davies) and for Louth and Horncastle (Victoria Atkins), and possibly the hon. Member for South Thanet (Craig Mackinlay) himself, the opportunity to do so. It is important to be accurate about these matters.
Craig Mackinlay
I am grateful for the advice, Mr Speaker.
I fully understand my hon. Friend’s concerns about wealthy families being the only people who can possibly afford to send their children into internships, but let us get back to what happens in this place. Under the alternative that he suggests, a volunteer contract would be illegal, so we would still have a vast number of youngsters applying to all of us, but some sort of statutory barrier would be saying that that was now impossible. I do not think that is the route we wish to take in allowing youngsters a new experience in life. My experience of the interns I have had—I am one of these evil intern users—is that they have a lot of latitude to do as they please in understanding the work. This Bill would put barriers in the way of good experience.
Alec Shelbrooke
I would like to probe my hon. Friend further—I more than welcome another intervention —on the average time people work with him for, and what areas they work in. I hope that he will contribute later and outline those specific areas.
As we have heard, there are companies out there that do, to my mind, do the right thing. Those who worry about opportunities being closed down should take note of the approach of some of these major institutions. KPMG provides internships that last three years, allowing new graduates to hone their skills in a wide range of areas such as technology, tax and pensions, marketing, and human resources. Throughout the graduate scheme, interns receive continuous training and development, as well as opportunities to study for industry-accredited qualifications. All its programmes provide a competitive salary. As it says on its website,
“we’re proud of our culture—it’s one that recognises hard work, encourages new ways of thinking and embraces diversity and inclusion.”
I repeat—“recognises hard work”. It is a company that values everyone who works not just for it, but within it, and recognises that everybody makes a contribution to its ongoing success. There is no question about whether the company can afford to pay interns, but a recognition that if it did not, it would not get the best people the market has to offer.
At Ernst & Young, graduates can join many different programmes in many different locations. The company operates across four service lines: assurance, consulting, tax, and transactions. Each has a graduate programme carefully developed to help hone strengths, build skills, and broaden knowledge as an all-inclusive business environment. It should be made clear that there is no guarantee of a job at the end, and the positions are described as internships, but these are companies with extreme wealth that would not cut out any opportunities because they feel there is a reward to be had for contributing to the company, whatever is done. AXA’s placement programmes have a basic salary of at least £26,000, with a £1,500 increase and performance-related bonus at the end of each completed placement within the business area. It has a two-year programme comprising three eight-month placements, with a particular focus on learning and development through on-the-job learning. Microsoft offers a 12-month paid internship programme where interns receive on-the-job coaching, mentoring, and personal development.
These multi-billion-pound companies do not see the need not to pay people based on the allure of working for a big name. They value their interns in the same way as all other employees, and do not suggest that they are doing them a favour in order to relieve themselves from a basic duty to pay their workers. These businesses recognise that interns contribute to the company, even if ultimately it does not work out for them and they move on to another firm.
Fundamentally, interns appear to be valued by these exemplar firms. Charlie Mullins, CEO of Pimlico Plumbers, said:
“For us it’s just a case of having clever young people who are able to offer us something and in return we pay them as well as giving them some skills and an entry for their CVs.”
Pimlico Plumbers said that for one intern who worked in its recruitment department, there was no formal regime; it was more a case of working in a real business for three months—much as, I am sure, my hon. Friend the Member for South Thanet (Craig Mackinlay) described—and getting life and work skills while getting paid. This is not part of a big graduate training programme like those that I mentioned, nor is it a required route into working for the company—it simply offers real experience greater than traditional work experience, recognising that people are contributing to the company as well as gaining valuable skills, experience and CV-building that, as Charlie Mullins says, deserves to be paid for. The more I researched this Bill, the more obvious it was that there really is no honest, viable business case that means that a company should have someone working for it for no pay.
I have been campaigning against the shoddy workplace practice of unpaid internships for many years. Indeed, I made a pledge to my constituents to do all I could in this place to bring an end to the inequality they bring about. Unpaid internships are a scourge on social mobility. If we are serious about building a Britain that works for everyone, not just the privileged few, it is time to end this exploitation of young workers. I want to ensure that eventually this loophole in the National Minimum Wage Act is closed so as to benefit not just my constituents but all our constituents who are not lucky enough to be of sufficient financial means to work for no pay. It is time to ban unpaid internships and make firms pay workers for their labour.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
I congratulate the hon. Member for Elmet and Rothwell (Alec Shelbrooke) on bringing this private Member’s Bill to the House. I know that this matter has been a key issue for him for quite some years. He has put a substantial amount of effort into it, and is to be commended for it.
Unpaid internships are a rather recent phenomenon. Twenty years ago, the concept might have seemed obscene; today, they are so prevalent that they are often a prerequisite for new graduates entering certain fields of work. While they are particularly widespread in the public relations, finance, legal, and marketing fields, they can be found across a number of other sectors, as many in this Chamber will be acutely aware. I was dismayed, yet unsurprised, to read the conclusion in a joint report from the Business, Innovation and Skills and Education Committees that while in past decades many UK employers used to offer substantial work-based training programmes for new graduate recruits, there is now a growing unwillingness by employers to recruit and train graduates who lack prior work experience. That was well illustrated by the hon. Gentleman.
That is not to say that work experience for graduates prior to entering the workforce formally is a bad thing. In fact, a number of university courses require work placements and internships, which can be highly beneficial to students. As such, I am pleased that the Bill makes an exception for those placed in internships as a requirement of a higher education course. However, these internships are a small minority when compared with the staggering number of unpaid internships that require a university degree to work for free.
Social mobility in the UK is lower than in many of its European neighbours. While I welcome the rhetoric from this Government regarding enhancement of social mobility and the promotion of meritocracy, substantive action needs to be taken. The Institute for Public Policy Research has found that the current system of unpaid internships
“excludes young people who come from less well-off families. This helps to ensure that certain industries and professions continue to be dominated by people from particular backgrounds, perpetuating inequality and dampening opportunities for social mobility.”
Even more concerning is the finding from the British Journal of Sociology of Education, which found that unpaid internships, particularly with more well-known companies, often hold greater esteem than paid placements. While this is all well and good for graduates whose families are able to offer them financial support on completion of their higher education course, those from less privileged backgrounds do not have the luxury of being able to work for free. For too long, the fields dominated by the elites have been run as a chumocracy. In this day and age, one’s prospects should not be dependent on one’s family connections. However, the current system of unpaid internships perpetuates inequality and reinforces the lack of meritocracy in the workplace.
It is important to note that although unpaid internships are prevalent in London, this is not only a London-centric issue. My constituency of Coatbridge, Chryston and Bellshill is 50 minutes away from Edinburgh. Capital cities have a tendency to become power centres, with opportunities for the elites but not the masses. Despite my constituency’s proximity to Edinburgh, the differences in opportunities are so stark that, to many, Edinburgh may as well be a million miles away. I spoke to a constituent recently whose case exemplifies the challenges that young people face, particularly those from less advantaged backgrounds, due to the prevalence of unpaid internships and the expectation that graduates will undertake an internship without pay before being hired for even an entry-level position.
My constituent asked not to be named. She graduated from a Russell Group university with a first-class honours degree in the field in which she wished to work. She began looking for work in Glasgow and Edinburgh, as both are well connected to my constituency by train. However, she quickly found that nearly every relevant job listing required several years’ worth of experience, despite being advertised as entry level—also something that the hon. Member for Elmet and Rothwell touched upon and illustrated so well. In fact, the only entry-level jobs that my constituent found in her field of work that did not require years of experience were unpaid internships, and even then they required at least an upper second-class honours degree as a prerequisite.
My constituent’s personal circumstances meant that she was unable to live with her parents. As such, she was unable to undertake an unpaid internship to gain the relevant work experience, because she needed to earn an income to pay for food, rent, utilities and the like. She eventually found herself forced to apply for jobs at call centres and coffee shops, and ultimately accepted a job for which she felt she was far over-qualified, in a field unrelated to her degree.
Unfortunately, my constituent’s story is far too common, and it represents both a waste of human resource and potential as well as the entrenchment of a system in which someone’s family background determines the opportunities available to them—shocking in 2016. However, in this Chamber today we have the chance to change that and to help to create a system whereby we all have the same opportunities and those who excel do so through merit. I commend the Conservative party for trying to implement that change.
I welcome the contributions made today in support of requiring interns to be paid a wage. Requiring a company to pay a wage to interns would open up scores of opportunities for those from less privileged backgrounds. It would also mean that those professions traditionally dominated by the elites could be opened up to all, helping to create a level playing field, whereby social mobility is enhanced.
It is not right that we deny so many the opportunity to choose their own path in life and it is time that we rectified that inequality. I fully support the Bill promoted by the hon. Member for Elmet and Rothwell.
Mr David Nuttall (Bury North) (Con)
It is a great pleasure indeed to follow the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell)—I hope that I have pronounced his constituency correctly.
Mr Rees-Mogg
May I tell my hon. Friend that Scottish National party Members are very willing to give advice on how their constituencies are pronounced and that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) spent some time helping me to get it right?
Mr Nuttall
I am extremely grateful to my hon. Friend for that intervention and I think that I need to go for those lessons, too, because I always dread having to follow the hon. Gentleman in case I am asked to pronounce his constituency. I think that I need to sign up for that course.
I congratulate my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) on presenting this Bill this morning and on coming third in the ballot for private Members’ Bills. As he made clear when he introduced the Bill, and to be fair to him, he has spent years campaigning on this issue; I think that is fair to say. That in itself demonstrates his determination on this issue and I know that he is introducing the Bill with the very best of intentions. He listed this cause as one of the six points in the plan that he put before his own electorate, so I do not criticise him in any way for introducing the Bill.
To be honest, I agree with my hon. Friend on the other five points that he put forward: focusing on jobs, action on dementia, supporting schools, calling for affordable family homes and tackling crime. Unfortunately, I have to say very gently to him that I do not support the Bill, and I will set out why. I hope that he will accept that I do so in a spirit of helpfulness.
Alec Shelbrooke
I am genuinely pleased at the number of my colleagues who are here today, perhaps to argue against the Bill, but this is a subject that, step by step, I have pushed further up the agenda and there are many issues to be explored. I say in all honesty and in all integrity that I sit here today to hear the points that he has to make, and I will listen very carefully to what he has to say.
Mr Nuttall
I am very honoured to hear that; to be perfectly honest, I am humbled to hear it, because I am not sure that my speech is worthy of that. Perhaps I have gleaned one or two things from looking at my hon. Friend’s Bill that will genuinely help. I will certainly be able to draw his attention to one or two details, which will assist him.
Philip Davies
Does my hon. Friend agree that we and our hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) are on exactly the same side when it comes to social mobility and wanting to extend opportunities, but that we feel that the Bill will restrict opportunities rather than enhance them? If I can catch your eye later, Mr Deputy Speaker, I might be able to suggest to my hon. Friend how we can work together to extend opportunities, as we both seek to do.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I am sure that you will be able to catch my eye, Mr Davies, subject to the length of Mr Nuttall’s speech.
Mr Nuttall
I have not started my speech yet, Mr Deputy Speaker.
I entirely agree with the brief point made by my hon. Friend the Member for Shipley (Philip Davies). What I want to do in making the points that I will shortly make is to do all I can to try to increase the number of opportunities available to young people. My genuine fear is that, rather than enhancing those opportunities, the unintended consequence—I entirely appreciate that this is not the intention of my hon. Friend the Member for Elmet and Rothwell—is that what is likely to happen if the Bill reaches the statute book is that those opportunities will be reduced.
I accept that at first sight the purpose of the Bill—the idea that by passing legislation we can somehow ban unpaid internships—might superficially appear to be a good idea, but I am genuinely concerned that on closer scrutiny we will find that that is not the case.
My hon. Friend cited a number of examples as evidence to support his contention that young people are being taken advantage of—I think that is a fair summary of what he said—because the national minimum wage legislation apparently does not apply to young people undertaking internships.
My hon. Friend has been lucky not only because he came third in the ballot for private Members’ Bills, but because this debate has fallen during Living Wage Week, which was marked by a debate in this Chamber only yesterday. This House has therefore had two consecutive debates, sandwiched on either side of yesterday’s Adjournment debate, on the minimum wage. Living Wage Week, which runs until Saturday, is a nationwide celebration of 3,000 employers who have voluntarily committed to ensuring that employees and sub-contracted staff working on their premises earn a real living wage.
I draw the House’s attention to that because, as my speech will show, the whole problem with the Bill revolves around how we define contracts of employment and a minimum wage. I should say at the outset that, personally, I do not like the word “intern”. It is not a word with which I was familiar previously. I did not grow up with it and I do not like the word “internship” either. I think that it is an American import—I can see hon. Members nodding in approval. I will be honest about it: I have nothing against our friends on the other side of the Atlantic, but I grew up with the term “work experience”, which I think more accurately describes the issue under discussion.
When I was at school, there was a work experience scheme called Trident. I do not know whether any colleagues have been on a Trident course. I do not think that I was able to secure a Trident placement—I certainly do not recall having had the opportunity to go on one—but many people I was at school with did have such an opportunity. Under the scheme, someone approaching the end of their compulsory school life was given the chance to go on a three-week placement with a local employer, but it was work experience, not an internship.
I want to consider, much as my hon. Friend did in promoting the Bill, how we arrived at this problem. Last Friday, we considered a Bill that was 18 pages long. This Bill is just two pages long. Unfortunately, it does not contain the answers to the problem it seeks to address. Indeed, it raises more questions than it provides answers.
The whole problem with the Bill revolves around the definition of three key terms: “work”, “internship” and “work experience”. Someone who is deemed to be a worker will have the right to be paid the national minimum wage—that is already the position. The regulation of wages in this country can be traced back to the end of the 19th century and then to the Trades Board Act 1909. After the second world war, wages councils arrived on the scene, with the Wages Council Act 1945. At their peak, 3.5 million people were covered by those councils. After they were abolished in 1993, pressure began to build for a new national scheme of a minimum wage. Despite the view of the Confederation of British Industry, which said in 1995 that
“even a low minimum wage would reduce job opportunities and create major problems for wage structures in a wide range of companies”,
two years later the Labour party included in its manifesto ahead of the 1997 general election a commitment to introduce a national minimum wage. To be fair, immediately upon election, it set about putting that into law, and the national minimum wage that we have today is still governed in primary legislation by the National Minimum Wage Act 1998, while the most recent secondary legislation is the National Minimum Wage Regulations 2015.
Section 54 of the 1998 Act gives the key definitions of employees, workers and contracts of employment. Subsection (2) states categorically that
“‘contract of employment’ means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.”
Subsection (3) defines a worker—again I quote so that we have it absolutely accurately—as someone
“who has entered into or works under…a contract of employment; or…any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”.
Workers are already, under the existing law, entitled to be paid the correct minimum wage if they are part-time, casual labourers, including even someone hired for one day, agency workers, workers and home workers who are paid by the number of items they make, trainees, workers who are on a probation period, disabled workers, agricultural workers, foreign workers, seafarers and offshore workers. Apprentices, who are separately provided for, are entitled to be paid a special apprentice rate, if they are either under 19 or 19 and over but in the first year of their apprenticeship. Apprentices over the age of 19 who have completed their first year are then entitled to be paid the actual minimum wage, depending on their age.
The Government set out the national minimum wage after considering the advice of the Low Pay Commission, an independent advisory, non-departmental body, sponsored by the Department for Business, Energy and Industrial Strategy. The commission is comprised of a chairman—currently Sir David Norgrove, a former private secretary to Margaret Thatcher—and a further eight low pay commissioners, who are drawn from a range of employee, employer and academic backgrounds and who make recommendations to the Government on appropriate pay.
Failure by any employer to pay at least the national minimum wage to those whom I have listed as employees is an offence and in breach of the national minimum wage legislation. To secure compliance with the legislation, the Government have introduced a naming procedure. In August, they published a list of 197 companies that had failed to pay one or more entitled workers the national minimum wage. Between them, those companies owed a total of £465,291 in arrears, and the most significant example was £99,541.98 owed to 30 workers. The naming and shaming scheme was introduced by the coalition Government in October 2013.
Those companies, which have been publicly identified and will undoubtedly have received negative publicity, may suffer an impact on their future relationships with customers and suppliers. Some 687 employers have been publicly listed as having failed to pay the national minimum wage to workers, and the wage arrears owed to staff have exceeded £3.5 million. That appears to be—
Proceedings interrupted (Standing Order No. 11(4)).