Unpaid Work Experience (Prohibition) Bill [HL]

Lord Holmes of Richmond Excerpts

2nd reading (Hansard): House of Lords
Friday 27th October 2017 Lords Chamber

Moved by

[Lord Holmes of Richmond]

That the Bill be now read a second time.

[Lord Holmes of Richmond (Con)]

My Lords, I thank all noble Lords who have signed up to speak in the debate and I look forward to hearing their insights and considered views as we progress. I would also say to all Members in the Chamber and to the wider audience watching the broadcast that they can join in the debate by contacting me by email and accessing the hashtag “#PayInterns”. We want to keep the pressure up on this issue both within the House and right across the country through the use of social media. I thank all the organisations which have helped in the preparation of the Bill and for providing briefings for myself and other noble Lords. I thank the staff of the Public Bill Office in preparing the Bill itself, and in particular the Social Mobility Commission, the Sutton Trust and the fabulous Intern Aware, a campaign started by young people—including not least Ben Lyons who is one of the founders—who were at a stage in their lives when they were incredulous that it could be the case that people would be asked to do work for no pay in 21st century Britain. I should also like to offer my thanks to my honourable friend in the Commons, Alec Shelbrooke, whose assiduity—is that a word? It is now—on this issue over several years has played no mean part in my being able to bring forward the Bill before us today. As is often the case in the legislative process, I am standing on the shoulders of many individuals both within Parliament and far beyond.

Why do we need this Bill? In 2017, employment is at record levels and unemployment is at similarly record low levels. That is good, but what is not so good is that we are currently seeing a boom in unpaid internships, where young people and indeed people of all ages are being asked to give of their labour for no remuneration. The Prime Minister has said many times in various speeches that we want to be a nation that works for everyone. I agree with her, but the nation is in no sense working for everyone while we still see the perpetuation of pathways of privilege. They have nothing to do with merit and nothing to do with talent. The pathways of privilege are where people are able to secure unpaid work opportunities on the basis of being fortunate enough to receive family funding or, indeed, to have access to the family’s black book. If noble Lords doubt this, YouGov research clearly shows that only 4% of those polled said that they would be able to take on an unpaid internship with no financial difficulties. Wilberforce slammed the door on slavery in the 19th century; we had the national minimum wage legislation in the 20th century; how can it still be, in the fifth-richest economy on the planet in the 21st century, that we are still asking people to give of their labour for no financial return?

What does the current law say? It says that if there is a relationship between an individual and a firm with clear obligations, the individual is a worker and is entitled to the national minimum wage. The law is clear, so why are we having this debate? What is not so clear and easy to prove is that you are a worker who should get the national minimum wage. In fact, it is quite easy for businesses and employers to get around the legislation in a whole series of ways, and it is getting worse. Since 2010, unpaid internships are up and internships in general have increased by 50%. More and more professions and trades now require not only a degree and a vacation scheme, but unpaid work experience if someone is to have any hope of getting a job. Time and again, adverts ask for at least six months’ work experience. Never mind the quality of the individual and the quality of the degree that they have already attained. The situation is getting worse—an increase of 50% since 2010—at a time when successive Prime Ministers have been talking about social mobility and enabling talent.

Further research shows that 30% of graduates are reporting that they have had to do unpaid work experience with their current employer, a figure that rises to 50% in some professions. Half of the people in a profession will have had to do unpaid internships in order to get across the threshold. As I have said, 4% report that there is no financial barrier for them, which leaves 96% for whom clearly there is. Some 40% of people report that they have sought internships but have had to turn down the opportunity through a lack of financial means. I believe that the current situation, with these practices, can be summed up quite simply: “If you want pay, go away”.

Worse than that, some organisations representing businesses are offering template letters that enable organisations to take a route which avoids the national minimum wage legislation. As noble Lords, in particular noble and learned Lords, will be aware, all contracts are agreements, but not all agreements are contracts. As the current law is set out, there are many ways to avoid and evade the regulations. Perhaps even more problematic is that all of the onus is put on the individual—on the victim, if you will—to pursue a claim. How likely is it that someone who has undertaken an internship to try to increase their social mobility and build a career for the rest of their life will bring a case against an organisation? Yes, it is possible to do, as Sony, Harrods and others have found out. It is possible, but is it probable? Even if it is, is it likely to put an end to these practices?

I turn to the Bill itself. What am I seeking to achieve through this short Private Member’s Bill? The answer is simple: a prohibition on all unpaid work experience—please note the use of the term “work experience”—exceeding four weeks. This will bring clarity to the whole area. I am a massive fan of work experience, as seen not least in the 2016 report of the Social Mobility Select Committee, of which I was a member. Work experience has a fabulous impact on young people because it enables them to have their first experience of the workplace. They can learn skills as well as the rhythm and routine of work.

However, are we honestly saying that a period beyond four weeks unpaid is in any sense acceptable? When I began the preparation of this Bill, my start point was zero weeks. I felt that if someone is doing something that is of benefit to a business, they should receive remuneration for their labour. Having undertaken extensive consultation, a period of four weeks seems to be what we can agree on across the sector. It is acceptable in that it will not have any adverse impact on work experience opportunities, but it would put a clear stake in the ground and bring clarity to the position. After the four-week period, an individual will be unequivocally entitled to the national minimum wage; indeed, for clarification, they are entitled to that wage during the work experience period as well, in particular if they are working as an intern as opposed to doing work experience, being in a shadowing scheme or something of that nature.

The Bill would reverse the onus so that no longer would it be for the individual to bring a case; it would be for the employer to prove that the individual is not a worker. It would eliminate many of the difficulties in terms of bringing claims and the whole prosecution process. Moreover, it provides clarity for employers in terms of how to treat interns. How should you treat them? The answer is to pay them. I believe, too, that talking about pay empowers interns, whereas at present the subject simply cannot be raised—it is not in any sense within their grasp to bring it to bear because of the nature of the power relationship in which they find themselves.

It is fair for me to consider some of the arguments against such a measure. Perhaps small businesses believe that they would not be able to afford to pay interns. The Bill introduces a four-week period for work experience in which an employer can get to know the employee and the employee can get to know the employer, but after four weeks why should the person not be paid? Is the business saying, “We are unable to survive without the labours of that young person being given for free”? If that were indeed the argument, I think we would all draw some significant conclusions about the nature of that business, both economically and ethically.

However, the Bill is not so much about small businesses; it is more about the larger, more prestigious organisations that offer these schemes. Possibly most concerning of all is that some of these so-called prestigious unpaid internships are seen as better and more prestigious for the individual than if they had undertaken paid work experience or internships with a different employer. That could be an argument against my Bill. What about the view of bigger businesses? Sixty-six per cent—two-thirds—say that they are in favour of the four-week limit. I could cite many but, to pick one at random, KPMG says, “We have a culture that respects hard work”, but clearly part of that respect is shown by remunerating that hard work.

Some argue that the Bill will not increase opportunities but will simply mean that all these internships disappear. If they are able to survive only on the basis of people working for free, with only 4% of the population of that age saying that they can undertake them and 40% having to turn them down, I do not think that that will be a great loss. It would certainly be no drag on social mobility or advancement or on economic growth for this country.

I turn to a more interesting claim concerning volunteering. I have had a lot of representations from volunteer organisations. The Bill as currently drafted will have no impact on the great work that volunteers do for many different organisations and many parts of our society. However, I hope that it will stop long-term unpaid internships that some charitable and third-sector organisations provide. The aim of a charity may be incredibly laudable, but that end is never justified by the means of having interns who, often for many months, if not years, work for no pay. That is a quite separate matter from those who volunteer and freely give of their time to great charitable causes.

Therefore, the Bill is about fairness and equality. However, if neither of those two things float your boat, I argue that it is also simply about talent. As I have said, 4% of young people can undertake unpaid internships with no financial difficulty, but why would a business want to exclude 96% of the potential talent pool from their organisation? Surely any business would want to try to attract the brightest and the best.

I ask the Minister whether the Government will support the Bill. If not this Bill, what Bill? What action will they take to end the pernicious practice of unpaid internships? They are a pathway of privilege—a route into some of the best jobs and brightest professions of our time. Surely the role of government is to enable and empower. Surely if we want the best businesses, the best public sector and the best third sector, we as a society, and we as a Parliament, need to state very clearly that we are calling time on any organisation or business that asks people to give of their time for no remuneration.

I would like to raise with the Minister a number of other issues allied to the Bill, although in no sense am I offering them as alternatives. I believe that the Government should consider all these issues alongside, not instead of, the Bill. If the Bill were passed, the matters that I am about to raise would need far less government intervention.

The first is massively to increase awareness among employers not just of the current legislation but of the Government’s view that unpaid internships are no longer acceptable. The higher education and university sectors should be asked to do much more to educate and inform graduands and graduates about their rights. The current law states that, if you are a worker, you are entitled to the national minimum wage. You should not feel that you have to do, and you should not accept, unpaid internships because, even if you can, you are standing on the shoulders of others and holding this nation back.

Regarding the whole reporting and regulatory sector, I believe that there needs to be a massive increase in and widening of reporting in this area, not least enabling third parties to report. HMRC needs to look across all the advertising websites, newspapers and outlets. Many of these advertisements are in plain sight—they are right there, ready for HMRC to go after and put an end to. This was brought up in Matthew Taylor’s review published earlier this year, in which he clearly highlighted that he felt that, when it came to unpaid internships, HMRC’s powers were far from satisfactory. Does the Minister agree? Will he say when the Government will respond to the Taylor review and whether they believe that the review, as published, went anywhere near far enough?

There is then the whole question of penalties. When we are looking to increase penalties in a whole series of areas, it seems particularly pertinent to do so in this one. If you fell foul of the current legislation, you could be compelled to pay the wages that you should have paid. That would hardly be a penalty; it would merely be a case of doing what you should have done in the first place. Will the Minister consider looking at penalties? A dramatic increase in penalties in this area would be not only appropriate but a very positive step towards ending this practice.

I believe that there is a role for business—small, medium and multinational—to use their power and influence, and to state categorically in all their communications that not only do they not engage unpaid interns but they have no truck whatever with the practice. A key way in which they could do this would be through procurement, saying, “We will not procure from you if you use unpaid interns”.

Naming and shaming could be incredibly positive in this area and across all sectors, and it should start right here and right now in this Chamber. To Conservative, Labour, Liberal Democrat, Cross-Bench and Scottish nationalist Members at both ends of the Corridor, we should say, “If you use unpaid internships, you have no comment to make about progress, merit, talent or social mobility”. We have to lead on this. I ask my noble friend to comment on what is happening in Whitehall, where there have been clear illustrations of how progress can be made when there is a commitment to this matter.

I conclude not with my words, nor the words of briefing or of Ministers or previous Members, but with the words of perhaps the people we should be listening to most: those who have suffered unpaid internships. As somebody from the broadcast sector said, “You can’t pay the rent with a glowing CV. You can’t buy food with exposure”. Somebody else from television described these practices as “cruel” and “pointless”. Perhaps most pertinently, somebody from the creative industries said, “You begin to doubt yourself and your self-worth”. Quite so. That is the impact on many more people, who feel the shame and embarrassment of having been engaged in these unpaid internships, who feel as though they had no choice and really do not want to talk about, as they describe it, that “shameful episode” in their lives.

This is about empowerment, enablement, fairness, equality, dignity, respect and talent. This is for the hundreds of thousands of individuals who have in the past suffered the shame of unpaid internships; for the tens of thousands of people who currently find themselves in that same situation today; and for a better Britain of tomorrow. Let us not just give the Bill a Second Reading; when the time comes, let us give it safe, swift passage into statute. I beg to move.

--- Later in debate ---

[Lord Holmes of Richmond]

I thank all noble Lords for taking part in the debate and for their support for the Bill. It is invidious to mention any particular noble Lords, but I will briefly pick up on a number of points that were made, if I may.

First, I agree with the point made by my noble friend Lord Flight about start points. As I mentioned in my opening remarks, my start point was zero weeks. Having four weeks in the Bill does not stop the clock ticking from day one, but it helps to define the period between what is and what is not work experience. I would certainly be happy to have more discussions on that point.

I am sad that the noble Lord, Lord Winston, does not like the Bill—I still like his television programmes. Perhaps I can help him out on one point—I hope so. He mentioned tidying up the ladies’ gym. I see no difficulty under the legislation—it is quite clear in that example that he was not a worker but a volunteer.

I was surprised by the noble Lord’s speech because I felt that many of his arguments actually made the case for the Bill. It is fine and a lovely thing to be able to help your children, but while Joel is in the lab working away and doing great things, what about Jack, or indeed Jane, from South Shields, who are able to watch the noble Lord on television but have very little opportunity to break through that glass screen? Without wanting to trespass on family issues, I say to Joel Winston that, having seen hundreds of thousands of pounds put into not fixing that piece of equipment, as the noble Lord set out, if I were him I would feel at least a little aggrieved to not receive any remuneration when undertaking tasks that were not only work but were clearly beneficial to the lab to the tune of hundreds of thousands of pounds.

[Lord Winston]

I mentioned Joel only as a bit of a joke. If the noble Lord looks at my record in my laboratory he will see that we have helped endless numbers of young people with work experience. Wherever possible we have tried to promote them thereafter, as we did with the last person I talked about, who would probably not have got into medical school and would certainly not now be a stellar performer in science. Their PhD was also supported through our charitable work. To be fair, I mentioned my privileged son only because of the underprivileged people we regularly see and want to help. I am not totally against the noble Lord’s Bill—of course I am not—but I want to see it adjusted in Committee to ensure that we do not prevent people properly accessing work experience.

[Lord Holmes of Richmond]

I thank the noble Lord and I accept his point. I look forward to discussing those points as we get to further stages. The intention is absolutely to have work experience opportunities—internships if they go on longer—not only paid but available to the broadest breadth of talent across the country.

The noble Lord, Lord Thurlow, raised a very interesting point. It is certainly one to discuss further as we progress. There is a potential danger in identifying any particular group of people and seeking to differentiate them. As he rightly and sensitively set out, it is clearly a difficult issue, but to differentiate too significantly could be problematic and may have at least the echoes of arguments made in previous decades on gender pay.

This has been a fantastic debate. I am clearly absolutely behind the principle. I am not totally, 100%, die-in-a-ditch committed to every last dot, cross, “i” and “t” in the Bill. As I said to the Minister at the outset: if not this Bill, what Bill? My mission is quite simply this: current legislation is clear and clearly is not working. I hope that the Bill is not a Rubiconic leap, a lunge or a blast into space, but merely a focused, targeted, thought-through tweak to existing legislation to bring clarity and to bring people within the law to enable them to have their rights and to be paid for the work they undertake.

Unpaid internships are a stain on our society, a drain on social mobility and desperately Dickensian. They are something of the past that I believe should be firmly committed to that past. We have the opportunity today to take the next step towards condemning unpaid internships to that past. In thanking all noble Lords who have contributed once again, I ask the House to give this Bill a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.