David Nuttall
Main Page: David Nuttall (Conservative - Bury North) National Minimum Wage (Workplace Internships) Bill
David Nuttall Excerpts
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.
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
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.
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)).