National Minimum Wage (Workplace Internships) Bill
Debate between Mark Pawsey and Alec Shelbrooke
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
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.
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.
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.
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.
Oral Answers to Questions
Debate between Mark Pawsey and Alec Shelbrooke(12 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alec Shelbrooke (Elmet and Rothwell) (Con)
1. What assessment he has made of the potential effects of planned changes to Government procurement on UK businesses bidding for contracts.
Mark Pawsey (Rugby) (Con)
6. What assessment he has made of the potential effects of planned changes to Government procurement on UK businesses bidding for contracts.