National Minimum Wage (Workplace Internships) Bill

Debate between Philip Davies and Alec Shelbrooke

Friday 4th November 2016 Commons Chamber

[Philip Davies]

There are so many things on which to congratulate the Chairman of Ways and Means that it would take me far too long to go through the list, so I shall refrain from doing so.

[Alec Shelbrooke]

May I offer a piece of advice to my hon. Friend, who I know is interested in making money in other ventures? Perhaps next time he would like to seek advice from the Deputy Speaker. I understand that I was one of the few people in the room when the ballot was drawn. Mr Deputy Speaker and I must be a lucky charm for that, so if my hon. Friend is looking for advice for his lottery numbers—

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[Philip Davies]

I am delighted to hear that the ballot is not a fix, but I never thought it was.

We all support the ambition of my hon. Friend the Member for Elmet and Rothwell to see greater social mobility, and I know that that is what lies behind the Bill. That is the motivation that brings my hon. Friend to this place. The problem that I have, that some of my hon. Friends and some Opposition Members have—[Interruption.] There is only one Opposition Member in the Chamber at present, but others do exist. I know that they agree with the principle of social mobility and giving people more opportunities. The problem is that many of us think the Bill will not achieve that and will make the situation worse. I shall expand on that argument and point to what I think might be a better avenue for my hon. Friend to go down, which would genuinely create better opportunities for young people to make sure that we have more social mobility.

I yield to nobody in my demand that we have more working-class people in some of the professions. I made a speech earlier this week in Westminster Hall in which I argued for more working-class people to be in Parliament and made the point that gender diversity does not deliver social mobility, as my hon. Friend wants. I pointed out that replacing Rupert from Kensington and Chelsea with Jemima in Kensington and Chelsea does not do a great deal for social mobility or diversity in this House, and that we should consider how to open up more opportunities for people from different class backgrounds. I agree with the sentiment behind the Bill, but I think it will be counterproductive.

Since I entered the House 11 years ago I have taken on so many people for work experience, as interns or whatever people want to call them or call themselves, that I could not begin to say how many have spent time in my office doing one form of work experience or another. Like my hon. Friend the Member for Bury North, I refer to it as work experience because, as far as I am concerned, that is exactly what they are getting. Whatever we call it, and whatever we call those roles, these people, from what they have said, have all had a great experience and seen the workings of Parliament first hand. They have used that experience to go on and get fantastic jobs or to help them with their studies. If this Bill had been in place, and I had had to pay some or all of those people the minimum wage, I can state quite clearly that they would not have had that opportunity. That is not because I have any objection to paying people—that is not the case at all—but because we have a budget for staffing in the House. The budget is perfectly adequate, and I make no complaint about it, but there is not a great deal spare at the end of each year. So if my hon. Friend wants these people to be paid out of that budget, the only way of doing that is to reduce the salaries of the people who already work for me, and I am not sure that that would be entirely fair on them.

[Alec Shelbrooke]

Would my hon. Friend just help me with the opinions I am forming? Will he describe how long, on average, people have come to work with him for?

[Philip Davies]

I will come to that in a bit more detail, but just so that I do not look like I am dodging my hon. Friend’s question, let me say that it has varied wildly: some people come for a day, some come for a few days and some—I would imagine it is the majority—come for a week. However, some have come for months—five or six months in a couple of cases—and I will refer to them later, because part of their experience was part of what I see as the problem with the Bill.

The issue is what will be lost, and the definition in the Bill spells out what could be lost, not just in Parliament but when people are looking for jobs elsewhere. Clause 1(b) says the national minimum wage would apply where

“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.”

That seems to be good old-fashioned, traditional work experience, but my hon. Friend seems to want to cover it through the minimum wage, and that would not be sensible. Learning and gaining practical experience are what is at stake. People doing work experience do it for the invaluable opportunity to gain that experience, and that is often something money cannot buy.

For many people thinking about going down a particular career route, spending even a small amount of time just seeing what happens and what the role actually means, rather than how it is portrayed in the media, is invaluable. They might actually think, “This job isn’t for me. I thought it was, because of what I thought about it, but after spending just a week here, I’ve seen what it’s really like, and it’s not for me.” The money someone can save by not pursuing a career that is no good for them is actually far more than they could ever earn by being paid the minimum wage for doing these things.

[Philip Davies]

My hon. Friend is absolutely right—as he invariably is, I might add.

Under the heading “What is work experience?”, the Government’s own guidance on their website about the minimum wage, work experience and internships says:

“The term ‘work experience’ generally refers to a specified period of time that an individual spends with a business—during which they have an opportunity to learn directly about working life and the working environment.”

I should say at this point that work experience has actually proven quite an essential part of the Government’s welfare reforms—reforms that Conservative Members, including, I am sure, my hon. Friend the Member for Elmet and Rothwell, are very proud of. I am sure we all recall when the Government had to introduce emergency legislation because they lost the Cait Reilly case in the courts over the work experience she was asked to do as part of her benefits regime. The Government introduced emergency legislation, the Jobseekers (Back to Work Schemes) Act 2013, which made it clear in law that people on benefits should have to do work experience in certain circumstances. Labour Members agreed to help the Government rush through that legislation because they too saw the importance of those people having to do work experience. The right hon. Member for East Ham (Stephen Timms), the shadow Minister at the time, gave Labour’s support to it. The legislation was about people doing unpaid work experience in the workplace because the Government believed, and everybody agreed, that that was one of the best ways to help them get into work. I think the Government said—I am happy for people to correct me if I am wrong—that about 50% of people on benefits who did the work experience got a job at the end of it. I would even be prepared to wager that my hon. Friend supported the Government in passing that legislation, because I am sure he appreciated how important that unpaid work experience was in people getting a job.

[Alec Shelbrooke]

Perhaps controversially, I have always felt that being given benefits from the state provides an income that can be used to help to get work experience and move forward. This Bill seeks to help people who have absolutely no means of supporting themselves through the benefits system or an income outside it. That is a subtle but distinct difference.

[Philip Davies]

I am grateful to my hon. Friend, but in making that helpful clarification he highlights one of the flaws in his Bill, because it does not make the exception that he has offered up with regard to who should be exempted from the terms of paid work experience. If he is saying that he wishes at a later date to add to his Bill another list of people who should not be part of it, then I welcome that. It is also the case that the Department of Work and Pensions introduced work experience as part of the youth contract, and that was probably one of the most popular parts of it.

I took on board my hon. Friend’s point—he made it very well—about some employers who might use internships for a purpose that some of us would not. I was struck by his example of Vivienne Westwood. However, we would be in danger of throwing the baby out with the bathwater if we went down the route in this Bill.

[Philip Davies]

That is absolutely right. This is the flaw in my hon. Friend the Member for Elmet and Rothwell’s logic. He says that he wants to even up the playing field to make sure that poorer people get the same opportunities that richer people get and take for granted. That is a laudable aim, and nobody disagrees with it. My fear is that he will succeed in evening up the playing field, but by making sure that nobody gets the chance to do work experience and internships. That is not my idea of success.

[Alec Shelbrooke]

Let me refer back to a couple of points I made in my speech. Two thirds of internships are already paid, so this Bill would not affect them. For me, the figure we must consider carefully is that 40% of people who are offered an internship cannot take it. People talk about reducing opportunities, but we are getting close to half of people being unable to take the opportunity in the first place.

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[Stephen Pound (Ealing North) (Lab)]

There is a self-respecting Conservative.

[Alec Shelbrooke]

Quite right—I agree with the hon. Gentleman on the Opposition Front Bench, who speaks from a sedentary position.

I gently say to my hon. Friend the Member for Shipley that he quite rightly points out that my interest is social mobility, but rather than trying to bring it down to a common denominator I am trying to bring it up to a common denominator, so that people can access opportunities for social mobility. I understand his concerns, but there is a large difference between trying to push everybody down and being under the control of one socialist fist, and trying to make sure that everybody can go as high as they possibly can.

[Philip Davies]

Yes, I absolutely agree. However, my view is that the outcome of my hon. Friend’s Bill would be to take away opportunities from people and not to add extra opportunities for them. I will make a suggestion a bit later—if I ever get the opportunity to do so, Mr Deputy Speaker—to suggest how we might actually do what my hon. Friend says, which is not to take away opportunities that exist but to make sure that there are more opportunities for other people.

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[Philip Davies]

As a well-known softie, I take a slightly different view. There is a difference between companies and organisations that are actively seeking a member of staff to come in and do some work for them, are advertising for that and in effect are trying to get somebody to do that job for nothing, and other companies. These are personal things, I guess; I think that situation is different.

I have never advertised for an unpaid intern. I have never said that I want somebody to come and work for me unpaid for x period of time. I do not think that that is right. Whether it should be illegal is a different issue, but I do not think that it is right; it is not to my taste.

[Alec Shelbrooke]

My hon. Friend is a thoroughly decent man, in stark contrast to the example I gave earlier of a certain millionaire fashionista.

[Philip Davies]

We do not hear that very often in this Chamber; I welcome that kind of intervention.

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[Philip Davies]

That is a perfectly reasonable argument to make and I do not necessarily disagree with it. As I say, the questions that we decide in this place are whether things should be legal or illegal. I am merely saying that I do not personally think it is right to advertise for a job and expect someone to work unpaid; that is not to my taste. There is a world of difference between that and someone saying, “Can I come and do some work experience with or volunteer for you? I really want to do something. Will you accommodate me?” The problem is that the Bill does not distinguish between those two approaches, which is unfortunate, because there is a massive distinction between them.

Labour Members criticised the Government’s work experience scheme for people on benefits, saying that it allowed companies such as Tesco to exploit workers and get cheap labour. However, the Government said, quite rightly, that taking somebody on work experience is not cheap labour, because, usually, the employer has to invest an awful lot of time and effort into accommodating that person. I have no complaint about that. My hon. Friend the Member for Bury North is very happy to give up his time to give people career advice and help and support. I am sure that that applies to every Member, irrespective of their party. That is what we should do, but it is wrong to say that such people are a source of slave labour. The reality is usually the other way round: it is usually the employer who makes the sacrifice in order to give people the opportunity. I fear that the Bill does not accurately reflect the nature of that relationship. It seems to think that it is a one-way street when it is anything but a one-way street.

People are already covered by the national minimum wage legislation, and it would be wrong to pretend otherwise. Many forms of work experience, placements and internships are covered; equally, there are some, which may be referred to as unpaid work or expenses only, where somebody gives their services free of charge. My hon. Friend the Member for North East Somerset (Mr Rees-Mogg) has made a very good point: what is wrong with the principle of somebody giving up their time free of charge because they want to contribute to a cause they believe in, or because they want to help out? Who cares whether it is for their own benefit or for altruistic purposes? If that is what they want to do, why should we have a law that says that they must not be able to do it? I really do not think that the state has any business in stopping people volunteering for causes that they believe in. That would be the only possible outcome from the Bill: it would make it virtually impossible for people to volunteer for causes in which they believe.

The hon. Member for Elmet and Rothwell has mentioned data, but precise data are difficult to find. In 2010, the Government estimated that there were 70,000 interns at any one time. The most common length of an internship was recorded in a YouGov poll in 2014-15 as between four weeks and two months—that is very different from my experience of taking people on—with only 3% of internships lasting longer than a year. The same poll found that 26% of firms with an intern paid nothing or less than the national minimum wage. London Economics found that 13% to 16% of graduate interns are unpaid, but the Sutton Trust suggests that a third of them are unpaid. There is a big discrepancy between those two figures and I am not entirely sure which is right.

Many loaded statistics are used to justify a statutory requirement to make internships paid, such as those used to argue that unpaid internships are less likely to lead to a job offer, but with 47% of paid internships and 36% of unpaid internships leading to a job offer, it seems that both options are very good at enabling people to move pretty rapidly into a paid job. Surely one of the things that the Government should always be looking to do is to help people find a job as quickly as possible. It is clear from the figures that, whether it be paid or unpaid, an internship is among the most successful options in helping people find a full-time job. We should be celebrating that, not looking at how we can curtail it.

In 2010, the Chartered Institute of Personnel and Development did a survey of mainly large employers. It found that, among those that employ interns, 49% said that they paid interns the national minimum wage; 18% said that they did not pay interns a salary but covered their travel costs; and only 3% said that they did not pay them anything, meaning neither pay nor travel expenses.

The various options currently available for unpaid interns online show how useful such internships can be. One advert on indeed.co.uk says of its unpaid internship offer:

“Jewelstreet is the UK’s #1 designer jewellery website and has won multiple national and regional awards. We are offering a unique internship in a dynamic working environment, based in North Devon.”

I am delighted to see that my hon. Friend the Member for North Devon (Peter Heaton-Jones) is in the Chamber. It goes on:

“Additionally over 70% of our internships have resulted in an offer of permanent employment.”

That takes us back to the point, which was made by my hon. Friend the Member for Rugby, that if the company did not advertise it, nobody would know that such an opportunity was available. It is great—surely we should celebrate this—that 70% of the people doing an internship get an offer of permanent employment at the end of it. It seems to me that we should celebrate that in this House, not make a mess of it.

CDP is offering the following:

“The internship will be at CDP’s London office and the successful candidate will have the opportunity to be involved in a range of activities within the Cities team. It will be a valuable experience for anyone seeking a career in the area of climate change, sustainability and the urban environment. The internship will run across key stages of the project, including defining the scope and structure of the outreach, communications planning, engagement and technical support”.

Again, I am sure that a lot of people who believe in the cause of climate change and want to do something about it would find such experience invaluable, either to see whether they want to pursue a career in that area or so that they can campaign on that issue in their spare time. We should welcome such opportunities, not decry them.

I am trying to go through a few points at speed, because I know that some of my colleagues wish to speak. When my hon. Friend the Member for Elmet and Rothwell proposed his ten-minute rule Bill in 2014, he said:

“Just last year, the National Council for the Training of Journalists found in its 2013 report that 82% of new entrants to journalism had done an internship, of which 92% were unpaid.”—[Official Report, 13 May 2014; Vol. 580, c. 593.]

I am interested in that because when I was growing up, my ambition was to be a journalist. I am delighted that the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Stourbridge (Margot James), is in her place, because I did a week’s work experience at the local paper in Stourbridge to see what it was like and to try to fulfil my ambition to become a journalist.

There is no reason on earth why I should have been paid by the local paper in Stourbridge for what I did. As it happens, I had the opportunity to write a couple of stories and visit the local court to see some cases and report on them. I clearly was not doing the job to a standard that deserved any payment. It would have been outrageous if I had been paid for my efforts, which obviously needed rewriting on many occasions before they were fit to appear in the local paper. However, it was great experience for me just to see what went on in a local newspaper office. It was also fantastic when I applied for a National Council for the Training of Journalists course—the one-year course in newspaper journalism that I did at Stradbroke College in Sheffield—to be able to point out that I had such experience. That counted very heavily in my favour when I applied for the course. It was not a great hardship that I was not paid by the newspaper for that work experience; it was actually for my benefit. It certainly was not for the benefit of the newspaper, which I suspect had to invest a great deal of time and effort in looking after me for the week, and the work certainly did not justify paying me anything.

[Alec Shelbrooke]

How old was my hon. Friend at the time?

[Philip Davies]

It was a long time ago, but I think I was 18 at the time. If anyone still at the newspaper can remember, I stand to be corrected.

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[Philip Davies]

It was not for me to pinpoint anyone in particular, and I should say for the record that the ones who are in the Chamber are among the ablest and most effective. I would not have wanted to do anything that prevented them from being here. That is not my point. My point is that, in all circumstances, people will use whatever opportunities they have to further their aims and ambitions, and we should not criticise them for that. The notion that if we pass the Bill we will end up with a system that provides equal opportunities for everyone is for the birds. That is just not going to happen. I do not think that my hon. Friend would make many inroads with this measure even if it were successful.

It is commonplace in business, and in other spheres, for people to secure opportunities such as internships and placements on the basis of who they know rather than what they know. I would like to think that the fact that we in this place are able to offer unpaid internships, work experience or whatever we want to call it to all our constituents if they ask—I certainly would never refuse a constituent, and indeed I try to accommodate as many people as I can who are not constituents—means that everyone, not just people we know, is being given an opportunity. I think that unpaid internships are extending the opportunities to more people, and I do not think that it is simply a question of giving the opportunity to someone we know or to a relative. That is why I think that my hon. Friend is attacking the problem from the wrong end.

[Alec Shelbrooke]

The Clerks advised me against having a 28-day limit, but would that satisfy many of my hon. Friend’s concerns? I would be interested to hear him expand on that.

[Philip Davies]

I am grateful to my hon. Friend for being prepared to be flexible with his Bill. We should commend him for that. I think there are areas where my hon. Friend can make the Bill better, but just making it better does not make it better than the status quo, so I cannot promise that if he were to amend it in that way it would all of a sudden command my support. I would say, however, that the Bill can be better than currently drafted, and my hon. Friend might want to explore that avenue. I am not entirely sure the Bill can be amended to make it into a good Bill, but it could be amended to make it a better Bill.

We should be clear about the rates of the minimum wage. It varies depending on people’s age. That is because we want to make sure that younger people get a fair crack of the whip; they would potentially be overlooked for someone older and more experienced if the minimum wage was the same across the board. So the Labour Government introduced a minimum wage, which has been maintained, which varies depending on age: it is £7.20 for those aged 25 and over, falling to £4 for those under 18, with different scales in between. In this context, I want my hon. Friend to bear in mind a further unintended consequence of introducing his Bill: there would clearly be an inbuilt advantage to take on younger people as interns if they have to be paid, because if they are being paid the minimum wage, they will be paid less than the cost of taking on somebody older. In this case, therefore, for the business concerned it would be a case of the younger the better. Schoolchildren would be exempt, as would students in full-time employment if it was part of their course. So this means anyone of that age could be taken on as an intern—schoolchildren could be taken on as interns for free—but for those aged 25 or over, the sum would be £7.20 an hour right away.

Somebody of 25 or over might, however, be in the greatest need of work experience, because they have clearly been finding it pretty difficult to get themselves a paid job, and they are having to do more to make themselves employable. It would be unfortunate if people in that position, who are striving to get a job and are prepared to do whatever it takes, are turned away because they have to be paid £7.20 an hour, which an employer either could not afford or was not prepared to pay. They might take on someone younger who does not have the same needs. One of the flaws of the Bill is that it is not needs-based; it does not look at who most needs these internships. Its strategy is too simple and is therefore flawed. Older people will lose out first even though they are most in need. That would need to be amended.

There is also no exemption in this Bill for participants in Government schemes or programmes to provide training, work experience or temporary work. I do not know whether that would conflict with other Government legislation. I imagine there would be another charter for making lawyers richer—as my hon. Friend the Member for Bury North feared—in establishing which legislation had precedence. I am not a lawyer, and those with a legal background would be better placed than me to comment, but my understanding is that usually the latest legislation trumps previous legislation.

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[Philip Davies]

I am grateful for that guidance, Madam Deputy Speaker, but I fear that if I got sidetracked into talking about the latest decision by the High Court, we could be here for quite some time. I want to return to the issue but not today; I will save myself for another day, when I will tell the House what I really think of those judges and their ruling.

What I take from the intervention by my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) is that, like me, he suspects that the Bill would in effect supersede previous legislation about work experience from Government schemes. We would therefore get ourselves in a bit of muddle. We all agree—both sides of the House agree—that people on benefits doing work experience is a good thing that should be expected of them, unpaid. It helps them to get a job and we do not want to interfere with a system that works very well for lots of people who are looking for jobs. The Bill would need amending on that basis.

My hon. Friend the Member for Elmet and Rothwell mentioned volunteers. If he gets the chance to wind up the debate, I hope he will deal with that issue because we have not had clarity on it. It is referred to in the explanatory notes, but they do not say a fat lot more than the Bill says, if I am honest.

The Bill is about enforcing the national minimum wage, and when the National Minimum Wage Bill was going through Parliament in 1998, the issue of volunteers was dealt with at length. The Minister at the time, Ian McCartney, said:

“I am pleased to say that the entire approach to the clause has been marked by a consensus both on our aims and on the means of achieving them. We want to ensure, first, that genuine volunteers—who give their time to good causes—are not caught up in the Bill’s provisions.”—[Official Report, 9 March 1998; Vol. 308, c. 23.]

The Labour Government at the time were clearly concerned about that issue, which was raised in the Bill Committee. I was not here at the time, but it appears that the Labour Government made changes as a result of concerns raised in Committee, which are the same as those raised by my hon. Friend the Member for North East Somerset, and they had discussions with people who were concerned.

During the debate, the then Minister said:

“We are conscious, however, that there is a grey area. The definition of ‘worker’ in clause 52”

of that Bill

“is quite wide, although no wider than the definition used for the purposes of provisions on unauthorised deductions in the Employment Rights Act 1996”.—[Official Report, 9 March 1998; Vol. 308, c. 24.]

It is an area of concern, and I am not entirely sure that the Bill does a great deal to clear up any confusion about that issue. It seems that the original National Minimum Wage Bill was determined to try to exclude real, genuine volunteers who were volunteering because they believed in a cause, so it would be strange if volunteer interns were now caught up in legislation that they were never really intended to be caught up in in the first place.

I might just say, Madam Deputy Speaker, that Mr Speaker spoke in the debate in 1998. I mention that not because I wish to draw him into the debate now—I do not—but because I agree with the point that he made. He said:

“Are there not instances in which a person works in a charity shop, not for an honorarium but for a modest but regular payment that is below the national minimum wage, and in which, if the shop were obliged to pay that person the national minimum wage, it would have to cease to employ that person? Would not that be a most undesirable state of affairs?”—[Official Report, 9 March 1998; Vol. 308, c. 29.]

[Alec Shelbrooke]

Following advice on drafting the Bill, clause 1 tries implicitly to make the point that it does not apply to the charity sector, by not listing that sector among the areas that the provisions apply to. We can get into the legal ups and downs, but that is the advice that I was given on exempting the charity sector, to address the specific point that my hon. Friend has just raised.

[Philip Davies]

I can understand the point my hon. Friend makes. The Bill makes it clear what a workplace is, but clause 3 deals with exclusions, and there is no mention of the charity sector in that clause. I absolutely understand what he is saying, but I am not sure that it is abundantly clear that that sector is excluded. A stated exclusion would have been helpful to clarify this point once and for all.

[Philip Davies]

My hon. Friend is absolutely right.

The Bill’s attempt to expand opportunities seems to be all stick and no carrot. I have been looking at what happens in other parts of the world. My hon. Friend has touched on some examples of this as well. In a submission from Perspective in 2013 in favour of paid internships, Robina Longworth cited other practices from around the world. However, as far as I can see, none of the countries listed pays the minimum wage to interns. China and Hong Kong, for example, have subsidised internship programmes for university graduates and hiring companies are eligible for tax breaks and loans. Perhaps my hon. Friend the Member for Elmet and Rothwell might like to consider giving tax breaks to companies who take people on. That might be a better carrot to offer.

[Alec Shelbrooke]

My hon. Friend will have noted my proposal to add some carrot by exempting national insurance contributions in the same way as is done with apprenticeships.

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[Alec Shelbrooke]

Specifically on those points, it will not have escaped my hon. Friend’s notice that the Bill contains an exemption for people on accredited degree courses. We were willing to put that in because many accredited degree courses contain a period of internship and—this was my reason—have access to student finance. He makes a valid point about granting that access to other people on the same terms, but—this is where I would blend my Bill in—there is a question about how to sort out the time limits on such a scheme. I am listening carefully to his comments. The Bill probably will not move into Committee, which is a great pity because many important things have been said in this debate that would help to develop it.

[Philip Davies]

I am grateful to my hon. Friend. He is being typically constructive, which goes to show that his dedication is not to a piece of legislation but to getting the best possible outcome for the people he wants to help. We all recognise his passion for this, and I am happy to work with him to help deliver it.

Let us take someone who wants to work in the fashion industry or the music industry, for example. The fashion industry was mentioned earlier, so let us say the music industry. It may be that doing a degree would not help them get a foot on the ladder in the music industry; it may or may not—I do not know the industry particularly well. It may well be, however, that spending six months at a record label in London after leaving school would represent a massive head start in getting a career in the industry. It would be good if the Government offered some kind of loan to enable someone to get that opportunity. They could then pay it back when they got a decent job in the industry. That would be a way to extend opportunities to more people, whereas the Bill would restrict opportunities.

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[Philip Davies]

Certainly not a red rose. A red letter is far better than a red rose any day of the week.

As for Members of Parliament, an FOI request of IPSA asked about the number of interns and paid interns working for MPs over the past three years. It seems that about one in four MPs took on a paid intern, but I am pretty sure that virtually every MP takes on people to do work experience of some sort or another and that everybody who does so gets something out of it. Given the number of people we take on to give that opportunity to them, if we had to pay them all the minimum wage, that would take up a sizeable part of our budget. It would mean either that we could not afford to take them on or that we would have to give our existing staff a pay cut. Neither of those would be a palatable option, but they would be the only options available to us.

Strangely, the Bill does not seem to recognise that people have short-term and long-term internships. My hon. Friend the Member for Elmet and Rothwell mentioned that issue, so I will not go into it further as he would wish to look at it. I have spent longer than I expected speaking to the Bill—[Interruption]—because of the number of interventions I have taken. In concluding, I just wish to mention a couple of people who have spent time with me. Before I go into that, I should just say that the Bill will mean we will probably end up with more people on zero-hours contracts. I know that quite a lot of Labour MPs employ people on those contracts, even though they are against them politically. [Interruption.] Does that mean zero-hours contracts are a good thing?

[Alec Shelbrooke]

I am conscious that my hon. Friend is drawing his remarks to a close, but what I have drawn from his comments is that he agrees with me that there must be a mechanism by which people can do these roles and be able to live, survive and do something. He has come up with interesting suggestions, but I think that he recognises the premise that we reduce social mobility if someone simply cannot afford to take up the post.

[Philip Davies]

Yes; as I said at the start, we all want to achieve the same thing, which is to expand the number of opportunities for people, particularly those who do not always get them at the moment. I do not know anyone in the House who would not share that ambition—I certainly do. The Bill would take us in the opposite direction, which is why the suggestions I have made would be better in trying to deal with the position my hon. Friend has set out.

In conclusion, I wish to talk about a couple of people who have spent time with me. One of my previous researchers, Grainne, initially started working at my office on an “unpaid internship”, as it would be described; it would fall within the scope of the Bill without any shadow of a doubt. She had left university and was struggling to get a job. If I had had to pay her, I would not have taken her on, not only because I could not have afforded to, but because I knew nothing about her. I did not know anything about her credentials, but she wanted to come to have a go and I was happy to facilitate that. This is what she said about the value of her internship when she went to speak at a school about her experience of getting a job in politics:

“Having tried unsuccessfully for months to get a paid job, the feedback I kept hearing again and again was that ‘you don’t have enough experience’. But how do you get experience if no one will give you a job? So I decided to apply for an unpaid internship with Philip Davies MP—in the hope this would lead to something more… I was made to feel like a fully integrated part of the team and given a wealth of opportunities that I would otherwise not have achieved.... Without my unpaid internship I am convinced I would not have been given such an excellent opportunity.”

When a job became available in my office, I gave it to her because she had proved herself and done such a good job in that time. She went on to say:

“From Parliament I moved to a Comms agency, before working in the Public Affairs team for a large corporate. I then became a Special Adviser and am now back in House working for a FTSE 125 company as their Director of Corporate Affairs.”

She is about 30 years old. She continued:

“I would not have been able to achieve any of this without my unpaid internship.”

Another intern, George, who completed a five-month unpaid placement in my constituency and is now working for my hon. Friend the Member for Christchurch (Mr Chope), said:

“Without the internship I very much doubt I would be working where I am today. Being able to have that first hand experience on my CV was invaluable to getting the job I have today, and I have been able to apply the experience gained to other areas in my role now”.

I employed my current researcher, who has done a marvellous job helping me on the Bill, after she completed a two-week work experience placement while at university. She did that not as part of her university course, but in the holidays, because it was something that she wanted to do. I am not sure whether that would be covered by the Bill, but I suspect that she would have had to be paid. She said that without doing those couple of weeks in the office, she would not have had the opportunity to show herself capable of the job when it arose, and that is absolutely true.

I want to see more opportunities for work experience and internships, and the Bill will inevitably lead to fewer such opportunities. I admire my hon. Friend’s passion on social mobility, but I hope that he will reflect on the ideas that I have set out today. In future, perhaps a Bill that covered some of the points made today will go some way to achieving the ambition that we both share.

National Minimum Wage (Workplace Internships) Bill

Debate between Philip Davies and Alec Shelbrooke

Friday 4th November 2016 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.”

--- Later in debate ---

[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.

[Philip Davies]

Don’t listen to lawyers.

[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—

Bradford & Bingley plc

Debate between Philip Davies and Alec Shelbrooke

Wednesday 27th November 2013 Westminster Hall

[Philip Davies (Shipley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. I hope you will convey my thanks to Mr Speaker for granting this debate.

As the Member of Parliament for the Shipley constituency, which includes the towns of Bingley and Crossflatts, where Bradford & Bingley was based, I have asked for this debate on behalf of the nearly 1 million Bradford & Bingley shareholders and bondholders who still do not know how or why their company was expropriated in a way that destroyed it as an ongoing business, unlike what happened to banks such as the Royal Bank of Scotland and Halifax Bank of Scotland, which had far weaker balance sheets.

I have also called the debate on behalf of the employees of Bradford & Bingley, many of whom had worked there for many years and were also shareholders. This debate is also important for the local community in Bingley and across the Bradford district, which has lost a highly valued brand from the high street. Bradford & Bingley had been in existence since 1851.

I thank many hon. Members for their support, both those here today and the many unable to attend. I particularly thank my right hon. Friend the Member for Mid Sussex (Nicholas Soames), who has been extremely helpful and supportive. He is a champion of the many shareholders in his constituency who lost out when Bradford & Bingley was nationalised in the way it was.

On Friday 26 September 2008, in the foyer of the Oval Office of the White House, the then Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), made the decision to nationalise Bradford & Bingley during a telephone conversation with his Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), who was in the UK. That decision was extremely disappointing for the shareholders, many of whom remain outraged by what they consider to be legalised theft. Indeed, it is a shame that neither right hon. Gentleman is here today to explain the part they played in the scandal.

Days after the telephone call, the Cabinet Office stated in response to a freedom of information request from a shareholder, Mr Jonathan Bloch, that it had no files whatever. David Blundell, the chairman of the Bradford & Bingley shareholder action group, whose main objective throughout has been to secure the truth on the nationalisation—he is also a director of the UK Individual Shareholders Society, a voluntary organisation whose main objective is to protect the rights of private investors—said to me at the time that he had difficulty believing that the Cabinet Office statement was true, and so it has proved.

After further freedom of information requests, the Cabinet Office finally admitted in 2011 that it did possess the relevant records, but it refused to release them on the grounds of public interest. The Cabinet Office also refused on the grounds of public interest to state whether the nationalisation decision had secured Cabinet approval. I put on the record my admiration for David Blundell’s tireless work on behalf of the Bradford & Bingley shareholder action group and his determination to get to the bottom of the events surrounding the nationalisation.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I put on the record my thanks to my constituent, David Blundell. He is fighting for the small person who invested their life savings in those shares and is now faced with nothing because of the decisions made at national level by the then Government. They have had no answers.

[Philip Davies]

My hon. Friend is absolutely right, and I know that he has been particularly helpful to the Bradford & Bingley shareholder action group. I thank him for all the help and support he has given to the many shareholders.

Surely the public interest demands full disclosure of the facts to secure the truth. How can the refusal even to release whether the nationalisation of Bradford & Bingley was ratified by the Cabinet ever be in the public interest in a democracy? Surely voters are entitled to know, let alone shareholders, bondholders and employees.

How do we know that the Cabinet Office’s original statement was untrue? I am probably one of the few people—I am sure you are another, Mr Betts—who has read the relevant part of “Beyond the Crash” by the right hon. Member for Kirkcaldy and Cowdenbeath, in which he admitted his part in the sorry mess. The shareholders would otherwise still be in total ignorance of the nationalisation process.