Clegg recruits big business to fight culture of unpaid interns

Hundreds of firms join Deputy PM's campaign to end 'it's who you know' advantage in jobs market

More than 100 big companies have pledged to pay young people on internships wages or expenses in the Government's drive to boost social mobility.

The firms have promised to advertise all work experience places for young people in an attempt to end the "who you know" culture which can blight the prospects of youngsters from modest backgrounds who lack connections.

The move follows concern that the so-called "sharp-elbowed middle classes" use their contacts to help their children get a foot on the job ladder, and that some companies force young people to work as unpaid interns in an increasingly competitive job market.

The companies have voluntarily signed a "business compact" on social mobility launched by Nick Clegg last year. He will today write to 50 other big firms urging them to join the scheme and hopes that it will eventually spread to the entire business world.

Mr Clegg's initiative ran into trouble last April after it emerged that his father had once secured him a work placement at a Finnish bank. There was criticism of the Liberal Democrats' use of unpaid interns and David Cameron was accused of undermining his deputy's drive by saying his constituency Conservative association was about to take one on.

The firms backing the Clegg campaign will provide financial support to interns, such as expenses or accommodation, or treat internships as a job covered by the national minimum wage. The Government is sending out new guidance saying interns who do "real jobs" must receive at least the legal minimum.

The Deputy Prime Minister will say: "By opening their doors to young people from all walks of life, this marks the start of a culture shift among major employers, driven by the belief that ability and drive should trump connections and privilege. This is an important step towards a society where it's what you know, not who you know, that counts."

The companies who have signed the compact employ more than 2 million people and have a turnover of more than £500 billion. They include finance firms Barclays, HSBC and Santander; retailers Asda, Tesco, Sainsbury's, Marks & Spencer and Morrisons; consumer brand manufacturers such as Coca Cola, P&G and Nestlé; the law firms Allen and Overy and CMS Cameron McKenna; and energy firms BP, Shell and E.ON.

Gordon Frazer, managing director of Microsoft, which has signed up, said: "Britain's young people have been some of the hardest hit in these difficult times and we want to do our part, working closely with the Government to raise aspirations and give them the opportunity to build their careers regardless of their background."

Paul Grimwood, chairman and chief executive of Nestlé UK & Ireland, said: "We must invest in initiatives which provide people with the opportunity to reach their full potential regardless of their circumstances."

Rise to the top: How they got ahead

David Cameron

Mr Cameron worked for Tory MP Tim Rathbone, who was also his godfather. Later, he had an internship with Jardine Matheson, whose chairman, Henry Keswick, was known to Cameron's father.

Nick Clegg

Nick Clegg worked at a Finnish bank in 1989, thanks to a helping hand from his father. His two other internships included a stint in New York at The Nation magazine and in Brussels for the G24 group. Both of these were advertised.

Ed Miliband

Mr Miliband worked as an intern in 1986 for Tony Benn, who also happened to be a close family friend.