Revealed: how businesses legally pay prisoners below national minimum wage
By Naomi Scherbel-Ball | 18 April 2012
Thousands of UK prisoners are being used as cheap labour by companies. They are typically being paid less than the minimum wage – as little as 22p an hour – prompting fears that the practice costs ordinary people’s jobs.
Exaro obtained details of contracts for prisoners’ labour following a series of requests under the Freedom of Information Act. The results show how prisoners are proving an increasingly attractive employment option for business.
Companies are typically paying prisons the equivalent of around £2 an hour, with inmates receiving only part of that. The prisons decide how much to pass on to prisoners, and retain much of the pay to compensate victims and help fund jail facilities.
It means that companies are – legally – able to pay, in effect, less than the statutory minimum wage, currently £6.08 an hour for a person aged 21 or over. The documents obtained by Exaro name the companies with contracts for prison labour.
The Prison Officers Association’s assistant general secretary, Glyn Travis, told Exaro: “Some of this work is slave labour. The government and private companies are using the prisons as a cheap source of labour and it’s the community that suffers.”
Contracts for prisoners’ labour generate £35 million a year for the country’s prison service, which is overseen by the Ministry of Justice (MoJ). The prison workforce of 8,700 inmates carries out jobs ranging from laundry-services and printing, to packaging and tool repair.
Supporters of the scheme claim that most work being done by prisoners would otherwise be lost to cheap labour overseas.
But Travis said: “Much of the work cannot be sourced abroad. It would not be cost effective to send your laundry to China, would it?”
Mike McCartney, national officer for Unite, Britain’s biggest trade union, said: “This is worrying. It means that it undermines the minimum wage and stops jobs being offered in the community. We have real concerns about how this will affect Britain’s manufacturing sector.”
A spokesman for the MoJ’s prison service said: “When working with the private sector, all prisons must ensure that the work does not represent unfair competition and avoid job losses in the community.”
Sharp Interpak, the food packaging company, awarded contracts of nearly £100,000 to prisons in Canterbury, Whatton and Kingston in 2010. This was in addition to an existing contract of £50,000 with Rochester prison.
The company, whose clients include Cadbury, employed 74 prisoners under the contracts covering the 2010-11 financial year. At Rochester, prisoners are paid between £10 and £30 for a 21-hour week.
Sharp Interpak has factories in Bridgewater, Aylesham and Yate, areas with above-average unemployment, where it employs more than 500 people.
Ursula Martin, a co-ordinator at Timebank, a community project based in Bridgewater to help unemployed people, said: “These jobs should not be going to prisoners who are exploited as cheap labour. They are needed here in Bridgewater.”
Speedy Hire, the tool-hire company, shed more than 800 jobs and closed 75 depots in 2010. However, it increased the size of its prison contract by almost 10 per cent, paying Erlestoke, Garth and Pentonville prisons £114,012 for the services of almost 100 prisoners during the 2010-11 financial year.
Calpac, another packaging company, increased its contract with Kirkham prison from £34,321 in 2010 to £154,267. The company payroll, obtained by Exaro, reveals that the highest paid job is office manager – £40 for a minimum 40-hour week. A “manual packing operative” is paid just 55p an hour. The payroll shows that many of the prisoners work overtime, taking them up to 60 hours a week.
Caroline Onwuna, a director of Calpac, claims that her company would not be able to afford to employ people on the minimum wage. She said: “If I moved my business on to the outside, I would be using machines not people. I think it is pretty cruel really of the prison, the contract I have says that the work has to be labour intensive.” She added that Calpac provides an in-house qualification for the prisoners and helps them to find work on their release.
Other companies are almost completely dependent on prison labour. MNH Recycling has only 20 non-prison employees on its payroll, but it paid 77 prisoners between 64p and £1.52 an hour during the 2010-11 financial year, to recycle headphones supplied to major airlines including British Airways, Virgin Atlantic, and Qantas.
Summit Media, a digital marketing consultancy, employs 28 prisoners at HMP Wolds, a private-sector prison. The consultancy confirms this on its website. It has contracts with Argos, Carpetright, Comet, Hutchison 3G UK’s ‘3’ mobile-telephone service, and Selfridges.
Exaro repeatedly tried to contact Speedy Hire, Sharp Interpak and MNH Recycling for comment, but they did not respond.