Unpaid Internships

Debate between Luciana Berger and Hazel Blears

Tuesday 18th June 2013 Westminster Hall

[Hazel Blears]

I could not agree more with the hon. Gentleman that this issue is about behaviour change and changing the mindset. In the past, not only in the media or the law but in this House—I will come on to discuss this House—there was a culture of having unpaid internships, and I do not think that people really considered the impact on the young people.

We are making progress on this agenda. There are many companies now that, for good business reasons, want to access a wide pool of talent. Also, they feel that it is morally wrong to exploit young people through unpaid internships. If we look at some of the big consultancies, such as Ernst and Young, PricewaterhouseCoopers and Deloitte, and some of the big insurance companies, including AXA and Aviva, or some big construction companies, such as CH2M HILL, they are all now paying their interns. I congratulate them; they are leading the way. Some of this behaviour change is about naming and shaming the people who are doing the wrong thing, but it is also about praising the people who have been prepared to put their money where their mouth is and do the right thing. That is why I think we are making progress.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I congratulate my right hon. Friend on securing this debate. It is absolutely vital that we discuss the issue, and that we see urgent change. She has talked on two occasions this morning about the pool of talent. She also mentioned the vast array of companies and organisations that unfortunately still have unpaid internships, of which a majority are in the creative industry sector. Does she share my concern that that will lead to a reduction in the pool of talent, and will impact on one of the most important sectors in the UK economy, and that that could have long-lasting implications?

[Hazel Blears]

My hon. Friend makes a very interesting point. In fact, I think that we have an Opposition day debate tomorrow on the role of the creative industries in our regional economy. The evidence is overwhelming that creative industries are making a significant contribution to the GDP of this country; at the last count, I think they contributed 7% of our GDP, so they are really important.

Also, we very often find that the most creative people come from difficult backgrounds, and that because of their life experience they have a different perspective from other people. I met a fine art student recently. It was heartbreaking, because she clearly had talent, but she was devastated; she said to me, “I can never be a fine artist because of the culture of unpaid internships.” I think she could be a future Monet or Pissarro, but we will never see what she could paint, and she will probably end up doing a fairly normal job, yet she was incredibly creative. That is a great pity, and it is damaging us as a country, as well as damaging those individuals.

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[Hazel Blears]

I am grateful to my right hon. Friend for his support. When we start a campaign, we sometimes think the forces ranged against us will be implacable and that we will never make progress. Through a combination of attrition, tenacity, determination and, sometimes, the fact that people just want us to shut up, we do start to change attitudes. Most people actually want to do the right thing; the issue is how we encourage them. It is a bit like the national minimum wage. When the Labour Government brought it in, everybody said that it would cost 1 million jobs and that people would not be able to sustain their businesses. The people who did not pay the national minimum wage undercut the good companies that did, and we have exactly the same thing with interns: good companies are doing the right thing by bearing the cost, while other companies, which are doing the wrong thing by not paying young people for their work, are getting a financial competitive advantage. We went on a journey with the national minimum wage; we are now on another journey, and I hope many more people will join us.

[Luciana Berger]

Does my right hon. Friend share the concern that I feel when hon. Members talk about interns supporting their internship by doing paid work in the evenings or at weekends? Unfortunately, that is difficult for people with caring responsibilities. It was carers week last week, and millions of people who care for a parent or child might want to get on the career ladder but cannot, because they cannot do that extra evening or weekend work to support their unpaid internship.

[Hazel Blears]

My hon. Friend makes an extremely good point. Life is difficult enough, but it must be virtually impossible for someone with caring responsibilities to get a foot on the ladder. At a time when so many young people are unemployed, we should be giving them stepping-stones to success, rather than putting further barriers in their way. It is a hackneyed phrase, but we need a level playing field so that people are not discriminated against on the grounds of wealth, class, background or caring responsibilities; they have as much right to do well as those in different circumstances. The fact that someone has privilege or wealth should not give them an unfair advantage, and many of us on both sides of the House came into politics because we believed in a different kind of society. This issue is an opportunity for us not only to exhibit our values, but to do something practical about putting them into practice.

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[Hazel Blears]

My hon. Friend makes a good point, with her characteristic optimism and belief in the future, which is what the debate is all about—a belief that young people’s talent and skills can make a difference. Often, particularly in the creative industries, people take a different slant on life because they have not come from a traditional background; and then the best music and drama happen. The role of the arts is to challenge people’s perceptions; so why not have young people in there, who are the best at challenging many of us whose views have become perhaps a little established? My hon. Friend makes a fantastic point, and I am reminded again of Martin Bright’s organisation, which did a huge amount with the future jobs fund. With so many young people unemployed, it is sometimes said that it is difficult to find the money to support people. However, if we do not, we shall lose a generation of talent, and the country cannot afford that.

I wonder if I might make a little progress with my speech now, although I am grateful for the interventions of hon. Members, many of whom, I know, are not able to stay for the whole debate. It has been helpful to hear their different points of view. I want to give not boring statistics but a few bits of evidence, now that we have heard about the principles of the debate. A couple of surveys have been carried out recently. One was for the European Youth Forum, and it painted a pretty depressing picture, in which just over half of all the interns surveyed had been paid at all; 41% of those who received some money found that their remuneration was insufficient to cover day-to-day living expenses; and in total a quarter were able to make ends meet. Nearly two thirds relied on financial support from their parents.

In another poll conducted by Survation for Unions21, 84% of people over 35 said that a young person in their family could not afford to do an unpaid internship in London. That is a massive exclusion barrier. The culture of unpaid internships is now so widespread that many young people no longer think about applying because they know that they will not be able to meet their living costs during the internship. Young people who have played by the rules, worked hard at school and taken on thousands of pounds of debt to get a degree are finding themselves cast aside in a career market that now often values experience over qualifications. Alan Milburn reported in March 2012 that more than 30% of newly hired graduates had previously interned for their employer, with that figure rising to 50% in some sectors, so unless someone has their foot in the door, it is very unlikely that they will be able to get a full-time job.

Many jobs are offered on the basis of whom people know, rather than what they know, which immediately puts people from families that do not have a background in a particular area at a disadvantage. It is interesting to see the controversy that has recently surrounded the appointment of the Government’s new social mobility tsar, James Caan. I welcome his appointment, but on the day he was appointed there was a story about him employing his two daughters. He said that his daughters had worked in other industries, that they had shown their worth and that they could therefore make a great contribution to his company, but the eruption of that furore shows how such things go to the heart of people’s sense of unfairness. People will always want to help their children because that is a natural instinct, but I ask employers and business people such as the hon. Member for Cities of London and Westminster to think twice; excluding people who deserve a chance will damage their business because they are not accessing the talent pool. I hope that in his new position Mr Caan will be able, from his own personal experience, to be a good advocate and ambassador for opening the field to people beyond family members, thereby ensuring that the wider field of talent is drawn in. I hope to meet him fairly soon, and I am sure we will have an excellent discussion about what he can do in his role.

There have been a couple of examples of parents being able to bid in auctions for unpaid internships for their family, which is pretty shocking. The Guardian recently reported that parents at Westminster school, which is a private school with pretty high fees, bid more than £650 for a mini-pupillage with a criminal barrister—[Laughter.] Perhaps I should say a barrister in criminal practice. Such auctions fly in the face of aspiration and social mobility.

[Luciana Berger]

Does my right hon. Friend share my concern that, in the very same auction, the Government’s adviser on high streets, Mary Portas, was also offering one of these unpaid internships that was going for hundreds of pounds?

[Hazel Blears]

Goodness! I do not know whether that was an unpaid internship in Mary Portas’s lingerie factory making ladies’ knickers, but it may well have been. I would tell Mary Portas or anyone else to think again, because the internship could have been offered with the best of motives to try to give people some experience, but who can bid £500, £600 or £700? Someone may well have benefited from work experience or an internship with Mary Portas because of her skills, entrepreneurship and experience—that would be a fabulous opportunity—so perhaps we should encourage her to offer a paid internship to someone from a disadvantaged background, which would be a fabulous thing to do. We shall see what happens. I am grateful to my hon. Friend for raising that issue.

There are compelling practical reasons for having paid internships. I remind people that long-term unpaid internships are against the law. Sometimes we get away from that point. Anyone doing a job that involves set hours and set responsibilities is a worker and is entitled to the national minimum wage—I do not know how many times I have to say that—and Her Majesty’s Revenue and Customs has a responsibility to make that crystal clear, which I know the Minister is pushing. Many businesses that I meet are genuinely confused: they do not know what the rules are and they would welcome some certainty about the difference between volunteers and workers and about who is entitled to the national minimum wage. I know the Minister is hoping to issue some guidance, which will be incredibly helpful. HMRC is doing more enforcement work, which is very welcome.

HMRC has stepped up its game. We have recently had information that, during the past year, HMRC has ordered nine firms to pay a total of £200,000 to people who had worked for them as unpaid interns. Over the past year, more than 26,000 workers have been paid back a total of £4 million after action by HMRC on breaches of national minimum wage laws and some of the nearly 1,700 complaints relating to unpaid internships. We are seeing a bit of a step change, but I would like to see HMRC, rather than responding to complaints, take a more proactive stance so that when it sees adverts that it thinks cross the line between volunteering and unpaid internships it proactively investigates those companies, rather than simply waiting for complaints. It is very difficult, almost impossible, for young people to make a complaint when they are perhaps hoping to get a full-time job with the company with which they are interning. Credit to HMRC for what it is doing, but, as we say in the Labour party, “A lot done; a lot more to do.” We want to see more action.

I pay tribute to the fantastic work being done by Gus Baker, Ben Lyons, the people at the Intern Aware and Internocracy campaign groups and all the mainly young people who have got themselves organised and decided not to wait for us politicians to take action but to get on with it and make a difference.

Gus came to the meeting that we had with the Minister earlier this year. We were grateful for her receptive response. She has recently handed a list of 100 companies to HMRC so that it can take action. I feel that we are making progress. This time last year, a third of the opportunities for young people advertised on the Government’s graduate talent pool website were unpaid; we are now down to some 3% or 4%. Things are changing dramatically. A few years ago, many unpaid jobs with Members of Parliament were advertised on w4mp; now it is just the odd job. Usually when I contact a Member to explain what is going on, the adverts come down. There are still one or two outliers in Parliament, and we encourage everyone to do the right thing.

I introduced a ten-minute rule Bill to outlaw the advertising of unpaid internships. The Bill did not make a huge amount of progress, as is sometimes the case with ten-minute rule Bills, but it enabled us to raise the issue. We got cross-party support, and if the Government can find time to amend the national minimum wage legislation— perhaps through secondary legislation, as I know how difficult it is to pass primary legislation—I encourage them to do something. We should say that it is not right to advertise something that in itself is unlawful. The law has ended up in a ridiculous state, and changing it would send a clear message to those who advertise unpaid internships that they should not do so.

I am delighted that Monster and Totaljobs, which run extensive online recruitment companies, have recently decided to take down any advert for unpaid internships or unpaid opportunities, and they have done that themselves because they think it is the right thing to do. I praise them for their leadership on the issue. The chief executive of Monster will talk to all his colleagues in the online recruitment industry to try to ensure that they all take similar action, which would be a huge step forward. Those companies operate multinationally across Europe, and they are standing up, being brave and doing the right thing.

The good companies are doing excellent work, but I was a little concerned to read recently that Wigan Athletic and Reading football clubs were advertising for highly qualified people to undertake unpaid roles as sports performance analysts. They are clubs with multi-million pound budgets, and such practices are totally unacceptable. I like to think that there was some sort of mystical karma in the fact that they both ended up being relegated from the premier league. Perhaps that was their just desserts.

We have talked about a few Members of Parliament who are still advertising for long-term unpaid internships, which is one reason why I proposed the Speaker’s parliamentary placement scheme. I put on record my gratitude to Mr Speaker for giving his backing, to the Minister for her support and to the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), who has been a supporter from the outset. We have been able to bring 10 people a year to work in Parliament. We are now recruiting for our third cohort. They get paid £18,000 a year and get help with housing costs from Unite, which is a very generous firm that provides student housing and has allocated some lovely flats a 10-minute walk from the House of Commons. Probably they live in better conditions than most people working here. They work four days a week with an MP, and on Fridays a personal development programme helps them learn how the House works, how a Bill is passed, how to make speeches and so on. Some of them have gone on to fabulous opportunities.

I am grateful to my hon. Friend the Member for Slough (Fiona Mactaggart), who has taken one of our students, who has done so well in his placement. Yesterday he appeared in a film on the “Daily Politics” programme, and he did a fabulous job. He was a great advocate and ambassador.