Unpaid Internships

Stella Creasy Excerpts

Tuesday 18th June 2013 Westminster Hall

[Hazel Blears]

I am grateful to my hon. Friend for making that point. Fashion, like journalism, is beginning to change. Martin Bright, who runs an organisation called New Deal of the Mind, has been a real leader in getting more apprentices and young people employed on proper terms and conditions in the whole range of creative industries. He has done a fantastic job in making that happen.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Will my right hon. Friend give way?

[Hazel Blears]

I would be delighted to give way to my hon. Friend. Unfortunately, I did not see her because she was on my wrong side.

[Stella Creasy]

That is very rare for us both. I join everyone in paying tribute to my right hon. Friend for the work she is doing. Did the hon. Member for Cities of London and Westminster (Mark Field) not put his finger on the nub when he talked about the economic model that exists? He was talking not about internships, but about companies using young people to do jobs that are not training opportunities. Does my right hon. Friend agree that we could learn from the voluntary sector, which I came from, where a clear distinction is made between business-critical work and value-added work in understanding what it is appropriate to ask a young person to do as part of a work experience placement, for example, and what it is appropriate to pay somebody for? Indeed, young people should at least be given the national minimum wage, and employers in the public and private sectors not doing that should be held to account.

[Hazel Blears]

I could not agree more. That is one of the issues that goes to the heart of the matter. Is a company employing somebody who should be doing a job with set hours, set responsibilities and set tasks? If so, that person is a worker, and entitled to the national minimum wage under the law. Someone who is a volunteer is to a great extent entitled to come and go as they please. They give their labour because they believe in a cause. They may get excellent work experience, and many voluntary sector organisations do the right thing. We need a bit more clarity—and this is something I want to ask the Minister about—on the distinction between a worker and a volunteer. However, companies, and some voluntary organisations, although not the majority, have designed an unsustainable business model. The situation is the same as with the national minimum wage: people had a business model that depended on paying people £1 or £1.50 to do a job. A business that cannot run without exploiting people is not being run in the right way. People need to change the model they work on. If good companies can do it and make a profit, everyone else should take up that challenge.

--- Later in debate ---

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Thank you, Mr Caton. I promise you that I shall be brief—uncharacteristically, perhaps.

We have already spoken at length about the fantastic work that my right hon. Friend the Member for Salford and Eccles (Hazel Blears) has done on the subject of internships. I feel equally passionately about it, as a former youth worker and as a former intern. I had an internship at the Fabian Society in 1995—if anyone present, perhaps my right hon. Friend, was getting the society’s mailings at the time, that was me, with my blood from the paper cuts. I clearly learned a lot in the year I was there, but it was different, and we need to understand how the culture has now changed. That was back in history—the shadow Minister is looking at me, so I shall say back in 1995—but things have changed substantially since then. As a youth worker, I was horrified by the stories that young people told me about the requirement to work full time for six or seven months or more without pay, perhaps with occasional expenses. They did not see anything wrong with the system, because everyone had to do it. That is what we have to change.

My internship was pre-national minimum wage. The widespread abuse of young people who want to get a step on the ladder is bad not only for them, but for employers, because the badge of having done an internship is being devalued as a result of the changes. It is no longer as clear to employers as it should be that people who have done an internship have had a training opportunity to learn and develop their skill set, so that they are worth talking to—an internship used to be a badge of quality.

The question is how to get the best and to avoid the worst in such a scenario. I have worked in the voluntary sector, so I see some simple rules that we can learn from; it is not rocket science to fix the problems. I made an intervention about the difference between business-critical and value-added experiences; the issue is not only about whether people are being paid, but whether, when they do an internship, they are learning skills and developing themselves as an individual, so that they are someone who a future employer will look at and think, “Actually, that is someone who I want to have in my work force.” The voluntary sector is clear about what a volunteer can do and, frankly, businesses should learn from that. For a key, business-critical role in their industry, they should not be relying on someone who has not had the requisite training and who might not be able to take the pressures or deal with the possible demands. Offering people opportunities through value-added experiences, however —to learn about what we do, complement what we do and see what else is happening in the industry—is a very positive thing to do.

Today, therefore, I want to add to the debate how we get our own house in order. Having had experience in the voluntary sector and the community, as well as my personal experience, I am extremely concerned. Seeing how things operate in Parliament, I am frightened that some of the progress made in recent years is being put at risk by some of the decisions of our mutual friend, the Independent Parliamentary Standards Authority. Hon. Members have already discussed our concern that some MPs are advertising unpaid internships—as many as 260 MPs, according to some suggestions—but 183 MPs are definitely using the voluntary internship agreement. I looked into the issue and talked to IPSA about it, but I have real concerns, because a number of Members of Parliament and I have applied for additional support; there has been an increase in casework, the business-critical work that I need to do as an MP for a community facing a lot of pressures, because of the changes in policy in recent months.

IPSA accepts the case for me and other Members of Parliament to have an extra member of staff, but it refuses the funding, arguing that its job is not to deal with the shortfall in funding for MPs or with the increased pressures faced by them. A member of staff at IPSA even suggested that I might make up the shortfall by using unpaid internships. If we acknowledge the increasing pressure on MPs’ offices, we must recognise the resulting temptation for Members to deal with the consequences. I myself had to make some difficult decisions about what correspondence and activities I cannot undertake, because I do not have the staffing complement to deal with them. Having been an intern and feeling so strongly on the matter, I will not use unpaid interns, and I have been clear with my community about that.

[Luciana Berger]

Does my hon. Friend share my concern that, under the IPSA arrangements, we can have an unpaid volunteer or whatever—essentially, an unpaid intern—whom, from a limitless budget, we can pay expenses? If, however, we want to pay a member of staff—I want to pay interns a London living wage—we cannot use that limitless budget to support the intern with travel and lunch expenses. Such a situation helps those people who do not want to pay their interns.

[Stella Creasy]

I agree. That is exactly the point that I am coming on to. If we look at the voluntary arrangements, I am concerned that MPs might inadvertently be getting on the wrong side of the national minimum wage legislation owing to such pressures. There needs to be recognition that MPs who want to do the right thing and to offer those skills and training opportunities must be able to support that.

I have looked at IPSA’s finances, and it consistently over-budgets for MPs’ staffing costs—there is a £7 million underspend in the system every single year. IPSA tells me that the money is not carried forward, but simply returned to the Treasury. I encourage the Minister to have some serious conversations about whether, given the commitment to fund the positions and that MPs are saying, “We need that support, we want to offer those training opportunities”, IPSA could look at the possibility of feeding the money into schemes such as the one put in place by my right hon. Friend the Member for Salford and Eccles. I also encourage the Minister to seek urgently the legal advice given to IPSA about MPs’ voluntary arrangements, to ensure that no MP is inadvertently breaking the national minimum wage legislation and that there is clarity about what we can ask someone to do. MPs should be advised about internships and about value-added versus business-critical work.

We also need to look at university placements. I have been offered young people who want to do nine months in my office, unpaid, for a university placement. We must be clear that we can tackle the problems and get our house in order in a number of different ways. They are not difficult or impossible to do; it would be good for Parliament to do them. We should open ourselves up to get quality staff, who will then have a badge of pride—the young people will have had an internship in an MP’s office and been paid, so their ability to live in our capital city would not have been at risk, and they will learnt the requisite skills. Anyone who has had to deal with and train young people knows that someone who does not have a good skill set and who has not had good training is twice as much work for an employer as someone who does come with experience.

It is therefore in our interest to get things right and to challenge IPSA to understand the pressure on MPs’ offices, to ensure that we really can get our house in order. If the Minister wants to see some of my evidence on the problems, I will be more than happy to share it with her. I hope that she will look favourably on my pleas for her help in this matter, so that we can be the beacon that we want to be.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I am delighted to serve under your chairmanship, Mr Caton, and I heartily congratulate the right hon. Member for Salford and Eccles (Hazel Blears), not only on securing the debate, but on her wider campaign—the “Let’s Get Our House in Order” campaign that is being launched today—and on the way in which she has driven the issue forward, leading to the launch of the Speaker’s parliamentary placement scheme. She has made sure that the issue is firmly on the agenda, and we are beginning to achieve some of the cultural change that we need to go alongside it. The determination, dynamism and passion that she has injected into the campaign has started to bear fruit. It is wonderful to watch, and I encourage her and hope that she will continue with it. I also welcome the strong turnout today. Not everybody has been able to stay, but the fact that 19 Members of Parliament from both sides of the House have come to a Westminster Hall debate is a clear sign that people feel strongly about the issue.

Internships can clearly play a positive role, as we all recognise, in people learning about the workplace, developing skills, or getting training, experience and networking opportunities. Employers can also benefit from fresh thinking in their organisation and, often, from finding great new permanent employees to join their team. Although a lot of the focus has been on pay, which I will come to, important points were raised by the hon. Member for Edinburgh South (Ian Murray) and by my hon. Friend the Member for North Swindon (Justin Tomlinson) about the quality of internships—about making sure that they are well structured and involve development opportunities, with the intern perhaps looking at different parts of the business, different types of tasks, and different skill sets over the time that they spend with an organisation.

We are trying to maximise good-quality opportunities by making sure that, first of all, the recruitment process is fair and open. The right hon. Member for Salford and Eccles mentioned the auctions that took place, which I find complete anathema. Such opportunities should be transparent and fairly allocated to those who will be best able to benefit from and contribute to the organisation as part of the experience. The process should be transparent and based on what a person knows, not who they know. Appropriate financial support should also be provided, which will depend on the nature of the opportunity. For a worker, that will be at least the national minimum wage, and good practice is expected, which will sometimes mean that the wage may even be higher. If the individual is a volunteer, it is obviously good practice to ensure that if there are out-of-pocket expenses, those are covered.

To give an example of a success, Channel 4 is offering 12-month internships for all ages. No specific qualification is required in advance—just talent and enthusiasm. All elements of its business are covered, whether someone is interested in going into the digital side, the marketing side, or commissioning, and all are paid substantially above the minimum wage.

To answer the hon. Member for Edinburgh South directly, the minimum wage is absolutely here to stay. It is a fundamental part of the protections that are important for employees in our society, and that is generally well accepted right across the House. That harks back to 1997, when I was certainly not eligible for the minimum wage; nor was I when it was brought in—I was 17 at the time—and I think he was in a similar situation, but thankfully we have moved on since then.

The Graduate Talent Pool website is definitely worth mentioning—if people want to go to it, the address is graduatetalentpool.direct.gov.uk. It is a way of encouraging employers, particularly small businesses, to offer graduate internships, and it ensures that those are available to the widest possible pool of recent graduates. It is free for employers and graduates, and it gives information and advice on all aspects of internships. The quality assurance process introduced in 2011 has really helped. It is a credit to employers, as the right hon. Member for Salford and Eccles said, that about 98% of the vacancies advertised on the website are paid; that shows significant progress.

I want to touch on the issue of definitions, which has come up in the debate. Although the word “intern” is a bit of an import and is not clearly defined, “worker” and “volunteer” are. The right hon. Lady set that out clearly. There is a checklist on gov.uk—if someone searches for “worker checklist”, they can get the complete lowdown—but basically, if someone is offering their time of their own free will and they can come and go as they please, they are a volunteer, but if they are required to perform specific tasks and can be disciplined if duties are not performed as agreed, they are a worker. Each instance depends on the facts of the case, but that is clearly set out, both for employees and volunteers, and for employers or organisations offering opportunities, so that they are able to understand what category they fall under.

The hon. Member for Walthamstow (Stella Creasy) set out how the voluntary sector has managed to find good ways of setting out which opportunities can be offered to which individuals. The issue is that there are some exemptions; if an internship is part of a further or higher education course, or if the individual is a volunteer, the national minimum wage does not need to be paid. That approach gives the flexibility that we need, while providing significant clarity for all those involved.

On the point about advertising, which relates to definitions, I understand the sentiment behind saying that all such adverts should be banned. I also understand the point made by my hon. Friend the Member for Birmingham, Yardley (John Hemming) about whether the Serious Organised Crime Agency would like to get involved. I am not sure whether it would, but one difficulty is that the adverts are not always clear about whether the person will be doing the role on a voluntary basis or as a worker; indeed, they may be on a higher education course and doing the role as part of a placement in between years, so they could be exempt. Therefore, an outright ban may be a blunt instrument, but if people think that an advert is for an illegal role, I encourage them to report it to the pay and work rights helpline.

I welcome the meeting that we had to discuss the issue earlier in the year, because despite the fact that an outright ban might be a blunt instrument, more can and should be done. We and HMRC have commissioned work to identify the adverts that have the greatest risk of offering opportunities that breach the law. That online research is being done, and the 100 employers that seem to be at the greatest risk of offering such opportunities will be written to, to advise them of the national minimum wage legislation that applies, and that they may be breaking the law. That is an important step forward. I am keen to ensure that we analyse the success of that, and see how that perhaps changes behaviour. If we can encourage businesses and employers to recognise not only the risk that they may be running, but the moral case, which has been discussed today, that is a good route to pursue. It is important, however, to keep that under review and see whether we can achieve success in that way.

The hon. Member for Walthamstow mentioned the Independent Parliamentary Standards Authority. It is not for the Government to tell IPSA what to do, but I am happy to write to it and draw its attention to the debate. I am sure that comments have been made and concerns raised that IPSA would be interested to read. I encourage Members to use other channels in Parliament, such as the Speaker’s Committee for the Independent Parliamentary Standards Authority, which would be an appropriate way of taking up those concerns. When the budgets for staffing were increased in 2012, being able to pay interns was a significant reason for doing so. I know that because my hon. Friend the Member for Bristol West (Stephen Williams), who sat on a Committee that was discussing those issues with IPSA, pressed strongly for that, and it made a big difference, encouraging and facilitating a lot of the changes that we have seen.

[Stella Creasy]

Does the Minister share my concern that IPSA has decided not to take that issue to the Committee to discuss it, despite the numbers of MPs who are making that point to it?

[Jo Swinson]

IPSA is an independent organisation, but concerns have clearly been raised in the debate that need to be raised with IPSA through the proper parliamentary channels. I shall certainly write to IPSA and draw the debate to its attention.

I recognise that time is running away from us, so I want to focus on what we are doing on enforcement. The pay and work rights helpline, on 0800 917 2368, is where people need to go if they have a complaint. HMRC will investigate and it will then be in a position to take action. It is also important to recognise that HMRC can also respect confidentiality, so the fears that some might have about coming forward do not need to be realised, because the matter can be dealt with confidentially. Since 2001, civil enforcement has benefited more than 200,000 workers with minimum wage arrears of about £45 million.

It is also worth people being aware that they can make a complaint up to six years—or five in Scotland—after the situation has taken place. I encourage people to be aware of that, and I apologise that there is not more time to respond to more points.