Minimum Wage — Question

– in the House of Lords at 2:45 pm on 30th November 2010.

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Photo of Lord Lea of Crondall Lord Lea of Crondall Labour 2:45 pm, 30th November 2010

To ask Her Majesty's Government what assessment they have made of the growth in the number of unpaid interns, particularly in the London area; and how this relates to the minimum wage.

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, the Low Pay Commission undertakes research and provides advice to the Government on issues related to the national minimum wage. The commission assessed developments in internships in its 2010 report and reported evidence that a growing number of people were undertaking unpaid internships. It did not report on the London area separately and it did not report any effect of the minimum wage on the number of unpaid internships.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

I thank the Minister for her reply, but it does not really address the anxieties of hundreds of thousands of young people for whom unpaid internship is their only option, despite their debts. First, will she commit HMG to producing some data, whether by random sample or otherwise, so that illegal practices can be identified and exposed? Otherwise her department will confirm its reputation as having no serious interest in enforcing the national minimum wage. Secondly, guidance on what is possible at the moment under the national minimum wage is really about what employers do not need to do, so will she look at the guidance and bring a Statement to the House before Christmas as to how it needs to be strengthened?

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

The Government of course recognise concerns about the increase in unpaid internships and the risk of exploitation and we are working to improve guidance on the status of interns and to raise awareness. We will ensure that enforcement of the national minimum wage continues to be effective and that resources are focused on where they will have the maximum impact. We want to make as many internships and work experience opportunities as possible available to our talented young people, from all backgrounds, because these opportunities may lead them into work in the future. Of course we wish to make sure that the guidance is clear and of course we wish to avoid people being abused-children particularly-in this way. At the same time, we want to be careful that we leave these opportunities for youngsters to gain good experience and possibly lead themselves into work in the future.

Photo of Lord Razzall Lord Razzall Liberal Democrat

My Lords, I support the remarks of the noble Lord, Lord Lea, particularly with regard to the expectation of the Government producing data on this. However, does the noble Baroness recognise that, for many people leaving college or university at the moment, at this stage of the economic cycle, their future path to employment often lies in starting with unpaid internship, which then leads to permanent employment? Does she recognise that getting the balance right between that and exploitation of youth is something that the coalition Government need to look at?

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My noble friend is exactly right and I agree with him on everything that he has said. As we are a coalition, it makes life so much easier that we can discuss these things sensibly. Thank you.

Photo of Lord Myners Lord Myners Labour

My Lords, I declare an interest as a former chairman of the Low Pay Commission. May I ask the Minister two simple questions? First, will she confirm that there will be no encroachment on the independence of the Low Pay Commission? Secondly, will she confirm that there will be no diminution in the funds available to survey and enforce compliance with the national minimum wage?

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

On the first question, I do not have any answer at the moment. I think that everything seems to be as it is. In the remit of the 2011 report, the Low Pay Commission was asked to review the labour market position of young people, including apprenticeships and internships. The commission will continue to do its work and report to the Government by the end of February next year, when I will return with that finding.

Photo of Lord Willis of Knaresborough Lord Willis of Knaresborough Liberal Democrat

Does my noble friend accept that a significant number of unpaid interns work in the Houses of Parliament and that we should be setting standards rather than exploiting these young people? Furthermore, many young people, particularly from the north of England and with limited income, cannot possibly come to intern here. Will the Minister discuss with her colleagues in DWP the possibility of making JSA available to interns coming to work in Parliament and other places in London so that there is at least a minimum recognition of the expenses that they have to fulfil?

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

We are unlikely to look at this. However, in BIS we pay interns a wage and things seem to be going very well.

Photo of Lord Young of Norwood Green Lord Young of Norwood Green Shadow Spokesperson (Business, Innovation and Skills)

Does the Minister agree that the problem with unpaid internships is that they discriminate against graduates from poorer households? Can she confirm that the Government will build on programmes introduced by the previous Government, such as the graduate talent pool and the scheme with the Federation of Small Businesses to encourage its members to create a number of opportunities?

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

In 2009, the Department for Work and Pensions announced a series of temporary measures, which the previous Government of course took forward. We have been using those measures and will do so until the end of this financial year. As we emerge from the recession, we will introduce more effective support for young people and the unemployed. A new work programme is coming out in the new year and we will be happy to bring that forward.

Photo of Baroness Farrington of Ribbleton Baroness Farrington of Ribbleton Labour

My Lords, does the Minister accept that many of us are interested in the question asked by noble friend Lord Myners, which she is unable to answer at the moment? We would like a written answer, with a copy in the Library, on whether the Low Pay Commission is going to remain independent of government.

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

Yes, it is. I am happy to answer that. I am sorry that I did not answer it before, but there will be no encroachment.