[Martin Caton in the Chair] — Unpaid Internships

– in Westminster Hall at 12:00 am on 18th June 2013.

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Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Randall.)

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles 9:30 am, 18th June 2013

It is a great pleasure to serve under your chairmanship, Mr Caton. I begin by thanking Mr Speaker, not only for allocating the time for the debate, but for his personal commitment to this whole agenda, which I will discuss later in my speech and for which I am very grateful; it has made a huge difference. I am also very grateful to colleagues from all political parties for coming along this morning. We have a good turnout, which indicates that the issue engages all parties and is very much a cross-party matter of concern. I have been grateful for support from Members of all parties, as I have tried to get consensus on this issue, so that we can move towards change; that support has been very valuable indeed.

Today I am speaking on a topic that I am really passionate about: the scandal—scandal is a strong word to use, but it is a scandal—of long-term unpaid internships. Nobody in this House would disagree that internships can be a valuable way for young people to get their foot on the career ladder, be it in the world of politics, journalism, public relations, the law, or fashion, or in any other kind of occupation. That is more important than ever, given the current economic climate, and given that more than 1 million young people are unemployed. We are not just talking about people who may have had a difficult upbringing and struggled at school; university graduates and even postgraduates are really struggling to find work.

Internships offer a chance for a young person to demonstrate to an employer their ability and suitability over a set period, usually at least three months. Young people apply for an internship hoping that—if they do well and like the company, and the company likes them—there could be a permanent job for them at the end of the period. However, my big problem with many of the internships currently on offer is that they are unpaid.

Recently I have seen figures that estimate that 92% of arts internships and 76% of internships in the public relations industry are unpaid. Some might say that is perfectly reasonable, given that there are no guarantees that the intern will be suitable for the role in the long term. However, the big problem is that the overwhelming majority of these roles are in London, which is the most expensive city in the country for people to live in. The London Evening Standard recently found that the average rent in London was poised to break the £1,000-a-month barrier, so three months working for free could cost an intern more than £3,000, just for accommodation, and that is without other living costs such as food and transport. Very few young people will have that kind of money saved up to enable them just to get by while they are doing an unpaid internship. Only those who already live with family in London or can call on the bank of mum and dad will be able to take up unpaid internships; that discriminates against a huge proportion of young people on the basis of geography and wealth.

Take someone from a less well-off household anywhere outside London who may have worked hard and scraped the money together, through loans, to get a degree. They have real talent to offer and they are more than capable of doing an internship in the industry that interests them—say, fashion—but how on earth can they possibly afford to work for free in our capital city? I spoke to one young woman recently who had an internship—I think it was with Karl Lagerfeld—and she worked for 12 hours a day, sewing sequins on couture gowns that retailed for £5,000. I asked her what her terms and conditions were. She did not receive a penny in payment. She said, “We very often get pizza and occasionally we get shouted at,” so it was not a very good environment at all.

Photo of Meg Hillier Meg Hillier Labour, Hackney South and Shoreditch

I thank my right hon. Friend for championing this important issue. I take on board her points about young people from outside London, but does she not agree that even in constituencies such as mine, which is close to Westminster, many young people need to contribute to the family household income, and unpaid working is a real problem? Sometimes even they cannot do it.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

My hon. Friend makes an extremely good point, and she has been a champion for the social mobility agenda for many years. The principle of working for free is wrong, irrespective of the circumstances, in London or outside London. I will just qualify that by saying that short-term work experience placements are perfectly suitable. However, long-term unpaid internships, wherever the intern lives, are wrong.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I congratulate the right hon. Lady on raising all these issues. I also thank Mr Speaker for allocating the time for this debate. Does the right hon. Lady share my concerns about social mobility, because this is about social mobility? Also, does she think that there are perhaps lessons to be learned from the history of the Bar? Initially, to get a pupilage, a person had to pay 200 guineas, but in 1975 that system was abolished and bursaries began to be introduced. Now there is a requirement to ensure that a pupil—who has to work as a pupil to become a barrister—is paid. That is perhaps something that other professions could learn from.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I am grateful to the hon. Gentleman for that intervention. I am also grateful to him for supporting Mr Speaker’s parliamentary placement scheme, to which the hon. Gentleman has shown a real commitment. He makes an interesting point about the law. I think that most of us would feel that the law might be one of those professions that had not made as much social progress as others. However, it is not just among barristers that there has been progress: some of the big law firms in London are now very conscious of the need to bring in a wider pool of talent to ensure that they are getting the very best people. As for barristers’ chambers, I will cite an example in a moment of something that I do not feel is right. Nevertheless, they have made significant progress.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I thank the right hon. Lady for giving way to me a second time. Does she agree that this issue is about getting a first step on the ladder? A person cannot get to the second step unless they get on the first step.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I absolutely agree. That is why this is about social mobility, because if someone cannot get their foot in the door as they do not have money or connections, or do not know the right people, it will be virtually impossible for them to use their talent and realise their potential. That is why I feel quite angry and passionate about this issue, and it is why I am so pleased that many Members share that passion and try to make a difference, as the hon. Gentleman clearly does.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

I congratulate the right hon. Lady on bringing this matter to the House for consideration by us all, and on the way she is introducing the debate. Does she feel that there is perhaps a need to change the mindset of big business and others who employ interns, to ensure that they give interns a minimum wage? Although internships are a good opportunity for young people to gain experience, for many of them, unpaid working is a real financial burden on them and their families. Is there a need for a sea change within big business?

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

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?

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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.

Photo of David Blunkett David Blunkett Labour, Sheffield, Brightside and Hillsborough

I apologise for not being able to stay until 11 am. I congratulate my right hon. Friend, not just on obtaining this debate and on her passion on this issue—I have never been in a meeting where she has not shown passion—but on the enormous amount of work she has done on the Speaker’s programme and on the Social Mobility Foundation.

We have all been in a dilemma in the past. I am committed to what my right hon. Friend is doing and will sign the pledge, but in the past we have all found ourselves not just having short-term volunteer work experience placements, which, as she says, is acceptable, but taking young people from university, on occasions—it is a long time since I have done this—on placements as part of a sandwich course, paying expenses, not realising what the burden on young people would be. In the light of the social mobility tsar’s reflections this week, would it be appropriate to work with universities with access programmes to ensure that resources are made available for those who are expected, and want, to take sandwich-course placements, including in this House?

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I am grateful to my right hon. Friend and return the compliment: a lot of my political passion has been mentored and guided by him. I have never been in a meeting with him when he has not been passionate—occasionally angry, but determined to make a difference, which is welcome. As ever, he makes a practical suggestion. A number of hon. Members have contacted me, saying that during certain modules on university courses, students have to come to Parliament for up to three months and little support is available. Student loans are in place for that period, but we should be discussing that with the university sector and, if it is a compulsory element, more support ought to be available. Perhaps our campaign can take that forward in a practical way. I am grateful for my right hon. Friend’s suggestion.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

It is important that we in Parliament collectively get our house in order, as far as this internship matter is concerned. We should, at the very least, pay a small amount of money to our interns and ensure that they are properly trained up, hopefully to get a permanent job, either in our office or someone else’s.

I appreciate what the right hon. Lady is saying and agree with the great thrust of it. I thank her particularly for the positive things she said about a number of City institutions that are trend-setters in this area. However, is she concerned that if we regulate to outlaw free internships, the risk is that rather than enhancing social mobility, there will be a black economy in internships, which will be taken up by those who are wealthy enough to rely on parents? How would she ensure that that unintended outcome of what she is proposing was avoided?

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I am grateful to the hon. Gentleman for raising the issue, and for his advocacy for change, particularly in the City. He has put his finger on an issue that many people raise with me: if we regulate, do we drive the issue underground and exclude more people? There comes a point when a moral decision has to be made. Are we comfortable asking people—often young people—to work for nothing? It is worse than Victorian. Some 100 years ago, people used to pay to be apprenticed to a master, and used to pay for their articles and pupilage, as John Hemming said.

There is a point at which, as political leaders, we say what is right and wrong and then get people to change their behaviour. We should have some regulation, although I would not do a lot of regulation in this field. I suggested that we outlaw the advertising of unpaid internships, which in themselves are unlawful. At the moment, people can advertise things that are unlawful, which is farcical for legislators. We have to make a moral and political decision, and then get behaviour change, led by good companies and firms, and good advocates, who will go with us. There are 100 companies in the Deputy Prime Minister’s social mobility compact; that is a massive swathe of people who can be our advocates and ambassadors.

On the idea of driving internships underground, at the moment 95% of people are excluded anyway. If companies use word of mouth, they will not be able to bring in those from other areas of the country, or those who do not have any money. Sometimes, we just have to stand up and be counted.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

Given that not paying people is unlawful under the national minimum wage regulations, and given that under the Serious Crime Act 2007 encouraging a crime is unlawful, I wonder whether advertising an unlawful thing and encouraging people to do it is already a crime. Perhaps the right hon. Lady’s efforts in this area could simply enforce the law.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I am grateful to the hon. Gentleman. I do not know if he has a legal background; does he?

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I set up a computer business many years ago. I am a computer programmer.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I was going to say that I love clever lawyers’ suggestions; nevertheless, I love clever suggestions. If people advertising were complicit in an unlawful activity, perhaps we could look at aiding and abetting and being accessories; all those things are now going through my mind. I do not think that we are necessarily in that territory. I am grateful to Her Majesty’s Revenue and Customs for taking this issue more seriously, at the instigation of the Under-Secretary of State for Business, Innovation and Skills, Jo Swinson, who has pressed HMRC to fast-track enforcement; I will come on to that later in my speech. More can be done, but the hon. Member for Birmingham, Yardley, makes an intriguing suggestion, and I am pleased that we have it on the record in

Hansard that it might be worth considering.

Photo of Meg Hillier Meg Hillier Labour, Hackney South and Shoreditch

Does my right hon. Friend agree that we have to guard against one important thing? If we move the threshold for people applying for positions that we hope would be paid or supported through a particular scheme, we could make it more difficult for children and young people from difficult backgrounds to reach the threshold, passing the interviews. We have to make sure that moving the entry point does not exclude some people from certain backgrounds.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

My hon. Friend makes a good point. Social mobility is about young people’s journey all the way through, from primary school to secondary school, to further and higher education and to their first interview and their first job. It is sometimes difficult for people to pass on the first occasion, in front of an employer, if they do not have the social skills to be able to impress people. Sometimes in our education system, we might do well on academic qualifications, but increasingly the evidence is that people with soft skills—team building and relationship building—impress employers most and end up getting the job. My hon. Friend makes an important point. That is why we need more mentors, role models and support, all the way through that journey, to ensure that the cleverest and brightest of whatever background can come through.

Photo of Justin Tomlinson Justin Tomlinson Conservative, North Swindon

On that point, I am from a challenging background; I was at a school that was at the bottom of the league tables, and I understand the sentiment behind this debate, but as a Member of Parliament and a former business owner, I was always being offered enthusiastic interns when I did not have permanent positions. On five occasions, vacancies came up by coincidence and I snapped up the intern. They all went on to have senior management positions, with four of them going on to be officer/managers. It is about gaining those skills. The key is using interns constructively; encouraging them to apply for permanent jobs from day one, even if that means that they have interned only for a couple of days when an opportunity comes up; and, crucially, being constructively flexible and supportive while they are working.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I am pleased to hear from the hon. Gentleman. Sometimes in this House, our policy positions are rightly coloured by our personal experience, which we bring to politics and Parliament. I share some of the hon. Gentleman’s difficulties. I applied for 300 jobs when I first came out of college—no connections, no interviews. It was a difficult time. That is part of the reason why I am so passionate about this issue.

I am glad that the hon. Gentleman has employed people, and really glad that they are doing well. However, the people who could afford to do the unpaid internships will be a tiny proportion of people in the country, because most people cannot come to London, cannot afford accommodation and cannot afford to be part of that pool, even, and are therefore excluded. A few weeks’ work experience is fine, but people are routinely advertising for 12 months’ unpaid internship. I know young people—there are interns in the audience today—who have done a series of one-year unpaid internships. They have worked for two and three years for no pay. It is ludicrous and simply wrong.

Photo of Justin Tomlinson Justin Tomlinson Conservative, North Swindon

I absolutely understand the right hon. Lady’s point about people advertising 12-month unpaid internships, which is not acceptable. However, the point about flexibility is that people might be able to intern for someone in the evenings, after they have done their stop-gap, part-time job. There is always an opportunity for people to round the edges off; employers just need to be flexible, to support people and to allow them that opportunity.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I agree entirely. I would say to employers that part of that flexibility and support is pay. If a student is doing a part-time job to get through university and an internship in the evening, that is not acceptable—that is not a life worth living. There must be some payment of the intern, who is working for the employer, in their company.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

If I might disagree with my hon. Friend Justin Tomlinson, I am still a business owner, and I employ more than 250 people. I believe it is better to select people on their abilities, rather than on their parents’ wealth. Does Hazel Blears agree?

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I apologise to the hon. Gentleman; could he repeat his question? I was just reading a note from the Clerk.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

The point I was making is that I am still an employer, and I employ a large number of people on their abilities, not their parents’ wealth.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I am delighted to hear that. I am also delighted to hear the debate we are having. It is important that people give their personal views when we have a debate. From that, we get behaviour change. I have been campaigning on this issue for the past two years, and I have seen people’s opinions change. Some people started out by telling me, “We think these things are acceptable” or “We think the jobs will go underground”, or by raising other problems, but we have achieved significant progress. I am therefore delighted that we are having this debate. Incidentally, the hon. Gentleman has a significant record as a successful business person, so an employer’s business need not suffer if they pay their interns. In fact, it could prosper because they are doing the right thing: they get a great reputation, their brand is improved and they make significant progress.

Photo of Paul Goggins Paul Goggins Labour, Wythenshawe and Sale East

I join others in congratulating my right hon. Friend on obtaining the debate and on the tremendous campaign she has waged. Her exchanges with hon. Members on both sides of the Chamber demonstrate the power of her argument. On the one hand, there is the moral case that it is simply wrong for a business that uses people to exploit them by taking their labour for nothing. On the other hand, investing in young people’s talent is in the interests of not only businesses, but the wider economy. My right hon. Friend sets out the argument neatly under those two headings.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

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.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

The right hon. Lady rightly said that many companies increasingly want to do the right thing, although it is perhaps fair to say that it is easier for a company employing 250 people to do the right thing. My slight concern—I do not wish to indulge in special pleading—is that, in the creative industries, such as fashion, which the right hon. Lady mentioned, and some of the smaller media industries, it is almost part of the economic model to have a whole lot of interns coming into play. I am in no way trying to defend that behaviour, but if we are to move forward, particularly with legislation and regulation along the lines the right hon. Lady would propose, we need to make the case more strongly to such companies than, perhaps, to City-type firms, which very much buy into this agenda. Has she any thoughts about how we can make that point to companies and, essentially, tell them, “Your economic model simply will not be viable for the 21st century”?

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

The hon. Gentleman, who has extensive experience of business, makes a good point. Let me use an example I was going to use later. I have recently discovered that Universal Music UK now pays all its interns above the minimum wage and in line with the London living wage. Morna Cook, its director of human resources, has said:

“We pay everyone who joins us above the national minimum wage and in line with the London Living wage. It’s only fair that they are paid for the work they do. Most importantly it also means that anyone can apply, not just those who live in London or can afford to work for free—we’re a diverse business and it’s important that’s reflected in the people who work for us.”

Universal Music UK is a fantastic leader in the field, and it is doing the right thing.

I recently saw a piece by Julie Walters, the famous actress. She said she was increasingly worried that working-class people could not come through the acting profession because of the culture of unpaid internships and that middle-class people had to adopt working-class accents to play working-class parts in the theatre. Goodness me, what state are we in if that is happening? If we cast our minds back 50 years, we could not find black actors, and people had to pretend to be black to take up some roles. We are in the same place with people from working-class communities.

In fashion, Stella McCartney is now paying her interns. Again, she is a great leader. If we have people in the creative industries saying, “I used to have unpaid interns, but now I’ve seen the light, and I know the right thing to do,” they can act as real role models for change.

Photo of Meg Hillier Meg Hillier Labour, Hackney South and Shoreditch

On the point about fashion, I have been working with the fashion industry in Shoreditch, which is a large fashion hub. A lot of work is being done to create proper, paid apprenticeships so that people are grown into the jobs. I completely agree with Mark Field that there are still real challenges, but there is a move in the right direction, and we should recognise that, on the grounds that we should applaud the good as well as condemn the bad.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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

Photo of Stella Creasy Stella Creasy Shadow Minister (Home Affairs)

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 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.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

I congratulate my right hon. Friend on securing the debate, which has been excellent so far, and will, I am sure, continue to be so. Access is the key. Whereas internships may be a barrier to access, work experience and the provision of work placements encourage it. We need to make that distinction.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

Absolutely. I have been trying to think hard about the distinction, because I am an advocate of work experience. There are many people in my constituency who perhaps have not worked since leaving school. Perhaps their parents did not work, and in some cases their grandparents did not. They know nothing about the world of work, so work experience, for which they must get up and have discipline, behave themselves and work in a grown-up fashion, is essential to their personal progress. The issue is when a work experience placement becomes a long-term job. That is the point at which exploitation begins.

In France, after someone has worked in a position for eight weeks, they automatically become entitled to the national minimum wage. We could consider such a period. We need to get the distinction right. In my constituency I run something called Kids without Connections. Fifty local employers give four weeks’ work experience to youngsters who have never done any work. They get a record of achievement and a reference. They all come to Parliament. It is the first time they have ever been to London. We make a difference to some of those young people. Half of them have been taken on in full-time jobs. That would never have happened without a work experience placement, so that employers could see what they could do. I am a total fan of work experience, but in some cases it crosses the line and becomes exploitation, through clever titling of an unpaid internship.

Photo of Chris Bryant Chris Bryant Shadow Minister (Home Affairs)

My right hon. Friend is right in everything she says. Does not all that she has described play a pernicious role in Westminster and politics? Only for the children of the wealthy is it affordable to take on a long-term unpaid volunteer post or internship. Those people go on to get special adviser jobs, which are rarely advertised by any political parties, much to the shame of us all, and they end up as Cabinet Ministers. We end up with a tightly-drawn circle—

Photo of Chris Bryant Chris Bryant Shadow Minister (Home Affairs)

It is exactly the same in your party, as well, madam.

The circle of people who rise to the top of British politics is small, and getting smaller.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

My hon. Friend could be making the speech that I made three years ago to the Hansard Society, when I said I was increasingly worried about the transmission belt—people working in a Minister’s office, becoming a special adviser, getting a safe seat and within three weeks of the election becoming a Cabinet Minister. The next morning when I walked into the Cabinet I was not the most popular person. James Purnell and my right hon. Friend Andy Burnham used to sit next to me. Everyone said “Are you having a go at me, Hazel?” I said, “Certainly not.” Eventually I looked round the table and said, “I think, ladies and gentlemen, you’ve made my point.” That situation was the very reason that when I came back to Parliament I set up the Speaker’s parliamentary placement scheme, for people from working-class backgrounds. In a democracy there is a need for people who can bring different life experiences to the table. No commercial company would want every one of its directors to be from the same background. Increasingly, the business case for diversity is being made strongly.

Photo of Mary Macleod Mary Macleod Conservative, Brentford and Isleworth

The right hon. Lady is generous with her time. I apologise for not being here for the beginning of the debate, but I was at another meeting. I congratulate her on the debate, which is important.

Do we need a clearer definition, to distinguish between work experience and internships? We are all very positive about the value of work experience, but sometimes the argument becomes all about the wealthy versus the poor, and that is not the issue. I started with nothing. My parents gave me no money; but I still went out and built my own connections, and asked about things, and tried to get work experience in that way. When I go into schools in my constituency I speak about building networks and connections. I say, “If you are struggling to get work experience, e-mail me, and I will try to help you find it.” Such things are important to build on.

I completely agree with the right hon. Lady about the long-term—

Photo of Martin Caton Martin Caton Labour, Gower

Order. That is a very long intervention.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I am grateful to the hon. Lady for her intervention and also for taking one of our Speaker’s scheme interns, who has flourished. I know that she has given that young person a great deal of personal development time.

The hon. Lady makes a good point: it is up to everyone to make the most of their connections. The difficulty is that some people come with ready-made connections, and some find things more of a struggle. That is relevant not just to professions, but to anyone getting their next job. When we set up the future jobs fund there was a statistic that I found amazing, which was that seven out of 10 people get their next job from someone they know; only one or two get it from the jobcentre. Whether someone wants to be a plasterer or a joiner, it is about having wider connections and knowing some people. We are trying to give people the incentive and ability to make connections. It is far less likely that someone from a poorer background will know a lawyer or doctor or member of a similar profession. Therefore, it is much more difficult for such people to make those connections.

Photo of Fiona Mactaggart Fiona Mactaggart Labour, Slough

My right hon. Friend has given a great account of her work. She mentioned the future jobs fund, and we have been talking about the dependence of the creative industries on unpaid interns. I was privileged to see how a network of creative businesses in London, from the Royal Opera House to the National Portrait Gallery and others, used the future jobs fund to establish a paid internship—they called the interns apprentices, although they were not full apprentices—sharing the learning between those different companies. They brought those young people in from the jobcentre, and they flourished. Those same young people then put on a jobs fair for others like them, to look at how they could get into those industries. When an opening is given to the less standard young people, they open the doors to others.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

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?

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

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 the Speaker for giving his backing, to the

Minister for her support and to 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 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.

Photo of Mary Macleod Mary Macleod Conservative, Brentford and Isleworth

I congratulate the right hon. Lady on her work on that scheme. Ellen Wright, who works in my team, has developed tremendously throughout and has managed to find fully paid work elsewhere; unfortunately, I did not have enough budget for her to stay on the team.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

I know that Ellen has enjoyed her placement and has gone on to get an excellent job. She now has the basis for a good career. Who knows? We may one day see her back in politics, which would be amazing.

I thank the Government Equalities Office, which this year has supported the scheme financially for the first time. We have also been able to bring some people with disabilities to be part of the scheme, which has been tremendous for us. I hope that that financial support will continue; I think that the Equalities Office has been satisfied.

My speech has gone on for a long time, perhaps due to interventions—I know that a lot of people could not make speeches, so I hope that has been appropriate. Today I am launching a scheme about Parliament called “Let’s Get Our House in Order”. If we are to provide leadership on the issue, I want us to do as we say rather than simply urging other sectors to do the right thing. We have to show that we are doing the right thing. Many Members have said that they will come to sign our pledge—I promise it is not for temperance; it is for doing the right thing—in room W3 off Westminster Hall between 12.30 and 2 o’clock today. It is a promise to pay our interns.

I reassure Members who have had unpaid interns in the past that that was in the past. We are talking about changing the culture. Everybody is capable of redemption, in my view. I would not want any Member to feel because they have had an unpaid intern that they cannot possibly be part of the campaign. We would love those Members to be part of it, because they will have been on the journey with us. The Speaker himself took on a young woman some years ago as an unpaid intern. She was from his constituency and was desperate to come, and as she had some financial backing, she was able to do so. The Speaker will say that he would never do that again. He now knows that it is not the right thing, because it excludes the vast majority of people. At the very top of the House is somebody who has changed his mind because of his personal experience.

It sends a great message to the rest of the business sector that unpaid internships have no place in Britain in the 21st century. They exploit young people, deny them the chance to pursue their hopes and dreams and perpetuate the existence of a system and society in which it is where people come from, not where they want to go, that dictates their future. I started by saying, and I still think, that internships are a scandal in a country that supposedly prides itself on fairness and equality. We should put an end to that practice for the future.

Photo of Eric Ollerenshaw Eric Ollerenshaw Conservative, Lancaster and Fleetwood 10:23 am, 18th June 2013

It is a pleasure to serve under your chairmanship, Mr Caton. Hazel Blears talked about redemption. Being a bad Catholic, one can deal with that, I hope. I join everybody else in congratulating her on her success and drive with the Speaker’s scheme and the wider issue of internships. I declare an interest: when I went to university in the 1970s, I do not think that there were internships. Because there were so few graduates, we just went into the market. I did not know anything about internships.

The figures that the right hon. Lady and others quoted seem to show that internships work. An article the other week said that university graduates on an internship scheme or some other kind of work are three times more likely to get a job, and that 61% of graduates in internships tend to get a job in that company or profession. Whatever the system is—we have imported the word from the United States—it appears to work. We must then ask what various hon. Members have asked: how do people get into the internship game?

I will declare another interest. I was a teacher for 37 years, including in social priority schools. In other schools, the drive was to give people confidence and push the talented ones to get somewhere. Meg Hillier hinted at my experience of teaching in Leytonstone, where students could see the towers of the City of London, but, because of their background and circumstances, never dreamed that they could enter it. As she said, if there were an internship system, their families could never have afforded to say, “You can take six months,” or however long, while keeping them at home.

I am now the Member of Parliament for Lancaster and Fleetwood. Many of the students I see at Lancaster university could never dream of taking an internship in London—the great capital, the centre of most of the great professions and businesses—because, as everybody has commented, accommodation costs alone would wipe out their money, let alone the costs of feeding oneself and so on. It is just not possible. Arriving here as a new Member of Parliament, I saw how many people were in the system and knowledgeable about it, because their families were knowledgeable about it and could support them through it, and I began to ask questions.

The penny dropped when I saw an article in the London Evening Standard in 2010 about an auction of internships in the creative industry, including in top fashion companies—at a charity event, to be fair—for £10,000 or £15,000. I thought, “Out of the people I represent and the people I used to teach, who could ever afford to get into this game, even at the smallest level?” There was something wrong. In Parliament, which is supposed to set an example, although I know it sometimes fails to do so, the same system operated.

In the same week that I read that article, I listened, as all politicians do, to the “Today” programme. Suddenly, there was Baroness Morris of YardleyEstelle Morris as was—chatting away with the right hon. Member for Salford and Eccles about the issue. Then I wandered into Parliament, and who was walking down the corridor but the right hon. Lady? The last time she and I had spoken was during a heated debate on television, when I was the Conservative opposing her and we had done the usual political thing. The fact is that across parties, we shared a common view that something was wrong.

People have rightly talked about equity—that is the passion behind the issue—but, as other hon. Members have said, it is also about the talent that we are losing through the system. This is a competitive world, a global race and all the rest of it. That talent is unable even to take a first step. Part of that first step—as everybody has said, it is also about money—is knowing that the system exists. We need to get that right. Being a Conservative, I do not want too much regulation, but we need to make the terms understood and to advertise them across the system.

To return to the students and pupils whom I taught in the east end of London, most of them would not know about internships unless teachers introduced the idea, and most teachers came from my generation and did not know what internships were. How were the students ever to learn that that system operates in most top businesses and professions as an add-on to graduation and a way of getting in? They lacked the knowledge even to start. It is a double issue.

I accept the restrictions. We must consider the definitions of internships and work experience. I am pleased that Her Majesty’s Revenue and Customs is now working on that, but we must also sort out how we can advertise in schools and universities, so that everybody with talent can see that they need to use that system to maximise their talents and contributions. There is a knowledge and advertising agenda. I also liked the right hon. Lady’s compliments to the Social Mobility Foundation, which has done a lot of work on the issue and is doing much with the Government agenda to get the system right.

How do we advertise the subject of internships? The right hon. Lady is proposing that Parliament sets an example, which would itself be a big advertisement: there is a thing called internships and, whatever a person’s background, they have a chance of getting in on this system. That is really important. As she said, paid internships are spreading through the House; I do not know the numbers or whether this figure is correct, but I saw the other day that 40% of internships are still not paid, which is enormous, and that unpaid system is still going on. If we have internships, we have to get right how they are termed in the House, even though that is a small-scale thing.

I do my own scheme, as well as supporting the Speaker’s parliamentary placement scheme. Every year, I keep some money aside to give someone a chance and to pay someone from Lancaster university to do a month in Parliament. I pay the minimum wage and all the rest of it. I have a rolling programme, so the interns appear to the Independent Parliamentary Standards Authority as paid employees. Anyone who looks at my numbers thinks I am a bad manager, because I have a huge turnover of people, in particular in summer and autumn, but they are paid internships. We need to get the House regulations right for what Members of Parliament are trying to do, so that no one can construe things. I might be a bad manager, I do not know—ask the staff who work for me—but at the moment it looks as if I have a big turnover in staff. We need to get small things such as that right.

It is important for the Minister to get in, but I shall emphasise my main points: first, the equity issue; secondly, the loss of talent throughout the country because people are not entering internships; and, thirdly, when we begin to get this right and finally set an example in Parliament, we need to advertise what is going on throughout business and the professions. Internships are not some odd thing, but are part and parcel of business and professional life. Every student in school needs to know that internships are part of the system.

Photo of Martin Caton Martin Caton Labour, Gower

I am about to call Ms Creasy. I would be grateful if you could resume your seat by 10.40 am, so that we have adequate time for the wind-ups.

Photo of Stella Creasy Stella Creasy Shadow Minister (Home Affairs) 10:32 am, 18th June 2013

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 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.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

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.

Photo of Stella Creasy Stella Creasy Shadow Minister (Home Affairs)

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.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 10:39 am, 18th June 2013

It is a great pleasure, Mr Caton, to speak under your chairmanship in such an important debate. I pay tribute to my right hon. Friend Hazel Blears, who has done so much in this House and in the country to highlight the plight of unpaid interns and issues relating to the world of work for young people.

I thoroughly enjoyed her speech, and the passion with which she delivered it is unsurpassed in the House. It was a delight to hear what she had to say.

For some time, unpaid internships have been thought to be necessary for any young person who wants to fulfil their career goals, but they divide our young people into those who can afford them and those who cannot. I want to look at the scale of the problem. One poll has shown that two in five people aged between 18 and 24 believe that not doing an unpaid internship acts or has acted as a major barrier to them getting a job. Another survey showed that 40% of people who thought about applying for an internship reconsidered because they could not work for free, and 39% of people offered an internship had to turn it down for financial reasons. That highlights the problems with unpaid internships and what they do for young people’s aspirations and hopes.

Unpaid internships are rife in some industries. It was right to have highlighted some of the positives, particularly in the creative industries and others, but in those industries, young people are so desperate to start their career and get on the ladder that they often feel they have no other choice than an unpaid internship. The cycle is dismal: if someone wants to work in the fashion industry, for example, they must have experience before applying, and the only way to get that experience is to work in the industry for nothing. Even getting their foot on to that first rung of unpaid employment is not easy, and it may be more about who they know than what they know. Those are the key issues in this debate.

In his role as the Government’s adviser on social mobility, Alan Milburn reported last year that more than 30% of newly hired graduates had previously interned for their employer, and that rose to 50% in some sectors. That might be seen as a positive, in that some young people’s experience of an internship has taken them on to employment. The key to the problem is that when they are at university or leaving school, young people see that the only way of fulfilling their dreams and talents, and pursuing their desired career, is by taking an unpaid internship. That is where the cycle started, and it continues. I hope that this debate and my right hon. Friend’s work will stop that cycle in its tracks.

My right hon. Friend introduced a private Member’s Bill, the Internships (Advertising and Regulation) Bill, which was signed by my hon. Friend Mr Wright, who is a member of the Opposition’s shadow business team and is a great advocate on the issue. When my right hon. Friend introduced the Bill, she said:

“for the sake of thousands of young people who are in similar circumstances today, whose hopes and dreams have often been dashed because they cannot do an unpaid internship, we must act quickly to ensure that they are treated with respect and given a decent start to their working lives.”—[Hansard, 5 December 2012; Vol. 918, c. 554.]

I could sit down now because that quote sums up this debate and all the issues relating to unpaid internships. However, I have a few more minutes, and I want to ask the Minister some questions.

It is appropriate to pay tribute to people outside Parliament who have done so much. They will be watching the debate, and some may be here listening. I know that I cannot draw direct attention to people in the Public Gallery, but I pay tribute to Intern Aware, Interns

Anonymous and Internocracy, as well as the National Union of Students, who have done tremendous work in raising awareness among the press and the industry, and have met hon. Members. They have been formidable in raising the issues with us politicians directly.

It would be remiss of me not to recognise that this is a cross-party issue that has received support across parties, but conversely, some people have undermined the campaign by their actions in the House. I may go into more detail later. It is worth celebrating businesses that do well, and I was delighted hear from my right hon. Friend that Monster and other recruitment sites have taken it on themselves to do the right thing.

Part of the problem with where we are on the issue has to do with the rewards and success that people can get from paid internships. These programmes give young people a fantastic experience. All we are looking for in taking this forward responsibly is for interns to be paid properly for a day’s work. People providing unpaid internships exploit a loophole. I want to put on record the contribution of Kezia Dugdale, MSP for Lothian—I represent part of her constituency here—who offers paid internships at the living wage for three-month periods every three months. During her five-year term of office, she will have offered that opportunity to dozens of young people. Not only does she pay them the living wage, but she puts together a proper programme, which is another issue. If someone told me they would give me £10 if I could define “internship”, I am not sure that I could. However, one definition might be that it is properly paid with a proper programme of work allowing the intern to gain a tangible benefit.

It is important to recognise that people give up their time to volunteer without payment. Many charities and organisations that we rely on in our constituencies would find it difficult to operate without volunteers, but that is a completely separate issue, and goes to the heart of why we need proper definitions of “intern”, “volunteer”, “worker” and “employee”. The difference between “employee” and “worker” is difficult legal territory, which is where some of the big issues come into play.

I want to spend a few moments talking about the national minimum wage and its enforcement. I pay tribute to the Under-Secretary of State for Business, Innovation and Skills, Jo Swinson, for the strides she has taken in trying to resolve some of the enforcement issues with unpaid internships and some of the current more general enforcement issues. It is worth emphasising that, as my right hon. Friend the Member for Salford and Eccles said, under the national minimum wage regulations it is against the law to have someone working set hours and doing set tasks without being paid. There is an explicit link between the national minimum wage and unpaid internships.

It is worth reflecting on the Government’s slightly schizophrenic approach to the national minimum wage. Once upon a time, the idea of a minimum guaranteed wage for people in the UK was pie in the sky and highly controversial. Now, in light of its impact on family life, the economy and indeed this place, there seems to be consensus that the national minimum wage is an integral part of work and the UK economy, and it has cross- party support. However, without the previous Labour

Government, there would be no national minimum wage, and that is one of our proudest achievements. If anyone asks what the previous Labour Government’s proudest achievement is, the national minimum wage would be at the top. When it was introduced, it helped to raise pay for more than 2 million people, and some 50,000 low-paid teenagers received a boost in income when the minimum wage for 16 and 17-year-olds was introduced in 2004.

Crucially, in 1997 the policy was opposed when the Labour Government were taking the National Minimum Wage Bill through the House, and it is strange that there are still calls from Conservative Back Benchers to scrap it. I hope that the Minister will give a cast-iron guarantee that it is not only here to stay, but is the foundation of the bottom end of our economy, building on what is achieved in the economy. In 2010, many Conservative Back Benchers signed a private Member’s Bill to scrap the minimum wage and to undermine it for younger people. That emphasises the whole issue of unpaid interns, and it would be even worse if the national minimum wage regulations could not be used to highlight this important issue.

Intern Aware has complained about several companies that have exploited loopholes in the national minimum wage legislation, and has reported them to the Department for Business, Innovation and Skills. Will the Minister update the House on what she is doing about enforcement? Will she also update the House on the 100 companies she reported for not paying the national minimum wage, and on what stage enforcement has reached? Will she also explain how many enforcement actions have been taken by HMRC on the national minimum wage over the last year, how many resulted in criminal prosecutions against companies, and how many companies were fined for breaking the law?

I have concentrated on the national minimum wage; at the crux of dealing with the issue of unpaid internships is enforcing the system and the regulations that are in place. It is against the law to advertise for something that breaches regulations, but people are still advertising unpaid internships in newspapers and online, and if we cannot enforce the rules that are in place to deal with that, we will end up in a very difficult place. I have already mentioned the ability to follow a proper programme, which is important.

In a world where the odds are already stacked against our young people—we see that in the unemployment statistics—we need the Government to be much more active in ensuring that unpaid internships are made a thing of the past. Otherwise, we will continue in a downward spiral, and the issue will be not what you know, but who you know and how much you can afford. That would be very bad for the economy and for our young people in the future.

Photo of Jo Swinson Jo Swinson The Parliamentary Under-Secretary of State for Women and Equalities, The Parliamentary Under-Secretary of State for Business, Innovation and Skills 10:50 am, 18th June 2013

I am delighted to serve under your chairmanship, Mr Caton, and I heartily congratulate 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 Ian Murray and by my hon. Friend 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.

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 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 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.

Photo of Stella Creasy Stella Creasy Shadow Minister (Home Affairs)

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?

Photo of Jo Swinson Jo Swinson The Parliamentary Under-Secretary of State for Women and Equalities, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

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.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

May I just add that one organisation that has been absolutely fabulous on this agenda, and on the Speaker’s scheme, is the Social Mobility Foundation, of which I am a trustee? I ask the Minister to put on record her support for the foundation.

Photo of Martin Caton Martin Caton Labour, Gower

Order. We need to move on to the next debate.