Internship letter to the Deputy Prime Minister - London Chamber of ...

15 June 2011
Rt Hon Nick Clegg MP
Deputy Prime Minister
Deputy Prime Minister’s Office
70 Whitehall
London
SW1A 2AS
Dear Deputy Prime Minister
I am writing to you on behalf of London Chamber of Commerce and Industry (LCCI) to
discuss the issue of unpaid internships and their role in securing jobs for young people.
As you will be aware LCCI is an independent, not-for-profit business support organisation
with over 2,500 members. We are the capital’s largest and most representative business
organisation, with members in a variety of sectors ranging from multi-national companies to
SMEs and sole traders.
As you clearly say in your Supporting Youth Unemployment strategy work experience, via
both apprenticeships and internships, is highly valued by employers and can be more cost
effective than job creation schemes. LCCI is very supportive of apprenticeships as we agree
that they spread opportunity and contribute to boosting the economy. Although we share
your concerns about the negative consequences for social mobility of unpaid internships, we
believe that they are a unique opportunity for young people to better understand the work
environment, as well as providing them an exceptional insight into the industry they want to
go in and to build on the skills they need for future employment.
Internships also allow businesses to train new potential members of staff, whilst giving them
access to young people with formal and informal knowledge on the latest information in their
area. Many of our members have supported routes into work through offering internships to
young people in the past, however recent legislation on ensuring companies pay National
Minimum Wage (NMW) has led to a decrease in the number of internships they now offer.
SMEs in particular cannot afford to pay (untrained) members of staff in the numbers they
offer internships. If firms have to decide between taking on a person with no or minimal
experience and a more experienced worker, they will undoubtedly choose the latter as their
investment, in terms of time for example, will be lower. We know some of your colleagues
sympathise with this position as they are unable to stretch their parliamentary staff budget to
pay interns NMW without sacrificing their employees’ salaries. The result is that SMEs and
MPs may find themselves breaking the law as those offering unpaid internships are liable for
prosecution for a period of six years − or not offering any internship at all, increasing the
number of young people unable to gain invaluable practical work experience.
If businesses limit the number of internship opportunities they offer, it is likely that graduates
will be most hard hit as they can easily be replaced by students who are required to
undertake an internship as part of their course; under these circumstance businesses have

no legal obligation to pay them. The result of this will be graduate unemployment increasing
even further than its current levels.
Moreover, we believe that the recent proposal to change the legislation around internships
does not solve the problems surrounding internships. In the last months we have seen an
increase in the number of “voluntary work” positions advertised, particularly on websites
where internships were offered before. Our concern is your announcement has merely led to
a change in terminology rather than in content; therefore the fundamental issues still remain.
A volunteer does not have specific duties neither does he nor she have any obligation to turn
up to work. However, it is difficult to believe that young people would not turn up to work, or
work within set working hours as they will be keen to leave a lasting impression on any
prospective employer. As a result, they will effectively become a “worker”. Furthermore, this
does not resolve the issues around social mobility and equal access to opportunities as only
those who can afford voluntary (unpaid) work will be able to get the opportunities available.
LCCI welcomes the decision to continue to provide funding for the Graduate Talent Pool and
to extend it to those who graduate in 2011. As you will be aware the current scheme allows
students who graduated in 2009 (but not those who graduated in 2008 or 2010) and have
been claiming job seekers allowance for six months or more to apply for a training allowance
whilst undertaking an internship. However, we feel that all graduates from 2008 onwards
should be able to undertake internships whilst claiming job seekers allowance and that this
possibility should be available to them from day one. This will ensure that the doors to
internships are open to all graduates and will minimise the loss of skills among them.
Together with this, LCCI is calling for establishing a new legal definition of internships. The
existing ambiguous rules surrounding interns’ pay means that businesses are uncertain
about the conditions under which they can take interns on. If legislation surrounding
internships is not changed, businesses will continue to reduce the number of internships
they offer. This will, consequently, limit the number of opportunities to develop and learn new
skills available to young people in a time when youth unemployment is at its highest.
We would very much like to discuss this matter further from the business community
perspective, and would be delighted if you would meet with us so we can elaborate on the
issues above. If you are interested in meeting then please ask your office to contact Policy
& Public Affairs Executive, Verity O’Keefe on vokeefe@londonchamber.co.uk or +44(0)20
7203 1889.
I look forward to hearing from you soon.
Yours sincerely
Dr Olalla Linares Segade
Head of Research