Wally Harbert: Are unpaid interns really a problem?

Worrying about interns is just a distraction from the big picture, writes our online guest columnist

Wally Harbert
Wally Harbert

The morality of unpaid internships is not as straightforward as protagonists appear to believe. Nick Clegg, the Deputy Prime Minister, complains that they give the wealthy an unfair advantage and the trade union Unite has singled out charities for criticism, describing unpaid internships as unethical.

If we end unpaid internships in charities we shall be telling young people, even some of relatively modest means, that back-packing through Thailand is more laudable than unpaid charity work or laying foundations for a career. Do we want a society in which people are told how to spend their own time and money? And should people be stigmatised for wanting to volunteer?

For more than 40 years, we have elected governments that deliberately increased inequality. Despite much rhetoric, there are few proposals on the table that will tackle this head-on and still fewer that have a chance of being adopted by an electable political party. Today’s gross inequalities will not be undone by tampering with the system of interns, which will lead the wealthy to obtain privileges in other ways.

Nor will inequalities be ended by backbench parliamentarians begging and bullying multinational companies into paying more tax than required by law. What kind of tax policy is that? Legislators should legislate, not moralise.

In the first half of the 19th century, pressure to reform the Poor Law arose because it was seen as immoral and unsustainable for the public to subsidise inadequate wages. We have now turned full circle, with low wages topped up by tax credits and housing benefit. This state largesse enables some top people to award themselves pay packages more than 1,000 times the median national wage.

Employers’ organisations fret about the level of corporation tax but ignore subsidies paid to working families by taxpayers. The government spends about £30bn each year on working tax credits and child tax credits while the majority of the £23bn spent on housing benefit goes to working families. It is likely that some inefficient and uneconomic enterprises are kept alive by these subsidies, which draw millions of families into welfare dependency.

As well as being concerned about the propensity of Starbucks to avoid corporation tax, we should recognise that the profits the company remits overseas are subsidised by workforce payments from the UK taxpayer, which keep pay levels artificially low.

There are no simple remedies. A root-and-branch reform of the system is overdue, involving new thinking. Some changes will require international agreement. For a start, HM Revenue & Customs should be able to claw back workforce subsidies from companies that tolerate gross inequalities in pay. Perhaps these companies should pay a higher level of corporation tax. Worrying about interns is just a distraction from the big picture.

Wally Harbert has held senior positions in the voluntary sector and is a former president of the Association of Directors of Social Services. His book Baby Boomers and the Big Society was published in March 2012 by Grosvenor House Publishing

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