Whistleblowers

Monday 27th November 2017 Lords Chamber

Question

14:44

Asked by

[Lord Cromwell]

To ask Her Majesty’s Government what assessment they have made of the effectiveness of the processes in place to enable whistleblowers to come forward without adverse personal consequences.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, individuals should be able to report malpractice in the workplace without fear of reprisal. The Employment Rights Act 1996 provides employment protection for workers in all sectors who have blown the whistle. It enables them to seek redress if they are dismissed or suffer detriment at the hands of the employer because they have made a protected disclosure about wrongdoing that they have witnessed at work.

[Lord Cromwell (CB)]

I thank the Minister for his reply. As he knows, in putting down the Question I had in mind a specific example. The whistleblower concerned, who is from the UK banking sector, asked me in due course not to name them for fear of persecution. Will the Minister agree to meet me and the organisation Whistleblowers UK to review the shocking evidence that, far from being respected for their bravery, whistleblowers are frequently made unemployable or impoverished, and many are driven into mental illness? Does he also agree that the FCA should do a great deal more as a regulator to support them, particularly in their legal costs? Finally, what message does he feel we send to those who expose wrongdoing if in America they are rewarded, whereas in this country they pay such a terrible price for doing the right thing?

[Lord Henley]

My Lords, I thank the noble Lord for his Question and the supplementaries. I am grateful that he did not raise an individual case, because obviously I would not be able to comment on that. However, I am more than happy to make arrangements to meet him and Whistleblowers UK to discuss that case. I note what he says about the FCA. I am sure that he is aware that the FCA is looking at its procedures and will conduct a review, as I think my noble friend Lady Williams made clear during the passage of another Bill earlier this year. The possibility of following the American route is interesting, and the review could certainly look at it. The review that the FCA conducted in 2014 concluded that introducing financial incentives was not likely to increase the number or the quality of disclosures, but it will certainly look at that again in its review in early 2018.

[Lord Howarth of Newport (Lab)]

My Lords, do the Government have plans to ban gagging clauses—the practice whereby individuals who are aware of failures or malpractice within an organisation are paid to leave on the basis that they keep quiet about what they know? Will the Government ban this practice of bribery and conspiracy of silence?

[Lord Henley]

My Lords, I would be more than happy to look at that matter. Of course, as I made clear, the FCA is conducting a further review, but there are the protections within the Employment Rights Act 1996, as amended—as the noble Lord will be aware—by the Public Interest Disclosure Act 1998. Whether under those two pieces of legislation gagging orders would be prohibited or would in fact apply needs looking at.

[Lord Skelmersdale (Con)]

My Lords, I urge my noble friend to have some caution in this area. It is one thing to concentrate on whistleblowers as result of activities at work, but we have seen recent cases—not least in that of a former Prime Minister—where a whistleblower has cost the police vast of amounts of money to no effect whatever, as far as I can see.

[Lord Henley]

My noble friend makes an interesting point which goes slightly beyond the Question, but we should bear it in mind. We are looking here at the protections offered by the Employment Rights Act 1996, as amended by the Public Interest Disclosure Act.

[Baroness Kramer (LD)]

My Lords, will the Minister resist this negative connotation of whistleblowers? This summer I met whistleblowers whose lives are in complete ruins. The example given by the noble Lord, Lord Cromwell, is one of very many. The regulators have a long history of being totally passive, of providing no protection and often of being gratuitously suspicious of whistleblowers. In the United States, not only is there compensation for a life damaged and ruined but there is an Office of the Whistleblower—a concept that we attempted to get into the then Criminal Finances Bill—which provides appropriate protection from a significant, senior and high level.

[Lord Henley]

My Lords, I do not believe that we are taking these matters lightly. I know that the noble Baroness has considerable concerns about this matter. She raised them during the passage of the Criminal Finances Bill, enacted in 2017, and many of them were dealt with by my noble friend far better than I could do in the brief time I have available at the Dispatch Box. I could quote at length the answers that my noble friend gave the noble Baroness on that occasion, but suffice it to say that we note her concerns. The FCA is looking at this issue and conducting another review, and no doubt the noble Baroness will take a look at that when it comes out next year.

[Lord Touhig (Lab)]

My Lords, I introduced a Bill to protect whistleblowers but it did not succeed. Later, my Conservative colleague and friend Richard Shepherd succeeded with the then Public Interest Disclosure Bill. It was a great step forward but no longer protects whistleblowers as it should. It should be revised. Why will the Government not do so?

[Lord Henley]

My Lords, as I have made clear, it was revised in 1998—by the Government of whom the noble Lord was a very keen supporter. I also made it clear that the FCA is looking not necessarily at amendments but at further adjustments that can be made. I commend the noble Lord on all that he did on that occasion. I am sorry that his Bill did not succeed but others did and legislation is now in place. That legislation was amended by the party opposite—again, with support from all sides of the House—and we should see what the FCA can do in the future.