Protection for Whistleblowing Bill [HL]
(1 year, 11 months ago)
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Baroness Kramer
That the Bill be now read a second time.
Relevant document: 19th Report from the Delegated Powers Committee
Baroness Kramer (LD)
My Lords, I thank the All-Party Parliamentary Group on Whistleblowing and its past and present chairs, Stephen Kerr and Mary Robinson, for the APPG’s role in making sure that this issue is heard in Parliament. Lawyers working with the APPG developed the Bill that I am bringing forward today in a further refined version. I thank the academics who contributed to the Bill, but those lawyers, leading practitioners in this field, and WhistleblowersUK made a critical contribution to drafting a Bill which can work in the real world.
Whistleblowers are the canaries in the mine; they give the earliest alert to wrongdoing of all kinds, especially by powerful entities, both public and private. In a meeting last week with major financial auditors, I was told categorically that 40% of fraud is uncovered through whistleblowing rather than formal management, audit and compliance processes. I cannot think of a scandal exposed in any field, from the NHS to financial services to money laundering, where whistleblowers have not played a vital role. I draw noble Lords’ attention to the news today of the scandals at University Hospitals Birmingham and the way in which whistleblowers there were treated.
Good organisations value whistleblowers and act on their information. We rarely hear about those instances because harm is halted in its tracks. Sadly, some organisations turn on whistleblowers overtly or covertly, and with vindictive hostility. Effective regulators and enforcement agencies regard whistleblowers as a citizens’ army that greatly extends their reach beyond their formal resources and acts as a deterrent. However, virtually none of them provides any protection except confidentiality, which cannot be guaranteed, because the identity of a whistleblower is often evident due to the nature of the information and because many people’s first instinct when they see wrongdoing is to speak out to those in charge. When there is retaliation against the whistleblower, there is no regulator batting on their team.
This country led the way in providing legislation to give some protection to whistleblowers with the Public Interest Disclosure Act 1998, but it is limited and virtually unamendable because it functions only within employment law. It covers only workers speaking out about their employers, not clients, suppliers, contractors and others. PIDA provides redress, but only for a worker facing retaliation and through the employment tribunal, which is a costly process and does not allow for the recovery of legal fees.
Dr Raj Mattu faced a legal bill of £1.48 million to clear his name in the employment tribunal and it took seven years, in which he had no work. On winning, he was awarded only £1.22 million. Lawyers tell me that a whistleblower needs at least £40,000 to get to a tribunal, often a three-year process, and that the case then can linger for years, especially with employer appeals. The awards rarely cover the lifetime career impact and informal blacklisting is never considered.
PIDA provides no mechanism to make sure that a whistleblowing report is investigated or that the whistleblower ever knows what happens. These limitations persuade many people not to speak out. Those who do speak out often become so shell-shocked and frightened that they accept settlements that include confidentiality clauses that effectively silence them—the Americans call them non-disclosure clauses. This is the rationale for replacing PIDA. Of all whistleblowing claims brought before the employment tribunal, only 4% succeed, such is the weakness of the Act in upholding workers’ rights.
The various regulators react differently to whistleblowing. Some are very diligent but others, frankly, regard whistleblowers as emotionally troubled people, not a source of vital information. Many do not use skilled investigators to triage the information and therefore tend to overlook it. If anyone doubts that, I recommend Dame Elizabeth Gloster’s excellent report on the FCA and the London Capital & Finance scandal. Identifying who is the right prescribed person for a particular disclosure can be a nightmare; for wrongdoing in the education sector, I defy anyone to tell me which cases need to be reported to the school, the local authority, Ofsted or the Department for Education. The NHS has the National Guardian system, but it is basically a signposting operation with no power of action.
The European Union recently issued a detailed directive on whistleblowing protection. Feedback on this indicates that it lacks teeth, but it goes in the right direction. The USA is aggressive in recruiting and rewarding whistleblowers. The Bill does not copycat the US system, but the key lesson I take from the US is that only if you have very powerful enforcement and a very strong whistleblower regime can you afford to risk lighter regulation. We have neither in the UK. The UK has waited far too long to update its whistleblower protection, albeit that we will do it in a British way.
The Bill adopts the strategy of creating an office of the whistleblower to act as a champion for whistleblowing and to set standards and good practice, particularly among the regulators and prescribed persons. The last time I brought forward a Bill for such an office, the Minister argued that it would be swamped by overseeing 35,000 whistleblower-initiated investigations a year. But of course, the design is for a compact office that works through the regulators and with relevant persons setting standards for procedures, not investigating cases itself except where no regulator is available. The office would be paid for by fines that it can levy against those who retaliate against whistleblowers—an arrangement that I will elaborate on in a moment.
In his objections last time, the Minister also argued that regulators are experts who need no overarching body to set standards or monitor them. If he remains of that opinion, he needs to explain to this House why so many scandals in so many sectors arise every year because whistleblowers have either been afraid to come forward or have been ignored. Other speakers today will provide evidence of failures by citing individual cases. I tell the Minister that—obviously off the record—regulators have told me directly that they wish for the office to be created, as whistleblowing is an area in which they require expert support and help.
The Bill defines a “protected disclosure”, clarifying what qualifies as the content of such a disclosure, and who is a “relevant person” to whom it can be made. It lets the office of the whistleblower set standards for how the information is treated. The office also has principles and objectives that include encouragement and support for speaking out and the establishment of standards for procedures and reporting. It ensures that disclosures are followed by investigation and action—the most important ask, frankly, of every whistleblower. Importantly, that clause is qualified to exclude disclosures that are “frivolous, malicious or vexatious”. Non-disclosure agreements, which I mentioned earlier and are so often used to supress investigations, are banned specifically for whistleblowers.
At the heart of the Bill lies protection for whistleblowers, so that if the office determines that a whistleblower is at risk of retaliation, it can issue an interim relief order. If the office determines that a whistleblower has been subjected to detriment, it can issue a redress order that can include an order to pay compensation. That is a far speedier process than the current employment tribunal and without cost to the whistleblower: in effect, it is a reversal of the power structure as well. Such powers are balanced in the Bill, so that any party disputing an order levied on them can appeal to the First-tier Tribunal.
The Bill in effect reverses the current burden of proof that requires a whistleblower to prove to a tribunal that the detriment they have experienced is a result of whistleblowing. It also removes the inequality of arms, since any entity or employer challenging a redress order is facing the office, not a lonely whistleblower with few resources. Today, other speakers will vividly illustrate the issues with real-life cases. I have with me some 17 letters, primarily from whistleblowers, including some from Ireland, which is going through a revised version of the PIDA, which many people think could be an answer—the letters make it evident that it is not. We need a change to normalise and eliminate stigma from whistleblowing, which we know will not only expose wrongdoing but, perhaps even more importantly, deter it in the first place. The Bill creates the framework for that culture change, protecting those who do the right thing. I beg to move.
Baroness Altmann (Con)
My Lords, I congratulate the noble Baroness, Lady Kramer, on introducing the Bill and I sincerely hope it might be third time lucky after her two previous attempts. Her Bill is an important contribution to public protection in many areas. It has an absolutely noble and correct objective, which is increasingly important as fraud, scams and malpractice, particularly in the financial arena, have expanded enormously. We are well behind other countries, which seem to value whistleblowers far more highly than we do. We need to champion their actions as protection from the inside against wrongdoing that may not be apparent until it is too late.
The Bill seeks, rightly, to rebalance the current system and redress the asymmetry of power and cost more in favour of the whistleblower. The burden of proof should indeed be more on the accused and it should absolutely be important to ensure that reported wrongdoing is taken seriously and in a way that protects those reporting it. The Bill’s establishment of the office of the whistleblower is very welcome. My experience during my City career showed me the damage suffered by those trying to report wrongdoing. It can definitely be a career-ending move.
Indeed, a good friend suffered stigma and ostracism after reporting financial irregularities. She had seen colleagues basically telling clients things that were not true or trying to sell them positions that they themselves had already decided to get out of and trying to front-run the price. My friend, however, was willing to come forward only because she had already decided that she was going to retire. She knew, and had seen it with others, that were she to come forward at that stage, she would not have worked in the City again. She certainly believed that. Compensation for losing a current job is therefore not really sufficient for the younger whistleblowers. If they can never work in their sector again, there will not be sufficient support for them to have the courage to come forward.
The PIDA 1998 was well intentioned, but it is clearly inadequate. It merely encourages rather than mandates whistleblower protection and the procedures required. So, its main impact is retrospective rather than supportive and pre-emptive, and the costs of employment tribunals are, as the noble Baroness, Lady Kramer, said, prohibitive. The present regulatory system in financial services does not work well enough to prevent wrongdoing. It does not, and perhaps cannot, pick up internal wrongdoing, and it has so often displayed expertise in bolting stable doors after the horses have long galloped away and trampled on unsuspecting members of the public who cross their path. That is why I believe the Bill is right to seek to impose a proactive duty on employers to take whistleblowing reports seriously and prevent the victimisation of whistleblowers.
I support the aims of this Bill, which mirrors that of my honourable friend Mary Robinson MP, chair of the whistleblowing APPG. I accept that there is criticism. There are concerns, for example, about abolishing the PIDA through Clause 26 before we have this new office well-established, but these can be dealt with in Committee. Part 1’s remit is extremely wide, and perhaps one could limit some of the catch-alls—for example, prescribed “other matters” as the Secretary of State might decide by regulations, or the “misuse” of authority. I think the itemised list is excellent. If noble Lords have problems with one or two, they could be merged. Part 4 on civil penalties is really welcome. Indeed, I might go further—why limit the maximum amount to £18 million? For a very large multinational, this could be perceived as just the cost of doing business.
Overall, I hope my noble friend the Minister will take the aims of the Bill seriously. I know that the Government have promised to come forward with a review of the existing system, but we do not have a timetable, nor indeed the remit of that review, so I would welcome any reassurance that they are willing to take this issue seriously now.
Lord Browne of Ladyton (Lab)
My Lords, it is a privilege to follow the noble Baroness, Lady Altmann, and I commend her comprehensive and detailed speech. She gave a lot of examples and good reasons for supporting the Bill in the name of the noble Baroness, Lady Kramer. I congratulate her on achieving a Second Reading, and I commend her and the all-party parliamentary group for their tireless work and persisting with this objective. Maybe the noble Baroness will be lucky enough on this occasion to persuade the Government that this path forward is the appropriate one.
My intention in contributing to the debate is not to share a lot of anecdotes from my experiences as both a parliamentarian and a lawyer in whistleblowing cases. On reflection, given that I have been a “relevant person” for a significant part of my life, I am surprised at how little there is on whistleblowing. My concern about the current state of affairs is the irrelevance and ineffectiveness of the processes and the available legislative structure.
Late yesterday evening, I was trying to work out in my head what order I would put the various facts I had collected in anticipation of speaking today. About half past 10, I decided that I had had enough of that, and I put the papers aside and switched on the television. I heard Kirsty Wark say: “A ‘Newsnight’ investigation reveals a culture of fear in one of England’s biggest hospital trusts, where doctors tell us their warnings about patient safety are met with disciplinary action”. I thought to myself, “Well, if I watch this programme, I may get some insight into how this current system works”, but I was disappointed.
The item, the product of a two-month investigation involving a considerable number of BBC journalists, it would appear, took up about 15 minutes of the programme and included parts of interviews with former and current leading clinicians and the local Member of Parliament. The story, I note, led this morning’s BBC News. I have no intention of engaging your Lordships with the detail of the reported investigation or indeed the deeply worrying claim that in the last 10 years the trust has referred 26 of its doctors to the GMC, but in not one of these cases has the GMC taken any further action. I raise it today because of what we can infer about the effectiveness of the current legislative protection, the Public Interest Disclosure Act 1998, in providing adequate, never mind comprehensive, protection to whistleblowers and the public.
In last night’s programme, the word “whistleblower” was used only once and that was in the presentation’s peroration. It is more present in today’s reporting, but in neither the written reporting today or the BBC’s reporting night was any reference made to the current legislative protection, the Act or indeed any regulator whose attention was brought to this matter and who caused it to be investigated. In fact, it seems that, as a case study it is compelling evidence of not just the ineffectiveness but the irrelevance of the current law.
On ineffectiveness and irrelevance, when previous iterations of this Bill were brought before your Lordships’ House, the argument was that establishing the office of the whistleblower, as this Bill proposes, would duplicate the work of existing regulators. I understand the importance of clear lines of accountability that are not blurred by a regulatory body with overlapping functions or remits, but I would like to know what the regulators actually do. Surely, the onus is on those who make this argument to produce the data showing that we will be disturbing a system that already works. I cannot find that data anywhere. Probably the only question I will put to the Minister is: does he have the data on the number of cases that pass through the regulatory system, and the impact of that? If that data shows what I suspect it does—from anecdotal evidence only—then this process is ripe for complete restructuring. It does not work at anything like the scale it ought to because of the level of wrongdoing going on in all of the spaces where it should work.
In the few seconds I have left, I want to share one experience with your Lordships. As a former Secretary of State for Defence, I am often approached by people who want me somehow to impact the MoD. I mostly have to tell them that I am unable to do that, but I do still have some contacts there. I want to raise the issue of whistleblowers who have signed the Official Secrets Act. I have heard of cases, which for obvious reasons I will not say very much about, of people in just that position who have repeatedly been warned against taking their concerns outside their employment due to their obligations under that Act. The examples of abuses and corrupt and unethical behaviour reportedly include ones that would be considered serious in other environments, including cases of serious sexual violence. These are entirely inappropriate things to do, but people are being intimidated regularly and warned against taking such cases forward, just because of what they have signed in the past. This should not stop them doing it, but it is being deployed to do so.
Baroness Featherstone (LD)
My Lords, it is a great pleasure to follow the noble Lord, Lord Browne of Ladyton, who made some excellent points. I congratulate my noble friend Lady Kramer on this vital Bill.
I was leader of the opposition on Haringey Council when Victoria Climbié was murdered in 2000. “Lessons must be learned” was the oft-repeated answer to all the questions, but no one in authority listened or learned. So it happened again. Again in Haringey, just seven years later in 2007, baby P—Peter Connelly, a 17 month-old toddler—was murdered by his mother’s partner, his mother and one other. By that time, I had become the MP for Hornsey and Wood Green, the western half of Haringey. Again, there had been warnings from whistleblowers.
The particular case I am citing is the story of Kim Holt, one such whistleblower, a doctor in the special clinic run by Great Ormond Street Hospital as outreach at St Ann’s in Haringey, and the clinic to which baby Peter was taken. Why was Great Ormond Street running a child safety clinic in Haringey? It needed to demonstrate outreach work to gain foundation status. Kim eventually came to me as the only person who would listen to her and do something. Kim and I flagged up the dangers caused by the lack of appropriate staffing at the clinic before Peter was murdered. Between us, we saw the police, Haringey Council leadership, Haringey Council social services, the local PCT, the Great Ormond Street board and CEO, the chief nurse of the NHS, and others, but none of them heard what we were telling them—neither me nor Kim. It was too big to fail; protect the institution; reputations were at stake. I do not have long enough to tell the whole tale or include all those who tried to flag up the dangers ahead.
When baby Peter was killed and the furore arose, the media focus was on Haringey Council and Sharon Shoesmith as the head of social services. But it was also this clinic that failed baby Peter and therefore Great Ormond Street, because it was its clinic, its responsibility, and it had been warned. With a long history of hospital admissions and many, many injuries, Peter made his final visit to this clinic—his last hope. The doctor there did not perform a full examination of Peter because he was “miserable and cranky.” Furthermore, no reports had been provided of his previous admissions and attendances at the Whittington or North Middlesex hospitals for possible non-accidental injuries, nor were they even sought. Had they been, the doctor would have seen the history of the myriad signs of abuse that were taking place. According to the post-mortem, Peter would have been suffering from numerous fractured ribs and possibly a broken spine at the time of that last visit. The broken spine would have left him paralysed and unable to empty his bladder.
Post Peter’s death, the clinic was judged “clinically unsafe” in the Sibert and Hodes report—the report commissioned by Great Ormond Street. “Clinically unsafe” was the actual terminology used by investigators post Peter’s death and independently verified by the Royal College of Paediatrics and Child Health investigators. The report found that, while originally four paediatricians were employed, two had resigned and a third, Kim Holt, was put on sick leave due to the overload, thus leaving only one single doctor in charge to staff the clinic, Dr Sabah Al-Zayyat. She was not properly qualified, was tired and overworked, and the report found that she should never have been employed in the first place. She paid a price for her part in this disaster.
The report also found that there was no named doctor for child protection. The named doctor position is the absolute critical requirement for this service. That crucial information was deliberately withheld. Instead of submitting the full report as an addendum to Great Ormond Street and Haringey PCT’s individual management review, Dr Collins, the then CEO of Great Ormond Street, passed over only a partial and selective version, omitting all the key points of danger. The information that had been expunged would have flagged up the dangerous conditions operating within the child health safety team for which Great Ormond Street had the responsibility. This report was kept secret and was released only in response to a freedom of information request from the BBC to Tim Donovan, with whom I worked to expose this horrific cover-up for a period of two years.
Dr Holt had escalated her concerns to the chair and CEO of Great Ormond Street in November 2006; she had been to the GMC. I took it to the board of Great Ormond Street, who basically told me to get lost—as I said, it was too big to fail. How dare I question this great establishment? Shoot the messenger—silence the whistleblower.
Kim was ostracised by the senior management team. Her workload had been unsustainable and she had been signed off work with work-related stress in February 2007. Great Ormond Street then moved to remove her from her post, with an offer of a year’s salary and the expectation that she would sign a non-disclosure agreement. Great Ormond Street would not allow her to return to work. The offers of money increased to £120,000, and that was signed off by the Treasury. Kim declined, as she felt that the concerns she raised were important and relevant for the inquiries that had, sadly, begun to happen. She eventually returned to work four years after her initial period of sick leave. Great Ormond Street has since apologised to her for the distress caused. It is too big to fail, as in so many cases. These are the reasons why my noble friend’s Bill is vital.
Baroness Jones of Moulsecoomb (GP)
My Lords, I thank the noble Baroness, Lady Kramer, for bringing this Bill and for her tenacity in continuing to bring it, because after reading up on this issue, including the excellent Library briefing, I am shocked that we do not have something like this in law already. I do not understand why there is such a gap in human rights and in plain justice. I very much hope that the Minister will listen hard to what we are saying and will say that it is a fantastic Bill and he will pick it up immediately.
I was on the Metropolitan Police Authority for 12 years, and in that time I was put on to the domestic extremist database by the police. I am never sure which commissioner actually did it. I have challenged all of them, and they all blamed somebody else. I was on it for something like 10 years, and it was only by chance that somebody said, “Are you on the database?” So I asked, and I found out that I was. I got a copy of the list of things that they had recorded about me. Quite honestly, it was not as good as if they had just asked for my diary, which I would have been more than happy to give to them.
However, I had first-hand experience as a whistleblower because when I asked to see the full files that the Met Police held on me as a domestic extremist, I was told by senior officers, including the deputy commissioner, that they had been destroyed. Sometime later, I thought I might just check again, and I asked. At that point, a Met Police sergeant told a journalist that he had just seen my files destroyed. This was some months after I had been assured by senior officers that they had been destroyed. After that time, I of course followed it through, and the Met covered up as much as it could, but the sergeant had a very tough time within the Met from that moment on and suffered for his honesty.
The noble Baroness, Lady Kramer, mentioned that whistleblowers are often overlooked as emotionally troubled, but quite honestly, after going through the sort of trauma that they experience when they tell the truth about some quite nefarious goings on, they will be emotionally troubled because they are treated so badly.
As we have heard, all the Public Interest Disclosure Act 1998 does is provide some sort of compensation if an employer victimises or sacks a whistleblower, and that is always within very limited parameters. It is an after-the-event protection that does nothing to resolve the underlying issue, whether that is exposing a legal, health and safety or environmental issue or cover-up. There should be a statutory requirement for an employer or public body to investigate the whistleblowing allegation with penalties if it does not, in a similar way to safeguarding children and vulnerable adults. This Bill is sensible and needed, and the Government should support it. I very much want this Bill to go through, but I am slightly conflicted because it would not go through if the Government collapse, and I think on balance I would rather have the Government collapse than the Bill, but that is nothing against the Bill. That is totally against this Government.
Lord Shinkwin (Con)
My Lords, I begin, like other noble Lords, by offering my heartfelt thanks to the noble Baroness, Lady Kramer, for what the noble Lord, Lord Browne of Ladyton, rightly described as her persistence in championing this vital issue and to Mary Robinson MP in another place for her efforts. I say “heartfelt” because this cross-party Bill is personal. I was a whistleblower without the protection that this Bill would provide. It was one of the most frightening experiences of my life—and I have certainly had a few because of my disability.
I will never forget the sense of isolation and self-doubt that threatened to overwhelm me—until I googled “whistleblowing” and came across the wonderful Cathy James, the then chief executive of the UK’s premier whistleblowing charity, now called Protect, and her equally helpful colleague, Francesca West. Within minutes of calling their helpline, I was assured that the situation I was describing did merit my concerns.
As recorded in Hansard, I shared my deeply unpleasant experience with noble Lords in our debate on civil society and lobbying on 8 September 2016, so I do not intend to rehearse the details today. However, I will reiterate that I would never have believed that the behaviours I witnessed in the charity sector were possible had I not seen and experienced them myself. Bullying pressure was applied by a senior director to try to force me to approve a payment from charitable funds, which I made clear in writing would be unethical. The wholesale and expensive restructuring of the organisation I was working at resulted in a swathe of thoroughly decent former officers from different wings of the Armed Forces effectively being removed from their roles as charity managers because they had had the temerity to stand up to the civvies who had the whip hand on the charity’s executive board. This was done so cynically and systematically, with these former senior officers required to reapply for their jobs after years of excellent appraisals, only to be told that they had failed a psychometric test. All this happened without any real accountability. It was a clear abuse of power.
The individuals concerned—Chris Simpkins, Sue Freeth, Sharron Lewis-James and Jane Charlton—have all since moved on, and the wonderful charity to which I refer, and for whose vital work I will always have the greatest respect, the Royal British Legion, is thankfully now under new management. Yet for some, the scars left by those individuals’ actions and behaviours will never heal.
I was the lucky one. Thanks to Cathy James, who put me in touch with an outstanding solicitor, Clive Howard, then at Slater and Gordon, I had a degree of protection from those individuals which meant that I could, reluctantly, leave the job I loved on my terms. The same did not apply to the county managers I have mentioned, whose sense of honour, I suspect, played a part in their not pursuing the same course that I was forced to take. Another factor was that they probably felt they had nowhere to go, and the individuals that I have already mentioned will have known that too.
This Bill is crucial because it would have provided a shield for myself and the county managers and, no less importantly, as the noble Baroness, Lady Kramer, has already said, a deterrent against such actions and behaviours being seen as acceptable in the first place. So I particularly welcome the provisions in Clause 1 and the expansion of the range of relevant matters to include mismanagement of public funds—to which I would add the mismanagement of charitable funds—and the misuse and abuse of authority, as proposed. I also welcome the proposed establishment of the office of the whistleblower and its objectives, including the promotion of good governance. Clause 6, and the preservation of the confidentiality and anonymity of whistleblowers, is paramount. I could not risk going to the Charity Commission, because neither would have been guaranteed in my case.
In conclusion, this Bill is sensible, it is necessary, and it enjoys cross-party support. Subject to further scrutiny in Committee, it deserves the support of your Lordships’ House as well.
Lord Berkeley (Lab)
My Lords, I also fully support this Bill and I congratulate the noble Baroness, Lady Kramer, on her persistence in bringing forward her third attempt. I also pay tribute to all the people who supported her and the all-party group.
I will start by repeating the words of Mary Robinson MP, who said that
“if you name an industry, I can name … a scandal brought to light by whistleblowers”.—[Official Report, Commons, 26/4/22; col. 598.]
That is a pretty wide generalisation. She went on to say that ignoring whistleblowers costs lives. Whistleblowers are proven over and again to be the first line of defence against crime, corruption and cover-up. They do not do it for fun, pretty obviously; they do it because they want to protect other people from the impact of wrongdoing. This is the Bill that they want, because it puts whistleblower issues front and centre and protects those who speak up from retaliation.
I will give a few examples. I expect that many noble Lords will have read the Reading the Signals report about the east Kent NHS trust last year and the hundreds of avoidable deaths and injuries to mothers and babies. It is a traumatic case and report, but it has also cost the NHS about £8 billion in compensation—let alone the damage done to the people concerned.
I have other examples. I was first approached by a whistleblower on HS2—somebody called Doug Thornton. I have spoken about him before. He is a chartered surveyor, a fellow of the Royal Institution of Chartered Surveyors and a former top civil servant. He was recruited by HS2 to be its land and property director, to value and purchase all the land needed. He identified large holes in the accounts, and delays, and he believed that HS2 was misleading Parliament as to the real cost of the project. After alerting the board and chairman, he found it necessary to resign. I do not blame him, but of course he lost his job and his career.
Many whistleblowers approached Michael Byng, a quantity surveyor who I have been working with closely, alleging fraud on the HS2 project in some pretty wide areas. As noble Lords will know, Michael Byng believes that the cost of the project should be £158 billion, compared with the Government’s costs of £102 billion, but what is important is that whistleblowers inside HS2 have contacted Mr Byng to offer their agreement and support for his appraisal costs, which they believe are being deliberately withheld from Parliament by HS2 Ltd and the Department for Transport for fear that knowledge of the true cost would lead to curtailment and cancellation.
I can go back through HS2 phase 1—London Euston is not sorted, nor is the station on the Great Western main line, and there are serious ground settlement conditions up the line—but that really is not the point. The point is that railways now use a method of measurement that I will call RMM1. HS2 denies that it uses it, but all the people within HS2 say that it is used.
Of course, this has resulted in HS2 coming up with two parallel sets of accounts. This is like having two columns for your cost accounts: one we keep for ourselves and one we share with Parliament. According to the whistleblowers, they are very different accounts. There are many reasons for this, but the general reality is that they are trying to delay news of future costs so that the news does not get out until it is too late to do anything.
These whistleblowers are directing their allegations to Mark Thurston, the chief executive of HS2 Ltd; Michael Bradley, the former chief financial officer of HS2; Rob Doran, the former project controls director of phase 1; and Tim Smart, the current managing director of phase 2. However, Mark Thurston and the Permanent Secretary are accounting officers, and accounting officers are supposed to account to Parliament that the money they say they need is sufficient and that it is sufficient to finish the job. I do not know how they can do that, because, at the moment, there is a 50% difference.
I hope that the large number of whistleblowers in HS2 will eventually receive some reward for what they have told Michael Byng and that they will tell other people quite soon. However, it is extraordinary that none of these allegations have been independently investigated. I hope that this Bill will be a safety net for all whistleblowers. There is a similar situation with Crossrail, which I will not go into because I do not have time. The whistleblowers really need to avoid the fear of retaliation; this will undoubtedly save the company and the country money. I hope the Government will give this Bill every encouragement.
Lord Sharkey (LD)
My Lords, I congratulate my noble friend on securing this debate and welcome her Bill. I declare an interest as a vice-chair of the APPG for Whistleblowing.
The Bill addresses important defects in our current whistleblowing system, without being overly prescriptive. These defects are a cause of real damage and distress to individuals and harm to the public interest. They are also a barrier to proper oversight, control and remedial action in both our public and private sectors. Both these sectors contain extremely large, complex and well-funded organisations. This presents not only a striking inequality of arms when it comes to whistleblowing but a real difficulty for outsiders, including regulatory bodies, in spotting wrongdoing within these organisations, either at all or in a timely manner. Whistleblowing by insiders is a vital counter to malfeasance in these large and complex organisations. Unfortunately, however, the protections and incentives needed to make whistleblowing a realistic prospect are largely missing from our UK regime.
Things are very different in the US, as my noble friend Lady Kramer noted, where many states have their own whistleblower regimes, as do some of the main federal agencies. One of the biggest whistleblower programmes belongs to the SEC. The IRS Whistleblower Office’s annual report to Congress for the fiscal year 2022 makes the point:
“Enforcement actions brought using information from meritorious whistleblowers have resulted in orders for more than $6.3 billion in total monetary sanctions, including more than $4.0 billion in disgorgement of ill-gotten gains and interest, of which more than $1.5 billion has been, or is scheduled to be, returned to harmed investors.”
The importance of whistleblowers in the financial services industry was explicitly mentioned by the SEC chair, Gary Gensler, who said:
“The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.”
We could not say the same in London, where the protections and awards for whistleblowers are trivial and ineffective by comparison. It is not uncommon, for example, for agreed settlements to be almost entirely eaten up by the whistleblower’s obligation to pay their own costs. The average tribunal award is around £28,000, less than the average UK annual wage and often less than the cost of bringing the action.
The United States typically operates with light regulation and very strict enforcement and penalties, using information from whistleblowers. It is an irony that the UK is about to embark on a lightening of regulations but with no corresponding increase in either incentives or protections for whistleblowers. The Bill provides the mechanism for putting that right in the office of the whistleblower. It does not, of course, contain a proposal for a reward mechanism, but it would allow the office of the whistleblower to create an appropriate regime if Parliament so directed.
So far, I have discussed whistleblowing in the context of the financial services industry, but I will now briefly illustrate examples from the manufacturing industry and public services. A whistleblower was a senior engineer in one of the largest sectors of what remains of our manufacturing industry, working for a major company and dealing with SME supply chains. They had been raising concerns since 2018 about a number of potentially catastrophic defects in safety mechanisms across a range of products produced by the supply chain. The whistleblower’s requests to escalate within the manufacturer the damning simulation test results evidencing catastrophic failure were turned down by senior management. The whistleblower was repeatedly warned not to open that can of worms. On investigation, it was found that the whistleblower’s concerns were valid, and remedial action for the supply chain was requested by the manufacturer. The supply chain SME reacted by threatening the whistleblower with violence and other abuse. Eventually, the manufacturer confirmed that, in dealing with the whistleblower, it had failed to uphold the standards set out in its own staff handbook, acknowledged detriment and proposed his exit from the business with a settlement agreement containing some confidentiality terms. The settlement was not financially generous, but it helped to settle the legal costs incurred. But the whistleblower was out of a job and had been through an extended and brutal period of uncertainty and unpleasantness, with effects on mental health. All of this happened due to the whistleblower reporting defects that, uncorrected, could well have cost lives. Neither the manufacturer nor the supply chain SME suffered any penalty or sanction.
As we have heard, there are also grounds for concern in the public sector. The NHS has had a well-documented series of problems. The noble Lord, Lord Browne, mentioned this, and it was made clear by the “Today” programme’s lead story this morning, which was on the maltreatment of whistleblowers by the University Hospitals Birmingham trust. One reason given by healthcare professionals for not blowing the whistle is fear of retaliation. The recent Ockenden report on the decades-long maternity scandal in Shrewsbury and Telford suggests that, even where the concerns are extremely serious, staff do not speak up for that very reason. As Sir Robert Francis concluded in his mid-Staffordshire public inquiry report nine years ago:
“A greater priority is instinctively given by managers to issues surrounding the behaviour of the complainant, rather than the implications for patient safety raised”.
This focus on the whistleblower and identifying him or her is clear from the recent witch hunt in the West Suffolk NHS Foundation Trust. Consultants were actually asked to provide fingerprints and handwriting specimens in an attempt to identify a whistleblower, which is all too reminiscent of Jes Staley’s outrageous attempt to identify a whistleblower when he was CEO of Barclays. That cost him at least $1 million in penalties, but such penalties are regrettably very rare in the UK. I believe that attempts to identify whistleblowers should be firmly on the list that the office of the whistleblower takes forward.
The office of the whistleblower, as proposed in the Bill, will put an end to these practices and will drive a cultural change that will not only prevent retaliation but incentivise these large organisations to act with integrity. I hope that the Minister will find himself in some sympathy with this timely and important Bill.
Lord Bassam of Brighton (Lab)
My Lords, all speakers have congratulated the noble Baroness, Lady Kramer, on her persistence, and I join in that. This is her third time of asking, but she has pursued this case at other parliamentary moments as well, and we can all applaud it. I start from the premise that whistleblowers fulfil and perform an important public service. As we have heard in the debate thus far, barely a day goes by without there being news of a scandal that would never have come to light had it not been for the public service provided by a whistleblower.
As we have heard, the key purpose of the Bill is to increase the protections for whistleblowers in the UK. This follows concerns raised by parliamentarians and whistleblowing support organisations about the general effectiveness of the current Public Interest Disclosure Act 1998 in providing adequate and comprehensive protection to whistleblowers and the public. The Bill would introduce several protections for whistleblowers, including the establishment of an independent office of the whistleblower. The Bill also creates offences relating to the treatment of whistleblowers and handling of whistleblowing cases. It would repeal the UK’s current whistleblowing legislation. The case for that has been made by a number of Peers during the debate. My noble friend Lord Browne of Ladyton said that the current framework does not work, and he is absolutely right.
The Bill has more to it than its predecessor. In particular, it focuses on creating a criminal offence of subjecting a whistleblower to detriment, and it brings forward civil penalties that could be imposed on a person for failing to comply with obligations placed on them by the office of the whistleblower. Those measures reflect the concern at the treatment of whistleblowers.
Several whistleblower-support organisations have welcomed the Bill, particularly the creation of the office of the whistleblower. Not all have agreed that the Public Interest Disclosure Act 1998 should be repealed, and some have argued that the legislation should be reformed instead. That is a genuine and real debate. The Government have in the past committed to undertake a review of the UK’s whistleblowing legislation, and in October said that the scope and timing of the review would be set out in due course. My question to the Minister is: when will that be?
The establishment of the independent office of the whistleblower was first raised by the noble Baroness, Lady Kramer, in 2017 in Committee on the then Criminal Finances Bill. At that time, she introduced an amendment that aimed to protect and provide compensation for whistleblowers. She said that establishing an office would help to enshrine the importance of whistleblowing in the public domain. I think that we are all agreed that whistleblowers need more protection, but we are not necessarily all agreed about the form that it should take.
In April 2021, the Government said that they remained committed to reviewing whistleblowing legislation and that the review would be carried out
“once sufficient time had passed for there to be the necessary evidence available to assess the impact of the most recent reforms”.
We have had plenty of time to consider these things—why have the Government not brought anything forward between April 2021 and now? The case for a review is long overdue, and I hope that we will hear from the Minister this afternoon exactly where they are at. In July, the Government said that the scope and timing of the review would be confirmed in due course. Several months have gone past since that observation was made. Most recently, on 26 October, in their response to the House of Commons Foreign Affairs Committee’s report on illicit finance and the war in Ukraine, the Government reaffirmed its commitment to reviewing the whistleblowing framework. They said that the scope and timing of this review were still under consideration. Why so many promises and so little action?
When people come forward, they do not do so for money or fame; it is often in spite of the impact on their career or family. They do so because, as other noble Lords have said, they believe that they are doing the right thing and that the public have a right to know. There are many examples where whistleblowing could have made a real difference and saved lives: Grenfell, Carillion and Boeing 737 MAX, just to name a few. This afternoon, we have been reminded of some of the terrible cases involving NHS trusts and charities. Yesterday we had a debate in your Lordships’ House, in which my noble friend Lord Browne and I took part, focusing on the Metropolitan Police. If ever there was an institution in which protecting whistleblowers was important, that would be one very high up on our list.
We know that the current legislation is not adequate or fit for purpose. It is over 20 years old. While it was workable at the time, it does not ensure that whistleblowers now get the protection and support that they need. Its use essentially comes down to employment tribunals, where individuals must face their employer, with relevant individuals such as trustees, trainees and volunteers being excluded from the law and regulators being unaccountable for the way that they treat whistleblowers, who do not even get legal aid and must personally pay their legal fees. Ultimately there are no official standards for whistleblowing, and employers must meet all recognised procedures for them to follow. That can have a serious impact on how quickly whistleblower reports are accessed.
Sadly, it seems to me and, I think, to others in this debate, that the Government do not take this as a priority. As many others have said, the most recently introduced change was back in 2017: a new legislative requirement for most prescribed persons to produce an annual report on whistleblowing disclosures made to them by workers and employees—a useful move but perhaps only a small one that has really not taken us much further forward.
In terms of the Bill, the idea of an office of the whistleblower is certainly one that we value, and we on the Labour Benches would welcome the opportunity to have further debates on that issue. It would be helpful to hear the following from the Minister: what concerns does he have about a dedicated office that have prevented the Government from bringing it forward? How can the protection and support that such an office might offer be effective without the creation of something like an office of the whistleblower? If the Minister’s and the Government’s concerns are financial, what estimate do they make of the cost that is so much of a barrier?
The Labour Party has suggested giving protected status to whistleblowers and imposing a statutory duty on employers to prevent victimisation, something that many noble Lords in this debate have made reference to. Does the Minister support such proposals so that we can prevent discrimination against victims?
Whistleblowers play an important role in protecting the public and consumers. They save lives, money and reputations, and they could do much more with protection. They could ensure that businesses and services operated more effectively and improve efficiency, as well as preventing serious incidents and accidents from occurring. We need to ensure that they receive the right and proper support. To do that, we believe that action is needed. I look forward to hearing what the Minister proposes by way of his response. The Bill goes a long way in the right direction. It is worthy of further consideration and of your Lordships’ support.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I join the rest of the House in congratulating the noble Baroness, Lady Kramer, on securing Second Reading of her Private Member’s Bill. As a former co-chairman of the All-Party Parliamentary Group on Whistleblowing, she has continuously highlighted the important role that whistleblowing plays, shining a light on wrongdoing and advocating reform in this area.
I thank all other noble Lords who have contributed to this excellent debate, many of whom spoke passionately about the experiences of whistleblowers. Like the rest of the House, I was appalled and saddened to hear about the bullying and unethical treatment of my noble friend Lord Shinkwin, and I was sorry to hear about the experiences of the noble Baroness, Lady Jones. It is of course ridiculous that the Metropolitan Police was wasting resources on keeping a file on her; I assume it must have arisen from her membership of the jam-makers’ liberation army and other such extremist organisations. Frankly, it is infuriating when you hear reports, as you often do, of the police not having the resources to investigate thefts, burglaries and other matters when they were wasting resources on such things. I hope their practices have been reformed since then.
I was concerned, as I am sure the rest of the House was, to hear about the issues raised regarding University Hospitals Birmingham. I confirm that the Department of Health and Social Care has approached NHS England for a full update in relation to that matter.
The noble Baroness, Lady Kramer, asked why so many scandals still occur. It is important to remember that the whistleblowing framework provides workers with a route to raise such concerns to their employer or prescribed person.
The noble Lord, Lord Browne, asked what evidence there is that action is being taken on whistleblowing disclosure to regulators. The Government are aware of the importance of transparency in how the framework for prescribed persons—they are usually regulators—for whistleblowers works and how they deal with whistleblowing disclosures. That is why, in 2017, we introduced a requirement for most prescribed persons to report on the whistleblowing disclosures that they receive. Those reports show that over 50,000 whistleblowing disclosures were made to prescribed persons in the 2021 financial year and the range of actions that regulators can take in relation to whistleblowers.
My noble friend Lady Altmann and the noble Lord, Lord Bassam, asked for reassurance that the Government take whistleblowing seriously and what our plans are for the review of the whistleblowing framework. There is no doubt that the Government value the important work that many of these whistleblowers do when they speak up. From our point of view, recent action to strengthen the whistleblowing framework includes guidance for prescribed persons, and for whistleblowers and employers.
As I mentioned, we introduced a new requirement in 2017 for most prescribed persons to produce an annual report on whistleblowing disclosures. We also made a recent update to the prescribed persons order—the bodies and individuals that are prescribed for whistleblowing. These changes will come into force later this month. As mentioned, we are also intending to carry out a review of the existing framework and will share further information on this in due course.
I turn now to the contents of the Bill, which would repeal the Public Interest Disclosure Act 1998 and introduce a new legal framework for whistleblowers. The Government’s concerns with this Bill are twofold. First, it is premature to make legislative change ahead of the planned review. Secondly, there are some difficulties with the approach to whistleblowing policy in this Bill. I will briefly set out some of the key concerns about this approach.
Part 2 of the Bill contains provisions on the office of the whistleblower. As well as providing advice and guidance, the office would have significant powers to set and enforce standards. I understand that the intent of this provision is to provide consistency in standards for regulatory investigations that have been triggered by whistleblowing information. Our concern is in relation to how the office would interact with the role of regulators.
Under the existing framework, there are currently over 80 prescribed persons for whistleblowing, many of whom are regulators. In our view, an overarching body would not have the expertise to advise each sector on how disclosure should be investigated and what further action may be required. To impose an overarching standard could also jeopardise the ability of regulators to develop whistleblowing frameworks that are responsive to the specific challenges in their particular sector. Should the new body have these functions, it would require significant staffing resources, with diverse expertise across a range of sectors, to enable it to carry out these functions effectively.
The Bill introduces new criminal offences relating to whistleblowing. This means that it would become a criminal offence to subject a whistleblower to any detriment. It would also be an offence if a person who had received an information notice from the office provided false information or prevented the office investigating relevant materials.
I note the concerns from my noble friend Lady Altmann on employment tribunals, but this would be a big step away from what the current framework aims to achieve, which is openness and transparency in how disclosures are handled. I would not want the Government to take a step away from the employment tribunal system without considering all the evidence that would be gathered through the planned review.
I thank the noble Baroness, Lady Kramer, for bringing the Bill to the House and for enabling this important debate. But, as it stands, the Government are not convinced that the Bill is the right solution to the matters that have been raised.
Baroness Kramer (LD)
My Lords, I will follow the usual convention of not giving a wind-up speech at the end of a Private Member’s Bill, but I acknowledge that so many of your Lordships spoke so eloquently. There were brilliant speeches about very individual situations that bring to light exactly the culture and reality for whistleblowers today. I point the noble Lord, Lord Callanan, to that. These are not exceptions but, if you like, exceptions that prove the rule. Although he can cite many instances in which known whistleblowers are recognised and acknowledged by regulators, so many scandals continue to occur—week after week, month after month, sector by sector—that it is clear that the current system is completely inadequate.
We have dealt with the problem he noticed in the Bill by seeking to fund the office of the whistleblower through its share of the penalty system. This is a self-funded body. He will recognise that, in the United States, which has a much more expansive system, that works exceedingly well. There are plenty of ways to extrapolate from that opportunity and to make sure that there is no call on the public purse to have this office of the whistleblower in place.
If the Minister feels that the regulators are troubled by the idea of an overarching body, I suggest that he talks to them. I think he will discover that they find this area so difficult to manage that they welcome the idea of having in place an office and someone with the expertise to help make sure that their standards are appropriate.
On the issue that the noble Lord, Lord Browne, raised about the Official Secrets Act and making sure an investigation happens, this is about not exposure to the press but having in place within any organisation the methodologies, procedures and standards to make sure that, when a whistleblower raises an issue, it is properly and appropriately investigated.
I finish with this, because to me this is the absolute key and the reason I beg the Minister to either pick up this Bill or proceed with his review urgently. I echo the noble Lord, Lord Bassam, and so many others who spoke. Every day that we do not have proper protection for whistleblowers, someone is making the decision not to speak out against abuse of people in a care home, misogyny in the police force, or the scam perpetrated by their financial services institution. Carry this across so many entities and the damage to the public welfare and the public interest is recognised as substantial.
As ordinary citizens we pay a price for the absence of an effective, powerful scheme to provide proper protection for whistleblowers to ensure that people speak out at the earliest possible opportunity and that action can be taken to protect us in the many ways that I am sure the Minister believes ought to be available to us. Please will he act with urgency? I was so upset to hear him again use the words “in due course”, which are recognised in this House as the long-grass statement. I hoped we might get a “shortly”. Will he please urge his colleagues to act soon, before more people suffer because detriment is not exposed in the very early days when it could be?