Protection for Whistleblowing Bill [HL]

Lord Sharkey Excerpts

Friday 2nd December 2022 Lords Chamber

[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.