Office of the Whistleblower Bill [HL]

Lord Sikka Excerpts

2nd reading
Friday 25th June 2021 Lords Chamber

[Lord Sikka (Lab) [V]]

My Lords, I congratulate the noble Baroness, Lady Kramer, on this much needed Bill, which I fully support. Whistleblowers take enormous personal risks to protect society from harmful practices, but they receive little support from within the organisation or from industry regulators, which are all too often inclined to silence individuals. Whistleblowers and their families pay a heavy price for exposing wrongdoings and their reward is often insecurity and early death.

The issues become evident whenever anyone looks at the life histories of whistleblowers. One such person was Paul Moore, head of group regulatory risk at HBOS. His revelations foreshadowed the follies exposed by the 2007-08 banking crash. In 2004, he reported reckless risk-taking through unsustainable lending and the sale of dubious financial products, such as payment protection insurance, to the HBOS chief executive. Paul was fired for reporting this. His complaint was put to HBOS’s auditor, KPMG, which is hired and paid by directors, and which inevitably sided with the board. As Paul’s role was senior, his sacking was investigated by the Financial Services Authority, which also sided with the HBOS board. Then came the 2007-08 crash and HBOS became the subject of a £21 billion bailout.

Despite being proved right, Paul paid a heavy price for his principled position. Headhunters ignored him and he never worked in banking again. He had to cope with bouts of depression and ill health. He died last October at the age of 61. Had the board and regulators heeded his warnings, HBOS would potentially not have failed so spectacularly. In fact, HBOS was so aggressive about its lending that it created a race to the bottom for the lending market and increased the risk in the system. The true cost of its recklessness will never be known. Paul’s case shows that employers and current regulatory bodies are conflicted and cannot support or protect whistleblowers. The current legal framework also failed to support and protect Paul. We need an independent office of the whistleblower, as the Bill proposes. I very much hope that the Government will support the Bill.