Economic Crime and Corporate Transparency Bill

Earl of Minto Excerpts

Committee stage
Tuesday 9th May 2023 Grand Committee

[The Minister of State, Department for Business and Trade (The Earl of Minto) (Con)]

My Lords, I first draw attention to my interest as set out in the register, as a non-executive chairman of Not Another Bill Limited. Secondly, I want to thank noble Lords for their warm welcome to the hot seat, which is much appreciated.

I am pleased to be able to represent the Department for Business and Trade in my new role as Minister of State. I thank all noble Lords for their inputs into the debates so far and express my pleasure at being able to speak today on this amendment. I also thank my ministerial colleague and noble friend Lord Johnson of Lainston, who is indeed in Hong Kong, for his support in preparation for today’s debate.

Moving on to the Bill itself, I thank the noble Baroness, Lady Kramer, for raising the important matter of whistleblowing. As a former co-chair of the All-Party Parliamentary Group for Whistleblowing, she has continuously highlighted the important role that whistleblowing plays in shining a light on wrongdoing. The Government have a significant interest in ensuring that our whistleblowing framework is robust. An effective whistleblowing framework is a vital part of the UK’s ability to tackle corruption and all forms of economic crime and illicit finance. As these acts are by their very nature often covert, those working for an organisation can be a key source of intelligence for authorities.

My concern with this amendment, however, is two-fold. First, these reforms risk duplicating elements of the existing framework, leading to a confused landscape, and potentially at considerable cost. As I understand it, this position was explained by my noble friend, Lord Callanan, during Second Reading of the noble Baroness’s Protection for Whistleblowing Bill in December last year. So I will not go into detail here but, just to recap, the Government are concerned about how such an office would interact with the role of regulators. As has been mentioned, a new body could also come at a considerable cost, as it would require significant staffing resources, with diverse expertise across sectors, to enable it to carry out these functions effectively.

Secondly, it would be premature to make legislative change ahead of the review of the whistleblowing framework, which everybody has mentioned. The review, which the Government launched on 27 March this year, will examine the effectiveness of the whistleblowing framework in meeting its intended objectives—that is, to enable workers to come forward to speak up about wrongdoing and to protect those who do so against detriment and dismissal.

The noble Baronesses, Lady Kramer and Lady Altmann, asked whether the review will consider the merits of establishing an office for the whistleblower. The review will consider evidence related to the effectiveness of the whistleblowing framework in meeting its intended objectives. This is to enable workers to come forward to speak up about wrongdoing, and to protect those who do so against detriment and dismissal. As the right reverend Prelate explained, proper protection is needed against terrible misery and personal risk.

The review will consider a number of topics that are central to the whistleblowing framework. These include: how workers are defined for whistleblowing protections; the availability of information and guidance for whistleblowing purposes; and how employers and prescribed persons respond to whistleblowing disclosures, including best practice. The research for the review will conclude in autumn 2023. The full terms of reference for the review are published on GOV.UK.

There have been a number of very specific questions. I think that I have written down all those on data so, if it is all right with noble Lords, I shall respond swiftly in writing to some of the specific questions that were asked. There is no doubt that there is a lot of data behind this amendment; it is important that proper answers are provided.

[Lord Browne of Ladyton (Lab)]

I thank the Minister for giving way. On 2 December, I asked the noble Lord, Lord Callanan, whether he could provide the data on the performance of regulators and other prescribed persons in relation to whistleblowing, specifically asking the same question that I asked the Minister. He did not answer it then and he has not written to me. Does this data exist? I suspect that it does not.

[The Earl of Minto (Con)]

I do not know whether it exists; if it does, I shall find out and let the noble Lord know. I think it must exist, but we will have to see. The other important issue was the expense of going to a tribunal, which is a very serious issue. My understanding is that the review will certainly take that into consideration.

Not long after taking office, my ministerial colleague the parliamentary Under-Secretary of State, Kevin Hollinrake MP, committed during the Public Bill Committee in the other place to get this review moving. We have followed up on this commitment and continued to deliver on whistleblowing policy. On 17 October last year, the Government laid before Parliament the most recent update to the prescribed persons order. This came into force in December and is a significant improvement to the framework, adding six new bodies and all Members of the Scottish Parliament to the list of bodies and individuals that a worker can blow the whistle to. I hope that demonstrates to noble Lords that the Government are very serious about whistle- blowing.

I welcome the continued constructive engagement on this topic, and I know that Minister Hollinrake has valued the discussions to date with parliamentarians and organisations representing whistleblowers in preparing for this review. However, this amendment could create a confused landscape for whistleblowing, potentially at considerable cost. It would also pre-empt the ongoing review of the existing framework. I therefore respectfully ask the noble Baroness, Lady Kramer, to withdraw it.

[Baroness Kramer (LD)]

My Lords, I thank all noble Lords who have spoken in this superb debate. I thank the noble Baroness, Lady Altmann, and the right reverend Prelate the Bishop of St Albans for giving those personal examples. They bring home to people the experience that we are trying to deal with, so that people can relate to them and ask “Would I be brave enough? Would I let this happen to me and my family?” and understand why whistleblower protection is so important.

There were some specific questions. First, if ever I have seen a red herring, this question of cost must be it. In the United States, the Office of the Whistleblower has turned into a profit centre for the US Treasury, because the number of cases it can drive through and the consequences of remuneration, fines and compensation have meant that it not only covers its costs but can return substantial amounts to the Treasury. The Minister is most welcome to get the latest figures on those. I do not have them in front of me, but he will be able to access them very easily. So cost is not the issue.

We are often told that we will need an enormous, monstrous octopus of an office. That is not what we are talking about. We need a place where people can go and know that their disclosure is absolutely safe. As other noble Lords have said, including the noble Lord, Lord Cromwell, people want to know that there is genuine follow-up on the issue. He asked how the language of my amendment on investigation would work. It would work by acting through the regulators. I have had many a conversation with regulators and, interestingly, they are all desperate for something like the Office of the Whistleblower, because dealing with whistleblowing is completely outside their standard remit—how they structure themselves and hire their personnel. This creates that exchange with the Office of the Whistleblower as a director of the information to the regulator. That dynamic gives us the assurance that there will be action. The office can chivvy if action does not follow.

The noble Lord, Lord Cromwell, also asked how the office of the whistleblower would protect individuals from detriment. This is a very abbreviated amendment because it has to come within the scope of the Bill. My Private Member’s Bill deals with the issue in far greater detail, but the logic of it is basically that, when the office determines that a whistleblower has received detriment, it will be able to order the employer—although this applies to all whistleblowers, so it is a broader picture—to provide compensation. However, if that employer or company decided that the compensation was inappropriate, it could take the office of the whistle- blower to the First-tier Tribunal. But in that case, facing each other, you would have the institution of the office of the whistleblower and the institution of the employer or organisation on the other side. You would not have the David and Goliath situation of a poor, lonely whistleblower who has already spent all their savings and is borrowing money to continue their case facing an employer which can afford to pay for the best counsel in the country and continue to drag out the entire process on appeal after appeal. So it changes that dynamic.

I refer noble Lords back to my Private Member’s Bill. I have always said that I am not precious about exactly how all this is done, but the core principles of it need to be seized and taken. I am sad that the Minister again uses the term “workers”, because there are so many people who blow the whistle, including contractors, suppliers and customers, and they are all often subject to retaliation and blacklisting—and that matters.

I think that I have covered most of the questions that were asked, but I would be glad to continue this conversation off-piste rather than take up more time in Committee today. This is an absolutely fundamental issue. One opportunity in this Bill is to echo how it has been done in the United States, where the Office of the Whistleblower is set within a financial services regulator structure, and this amendment would enable that to happen—or there is the alternative to going to a much broader office of the whistleblower. When you talk to the regulators dealing with education, the National Health Service, nuclear waste or whatever else, they will all say, “For goodness sake, can you take this burden of dealing with whistleblowers off my shoulders? I really need a professional and focused organisation sucking in this information and making sure that I get what I need to act as a regulator”. I can assure the Minister that, while none of them says it publicly, he will find that, privately, the regulators are very much in support of this kind of arrangement. I beg leave to withdraw the amendment.