Draft Prescribed Persons (Reports on Disclosures of Information) (Amendment) Regulations 2022

Kevin Hollinrake Excerpts

Wednesday 30th November 2022 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

I beg to move,

That the Committee has considered the draft Prescribed Persons (Reports on Disclosures of Information) (Amendment) Regulations 2022.

It is, as always, a pleasure to serve with you in the Chair, Mr Gray. Before I speak to the regulations, I will briefly touch on how our whistleblowing framework works. As a former vice-chair of the all-party parliamentary group for whistleblowing, I am keen to ensure that we get this legislation in the right place.

The Employment Rights Act 1996, as amended by the Public Interest Disclosure Act 1998—PIDA—enables workers in all sectors to seek redress if they are dismissed or suffer detriment at the hands of their employer because they have blown the whistle. Workers who believe that they have been dismissed or otherwise detrimentally treated for making a protected disclosure can complain to an employment tribunal. To be covered by these rights, a worker who makes a disclosure must reasonably believe that they are acting in the public interest and that the disclosure tends to show past, present or likely future wrongdoing. A worker must also generally make their disclosure either to their employer, legal adviser or the relevant prescribed person.

There are over 80 prescribed persons across numerous sectors, including bodies such as the Equality and Human Rights Commission, the Health and Safety Executive, the Financial Conduct Authority and the General Medical Council. Prescribed persons have been given this legal status because of their ability to take action in respect of a disclosure made to them. Many have extensive knowledge and understanding of the subject matter and, in some cases, regulatory oversight of the sector. Over 50,000 whistleblowing disclosures were made to prescribed persons in the 2020-21 financial year, which underlines just how important prescribed persons are in our whistleblowing framework. They are an invaluable route for whistleblowers to provide vital information to appropriate bodies, enabling them to prevent and act on wrongdoing that harms both our economy and wider society.

The changes in these regulations are necessary as a result of changes made in another statutory instrument, the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022. I am pleased to say that that instrument makes a number of significant additions to the list of prescribed persons: the Drinking Water Inspectorate, the Office for Environmental Protection, Environmental Standards Scotland, Social Work England, all 129 Members of the Scottish Parliament, the Scottish Public Services Ombudsman and Natural Resources Wales. The SI also removes the European Securities and Markets Authority as a prescribed person, reflecting the fact that, since we exited the EU, the relevant regulatory responsibilities have been assigned to the Financial Conduct Authority. Consequently, disclosures that could previously be made to the ESMA will now be made to the FCA.

The overall effect of the SI is that more workers will be able to blow the whistle to a relevant prescribed person. This not only ensures that the worker making the disclosure is more likely to qualify for employment protection, but means that those regulators and public bodies will benefit from receiving valuable intelligence.

The draft regulations deal with the annual reporting requirement that applies to most prescribed persons. The requirement was introduced in 2017. It requires most prescribed persons to publish an annual report on whistleblowing disclosures made to them by workers. It introduces greater transparency on the work of prescribed persons to increase confidence among whistleblowers that their disclosures are taken seriously and action is taken where appropriate. The requirement also supports greater consistency across different bodies in the way they respond to disclosures.

A small set of prescribed persons are exempt from the reporting requirement, including Members of the House of Commons and Welsh and Scottish Ministers. These prescribed persons are exempt as they do not have a regulatory function; instead, they are prescribed due to their distinctive and key role in aiding constituents on whistleblowing matters and supporting them to make a disclosure to a relevant regulatory body. As a constituency MP I always want to hear about the issues impacting my constituents, and know how important we can be in championing the causes of whistleblowers.

The draft regulations amend the list of prescribed persons who are exempt from the reporting duty in two ways. First, as Members of the Scottish Parliament are being added as prescribed persons, the regulations add them to the list of prescribed persons exempt from the reporting requirement. That will ensure that MSPs will be able to fulfil their role in a proportionate manner and will be prescribed on the same terms as Members of the House of Commons. Secondly, the regulations remove the ESMA as a prescribed person exempt from the reporting requirement. This is necessary because, as I explained, the ESMA is being removed as a prescribed person.

In conclusion, the Government greatly value the role of whistleblowers in bringing wrongdoing to light. The effect of the draft regulations will be to bring the list of prescribed persons exempt from the reporting requirement up to date, and I commend them to the House.

--- Later in debate ---

[Kevin Hollinrake]

I am grateful for the Committee’s support and I thank all hon. Members for their consideration. I really appreciate the shadow Minister’s support.

The point made by the hon. Member for Hackney South and Shoreditch about Members of Parliament’s responsibility is a very good one. I have had a number of whistleblower disclosures—protected disclosures—sent to me personally, and I was a little confused myself about what I should do with them. For the benefit of the Committee, Members of Parliament are expected to liaise with the relevant regulator. That is what they are expected to do, rather than deal with the issue ourselves. There are people with expertise in particular matters—for example, if a case involves financial matters, the Financial Conduct Authority is the relevant body.

We need to address a wider issue with whistleblower reform. As a former vice-chair of the all-party group I have some ideas about the change I would like to see, which might well encompass better advice for MPs and MSPs. I am keen to undertake that review as quickly as possible and am working with officials to do it. The hon. Lady makes a very good point.

The underlying key to the regulations is that we are looking to make the UK the best place in the world to start and grow a business. To do that, we need a partnership between business people and the labour market, and we need a strong and flexible labour market that supports participation, income and growth. In my view, whistleblowing is key to that and to ensuring that the framework for employment is fit and proper and fit for purpose. That benefits both workers and businesses.

We know the important work that whistleblowers do in rooting out wrongdoing. I believe that the draft regulations will give workers the confidence they need to raise concerns about wrongdoing and to ensure that the information goes to the relevant bodies. That is key to this. Those bodies have the powers to act on the wrongdoing that can harm both our economy and wider society. In line with that, we need Members of Parliament to properly understand the rules, as the hon. Lady set out, and to fulfil their role in a proportionate manner. I commend the regulations to the Committee.

Question put and agreed to.