Whistleblowing Awareness Week

Kevin Hollinrake Excerpts

Thursday 23rd March 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

It is a pleasure to serve with you in the Chair, Ms McDonagh. I thank my hon. Friend the Member for Cheadle (Mary Robinson) for all the work that she does on the all-party group. As she rightly points out, I was formerly the co-chair with her on that group. We can sometimes move from a Back-Bench position where we speak about an issue that we feel strongly about, and then we can be put in a ministerial position that covers that brief, but I can reassure Members that I am as ambitious as ever to make sure we get the right reforms for whistleblowing.

My hon. Friend had a reception, which I was pleased to attend. She has had a number of events this week, and I pay tribute to her for her work in drawing attention to the importance of whistleblowers for our society. Whistleblowers are clearly the eyes and ears of our organisations, in terms of potential wrongdoing. As my hon. Friend knows, I have had a number of experiences with constituents. Ian Foxley blew the whistle on GPT Special Project Management, and did an incredible job. Paul Moore blew the whistle at HBOS prior to its financial distress and collapse. Sally Masterton was the whistleblower of the HBOS Reading scandal, which took five years to reach court, where she was vindicated for her statements.

The hon. Member for Feltham and Heston (Seema Malhotra) referenced Danske Bank, and the £234 billion of money laundering. She is right to talk about some of the UK corporate vehicles used for that. We are working together on the Economic Crime and Corporate Transparency Bill to tighten up the opportunities people have to use those vehicles. One of the biggest scandals in that case was Danske Bank allowing that to happen on its watch. Howard Wilkinson was the whistleblower; the £234 billion of Russian money washing through Danske Bank in Estonia resulted in a $2 billion fine from the US authorities.

According to the statistics, 43% of economic crimes are highlighted by whistleblowers, but in my experience, and as my hon. Friend the Member for Cheadle stated, it is much higher than that. Every case of economic crime I have dealt with has come from a whistleblower, and I pay tribute to them. It is not just financial crime; my hon. Friend the Member for Bury North (James Daly) highlighted issues with the Met police, which might have been brought to light much sooner if people had felt more confident about the whistleblowing framework. My hon. Friend the Member for Erewash (Maggie Throup) talked about Winterbourne View; that also might have come to light much sooner, with people being brought to justice much sooner, if people had more confidence.

It is right that we seek to more effectively protect and compensate whistleblowers for doing the right thing. It is excellent that we have so many top-quality parliamentarians in this debate who will throw their weight behind the campaign for change. I am keen to do so too.

Our whistleblowing framework was introduced through the Public Interest Disclosure Act 1998. It was intended to build openness and trust in workplaces by ensuring that workers can hold their employers to account, and are then treated fairly. It provides a route for workers to make disclosures of wrongdoing, including criminal offences, the endangerment of health and safety, causing damage to the environment, a miscarriage of justice, or a breach of any legal obligation. Disclosures usually need to be made to the employer, a lawyer or a prescribed person. Workers who believe they have been dismissed or otherwise detrimentally treated for making a protected disclosure can make a claim to an employment tribunal, which can award unlimited compensation.

Workers are often the first people to witness any type of wrongdoing within an organisation. Information that workers may uncover could prevent wrongdoing that may damage an organisation’s reputation or performance, and, in extreme circumstances, even save people from harm or death. In relation to whistleblowing protections, the standard employment law definition of a worker has been extended, and includes a wide range of employment relationships, such as agency workers; individuals under -taking work experience; self-employed doctors, dentists and pharmacists in the NHS; job applicants in the health sector; police officers; and student nurses and student midwives.

I fully understand that there are people who are not protected by the current legislation. Indeed, Ian Foxley was not covered by the legislation, and suffered hundreds of thousands of pounds of detriment for blowing the whistle. He spent 11 years without any employment, and he was a well-paid contractor prior to that time.

[James Daly]

What does the Minister mean by protected?

[Kevin Hollinrake]

Protected from detriment. In Ian Foxley’s case, he feared for his life. It could be detriment in terms of loss of employment. There are a number of different detriments. Both protection and compensation should be fairly made.

[James Daly]

As my hon. Friend the Member for Cheadle (Mary Robinson) said, there is a 4% success rate at employment tribunal. Those protections do not seem to be translating into ones that are enforceable in an employment tribunal, which is the problem.

[Kevin Hollinrake]

I will come on to what we are trying to do to make the legislation more effective. Do I think the legislation is where it needs to be today? No, I do not. That is the case for the changes we need to make. We need to look at all the different evidential points to ensure we move to the right place. Ian Foxley was a contractor, which is why he did not have the opportunity to get compensation in his case.

The SNP spokesman, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) made a good point about volunteers. They may also be the eyes and ears we need. He made the alarming point that people who blow the whistle could lose everything, which all of us should take into account. People who clearly do not feel they will be properly protected or properly compensated should feel more assured that they will.

My right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) pointed to the fact that the legislation was implemented 25 years ago by one of her predecessors. To give some reassurance, since the introduction of that legislation, the Government have continued to strengthen some of its provisions using non-legislative and legislative measures. We have produced guidance for whistleblowers and prescribed persons, as well as guidance and a code of practice for employers. We have produced guidance on how whistleblowers can make disclosures.

In 2017, we introduced a new requirement for most prescribed persons to produce an annual report on whistleblowing disclosures made to them. That duty is a direct response to concerns about the lack of transparency surrounding how disclosures were being handled. Most prescribed persons are now required to report on the number of disclosures, state whether they decided to take further action and give a summary of any action taken. We have also expanded the list of prescribed persons—the individuals and bodies to whom a worker can blow the whistle. In December 2022, I took forward some legislation to add six new bodies and all Members of the Scottish Parliament to the prescribed persons order. We continue to welcome proposals for appropriate additions to that order.

[Wendy Morton]

I appreciate that there have been updates to the original 1998 Act, and I recognise that work needs to continue. I want to push the Minister on the review. Will he give us any timescale or any indication of when we will see the Government undertake further work in the light of some of the thoughts, ideas and recommendations from the APPG?

[Kevin Hollinrake]

I was just coming on to that. As a former Chief Whip, my right hon. Friend will be familiar with a word we often hear in this place: soon. I will say very, very soon. It is fair to say that we talking about days, not months. We are closer to days than months; that is where I would say we are.

Many have spoken passionately today, and on previous occasions, about the experiences of whistleblowers, and raised concerns about the whistleblowing framework. As I said, the Government have committed to reviewing the framework. It is clearly a major priority of mine, and it has been since I joined the Department. My right hon. Friend the Member for Aldridge-Brownhills made the important point that while we must ensure we protect the right people, we do not want to allow for vexatious whistleblowers because that could have a detrimental impact on businesses and other organisations. It is important that we protect those who should be protected.

Indeed, as my hon. Friend the Member for Bury North said, we must protect the people who would have blown the whistle had they had confidence in the framework. That is one of the big problems here. People are not coming forward because of their concerns and because of what has happened to other whistleblowers. That includes, as my hon. Friend the Member for Cheadle mentioned, Jonathan Taylor, who blew the whistle in the oil scandal and was pretty much under house arrest for a year in Croatia. That was disgraceful treatment.

As I said, making progress on the review has been a priority of mine from day one. There will be an announcement on that very, very soon. That is what we are expecting. We are keen to engage with parliamentarians from across the House, both here and in the other place. Once that review is announced, I am keen to engage particularly with my hon. Friend the Member for Cheadle so she can make her points about the right way forward in terms of the provisions we need to make and future changes to legislation.

My hon. Friend talked about the policyholder for this particular brief and whether it should be the Department for Business and Trade or the Cabinet Office, as my right hon. Friend the Member for Aldridge-Brownhills suggested. I am very keen to keep it under my auspices, because, as Members have said in the debate today, I have a long-standing interest in this particular area. I am very keen and ambitious for it, so I am keen to keep hold of it. However, it is right to point out that it is the legislation around whistleblowing and employment that is held with me. Of course, the particular issues around Departments—the whistleblowing requirements—are held by each individual Department. For example, as my hon. Friend the Member for Erewash will confirm, whistleblowing in the NHS is very much a matter for the Department for Health and Social Care. That is the right situation regarding this particular policy.

[Wendy Morton]

From my experience as a Minister, I know how whistleblowing policy does cut into other Departments. I understand the Minister’s passion and willingness to drive this policy forward, but looking to the future, in whatever work he is doing can he really ensure that it embraces all of Government? That is why I was pointing towards the Cabinet Office.

[Kevin Hollinrake]

I quite understand my right hon. Friend’s point and why she made it. My view, both as a Back Bencher and as a Minister, is that we need to work more on a cross-Government basis than perhaps we do now to make sure that these kinds of measure are properly implemented across Government.

A number of Members, including the spokesman for the Scottish National party, the hon. Member for West Dunbartonshire, talked about NDAs. As he will know, being a member of the legal fraternity—

[Martin Docherty-Hughes]

indicated dissent.

[Kevin Hollinrake]

No? I thought the hon. Gentleman was.

In law, NDAs cannot be used to prevent a worker from blowing the whistle, so there are some protections in law in that respect. I believe the shadow Minister, the hon. Member for Feltham and Heston, also brought out that point.

[Mary Robinson]

On NDAs being used to prevent a worker from blowing the whistle, the Minister is quite right to make that point, but of course another point to consider is when a person blows the whistle, an employment dispute might arise that could be the subject of a case that goes to law, or lead to that person being dismissed from their job. At that point, the person might accept an NDA, so the harm that was being reported and brought to light in the first place is thereby effectively covered up.

[Kevin Hollinrake]

That brings me to my next point. My hon. Friend makes a very good point, but the employment tribunal is there to settle compensation. It is the regulators in the various sectors that are there to look at the problem, the detriment, and to consider the whistleblowing concerns and act on them. That cannot be restricted by an NDA in that kind of compensation settlement, I think.

What I regard as the key point in my hon. Friend’s contribution today is the proposal for an office of the whistleblower. I quite understand that the intent is to provide one central place for whistleblowing and to make sure that we have best practice across the piece. Such an office would provide consistency in standards for regulatory investigations triggered by whistleblowing information. I am also interested in the issues that dealing with whistleblowing disclosures might raise for the prescribed persons, and vice versa.

I know there are concerns, not just in Government but in wider circles, about how such an office would interact with the role of regulators, who are experts, of course. It is important that we look at the arguments for and against the proposed office, and I am keen to look at international examples. My hon. Friend referred to the USA. The numbers of disclosures there are interesting. According to my figures, there were 50,000 protected disclosures in the UK in 2020-21. I think my hon. Friend said that 20,000 were dealt with by the Office of the Whistleblower in the US, which is obviously a much bigger country in terms of population and potential whistleblowing. I am interested in the gap.

One point to make is that a UK office of the whistleblower would of course need extensive resources to be able to handle or to oversee 50,000 protected disclosures, and significant expertise to ensure that it fully understood the nature of the problem and was able to work alongside the regulators, which I think is what my hon. Friend envisages, rather than replace the regulators in terms of their functions. Clearly, regulators themselves, be it the FCA or the regulators in the NHS, would have a responsibility to ensure that the issues were addressed properly and whistleblowing guidelines and processes were followed. It is a question of understanding the interaction between the two and what resources would be needed to fully and properly fund an office of the whistleblower.

All these matters need to be taken into account in deciding how to proceed. The review, as I have said, is something that we want to bring forward very quickly, and we want hon. Members on both sides of the House to be able to input into it.

[Martin Docherty-Hughes]

Will the Minister assure hon. Members that in the review he will take cognisance of the question about what an employee delivering a service is? The millions of volunteers across these islands need reassurance. They need to be protected and given the ability to be a whistleblower within the system.

[Kevin Hollinrake]

The hon. Gentleman makes a very fair point, which I think was referred to earlier. Some of the whistleblowers I have dealt with were outside the current legislation because of their employment status, so I think that it is a very fair point and it is one that we are very keen to explore through the review.

I thank my hon. Friend the Member for Cheadle again for initiating this very important debate. We are in complete agreement: there should be no doubt that to blow the whistle is an act of real value to both business and society at large. Government, including my Department, will continue to examine and make reforms to the whistleblowing regime, and we will be setting out details of the review of the whistleblowing framework very soon.