Whistleblowing

Debate between Kevin Hollinrake and Norman Lamb

Wednesday 3rd July 2019 Commons Chamber

[Kevin Hollinrake]

I could not agree more. My right hon. Friend highlights the importance of some of these cases. We have to ask why an organisation would not want to know about this. My role before coming to this place four years ago was as managing director of my own business. We were quite a large business at that point. I dealt with all the complaints in the organisation because I wanted to know what was going on there, and that is the best way to find out. These people are our eyes and ears. We were an ethical business and we ran it well, but if anything was going off track, we would want to know about it. However, it seems that when these people step forward, the people around them—their superiors, I guess—too often feel that the situation is too risky and look to close down the complaints.

From the fair business banking perspective, we know that one third of all serious economic crimes are brought to light because of the actions of whistleblowers. It is very rarely the regulator that is going in there and identifying the problem and then dealing with it—in fact, quite the opposite. It is therefore absolutely fundamental that these people will step forward. All the whistleblowers we deal with say, “I would never do that again.” Other people in the sector hear about that and are then deterred from stepping forward. That is an absolutely intolerable situation. What these people do should be welcomed.

The right hon. Member for North Norfolk talked about the case of Mark Wright. In my experience, this not just about the organisations themselves but also about the regulator. The regulator could take a much firmer stance. Whistleblowing is part of its processes. It has responsibilities under protected disclosure to deal with whistleblowers, but that is not what happens. It pays lip service to the issue of whistleblowing. It says, “Yes, okay, we’re dealing with that,” but the cases that I will highlight illustrate that that is not what has happened. The FCA has got a terrible reputation in this area.

[Norman Lamb]

Does the hon. Gentleman agree that the sense one gets from the FCA is that it regards these people as irritants—troublemakers? The people who investigate the allegations of whistleblowers are often people who have been through the revolving door, in and out of banks and the regulator, and so are too close to the people they are supposed to be regulating.

[Kevin Hollinrake]

Yes. I ask myself all the time, “Why is it like this?” and that is one of the reasons—the revolving door. Those people are part of a wider group or club—the old boys’ tie kind of stuff. This cannot be allowed to be the case.

As I said, the right hon. Gentleman highlighted a case that was heavily reported where the FCA told RBS who the whistleblower was. That seems absolutely unthinkable, and it was criticised by the Complaints Commissioner. When the FCA dealt with the case of the chief exec of Barclays, Jes Staley, who had tried to find out the identity of a whistleblower, which is totally against protocol, he was fined a modest sum that was probably a few weeks’ wages for him. Where is the deterrent there for not treating whistleblowers in the wrong way?

In my own experience, Joanne Rossouw contacted me about fraud at Barclays relating to payment protection insurance claims under the Consumer Credit Act 1974. She felt that there was a total lack of protection and support from the FCA and that its communications were simply unacceptable. The case of Paul Carlier was heavily reported. He whistleblew on foreign exchange dealers at Lloyds and was then unfairly dismissed. The FCA had promised to support his case and to provide an opinion to the tribunal he went to when he was unfairly dismissed, but did not do so, despite Andrew Brodie at the FCA calling the Lloyds process for the treatment of whistleblowers a whitewash and a joke. That was not the only case—there were others that he dealt with. Yet these people are not sanctioned. Why is that?

Paul Moore, my constituent, was the first person to raise the issues at HBOS. In 2004, he described a toxic culture at HBOS, with pressured sales targets and people taking unacceptable risks in lending money. Of course, HBOS collapsed in 2008. He was unfairly dismissed. He was treated disgracefully by the Financial Services Authority, as it was then. As the right hon. Member for North Norfolk said, if we had taken a robust approach when whistleblowers came forward, it may have stopped the financial crash happening in the first place, which cost our taxpayers £1.8 trillion.

RBS Global Restructuring Group and SMEs

Debate between Kevin Hollinrake and Norman Lamb

Thursday 18th January 2018 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The right hon. Gentleman is making a powerful speech. He mentions the relationship between the FCA and RBS. Is he aware of the leaked minute from an FCA board meeting that says that one of the reasons why the FCA will not release the full report is that it is concerned about being sued by RBS? Does that not raise the question of who is regulating whom in this relationship?

[Norman Lamb]

The hon. Gentleman is entirely right. We rely on the regulator to be powerful and tough in such situations.

The human cost is incalculable. People have been driven to suicide and marriages and health have been destroyed, but who has been held to account for this disgusting behaviour? People and businesses ruined must have justice. I say to the Minister that an independent tribunal is essential. It would act as a deterrent to bad behaviour; banks would know their actions have consequences if they knew it would go to an independent tribunal.

My constituent Mark Wright is an RBS whistleblower. His career and his health have been destroyed. He and others are the heroes of this sorry story, risking everything to do the right thing, yet he has also been horribly let down by the regulator. The FCA, including its chief executive, Andrew Bailey, dismissed his concerns, but this week he won a vital victory when the complaints commissioner ruled that the FCA was wrong to reveal his name to RBS. What cavalier disregard of a whistleblower’s rights! The FCA fought the complaint all the way, only apologising right at the end. The case was brilliantly pursued by Steve Middleton, who deserves enormous credit. He is now setting up, with others, Bank Confidential—I declare an interest in that I am a patron—to protect whistleblowers and expose wrongdoing.

The truth is that whistleblowers have no real protection in this country. Contrast that with the situation in the United States, where the Dodd-Frank legislation introduced the Office of the Whistleblower, which is there to protect whistleblowers. Whistleblowers are rewarded financially for doing the right thing—they are awarded between 10% and 30% of the sanction collected against the firm, which can run into millions of dollars. What a contrast with the position in this country! We need our own office of the whistleblower, and whistleblowers should be guaranteed anonymity; they should be rewarded for their bravery. Maintaining the integrity of the banking system is of fundamental importance to us all, and whistleblowers are necessary for that purpose.

My fear is that in the aftermath of the crash in 2008, all the focus of the banks, the regulator and Government was on rebuilding balance sheets, and a collective blind eye was turned to how that was achieved and how many victims were left along the way—business owners and whistleblowers. The Government and the FCA now need to act to clear up this scandal and to get new arrangements in place to rebuild trust in British banking and give justice to those ruined by this outrageous behaviour.