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

Lord Lennie Excerpts

Tuesday 15th November 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, these regulations were laid before the House on 17 October 2022. The changes made by the statutory instrument before the House today are necessary as a result of changes made through another SI, also laid on 17 October: the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022. Among other changes, that order made Members of the Scottish Parliament prescribed persons and removed the European Securities and Markets Authority as a prescribed person for whistleblowing.

The regulations before the House today make two subsequent changes. First, they exempt Members of the Scottish Parliament from the duty that most prescribed persons are under to report annually on the whistleblowing disclosures that they have received. Secondly, as it will no longer be a prescribed person, the regulations remove the European Securities and Markets Authority as a body exempt from the reporting requirements.

The Employment Rights Act 1996, as amended by the Public Interest Disclosure Act 1998, enables workers in all sectors to seek redress if they are dismissed or suffer detriment at the hands of the 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.

As I set out earlier, the changes in the regulations before the House today are necessary as a result of changes made in the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022. I am pleased to say that the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022 makes a number of significant additions to the list of prescribed persons. It adds 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 the natural resources body for Wales.

The SI also removes the European Securities and Markets Authority as a prescribed person. This reflects the fact that, since EU exit, the relevant regulatory responsibilities have been assigned to the Financial Conduct Authority. Consequently, disclosures that could previously be made to the European Securities and Markets Authority will now be made to the FCA.

The overall effect of the statutory instrument 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 SI before the House today concerns the annual reporting requirement that most prescribed persons are under. It was introduced in 2017 and requires most prescribed persons to publish an annual report on whistleblowing disclosures made to them by workers. The requirement introduces greater transparency around 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 is exempt from the reporting requirement, such as Members of the House of Commons and Welsh and Scottish Ministers. These prescribed persons are exempt as, obviously, 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 regulatory body, as relevant.

The SI amends the list of prescribed persons exempt from the reporting duty in two ways. First, it adds Members of the Scottish Parliament to the list of prescribed persons exempt from the reporting requirement. This will ensure that MSPs will be able to fulfil their new role in a proportionate manner and means that they will be prescribed on the same terms as Members of the House of Commons. Secondly, as I said, the SI removes the European Securities and Markets Authority as a prescribed person exempt from the reporting requirement. This is necessary because, as I explained, the ESMA is being removed as prescribed person.

To conclude, the Government value the role of whistleblowers in bringing wrongdoing to light. The effect of the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022 and the Prescribed Persons (Reports on Disclosures of Information) (Amendment) Regulations 2022 will be to bring the list of prescribed persons up to date and ensure its effective operation. This will mean that whistleblowers across Great Britain have a greater opportunity to report on wrongdoing that they witness at work while qualifying for employment protection.

It is of course important that this list operates in a manner that is proportionate and effective. In particular, it is right that Members of the Scottish Parliament are exempt from the reporting duty that prescribed persons are under. I therefore commend this regulation to the House.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for bringing the regulations to the House, and I will also be brief in my remarks on this entirely sensible instrument. As we have heard, it amends the Prescribed Persons (Reports on Disclosures of Information) (Amendment) Regulations 2017 to exempt Members of the Scottish Parliament, who are being added as prescribed persons to the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022, from the requirement to report annually about the public interest disclosures that they receive from workers. It also makes a further amendment to the 2017 regulations to reflect the fact that the European Securities and Markets Authority is being removed as a prescribed person.

The Public Interest Disclosure (Prescribed Persons) Order 2014 prescribed persons to be recipients of whistleblowing disclosures for the purpose of Part 4 of the Employment Rights Act 1996. The 2017 regulations created an obligation on prescribed persons to report annually about what public interest disclosures they receive from workers. They also exempted prescribed persons from the obligation by excluding them from the definition of “relevant prescribed person” in Regulation 2. The 2022 order is amending the 2014 order to add Members of the Scottish Parliament as prescribed exempted persons and to remove the European Securities and Markets Authority.

This follows on a call for evidence in 2013 by the then Department for Business, Innovation and Skills about introducing an obligation on most prescribed persons to report annually on the whistleblowing disclosures they received. The intention was to increase confidence that whistleblowing disclosures were and are looked into and to drive up transparency across how prescribed persons are handled.

The MSPs are not the regulators of a sector or specific type of wrongdoing, and there is an interest in ensuring that they are not burdened with the administrative requirement to produce annual reports, as is the case with MPs. As such, they have been added to the list of those exempted from producing these reports. The European Securities and Markets Authority is being removed as a prescribed person from the 2022 order to reflect the fact that, since EU exit, the relevant regulatory responsibilities have been assigned to the Financial Conduct Authority. Consequently, it should be removed from the list of prescribed persons exempt from the reporting duty.

[Lord Callanan (Con)]

My Lords, I am very grateful to the noble Lord for his support. This is entirely uncontroversial and there are no questions, so I commend the regulations to the House.