Whistleblowing at Work

Lord Phillips of Sudbury Excerpts

Monday 24th March 2014 Grand Committee

[Lord Phillips of Sudbury (LD)]

My Lords, I should declare an interest in that 20 years ago I set up the charity, Public Concern at Work. I think it took me five or six years to persuade the Charity Commission that it should be given charitable status, but we got there in the end and it has done a wonderful job ever since. I commend the PCaW commission on this report. It is led by my old friend Tony Hooper—the right honourable Sir Anthony Hooper and a former judge in the Court of Appeal, I should say. There is no point in pretending that this is anything other than an incredibly vexed set of issues and that there is a great deal of fear where whistleblowing is concerned. There is also no point in disguising from ourselves the fact that we live in an age of collapsing standards. Over the past few years our own proud City of London has been embroiled in tragic and scandalous behaviour of all sorts. Great banks have completely lost their way. However, it is not just about us because this is a predicament across the developed world, and probably the underdeveloped world. The need for whistleblowing is therefore ever greater.

It is an extraordinary fact that in the LIBOR and PPI scandals and the foreign exchange rigging, apparently no whistleblowing went on. Those corrupt scandals lasted for years and involved hundreds of people—in the PPI case tens of thousands of people—all of whom knew that what they were doing was wrong. Most of them knew that it was unlawful and some knew that it was corrupt. The need, therefore, to act on the central provisions of this report certainly seems to be quite plangent. In saying that, I am not deluding myself, because I agree entirely with the noble Baroness, Lady Browning, that without an underlying moral cohesion of our society in the minds and hearts of ordinary people, no amount of law and regulation will succeed. The one can only buttress the other, but we need to buttress more effectively.

The Public Interest Disclosure Act 1998 was good as far as it went but, first, it did not go far enough. Some of the areas of insufficiency are set out in the commission’s recommendations. Secondly, I want to emphasise strongly that there is a total insufficiency of enforcement, a point that I hope the Minister will take back with him. Given the choice of putting much more effort into enforcement and making no changes to the law, I would go for the former every time. How many cases of fraud have been prosecuted on the back of evidence given by whistleblowers? The Minister may not know—it is not fair to spring it on him.

Perhaps I may mention Paul Moore of Halifax Bank of Scotland, who 10 years ago was dismissed for blowing the whistle on a state of affairs within that massive entity that was wrong and completely unsustainable. To give him his full title, Mr Moore was the head of Group Regulatory Risk and the good practice manager. After a great deal of in-depth inquiry, he reported to the main board, as he did at every board meeting, that the bank’s system was not sustainable. Indeed, one senior employer told him that to meet sales and marketing targets, the bank had to act unethically and that it could not be done ethically. That man has been blackballed in the City from that day to this. He never got an interview for any job he applied for and he was not offered a job. We have to understand, too, that we have a culture whereby people involved in certain aspects of our economy are themselves corrupted by all this, and who view anybody who tries to uphold the law as a traitor. Noble Lords would not believe what this man has been called in the intervening years. I have spoken to him about this at length and in depth and have his consent to mention these facts today.

I know that this is a difficult area of enforcement—I make no bones about it. It requires sensitivity, extreme tenacity of prosecutorial effort and a detailed knowledge of the law. Whoever takes this on will be met by legions of expensive lawyers and accountants because that is another feature of our times—the total disparity of resources in trying to uphold the law in relation to fraud and so on.

I commend recommendation 21 which asserts that tribunals dealing with the Public Interest Disclosure Act should be presided over by someone with specialist training in this field. We should look at what the Americans do, as they have a public authority with responsibility for dealing with whistleblowing. I think that is right. We need to go that way and have an authority—it may be small, but strong—which can uphold and enforce the law in conjunction with the prosecutorial authorities.

Finally, I believe that the most important body of recommendations in the commission’s report are those which beef up the role and the duty of the regulators in all aspects of our economy so that they have the power to require large companies to do something effective to enable whistleblowing to thrive to the benefit of companies, the economy and the country. That is the point, is it not? I wish well the Minister, the Government and all who have to take these important matters forward.

--- Later in debate ---

[Lord Young of Norwood Green (Lab)]

My Lords, I, too, congratulate my noble friend Lord Wills on initiating this debate. Contributing at the end, I find that the waterfront has been covered so well that I am almost tempted to say “ditto”. However, given my position as Front Bench spokesperson, I probably need to say a little more than that.

I went on to the website to look at the call for evidence and I noticed that it finished in November last year. However, I did not find a report. It may be that I missed it but perhaps the Minister could say whether any summary of the evidence has been published as yet. I can see a head shaking so it looks as though the answer is no. It has been quite a long while but no doubt we will be informed why. If the call for evidence finished in November, I would have thought that by now we would have had at least a summary, if not a complete report.

I concur with much of what my noble friend Lord Wills said. He made the point that the PIDA is now 15 years old. It may not be whiskery but given all the analysis we have heard today and the tributes we ought to be paying to Public Concern at Work—I was fascinated to learn that the noble Lord, Lord Phillips, was the instigator of that organisation—

[Lord Phillips of Sudbury]

I am terribly sorry. I should not mislead your Lordships. I was only the mere lawyer who set the thing up; I was not the impetus for it.

[Lord Young of Norwood Green]

Okay. He played a significant role, we will say. It is not often that I dare to disagree with him, and his analysis is usually good, but when he said that if he had to make a choice between reform and enforcement he would go for enforcement, I did feel that that is not the advice we ought to be giving the Government. It is a 15 year-old piece of legislation and a very significant and comprehensive report—it ought not to be an either/or choice; it should surely be both. Reform is pointless without ensuring that we have adequate enforcement, as we have heard, with regard to all the difficulties that whistleblowers face.

I have to be careful how I comment on an issue that I was personally involved with recently as a school governor, when I saw what happened when somebody tried to deal with a difficult and sensitive issue. They were not exactly congratulated by all those concerned and it led to the individual feeling that they did not want to continue in their role as governor. The point has been made time and again: the pressures on people who try to blow the whistle are enormous.

I could not help but reflect on the comments made by the noble Lord, Lord Low of Dalston. He listed a whole range of organisations, in construction, care homes, the BBC, the police—the list goes on and on. We have heard so much of this. It was actually the noble Lord, Lord Phillips, who mentioned the E-word—ethics, although I heard it only once. I am always fascinated when people talk about what goes on in MBA syllabuses and business schools and I am constantly reminding them of the importance of ensuring that ethics is a part of training.

Someone else—I think it was the noble Earl, Lord Lytton—talked about corporate social responsibility. It is there in every annual report. In theory, it is in companies’ own interests to encourage whistleblowing. If you think of the cost when organisations fail—whether it is health and safety or PPI, for example—the payouts are enormous. Companies ought to have a strong vested interest in ensuring that all their procedures are right but we know that, time and again, whether it is the hierarchical resistance referred to by the noble Earl, Lord Lytton, or the sheer fear whistleblowers feel about the reaction from their colleagues—whether it is higher up in the organisation or, as we saw in Mid Staffs, your own work colleagues—it takes a brave person to become a whistleblower. There is no guarantee that what you are doing, even if it is deemed to be in the public interest, means that you will be seen as a hero. The reverse can happen: not only can you lose your job but you can then fail to get employment elsewhere.

Without going through every single recommendation of the report—I do not think that I need to do that because so many of them have already been highlighted—there was one that I wanted to draw out, which was mentioned by the noble Earl, Lord Lytton: the question of whether workers who are wrongly identified as having made disclosures should be protected. I was interested in that because the Public Interest Disclosure Act says that the protection provided by the Act is not subject to any qualifying period of employment, so it is referred to as a “day one” right in employment law. Yet here, Public Concern at Work was saying, “Well, where the worker is wrongly identified as a whistleblower, there is a possibility that they will not get that ‘day one’ right to protection”. I hope that the Minister will be able to cover that in his response.

As regards all the points that have been made on regulation and being clear about what we mean by a worker—my noble friend Lord Wills was absolutely right when he gave us a long list of workers where it is doubtful whether they are necessarily included—I do not need to go through those again because they have already been adequately made. However, I look forward with interest to the Minister’s response, especially to the point I made about the call for evidence.