Whistleblowing

Stephen Kerr Excerpts

Wednesday 3rd July 2019 Commons Chamber

[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.

[Stephen Kerr (Stirling) (Con)]

My hon. Friend is underlining the point that the regulators are stricken with lethargy when it comes to responding to whistleblowers. Does he agree that whistleblowers need the protection of an independent office to advocate for them with these bodies, which are sometimes very forbidding in the way they respond to the approach of whistleblowers?

[Kevin Hollinrake]

My hon. Friend is absolutely right. We need to improve how we deal with whistleblowers and the legislation around them. We must also insist that regulators, which already have access to sanctions, deal with these issues robustly. There is a cultural problem in the FCA in dealing with this. That must be addressed, and it can only be dealt with by the leadership of the FCA.

The most egregious case I have dealt with over two years as co-chair of the all-party parliamentary group on fair business banking is that of Sally Masterton. She was a senior risk manager at Lloyds. In 2013 she wrote a report called “Project Lord Turnbull”, which highlighted the fraud that was concealed at HBOS before the takeover by Lloyds. She identified a billion-pound fraud—these are not small numbers or small issues, which is perhaps why they are swept under the carpet. She was asked to set out her findings. She produced the report and gave it to her superiors. This was happening at the same time as a police inquiry into the low-level fraud that was happening at HBOS. She was then suspended and prevented from working with the police, despite the fact that the police had said in an email that she was vital to the investigation. She was later constructively dismissed.

She was then discredited. Lloyds wrote to the FCA to discredit her, effectively saying, “This person is a rogue employee. They are not a cogent witness.” The FCA accepted that without any investigation. That was in 2013. Five years later, Lloyds apologised to Sally Masterton, saying that she had been disgracefully treated for five years and admitting that it had tried to discredit her all the way through that process—imagine what those five years of her life were like. The FCA told Lloyds to intervene because she felt she had been terribly mistreated. Andrew Bailey himself had met Sally Masterton and determined that she had been disgracefully mistreated. Lloyds apologised to her and came to a financial settlement with her, but the FCA did not sanction anybody in Lloyds for that mistreatment. That is incredible.

All the FCA keeps telling me is that there is another investigation going on—Linda Dobbs’s investigation of Lloyds’s reporting of information before and after the HBOS takeover—but that is unacceptable. The FCA has already established the mistreatment, yet it will not move forward to sanction the people responsible. Under the senior managers regime, these people, including the chief exec, could be sanctioned, fined or banned. That is exactly what should happen.

[Kevin Hollinrake]

My hon. Friend is right. The FCA has a huge opportunity. It should regulate without fear or favour, but that is not where we are. It constantly looks over its shoulder at the banks and seeks to defend their reputation by concealing the truth, rather than robustly investigating these issues.

I asked Andrew Bailey four times a simple question in connection with this issue: did he follow the processes set out on the FCA website for how it deals with whistleblowers? Sally Masterton’s case was supposed to be referred to his team within five days and then go through the proper process. Did he do that? He has not responded to that question four times. It is totally unacceptable.

Sally Masterton says in her protected disclosure to Andrew Bailey:

“This is the tenth time that whistleblowing issues have been raised with you and ignored”,

over a period of five years. That is despite the fact that the FCA itself, in communication within the FCA, has admitted her report was well drafted and presented, and one FCA person said to another:

“I see a couple of potential risks…We may get challenged as to what we”—

the FCA—

“did about this report when received or LBG’s treatment of Mrs Masterton”.

[Stephen Kerr]

We should also mention the fact that there was whistleblowing to the Financial Reporting Council on the audits done at HBOS about the amounts of money set aside against expected liabilities. The head of the FRC, Stephen Haddrill, appeared before the Business, Energy and Industrial Strategy Committee, of which I am a member, and said some really interesting things about ongoing inquiries with other regulators in relation to whistleblowing, but nothing further has been said.

[Kevin Hollinrake]

I think this is about KPMG’s audit of HBOS in 2008, which was signed off a few months before HBOS went bust, despite the fact that the risks to that business were clear. The FRC then gave KPMG a clean bill of health. There was the revolving door between the FRC and the auditors as well. It is a very big concern, which I know my hon. Friend has raised in his Select Committee work.

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[Stephen Kerr (Stirling) (Con)]

I declare an interest as co-chair of the all-party parliamentary group on whistleblowing. I was very impressed by the speech of the right hon. Member for North Norfolk (Norman Lamb). It was a compelling and comprehensive argument for the law to be reviewed. It is vital that we keep whistleblowing laws and protections, and public interest disclosure laws, up to date and relevant in an ever-changing, fast-moving landscape. I hope that the Minister will listen carefully to the arguments presented—the motion gives a strong case to be answered—and give a considered response. I know well that she is extremely conscientious in performing her duties as a Minister of the Crown.

I was hugely impressed, as ever, with the speech of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). Since becoming a Member of Parliament, I have had to look more closely at the performance of regulators, and what surprises me is how thoroughly inadequate most regulators in this country are at regulating what they are supposed to regulate. It is all too clear that there is, at times, an unholy relationship between the people who staff the regulator and the industry that they are supposed to regulate, and that stifles the tension that there has to be between a regulator and the sector or industry being regulated.

The APPG plans to publish a report shortly identifying how the law fails to protect whistleblowers of any type—I stress “of any type”. The APPG has consulted a whole range of groups, and has positive, effective and practical proposals for change. We hope to learn from other countries as we aim for a “best in class” legal framework. I believe this is one of the aspects of competitive advantage that we should be claiming for the United Kingdom, in terms of our economy and how we treat those who, in most cases, feel driven by conscience to speak up, to raise concerns and to do the right thing for the right reasons.

[Mike Amesbury (Weaver Vale) (Lab)]

I commend the hon. Gentleman and the APPG for the excellent work they do in this field. Prior to this debate, the Hospital Consultants and Specialists Association wrote to me. Referring to a recent staff survey in the NHS, it said that only 28% of respondents felt safe to raise their concerns as whistleblowers. So I agree wholeheartedly with the powerful contribution that he is making.

[Stephen Kerr]

I thank the hon. Gentleman for that intervention because it underlines the fact—and it is a central purpose of the APPG—that we need to improve the overall perception of whistleblowers, and the attitude to them.

[Mr Jim Cunningham (Coventry South) (Lab)]

I apologise for being a bit late for the start of the hon. Gentleman’s speech. Members who have been in this place for a long time will remember the case that I had of a consultant called Mattu. He was a whistleblower and he was suspended. He was never really employed again by the NHS and the case cost—you could take a guess at the figure—something like £3 million. It ended up in the courts, where they tried to use my letter against that individual. So on the one hand we encourage whistleblowers, but we do nothing to protect them and sometimes we try to destroy their reputation.

[Stephen Kerr]

I am grateful for that intervention. I think I remember taking part in a Westminster Hall debate in which that case was highlighted.

We are going to publish our first report of a series. We have created an ambitious work schedule for our all-party group, but our primary report, based on the first-hand testimony of whistleblowers, should be published soon. I see so many people in the Chamber who have been of so much support to the group’s work, and who have served on the panels that we have put together to receive evidence and witness testimony, so I take the opportunity to thank publicly the Members who have been willing to do that.

We have also worked alongside WhistleblowersUK, which specialises in supporting whistleblowers. I pay tribute to its work and that of other such organisations. Most importantly, I would like to thank the whistleblowers themselves. The whistleblowers who have come before us to give testimony have proven to be caring, principled members of society who have put themselves at considerable risk to call out malpractice and misdemeanour. Some of those people are not covered by the current whistleblowers’ protections and law; many work, but some were not working.

In less than 12 months, we have heard and collected over 400 pieces of individual evidence to contribute to the series of reports that we intend to publish. Many of the testimonies were very difficult to hear and I will tell hon. Members why. These are people who put everything on the line. As colleagues said earlier, when those whistleblowers first spoke up, they did not realise what it would involve. However, having started out on that course, they stuck with it. I have nothing but total admiration and respect for these people. They have suffered mental trauma, loss of their career, loss of their businesses, persecution of their families, stringent gagging orders—all in the name of blowing a whistle on crime, corruption, negligence, wastefulness and cover-ups.

Many of these people are not employees; they are service users, bystanders, parents at school, patients at hospitals, suppliers, customers and taxpayers. Whoever they are, we should be grateful for whistleblowers. They saw themselves as doing their job, doing their duty, doing what was right. They did the right thing to uphold what they thought was the right standard—the professional standard. They thought they would probably be praised and recognised for speaking up, doing the right thing, protecting people, protecting reputations—organisational reputations, individual reputations—and standing up for the public good and public confidence, particularly in our public services.

[Dr David Drew (Stroud) (Lab/Co-op)]

Does the hon. Gentleman accept that the public sector is sometimes the worst offender? I was contacted by a firefighter who had reported his hierarchy—I will not go into it because it is subject to legal action. He sent the report to the police and they then sent it back to the fire service he was reporting. That is the public sector. Unbelievable!

[Stephen Kerr]

As we have discovered, this is a common characteristic of how whistleblowers and the issues they raise are treated. Issues they raise in anonymity and confidence are then disclosed to the very body they are raising concerns about and because of that they are easily identified. What follows is deeply unpleasant—to hear about it is deeply unpleasant; to experience it must be something else. So I do agree.

Whistleblowing in a work environment in the public sector should not be difficult, but it is, and it is up to this Parliament to change that. Without whistleblowers, we would not know about Gosport War Memorial Hospital, Cambridge Analytica, Lux Leaks, the behaviour of Jess Staley, the CEO of Barclays, Mid Staff NHS Trust or Rotherham’s grooming gangs. These are issues that make headlines, but there are many more cases that Members probably know of in their constituencies, from all over the country and across all kinds of sectors and activities, public and private. Bringing these issues to light, while difficult, undoubtedly identifies better ways for companies to work, for services to be delivered and for justice to be served.

[Norman Lamb]

The hon. Gentleman is making an excellent speech. It was good to work with him in applying for this debate. We have heard about cases in the public sector, such as the one the hon. Member for Stroud (Dr Drew) mentioned, and about others in financial services, such as those the hon. Member for Thirsk and Malton (Kevin Hollinrake) mentioned. It is worth comparing the outcome for those brave people, whose lives, as he says, are destroyed, with the outcome for those guilty of wrongdoing in the banks, for example, who continue to earn a fortune and who no one has touched for their wrongdoing, despite the devastating impact they had on our economy.

[Stephen Kerr]

Whistleblowers are heroes, not villains—although sometimes there are villains in their stories—and they should be treated with respect and listened to. Sometimes they are looking for no more than validation of what they have brought to the attention of the authorities. Whether they should have a financial award, or whatever, is a side issue; the real issue is how they are perceived and responded to.

[Dr Whitford]

The hon. Gentleman raises financial rewards. Does he think they might make the personal situation for a whistleblower within a workplace worse, because it would be easy to ascribe their actions to their seeking a financial benefit as opposed to genuine altruism?

[Stephen Kerr]

I completely understand, and am sympathetic to, that point. We need to work together to establish this independent office of the whistleblower. Sometimes whistleblowers pay such a heavy price in terms of the financial consequences that flow from their actions that perhaps there is a case for compensation, but I have not made up my mind. We have to hear more evidence and have a wider discussion in Parliament about these issues. It is absolutely clear, however, that whistleblowers need somewhere safe to go, and to be supported and have their cases properly advocated in the face of power, authority and bureaucracy.

I mentioned the problem of blacklisting. One person told us how he had been blacklisted for speaking up. He had reported criminal activity to the employer. Instead of dealing with the issue, the employer dealt with the person who had spoken up in the first place and coerced them to stay silent. It is bad enough to have something criminal going on within one’s business, but then to cover it up, and contrive to force those who are willing to speak up for the reputation of the organisation or business to leave, is clearly unacceptable, and then to seek to blacklist them so that they cannot work in a profession in which they have trained and acquired qualifications is truly shameful.

The complex legal framework surrounding whistle- blowing covers too few people. It is complex and legalistic. Many of the whistleblowers whom we met were not recognised as whistleblowers by the law. The tests that are necessary to stop people abusing whistleblowing are too stringent and do not recognise complexity. One employee brought up issues of racism at work and the flouting of HR rules. The employer, instead of recognising the whistleblowing, tried to diagnose a mental health issue, sending the employee on medical leave. The company-appointed psychologist then broke confidentiality to speak to the managers of the business. Although regulators confirmed that the employee had a point, they were dismissed and have received no justice.

Whistleblowers can be dragged through the courts, with mounting costs and unending hassles. For many, their cases have consumed their lives. It may be thought that the best advice such a person could be given would be “Move on and forget it”, but that is not justice; it is unjust. While it might be said to have been good and well-intentioned advice, is that really the way in which we in this place want the affairs of our country—economic, and relating to public service—to be dealt with? I really do not think so.

However, it is equally important not to limit the definition of whistleblowers to employees. As I said earlier, and as was mentioned by the right hon. Member for North Norfolk, many categories of people should have the protection to which whistleblowers are legally entitled. We must ensure that, when they blow the whistle, they are given proper protection under the law—and the law is too vague in this regard.

When an individual faces the full force of a corporate or public sector legal department, it is a complete mismatch. Public corporations should be mandated to disclose legal costs to shareholders in such cases, and the same should be true of public authorities. They should have to make clear and transparent the costs of fighting whistleblowers that will be borne by the taxpayer. Some of the estimates of the costs that have been incurred by public services are absolutely mind-blowing and wholly disproportionate.

One brave whistleblower in Scotland had evidence of HR malpractice. It should have been a simple grievance dealt by the organisation, which should have been pleased to receive the feedback from that person. Instead, the person and their family, who also worked there, were victimised. They cannot afford legal representation, and will have to argue their own case at a tribunal against a public sector legal department with an expansive budget.

[Bob Stewart (Beckenham) (Con)]

I thank my very good friend for allowing me to intervene. It seems to me that the very best companies, corporations and organisations should include in their codes of ethics or conduct a requirement for employees, or people for whom they have responsibility, to report things that are wrong. In the first instance, that should happen within the organisation, but if people still feel that they have not obtained satisfaction, there should be a device within the organisation enabling them to report things, and they should not be victimised for that. They should be applauded, because if they do that, the company will get better.

[Stephen Kerr]

I completely agree with my hon. and gallant Friend. I cannot understand why any organisation would not embrace the feedback someone brings them when it has to do with the types of things whistleblowers raise: why on earth would any business or public sector organisation not want to know when things are not being done right—what is right in terms of the law, what is morally right, and what is right in terms of the values of the organisation? And there absolutely should be a no recriminations policy in any organisation worth its salt. I also absolutely believe that there needs to be a place where whistleblowers can go, a safe harbour where their case will be properly treated and respected and where they will get the necessary level of support, whatever that support might be, so their case can be properly heard.

I think I have made it clear that I strongly believe that no organisation of any repute should be operating in the ways we have heard discussed in this debate by various colleagues. Governments and companies should be confident enough to know when they are wrong, and they should be honest and brave enough to address that. The reaction to whistleblowing should be to say, “Thank you; thank you for speaking up”, and then when the whistleblower’s words and evidence are evaluated organisations should be more than happy; in fact, they should be recognising and themselves rewarding whistleblowers who speak up so that the changes that flow from that will mean they as businesses or public service organisations can become more efficient, effective and ethical in the way they operate.

The APPG will soon publish its findings and recommendations, and we will further consider and promote the case for an independent office for the whistleblower, giving protection to and advocating in the interests of whistleblowers. We shall also be asking for an end to the use of non-disclosure agreements to cover up wrongdoing, criminality and other morally dubious behaviour. That idea must be fully debated and explored, because there are currently far too many abuses of NDAs.

Parliament and Government have a responsibility to set the conditions and the standards; we have to create the culture in our country where people feel confident that they can and should speak up in the public interest. We want whistleblowing recognised as a positive and public-spirited thing to do, and I look forward to the Minister’s reply today, but this is the start of the debate on this issue, not an end, and we must recognise the courage and integrity of people who do the right things for the right reasons, because they are guided in what they are doing by conscience and the public interest.

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[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate and to follow the hon. Member for Oxford East (Anneliese Dodds). I congratulate the right hon. Member for North Norfolk (Norman Lamb), who set the scene, and I thank the hon. Members for Stirling (Stephen Kerr) and for Thirsk and Malton (Kevin Hollinrake) for making such valuable contributions, as others have previously and will afterwards. The members of the all-party group have been engaging on this subject and are to be congratulated on sustaining their interest and on their efforts today.

Like the hon. Member for Oxford East, I would not be happy to make known all the cases I have been involved in over the years, because of the individuals and organisations in Northern Ireland that were involved. I know of cases involving the health service, the council, sometimes the police and sometimes other organisations, but I shall not go into any of the details, because that would inhibit the people who came to me. I am always clear about the confidentiality of those conversations.

I wish to dwell on one case, because it has dragged on for so long. When I describe the case, the hon. Member for Thirsk and Malton will know it and the person involved, because he is indirectly involved in the case or has knowledge of the person. First, though, let me say that a review of the 20-year-old PIDA is welcome and necessary to ensure that the UK remains the best place in the world to do business. Piecemeal reforms, often as a result of individuals bringing claims, have extended the scope of who is protected, but unfortunately there remain gaps and inconsistencies. The Government recently committed to ensure that workers’ rights keep pace with those in the EU, whatever the Brexit outcome. This is an opportunity to reiterate the commitment to ensure that worker protection does not fall behind in the coming years.

I feel that I can say all that for a few reasons. In my constituency, I had a constituent who was engaged in what was at the time the longest-running employment tribunal case. It ran from 2007 to 2012 and involved 50-plus tribunal days. It was an absolute endurance test for my constituent and led to his substantive mental health problems and a complete physical and emotional breakdown. My parliamentary aide and I supported the employment tribunal process for some 18 months while he recovered. We helped that gentleman and his family. Sometimes, we need to be aware not only of the impact on the individual who does the whistleblowing, but the financial, emotional and mental impact on the family, too. It is clear that what that gentleman went through was horrendous.

In the end, the employment tribunal found that my constituent had made 12 protected disclosures involving going concern matters for the UK company and intangible asset valuations that could not be justified. Does that sound familiar? We had Carillion and BHS in 2018 and 2019. If people learned their lesson, wouldn’t that be great? But people do not learn their lesson, because these things seem to happen over and over again, as has been explained here today.

I make that point because, during those 18 months, my constituent and I engaged in occasion with the FRC on an investigation into his disclosures. The investigations by the FRC and the Institute of Chartered Accountants in England and Wales were lamentable. In fact, in response to the Business, Energy and Industrial Strategy Committee audit inquiry, the FRC’s chief executive officer recently refused to disclose what whistleblowing investigations had been undertaken in the last 10 years.

In 2011 and 2012, the predecessor of the Department for Business, Energy and Industrial Strategy had a consultation on the Sharman inquiry on going concern, which started in late 2011, to which I made an extensive contribution.

The 30-plus responses have all been removed from the FRC website. Eight years on, we have another BEIS/FRC consultation on going concern. Will this accounting profession ever get things right? Concurrently, in November 2011, the then Department issued a consultation on the reform of the FRC.

In December 2010, the FSA and PwC conducted an independent inquiry into the Royal Bank of Scotland. Their press release stated:

“The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals.”

How disappointing. It continued:

“The FSA cannot publish the content of the RBS review as information gathered from the bank during the course of the review remains confidential under the Financial Services and Markets Act 2000.”

Last month, eight years later, we had a further report from the FSA’s successor, the Financial Conduct Authority. Disappointingly, it essentially concluded the same.

[Stephen Kerr]

The hon. Gentleman mentioned the FCA and the FRC. With the change that is now coming to the FRC, we have an opportunity to break away from the pattern of performance in the past. We have an opportunity to disconnect from that past. Does he agree that it is vital that, whatever replaces the FRC, it is not continuity FRC?

[Jim Shannon]

Yes, I absolutely agree. I do not think that anybody in the House today, or probably outside it, disagrees with what he has said. Continuity would not be what we want; it is change that we want, and the quicker, the better.

Concurrently, the HBOS whistleblower, my constituent Paul Moore—I have his authority to mention his name—met the then Treasury Committee Chairman, Andrew Tyrie MP, now Lord Tyrie, in February 2011. We were delighted to learn, as was subsequently published, that the Committee would look to engage independent assessors, who would report to it for some of its future investigations. That was announced and reported on the front page of the business section of The Daily Telegraph on 5 May 2011, and it was followed up in subsequent inquiries.

However, only days ago, commenting on the Government response to its excellent report on the future of audit, the Chair of the BEIS Committee, the hon. Member for Leeds West (Rachel Reeves), stated:

“The collapse of Carillion and accounting scandals at Tesco, BT and Patisserie Valerie and others have provided a painful lesson that audit isn’t working. Businesses, investors, pension-holders and the public deserve better. Urgent audit reform is needed, not yet further consultation.”

That is exactly what the hon. Member for Stirling referred to. She continued:

“The CMA and BEIS Committee’s extensive inquiries on audit proposed a range of practical recommendations to improve competition, tackle conflicts of interest and improve the culture of challenge in audit firms. Their response to our report suggests the Government is in danger of kicking vital audit reforms into the long grass.”

Then they will get lost, and we will forget about them. That should not happen. She added:

“We should not wait for the next corporate collapse. The Government needs to ignore the lobbying of vested interests in audit and set out a clear timescale for delivering on the substance of the CMA and BEIS Committee’s recommendations”.

We should listen to what the Chair of that Committee says.

Are things different in 2019 for audit and whistleblowing, compared with my experience in 2011 and 2012, when I first came into the House? No, nothing has substantially changed yet. Yet, whistleblowers regularly provide an early warning sign when things are going wrong. Often dubbed the canaries in the coalmine, they can help to avert a future scandal. They can save organisations money. One in every three serious economic crimes was highlighted by a whistleblower, according to a recent survey. That makes whistleblowing more effective than all the usual watchdogs—corporate security, internal audits and law enforcement—combined.

In addition, we need a regulator who is willing and able to listen to whistleblowers who come forward, and to protect them from retaliation. Research by Professor Kate Kenny from Queens University in Belfast shows that the cost of whistleblowing can still be very high, financially and personally—both physically and mentally. I witnessed that up close with my constituent and his family.

For a healthy economy and a reputable financial sector, we need to start supporting whistleblowers. Finance has never been more difficult to regulate because it incentivises people to chase excess profits, even at the expense of ethics and the long-term survival of an organisation. It remains acceptable—in many cases, profitable—to remain silent about wrongdoing. We need to encourage whistleblowers. What this all means is that a significant shift is needed, starting with helping employees to speak up, otherwise the financial sector and the remainder of the economy remain at risk of another crisis. In fact, we may be asked to foot the bill, just as we did with the trillion-odd pounds last time.

The Democratic Unionist party has been very active in supporting the APPG on fair business banking and victim support groups such as the SME Alliance and the CYBG Remediation Support Group in pressing Her Majesty’s Government and the banks to put in place a voluntary redress scheme for SMEs that is truly independent. Wow! Wouldn’t that be great? Such a scheme should also address the unintended consequences of light-touch regulation enabled through the Financial Services and Markets Act 2000 and the abuse of SMEs. As a banking redress process is finally beginning to take shape, will the Minister make a similar commitment to address much more effectively the “Future of Audit” report and the renewed vigour for updating our whistleblowing legislation? Like the banking redress for SMEs, these are important matters for our economy post Brexit. The original PIDA whistleblowing legislation has its genesis some 20 years ago. I will therefore appropriately finish by restating my opening comments.

A review of the 20-year-old PIDA is necessary to ensure that the UK remains the best place in the world to do business. Piecemeal reforms, often as a result of individuals bringing claims, have extended the scope of who is now protected, but there remain gaps and inconsistencies. The Government recently committed to ensuring that workers’ rights keep pace with those in the EU. This is an opportunity for the Minister to reiterate the commitment to ensure that protection of workers does not fall behind in the coming years. The Democratic Unionist party—part of the partnership with the Conservative party in government—supports that commitment with regard to updating our whistle- blowing legislation in a post-Brexit Great Britain and Northern Ireland.

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[Dr Whitford]

I thank the hon. and gallant Gentleman for his intervention. As a medic myself, it is clear that we are advised by the General Medical Council, the Royal College of Nursing and various official bodies that we must speak up—that we have a duty to speak up. However, the landscape we look at is littered with broken careers and often broken people.

The problem is that whistleblowers think they are protected because they have heard about whistleblower protection, but it simply does not exist. The right hon. Member for North Norfolk talked about “brave people” speaking up. People should not have to be brave to raise concerns. If all people see is others ahead of them who have been driven and hounded out of their career, and who have maybe ended up with mental health issues or worse, then that is a big, black, threatening cloud—keep your mouth shut, keep your nose clean, walk by on the other side. The problem is that that results in more suffering and more death.

There are two aspects to this issue: business and industry, which is represented most commonly by the finance sector; and public services, which are most commonly represented by the NHS. Those two sectors—finance and the NHS—probably generate the biggest number of scandals and whistleblowing cases, and therefore specific treatment is required in those industries to invite whistleblowers to come forward and protect them.

While there is UK-wide regulation of finance, health services are devolved. The four health services are struggling with this and working to improve whistleblowing. After the Mid Staffs scandal, Sir Robert Francis highlighted that in Mid Staffs—indeed, this was an issue in some of the later scandals—there was an obsession with becoming a foundation trust. The hon. Member for Stirling (Stephen Kerr) and others have talked about why people cover things up. Whether it is a high-profile business or a public service that has been corporatised, there is a drive to remain shiny and perfect on the outside, instead of admitting a problem and trying to fix it.

Having produced his report, Sir Robert Francis set up the “freedom to speak up” guardians in hospitals and the national guardian. In Scotland, the local person in health boards—we do not have trusts—is a specific non-executive director who is a whistleblowing champion. The advantages of a non-executive director is that they are on the board, with a clear and loud voice, and they are not an employee, but they are part of the system. The “freedom to speak up” guardians are employed by the trust, so they are operational—they are a person to go to—but they are also an employee. There are issues at the trust and health board level with how the guardians or champions themselves are protected. Perhaps we need not only an independent national office but an independent system. In the NHS, that might be people who are taking responsibility for safety or healthcare services information. Unfortunately the legislation on that is in the Brexit long grass, but I hope it will eventually come forward.

There is a national guardian in England, but it does not have statutory powers. Scotland has set up an Independent National Whistleblowing Officer, who is basically the public services ombudsman. They are completely separate—they are outside the system—and they have statutory powers, which is important. A reporting and advice line was set up back in 2013, so that if people were afraid to report locally or were not getting anywhere, they could report to that phoneline.

[Stephen Kerr]

The hon. Lady makes a good point about what is happening in Scotland now, but it is worth mentioning the evidence that my APPG received from Police Scotland and NHS Scotland. For example, the lessons that NHS Scotland has learned in Inverness are being taken on board by public authorities in Scotland. The size of our country allows us to do things a bit more quickly and deftly, but undoubtedly the lessons of the past are being learned and implemented, and I applaud NHS Scotland and Police Scotland for that.

[Dr Whitford]

So small is beautiful after all—that is excellent. The evidence is there; it has been there for years. The problem is that action has not been taken.

The Independent National Whistleblowing Officer has already developed, published and is consulting on standards. The standards will look at bullying and harassment—an issue that has come out in NHS Highland—and patient safety issues, and they can empower reporting and review. They include primary care and social care. They include not only trainees like Dr Chris Day, who was appallingly treated, but students and volunteers. No one should be limiting and excluding the person who saw bad and dangerous behaviour from coming forward and doing something about it.

Every health board will have to report on the actions they have taken to remedy the findings of an investigation. Health boards must investigate and record how they investigated. They must record the action they took, and they must show any improvements that they developed from that investigation. Statistical analysis will be part of an annual report by the board every year, which will look for themes, trends and patterns. This is—and I welcome the fact that the hon. Gentleman recognises it—an attempt to make this work by having an independent office.

The results of a survey of health and social care staff in Scotland—and they are health and social care staff now—showed that two thirds felt they would have the confidence to speak up and raise a concern. That is contrary to the fact, as Members have said, that approximately a quarter of staff in England would have the confidence to speak up. As a doctor, I would like to see the figure an awful lot closer to 100%.

The Independent National Whistleblowing Officer will have among their statutory powers the ability to take disciplinary procedures against anyone who victimises a whistleblower. That is also critical because, at the moment, as we have heard, the whistleblower suffers, and the person who caused the suffering does not.

Regardless of how the different nations of the UK are trying to tackle whistleblowing issues within their own public services, particularly their NHS, we need to deal here with the financial and other UK regulation systems. In particular, the Public Interest Disclosure Act is the overarching legislation for whistleblowing, covering all sectors. It was actually 21 years old yesterday. It was a private Member’s Bill, so perhaps it did not really have the scrutiny it should have had. It was groundbreaking at the time, but the UK is now well behind the pack, including countries such as Ireland, and, frankly, it needs to catch up. As has been highlighted by the hon. Member for Ellesmere Port and Neston (Justin Madders), it does not protect the whistleblower; it only allows them to go to an employment tribunal after they have suffered huge detriment, with only a 3% success rate, and the tribunal is often used to create more damage and victimisation.

The whistleblowers I have been working with have asked for an independent, free-standing public interest protection Act—not part of employment law, but free-standing—that should do a few things. It must ensure investigation of the concern, because the concern often disappears in all the fighting. The whistleblower should be protected from the point at which they raise their concern. It should cover all those who would be in a situation to report, including trainees or non-workers. It should prohibit detriment, and there should be the ability for civil wrong or criminal offence actions to be taken.

This requires an independent agency or body, and it should also cover regulators. This is not just about the FCA or the FRC, because the Care Quality Commission is in the frame for Whorlton Hall, in that it did a report that described it as not having a problem when people had actually raised issues. If we take the heat out of whistleblowing and make reporting normal, as we have done with Datix systems in the NHS—making this not whistleblowing, but just part of normal duties—then we can change this. Whistleblowers must be valued. In the NHS, it is a matter of patient safety, and that is critical.