House of Commons
Friday 1 March 1996
The House met at half-past Nine o'clock
PRAYERS
[Madam Speaker in the Chair]
Scott Report (Civil Servants)
9.34 am
Mr. Tam Dalyell (Linlithgow): On a point of order, Madam Speaker. May I raise a matter that is germane to the debate about to be initiated by my hon. Friend the Member for Islwyn (Mr. Touhig)? Is it true that the Prime Minister's Press Office, run by Mr. Jonathan Haslam, has made a statement that Ministers have had their trial and been acquitted--presumably that is a reference to the decisive margin of 320 to 319--and civil servants have not?
May we have a statement at 11 am on the Government's warning about disciplinary action against civil servants by Ministers who accept no blame themselves? On 7 February 1983, at column 834, I initiated a debate on the Prime Minister's relations with the media and the role of the Prime Minister's press secretaries. It seems from the reports that Mr. Jonathan Haslam is going further down a political road than Bernard Ingham ever did.
Mr. Derek Foster (Bishop Auckland):
Further to that point of order, Madam Speaker. The Minister who will reply to the debate today, the Minister for Competition and Consumer Affairs, is from one of the Departments in which some civil servants are under threat of disciplinary action--indeed, dismissal. He is in the best position to come to the Dispatch Box at 11 am and make a statement about that matter, because he will know that civil servants in that position have a right to make a statement in their own defence only if it has been cleared by the establishments officer and the legal officer, and only if it does not criticise Ministers or Government policy. The House deserves a statement about that matter.
Madam Speaker:
I am not aware of the statement referred to by the hon. Member for Linlithgow(Mr. Dalyell) in the first part of his remarks, and I have not heard that the Government are seeking to make a statement on this matter at 11 o'clock today. As the right hon. Member for Bishop Auckland (Mr. Foster) has said from the Opposition Dispatch Box, there are Ministers on the Treasury Bench today who will have heard these exchanges, and who may seek to make some comment on them during the course of the debate.
Orders of the Day
Public Interest Disclosure Bill
Order for Second Reading read.
9.37 am
Mr. Don Touhig (Islwyn): I beg to move, That the Bill be now read a Second time.
People who act in the public interest and make the public aware of a crime, fraud or serious malpractice in an organisation currently have no protection in law against reprisals. The Bill that I and my sponsors place before the House today seeks to change that. I hope that, with the support of right hon. and hon. Members from both sides of the House, we can ensure that legal protection is afforded to those people.
I hope, too, that the House will recognise that we need to change the culture in Britain that seems to ignore the message, while questioning the motives of the messenger. There are plenty of examples of that. The official inquiries into the Zeebrugge disaster, into the Barlow Clowes affair and into the activities of the child abuser Frank Beck all show that alarm bells were clearly sounded by responsible employees, but that those in authority failed to act.
The cost of ignoring those messages has been devastating in terms of human lives, public money and private savings, and of a loss of confidence in business and in Government. That situation will not change unless we take action in two key respects. First, we must ensure that people are not deterred from raising concerns about serious malpractice or misconduct. Secondly, we must ensure that those in charge of an organisation recognise that they may have to account for their response to any warning that is given.
The Bill is not a nitpicker's charter; it will not provide a field day for whingers. It will protect only those individuals who, having discovered some crime, fraud or wrongdoing within their organisations, raise their concerns internally. Only then will they be protected from any reprisals. The individual must be seen to have acted responsibly.
If the serious malpractice continues in spite of the initial warning, individuals may feel that they must blow the whistle in order to safeguard the public interest. In that situation, the Bill ensures that they will be protected against reprisals. However, protection for whistleblowing is available only if the courts are satisfied that the disclosure to a regulator or to the press was in the public interest.
In addition, the individual must have satisfied four key conditions: first, he must have raised the matter internally; secondly, he must have had good reason to believe that the information was accurate; thirdly, he must not have acted in bad faith; and, fourthly, he must not have sold the story for profit. The Bill allows responsible individuals to go to court and take out an injunction to prevent dismissal or other reprisals.
Mr. Andrew Robathan (Blaby):
The hon. Gentleman said that individuals must not sell their story for profit. However, the Bill states that an individual must not make a disclosure
Therefore, could not someone blow the whistle and sell his story later on the grounds that he did not do so principally for personal gain?
Mr. Touhig:
We cannot wholly discount that possibility, but the Bill certainly does not encourage that sort of action. It states clearly that people will not be protected if they seek to sell their stories for profit.
The Bill also allows for compensation claims. However, any award can be adjusted to take account of bad conduct on the part either of the individual or of the organisation concerned. Whether the individual raises the matter internally or outside the organisation, he will not be protected under the Bill if he acts in bad faith.
That provision will deter people with grudges and those who are motivated by a wish to damage an organisation rather than by a desire to stop malpractice. It will also deny protection to those who blackmail their organisations by saying that they will keep silent if they are paid off or promoted. It will also bar people who are dishonest. Employees may bring claims before an industrial tribunal. In that case, the £11,300 ceiling on damages will not apply, and the rule barring employees who have not worked for two years will be waived.
The Bill imposes no direct costs on organisations. It does not require organisations to appoint new staff or introduce special procedures for investigating concerns. By requiring individuals to raise concerns internally before taking any other steps, the Bill allows responsible organisations to remedy malpractice without the damaging consequences of an external disclosure. The only organisations which would incur significant costs under the Bill would be those which break the law or otherwise threaten the public interest, and which do not deal with a serious malpractice, but seek to victimise the person who draws it to their attention.
There are many examples of that. Harry Templeton, a Scottish printer and a trustee of the Mirror Group pension fund, was such a victim. He was suspicious of Robert Maxwell, and questioned him repeatedly about the handling of the fund. For his pains, he was sacked, thrown from the pension fund board and effectively blacklisted from the printing industry. Maxwell was able to ride roughshod not only over Mr. Templeton but over pensioners, professional advisers and the public interest, because the law does not protect people who raise genuine concerns.
The consequences of an organisation's ignoring warnings about serious breaches of safety procedures, for example, are almost too awful to recount. Joy Cawthorne, an instructor at an Outward Bound centre in Lyme Regis, was so shocked by the lax standards she observed that she resigned. Before doing so, she wrote to the managing director, warning him that, unless something was done, he would end up
Tragically, she was proved right. Her warning was ignored, and four children died in a canoeing accident.
Many organisations today recognise the valuable role played by the whistleblower. Unless employees raise their concerns, those in charge may not realise that anything is
wrong. In principle, Ministers are accountable to the House, company directors are accountable for the actions of their organisations, and trustees are accountable for what their charities do. Yet, if those who are accountable in law do not know what is happening, it is very difficult to correct or prevent something that is seriously wrong and is done in their name.
Recognising that, the House and the law take a more lenient view when those in charge did not know about the misconduct. As the main thrust of my Bill is to ensure that serious concerns are raised internally, it strengthens the weakest link in the chain of accountability.
I refer, for example, to the case of Beth Lawson. Beth worked at the delicatessen counter of a major supermarket selling dairy produce, cheese and pates--that sort of thing. She discovered that her boss was changing the dates on food that had passed its sell-by date. Beth's colleagues were reluctant to take up the matter with their employer in case it jeopardised their jobs: they believed that it was more than their jobs were worth.
Beth knew that she would be leaving the company to start a new career, so she alerted her employers, who investigated and stopped the practice immediately. We can only imagine the possible consequences if Beth had walked away without blowing the whistle: people being taken ill from eating contaminated food, damaging headlines plastered across the newspapers, and a supermarket chain's reputation in tatters and jobs at risk. What was that action worth?
Unlike many laws, the Bill would impose no costs on responsible organisations, and would affect only those who knowingly engage in serious malpractice. As such, it would impose no red tape, and it would underpin competition, as it avoids any risk of cross-subsidisation of bad businesses by good ones. My fellow sponsors and I have sought to assure all who have bothered to ask, including Ministers, that we are not seeking to place unacceptable regulatory burdens on business and industry.
Last year, my hon. Friend the Member for Cannock and Burntwood (Dr. Wright) introduced a ten-minute Bill which paved the way for today's measure. I am grateful for the work that he has done. He pointed out that many companies have become aware of whistleblowing, and that they now believe in protecting the rights of the whistleblower and opening routes within companies to discover fraud and corruption.
British Telecom, Esso, Lucas and NatWest are only a handful of the major companies which have established a hotline to deal with employee concerns. That is clearly a sensible development for large organisations. Rather than imposing a regulatory burden, the Bill underpins effective self-regulation. It is essential. It recognises the role of a regulatory body only as an option of last resort.
How can self-regulation work effectively if employees are deterred from raising serious concerns about malpractice? When he was director general of the CBI, Sir John Banham wrote of
The Government have welcomed the work of whistleblowers. During the passage of the Pensions Act 1995, the Government tabled a "blowing the whistle"
clause to ensure that misconduct and malpractice were reported. It provides that auditors and actuaries who have reasonable cause to believe--the same test as in the Bill--that there is a material failure in a pension scheme or a breach of the rules or of the law must report it to the pensions authorities immediately.
In a letter to my hon. Friend the Member for Cannock and Burntwood in August, the Chancellor of the Duchy of Lancaster--commenting on my hon. Friend's Whistleblowers Bill--said that, with regard civil to the service, he was
In 1993, the then Secretary of State for Health--the present Secretary of State for National Heritage--published whistleblowing guidance for the NHS to ensure that concerns about patient care were addressed and not swept under the carpet. Last August, in the wake of the misdiagnosis of bone tumours in Birmingham, the present Secretary of State for Health published proposals that doctors should be under a contractual requirement to report to their employer malpractice or misconduct by a doctor.
The Prime Minister says that he is keen to improve the scrutiny of the public sector after the Scott report. The Bill will underpin the recent changes--in particular, the code of practice for open government and the new whistleblowing procedures in the civil service that the Government have introduced in Whitehall and pledged to extend across the public sector.
The core of the Bill is set out in clauses 1, 2 and 3. Central to the measure is the definition of public interest disclosure. Clause 1 states that this is a disclosure that, in an action for a breach of confidence, a court is likely to find was justified in the public interest; a disclosure that an individual disclosing it has acquired subject to an obligation or claim of confidentiality; a disclosure that tends to show significant misconduct or malpractice of a kind including--but not limited to--those set out in the schedule.
The Bill is not intended to blow a hole in the duty of confidentiality, and it rests on the assumption that that duty is important and must be respected. That is why the Bill requires serious concerns to be raised internally. Where the matter is not addressed internally, however, and where the law recognises that it is lawful and justified for an employee to take the matter outside, the Bill protects people who are acting in the public interest. The Bill does not weaken by one iota the importance of the duty of confidentiality.
Clause 2 defines disclosures that are protected in the Bill. A "protected disclosure" is a public interest disclosure where the individual making it is not acting in bad faith; believes on reasonable grounds that the information is accurate; has not made it for the purpose of obtaining payment for personal gain; and has taken reasonable steps to raise the misconduct or malpractice internally first. Clause 3 provides that an individual may not be penalised or be guilty of an offence for making or proposing to make a protected disclosure.
Finally, I return to the idea of changing the culture of Britain. A single Bill cannot change the culture of a country, but it can engender an atmosphere in which the
culture can be changed gradually. The creation of that atmosphere is possibly the most important thing that the Bill could achieve. Our entire culture, from cradle to grave, is secretive and silent. Look how, in early years, children become aware of the culture of silence--in the playground, they learn not to snitch. If we tell teacher, we are for ever dubbed "teacher's pet", and are ostracised and victimised. We should "keep mum" and not be "tell-tales".
Unfortunately, that frame of mind continues into adult life, where our language and culture are riddled with phrases and concepts of secretiveness--"keep it under your hat", "keep a lid on things." If we speak out, we have "let the cat out of the bag", or "spilled the beans". "Ignorance is bliss." "Silence is golden." But we all know that ignorance is not bliss, and that silence is not golden, when they lead to tragedies such as Zeebrugge, Piper Alpha and Clapham junction. We cannot continue to support the culture of silence where it affects the public interest.
"principally for the purpose of obtaining payment or personal gain."
1 Mar 1996 : Column 1109
"having to explain why someone's son or daughter will not be coming home".
"management's responsibility to give support to employees who report wrongdoing which is damaging the company. These whistleblowers should be regarded as a safety net where other forms of regulation fail, and meritorious whistleblowers should be protected."
"committed to ensuring that there were arrangements that both resolve genuine concerns and sustain the mutual confidence and confidentiality that should exist between all employers and employed."
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