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Mr. Robathan: I have been listening to great interest to the hon. Gentleman, who has made some good points. But I do not quite understand what he has just said. Is he claiming that the Herald of Free Enterprise would not have gone down had his Bill been enacted before the accident?
Mr. Touhig: Before the Herald of Free Enterprise tragedy, there were five reports of ferries sailing with their bow doors open, and the inquiry made it clear that that information never got beyond a certain level of management--as in the case of Piper Alpha--because people were afraid to report the matters in case their jobs were affected. I cannot say, in all truth and honesty, that the enactment of the Bill would have prevented that tragedy, but people who discover that something is wrong and speak out should be protected in law--that is our duty.
Mr. Iain Duncan Smith (Chingford): I rise as a sponsor of the Bill, and I hope that my right hon. and hon. Friends will understand from my speech that I am the last person who would rise to support a Bill that imposed greater regulation or any form of scrutiny that allowed people to obtain control over a company without reasonable intent.
I thought long and hard about sponsoring this Bill before I decided to do so, and I had long discussions with the hon. Member for Islwyn (Mr. Touhig), who promoted it--on which I congratulate him. He accepted many of my criticisms in those discussions, particularly on the issue that I was most concerned about and which he has raised today: that the Bill should not be a charter for people in companies who are disgruntled, have an axe to grind or have some grudge against the management. It should not be a charter for them to take up whatever issue they wish, to run outside the company, to create tremendously bad publicity and to cause difficulties for their company.
I was on a company's board, as a business man, before I was elected as a Member of Parliament. I have thought carefully about how we operated then. As in every company, there were always disgruntled employees--the barrack-room lawyers, as they are called in the army; the person who always has an axe to grind. Once most of those people's comments were discounted, I found that much of the time in board meetings was taken up by discussions on what was being said around the company: the rumours, the concerns, and who was saying what about what might be happening.
It was quite often in the course of what seemed to be general discussions that an issue arose and someone would then be tasked with resolving it. If the issue did not reach the board through the normal channels, it somehow still reached the board. That company had a system that allowed people to talk and to have problems and concerns brought to the board's attention.
In many ways, this Bill is about enshrining the best practice that already exists in good companies. The Bill will not change that best practice, but simply says that, if those companies are doing it, so should others, and they should be encouraged to do so. This legislation does not say that they will follow best practice, but that, if they do not, they obviously stand to lose considerably in the long run should problems arise.
I decided to sponsor the Bill after having read it and changed a number of things--particularly in clause 2--because I felt that it would enshrine best practice and not essentially damage good management-worker relations. The key to the Bill lies in the fact that the matters raised by individuals in companies will be in the public interest and not as a matter of public interest: there is a clear divide between the two.
People who are opposed to the Bill might say, "It provides an excuse for someone to say that the disclosure is about public interest, and that it should be in the public
domain." That will be no excuse in the courts. If it is clearly proved that the individual raised the matter simply as a matter of public interest, he will have no protection in law against subsequent prosecution by the company.
Mr. Michael Stern (Bristol, North-West):
Does my hon. Friend agree that the great danger in relation to this aspect of the Bill is that the decision whether the employee has acted in the public interest will be made only when the matter reaches court? The damage to the company, the organisation or the civil service may already have been done--because the person concerned was mistaken.
Mr. Duncan Smith:
I accept that point, and it was one of my major concerns when discussing the possibility of sponsoring the Bill. I asked myself, "What does the Bill change in the relationship?" It does not change anything. The individual will still have seriously to go through the company's internal procedure. He or she will have to accept in their own mind that they have demonstrated good faith, and they will not suddenly be able to depart from that practice.
If it is obvious, or even marginally clear, that the individual has, from the beginning, sought to raise the matter for other reasons, that will become known. The point is that it will be made clear, in public, that they have no protection. Protection does not exist now, and it will not exist after the Bill's passage.
People are currently doing what my hon. Friend the Member for Bristol, North-West (Mr. Stern) described, because there is a genuine sense that there is no protection. There will be no protection after the Bill, either. People will be in the same position, and they will not be able to use the Bill to draw any excuses for the type of actions he described.
There is nothing to stop the press proceeding like that now, and the Bill will not change that. It simply tells individuals who have concerns--there are two issues that I shall raise shortly--that, ultimately, if they genuinely believe they are right, they will receive the protection they deserve, but not otherwise. People who act because they are disgruntled will not be protected at all.
Mr. Anthony Coombs (Wyre Forest):
I know that this is a slightly paternalistic argument, but if the Bill creates a significant change in culture, as the hon. Member for Islwyn mentioned, some people--who may be totally misguided--may feel that they are entitled, in the public interest, to breach confidentiality with their employers, for example. Because they are so misguided and cannot differentiate, they may find that they not only unnecessarily damage their company but that they unnecessarily damage themselves.
When they come to court and discover the rigorous conditions that the Bill lays down, they may find that they are not protected by it. Therefore, there may be a dual effect: a greater breach of confidentiality, which will damage companies, and possible damage to relatively innocent but nevertheless misguided people.
Mr. Duncan Smith:
I understand that. I can only say that what should, and will, be made clear when the Bill is passed is that it does not give people those protections. In other words, people will not be able to believe that, somehow, in the course of this process, they will receive
I said earlier that the stress is not only the disclosure being a matter of public interest: it must be in the public interest. Most of the examples that my hon. Friend the Member for Wyre Forest (Mr. Coombs) described will not fall into that category. I am simply saying that the company's internal processes will not change. Its employees have a duty of confidentiality, and that has not been breached. I do not think that someone who currently wishes to pursue matters that he thinks are in the public interest, for example, will not have covered that matter. I am simply saying that the Bill makes that clear.
I do not claim, as does the hon. Member for Islwyn, that the Bill will dramatically change this country's culture. Ultimately, it will simply allow clear protection for people who genuinely seek to resolve a matter that they have been unable to resolve internally. I have two examples that are worth listening to, because they deal with that very issue.
As we examine the Bill, the real question is whether there is a need for it--if there is not, of course it is unnecessary. As the hon. Member for Islwyn said, there are plenty of examples in which, had a company or organisation's internally available information been properly used internally, some disasters or problems would not have occurred.
I recognise, having come out of a business culture,that no good company wants to destroy its management-employee relationship. It certainly does not want to destroy that relationship or its reputation because a matter was raised somewhere else by someone who was not in management. The problem often lies at the middle management levels--often not much higher--with people who are defensive because they did not deal with the issue first, which may make them look rather foolish or reflect badly on their judgment. The problem is getting rid of those blockages at the middle levels of an organisation or company, which are all too common.
I should like to mention two cases as examples of why I believe that legislation is needed. Many hon. Members will have heard of the case of Jenny Watson, the deputy head of Sidney Smith school, in Hull. The school is not in my constituency, but the Minister of State, my hon. Friend the Member for Boothferry (Mr. Davis) asked me to mention this case, because he has been pursuing it on her behalf. Jenny Watson fits exactly into the category of person that we are talking about. The case centred around her investigations, as a deputy head, into the abuse of claims for overtime and extra money from caretakers in the school and in the area. She was ultimately proved to be correct about a string of Spanish practices that were costing the school vast amounts of money and had been going on for years. The special overtime payments that Mrs. Watson studied in the timesheets stretched back over a long period, but the practices were considered acceptable, because no one wanted to challenge the caretakers or their union.
At first, the governors and the headmaster were supportive, but after much pressure brought by the council and the union, they started to back off--particularly the
headmaster--although the original chairman of governors remained supportive. An important aspect of the case was that, when the chairman of governors returned to the school one day, he saw a caretaker, who was claiming overtime for that period, sunbathing outside his house. That was the sort of practice that was occurring.
The deputy head was given the responsibility of looking after the budget and sorting out problems, but she found herself unable to raise the problem; she was told that people did not want to hear about it, because there were bigger issues at stake, and she was simply impinging on people's ability to sort them out. Many times, the head said to her, "You have no idea how extreme the pressure is from inside and outside the school to have you removed from anything to do with the caretakers or their budgets".
That set of claims was not addressed--instead, the deputy head was ultimately suspended. An inquiry was held by a tribunal, which immediately recommended that she should be sacked. When my hon. Friend the Member for Boothferry (Mr. Davis) inquired into the composition of the tribunal, he discovered that it consisted of three people, two of whom had close associations with the caretakers. When he complained, another two people were added to the tribunal, but one, if not two, of them were linked with the trade union involved. Such issues are at the heart of the Bill.
Even after the district auditor supported the lady's case and said that great abuse had been occurring, she was not reinstated. Those involved tried to deal with her rather than with the complaint. Eventually, the lady was offered the opportunity to return to the school as deputy head, but her terms of reference were completely changed--all mention of budgets or caretakers was cut out.
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