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Mr. Anthony Coombs: Resonance.

Mr. Luff: As my hon. Friend says, it has a certain resonance.

I fear--I want to be proved wrong--that this Bill could turn that anonymous leaking into a torrent of information. This is not a party point. I think that secrecy has a crucial role to play in the process of decision making, and that people in Government, whether Ministers or civil servants, will be more reluctant to express a point of view orally--never mind in writing--if they believe that that point of view will be reported too widely. It may even be a point of view; it may be a point of argument that could be publicly misrepresented as a point of view. So I think secrecy is essential to good government.

We know that there has recently been a great deal of debate about this issue in the civil service, not only as a result of the so-called arms-to-Iraq affair but also as a result of the Nolan committee's work in this sphere. I think that the new civil service code of conduct is right when it says:

"Civil servants should conduct themselves in such a way as to deserve and retain the confidence of Ministers and to be able to establish the same relationship with those whom they may be required to serve in some future Administration. They should comply with restrictions on their political activities. The conduct of civil servants should be such that Ministers and potential future Ministers can be sure that confidence can be freely given, and that the Civil Service will conscientiously fulfil its duties and obligations to, and impartially assist, advise and carry out the policies of the duly constituted Government."

Those are wise words of advice. I should like an assurance from those who support the Bill that nothing contained in it will undermine that important constitutional principle.

Collective responsibility matters in any organisation, not just in government. If doubts about proposals or ideas are revealed before decisions have been reached, the decision-making process can be damaged. Perhaps the Bill should make some distinction between exposing potential problems during a decision-making process--which is difficult--and decisions themselves which, when implemented, become policy. Perhaps a distinction can be drawn--I am not sure, but I hope so.

My hon. Friend the Member for Blaby talked about the schedule, and I am concerned about its omnibus nature. As my hon. Friend rightly said, the schedule contains some grey areas; it mentions abuse of authority, miscarriage of justice and maladministration, which are all matters of subjective judgment for individuals. I accept that the other three issues mentioned in the schedule are not.

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I am worried not merely about the subjectivity of the schedule, but about clause 1. It states that a public interest disclosure can be justified using the schedule, but it also states that it is

"not limited to that described in the Schedule to this Act".

Misconduct or malpractice beyond the already nebulous list would be justifiable when claiming public interest disclosure. I think that we should be a little more sure about the implications of the provision.

Secrecy is never good of itself, but it is sometimes a necessary means to an end. Mature democracies such as ours should be better able to deal with openness. I prefer a non-legislative approach. It is for the good of democracy and business to be as open as possible--in that way, both will win the confidence of the individual.

I shall conclude by quoting the remarks of one of my constituents. The then Sir Gordon Borrie, now Lord Borrie of Abbots Morton--writing in a document for Public Concern at Work which was published earlierthis year and is entitled "Four Windows on Whistleblowing"--said:

"A cynic might take the view that the phrase 'business ethics' is an oxymoron, i.e. the conjunction of two words of conflicting meaning, like 'deafening silence' or 'jumbo shrimps'. I believe that, at any rate, in a competitive market place, a company's own enlightened self-interest dictates that it should behave in an ethical manner.

If a commercial organisations wants to create a good long-term reputation with customers, employees and other"--

I apologise to my hon. Friends for the next word--

"'stakeholders', it should, as a matter of its own choice, do more than comply with the bare requirements of the law. One of the key ways of competing for market share may well be to demonstrate high ethical standards . . . The adoption of ethical conduct by a business, including the development of transparent and usable mechanisms through which employees can disclose malpractice without fear, may be seen as synonymous with enlightened self-interest. In genuinely competitive markets I am confident that one needs no more than enlightened self-interest to promote and deliver ethical conduct and it cannot be doubted that it is in the interest of the business itself (as well as in the public interest) that its leaders are made aware of any malpractice in its midst."

Whatever happens to the Bill today or during its further progress through the House--whether it succeeds or fails--both the Government and business would do well to heed the wise words of Lord Borrie.

1.23 pm

Mr. Alan Howarth (Stratford-on-Avon): It is reasonable to assume that the disclosure of malpractice is a public benefit. The Bill does not devalue the duty of confidence, but it recognises that there is an overriding benefit in disclosing danger to the public, fraud or other sorts of illegal and improper conduct, and that protection under the law is needed for the public-spirited individual who discloses such matters.

As hon. Members have observed, it is not easy to blow the whistle. The individual who contemplates doing so experiences conflicts of loyalty, and it may not be easy to muster the confidence to act in the public interest. The Bill encourages only the individual who is genuinely and seriously concerned for the public interest. It is not a charter for the mischievous, the sneak, the opportunist or the opinionated individual who thinks that he or she knows better than the policy of the organisation. It is a thoroughly responsible measure that has been carefully

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drafted to limit the conditions in which whistleblowing is encouraged. It would ensure that the public interest is the test and would encourage no more than the minimum public disclosure consistent with the public interest.

The law as it stands is a mess. The DTI inspector's report on Barlow Clowes usefully reviews the state of the law and its inadequacies. Recent statutes have provided piecemeal exemptions from the law of confidence. Some measures have required disclosure in certain circumstances. They include the Companies Act 1985, the Insolvency Act 1986 and the Criminal Justice Act 1993. Other legislation has authorised but not required disclosure. It includes the Drug Trafficking Offences Act 1986 and the Prevention of Terrorism (Temporary Provisions) Act 1989.

Case law provides justification for those who break confidence in the public interest, but, none the less, there is great risk for an employee who relies on it. The inspector's report on Barlow Clowes states:

"It is clear that a number of employees of Barlow Clowes could have disclosed their suspicions without acting in breach of their terms of employment . . . It has to be recognised, however, that they were under no legal duty to do so and the position of the whistle blower is frequently extremely uncomfortable. The most likely result of such whistle blowing would be an immediate if wrongful termination of employment and the prospect of a protracted dispute.".

Increasingly, businesses recognise that they stand to benefit from satisfactory internal procedures for the exposure of malpractice. Freedom for business must be accompanied by responsibility among all staff. That is one aspect of stakeholding, and Conservative Members are unwise to mock the principle of socially responsible business practice.

Mr. Luff: Will the hon. Gentleman give way?

Mr. Howarth: No. The hon. Gentleman has taken up a great deal of time already.

In their own terms, the Government do not want to impose regulation on businesses, and, as has been argued, the Bill would strengthen self-regulation.

Let us consider the Government themselves and whistleblowing. The damage to democracy through the failure of accountability and the poor quality of decision taking arising from the culture of secrecy has been glaringly exposed in the Scott report.

The report's exposure of one particular episode demonstrates the potential value of whistleblowing. On22 June 1988, a whistleblower within Matrix Churchill wrote to the Foreign Secretary to warn him that the company was supplying weapons making equipment to Saddam Hussein. The letter is quoted by Scott at paragraph D2.318, which states that the writer of the letter

"wrote to Sir Geoffrey Howe and said the company was 'working on a thirty million pound order for CNC lathes to be used for munitions production in Iraq,' and that 'these machines are going to be used to machine shell cases'".

Scott tells us that neither the Foreign Secretary nor any other Minister was shown the letter or informed of it, nor was any action taken on it then. Three years later, as the trial approached in 1991, a DTI official minuted internally in terms of the utmost cynicism, and that document is quoted by Scott at paragraph G10.29:

"The difficulty of course is not simply that the letter exists, but that the writer of the letter no doubt still exists and even if he has not so far been involved in the proceedings by either the prosecution

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or defence he may well make the existence of his letter public. The chances of his doing so will no doubt be all the greater if he is one of those who has already been made redundant or will be made redundant next month. It is tempting to suggest that we might claim PII"--

public interest immunity--

"for document 4"--

disclosing the receipt of the employee's letter--

"but I fear that doing so in the face of the possibility that the information in it may well appear across the front of the tabloid press during the course of court proceedings, makes me somewhat diffident about suggesting it."

It was the Matrix Churchill whistleblower's letter that caused alarm bells to ring with the then President of the Board of Trade, now the Deputy Prime Minister, when he was told about it. He sidelined five times a sentence advising him:

"Assuming the writer retains his public spirited interest it may well be that as the details of the case get into the public domain he may feel moved to write again, but possibly to the press."

The right hon. Gentleman shrewdly realised the risks of being seen to be party to a cover-up.

That episode demonstrates powerfully the case for systems in the civil service and all organisations to ensure that alerts to malpractice are effectively acted on and that there is protection for whistleblowers. How different and how much happier for the Government the story would have been if that letter had been acted on in 1988. As my hon. Friend the Member for Islwyn (Mr. Touhig) said, the costs of ignoring such messages in human lives, public money, public shame and the reputation of government or business are immense.

While Ministers defiantly snarl that they have been acquitted by Scott, civil servants are deeply worried. Elizabeth Symons, general secretary of the First Division Association of Civil Servants, wrote in The Guardian on 8 February:

"It has always been unclear as to the course of action open to a Civil Servant who knows that a Minister has sought to evade ministerial responsibility by, for example, misleading either deliberately or unknowingly the House of Commons. That was the issue raised by the Westland affair, and is one of the major issues of debate in relation to Matrix Churchill."

It does not appear that the Scott report offers help to civil servants in that difficulty.

Paragraph 11 of the new civil service code states that a civil servant who is required to act improperly should report the matter in accordance with procedures laid down in departmental guidance or codes of conduct. A civil servant should also report to the appropriate authorities evidence of criminal or unlawful activity or other breaches of the code. Those provisions are not sufficient. They do not clearly cover activities that, although not criminal or illegal, are unethical or unconstitutional.

The code does not make it clear what duties or rights a civil servant has when a Minister misleads Parliament--one of the crucial issues in the arms to Iraq affair. What is a civil servant entitled to do when he or she is required to draft letters, parliamentary answers or statements to Select Committees that tell half a truth or less than the truth and effectively mislead Members of Parliament? What can a civil servant do when he or she knows or reasonably supposes that official statistics are being abused?

These are growing difficulties for civil servants in fulfilling their duty, as described in paragraph 1 of the code of conduct, to assist the Government with

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"integrity, honesty, impartiality and objectivity."

With contracting out, civil servants do not have the same access to information in areas for which their Ministers remain responsible. The "commercial: in confidence" formula is extensively used--far more in this country than in the United States--to prevent officials and politicians from knowing what is going on.

In a context of increased competitiveness--market testing, contracting out and time-limited personal contracts--pressures increasingly drive officials in the direction of expediency and self-serving survival. In an increasingly marketised public service, the ethic of public service for which the British civil service has been justly famed, and which has been the envy of Governments and peoples in many other countries, is harder to retain and to transmit to new generations of public officials.

Mr. Gladstone famously said in 1879 that the British Constitution

"presumes more boldly than any other the good sense and good faith of those who work it."

Even after Scott, the Government appear to be unrepentant. Grimly, the new code of practice's final paragraph states:

"Where a matter cannot be resolved by the procedures set out in paragraphs 11 and 12 above, on a basis which the Civil Servant concerned is able to accept, he or she should either carry out his or her instructions or resign from the Civil Service."

It adds:

"Civil Servants should continue to observe their duties of confidentiality after they have left Crown employment."

We need to support the good sense and good faith on which Mr. Gladstone wanted to rely. That means providing legal protection for whistleblowers, so that, if they cannot achieve their purpose in the public interest through internal channels, they may make public their criticisms--always provided that they are properly founded and are made in good faith.

Alongside protection for whistleblowers, we should have freedom of information legislation to limit the scope for unnecessary secrecy and the abuses that it allows, and to limit the occasions on which whistleblowing may be necessary.

The position of the whistleblower would seem, in some ways, less unfavourable in local government than in Whitehall. The Audit Commission has done much to encourage responsible whistleblowing. The 1995 update of the Audit Commission's publication, "Protecting the Public Purse: Ensuring Probity in Local Government", stresses the principle that

"employees should be encouraged to come forward if dishonest acts are identified or suspected."

The document reproduces and endorses 16 recommendations to local authorities put forward by Public Concern at Work.

Yet the experience of Mr. Bernard Crofton provides a disturbing cautionary tale. Mr. Crofton has been reinstated as director of housing in Hackney, but when he set out, energetically and courageously, to deal with fraud within the authority, he was sacked on the grounds of racial harassment and gross misconduct. In the immensely valuable evidence that he recently submitted to the Social Security Select Committee, he threw much light on the circumstances in which fraud thrives unchallenged in organisations and the reasons why people keep their heads down.

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In the national health service, the situation is also confused and creates enormous difficulties for conscientious staff who have become aware of malpractice. I applaud the Secretary of State for Health for encouraging doctors to blow the whistle, but I am not clear that he has similarly encouraged, let alone protected, other staff.Ms Sue Machin, a social worker, exposed maltreatment at Ashworth special hospital in 1993 and was sacked. In 1995, after two years of injustice, an industrial tribunal ruled that she had been unfairly dismissed.

The journal Adviser, in 1994, commented on the Royal College of Nursing's whistleblower scheme. It stated:

"Many nurses are using the scheme in order to vent their frustrations at their inability to speak out, and the scheme has revealed just to what extent nurses are frightened and unhappy about the conditions in which they have to work."

There is a tension between contracts of employment that insist on strict confidentiality and the nurses' code of professional conduct. The code calls on

"Each registered nurse, midwife and health visitor . . . above all to safeguard the interests of individual patients and clients".

If nurses do not speak out, their patients may suffer. If they do, they themselves are liable to suffer.

Some trusts, such as the King's Healthcare trust are admirably enlightened about whistleblowing. But Christine Hancock, general secretary of the Royal College of Nursing, writing in the Health Service Journal last September, felt obliged to say:

"In recent years, nurses have found it increasingly difficult to discuss standards of care openly because of a prevailing culture of secrecy compounded by confidentiality clauses in employment contracts."

She continued, pertinently:

"If the Government's proposals are to work without inspiring a climate of fear, health services must encourage openness about professional concerns. Over the long term, this would make almost all whistle blowing unnecessary."

Who is to decide where the public interest lies? That is a question that the Government posed on page 31 of the White Paper on open government and conspicuously failed to answer. It is a question that Ministers and high officials, even if they are not complacent, find it painful to consider. It needs humility to accept that the low-ranking member of staff or the mere public-spirited citizen may point out the defects of their judgments and systems. The emperor resents the little boy who observes that he has no clothes.

Ministers and their advisers find it equally unendurable that the courts should be set over them. Governments are jealous of power and they resent the judges who now so frequently find themselves obliged to strike down Government decisions.

The Matrix Churchill affair is only the latest and most notorious in a series of instances that have shown that the responsibility for determining the public interest cannot safely be left in the hands of the Government alone. We shall find a greater safety through a wider diffusion of information and a plurality of responsibility. The legal protection for responsible whistleblowers that the Bill would provide would be a valuable additional protection to our liberties and to public safety.

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