I thank the right hon. Member for Barking (Dame Margaret Hodge) and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—the chairs of the all-party groups on anti-corruption and responsible tax and on fair business banking respectively—for securing this important debate. As chair of the all-party group for whistleblowing, I also thank them for making the APPG’s proposal to create an office for whistleblowers a policy recommendation as part of their “Economic Crime Manifesto”.
The recently published “Economic Crime Manifesto” presents the Government with good recommendations on how they can robustly tackle economic crime. Taken together, the manifesto’s four umbrellas for reform—transparency, enforcement, accountability and regulation—work to stop economic crime from all angles and at all levels. I ask the Government to give proper consideration to the detailed proposals made in the manifesto, if they are serious, as I know they are, about fighting economic crime.
The motion recognises the enormous cost of economic crime to the economy of £290 billion a year. It calls for an economic crime enforcement strategy and a restructuring of the fight against economic crime. That is much needed and part of that, in my view, is the office for whistleblowers. That office, which comes under the manifesto’s “Accountability” heading, would go a long way to supporting the detection of economic crime by supporting the individuals responsible for detecting the majority of fraud.
The Association of Certified Fraud Examiners, in its 2022 “A Report to the Nations”, found that 43% of fraud was detected through whistleblowers versus just 15% by internal audit and 3% by external audit. Whistleblowers are the single most cost-effective detection tool yet, as it stands, there is little to incentivise whistleblowers to come forward with information. When they do, they face, at best, being ignored, stifled and gaslit and at worst, having their careers and lives destroyed. When an employee blows the whistle, they risk retaliation, harassment, unfair dismissal and blacklisting and, as we have heard in relation to some crimes, much worse.
Meanwhile, the bosses of economic crime gangs take money from hard-working taxpayers and funding from much-needed public services. Although the knowledge of having done the right thing may be sufficient reward
for many, it is the personal cost that deters so many others. With little to look forward to but possible pain and suffering ahead, is it any wonder that people choose not to speak up?
To combat economic crime, we need a shift in society, where people feel confident to come forward and are supported in doing so. Disturbingly, the National Crime Agency believes that just 20% of incidents of fraud are reported. Although the Office for National Statistics crime survey reports more than 3 million incidents of fraud a year, the true figure could be five times that.
While a whistleblowing-positive culture will uncover more economic crime that will need investigating, the office for whistleblowers would support law enforcement. The office would be responsible for setting, monitoring and enforcing standards for the management of whistleblowing cases, would provide advice services and a clear avenue for disclosures, and would direct investigations and handle redress for whistleblowers. Although the current whistleblowing legislation covers only employees, anyone who blows the whistle—witnesses, contractors and many others—would be supported by the office for whistleblowers. If we want to combat economic crime effectively, we need to know about instances of it, to understand the scale. If we want to understand the scale, we need those with the information to come forward. If we want people to come forward, we need them to be able to do so without repercussions.
Serious and organised crime funds gangs and results in public and private money co-mingling with drugs, human trafficking, arms dealing and more. At a time when the state and individuals can least afford it, billions of pounds are being funnelled into illegal activities, despite modern and sophisticated crime detection techniques. Despite Government efforts over recent years, we are continuing to lose vast sums to criminals. That suggests to me that a new approach to handling economic crime is needed. I thank the right hon. Member for Barking and my hon. Friend the Member for Thirsk and Malton for securing this important debate; I am happy to support the motion.
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