I rise to speak to new clause 7, which is in my name, and the names of Members across the House. It would require the Secretary of State to set up an office for whistleblowers within 12 months of the Bill receiving Royal Assent, and as chair of the all-party group for whistleblowers, I wish to register my interest.
The office for whistleblowers would be an independent body, which reports to Parliament and would have three main duties: to protect whistleblowers from detriment resulting from their disclosures; to ensure that these disclosures are investigated; and to escalate information and evidence of wrongdoing that is outside its remit to the appropriate authority, including regulators or, if appropriate, the police.
I thank the right hon. Member for Barking (Dame Margaret Hodge), who introduced this new clause at Committee stage and spoke to it robustly and with the knowledge and passion of someone who has been pursuing this for many years.
Despite a complete lack of reference in the Bill, whistleblowers and whistleblowing have a pivotal role in the fight against economic crime. Indeed, when this proposal was debated at Committee, the right hon. Member for Barking referenced her time as Chair of the Public Accounts Committee and noted that all the work that the Committee did on economic crime came from whistleblowers, and yet, in a Bill that seeks to tackle economic crime, whistleblowers are not referenced.
One statistic that has been shared many times when debating this subject in Parliament is that 43% of economic crime is detected and exposed through whistleblowers. However, in his response to the Committee debate, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) noted that he believed that about 100% of economic crime detection could be attributed to whistleblowing. Once again, that appears to be confirmation that, if we want to know where an economic crime is being committed, it is most likely to be a whistleblower who exposes it.
The objectives of the office I propose in this new clause would be to encourage support and advise whistleblowers, providing a safe place to share information and acting on evidence of detriment to the whistleblower. We simply must protect whistleblowers who speak out, risking retaliation, as we have heard, harassment and losing their job—or, in the case of serious organised crime, possibly a much worse outcome. The office will enhance protections of those who whistleblow, while at the same time incentivising such disclosures by providing a safe space to share information.
There is evidence that an office for whistleblowers does incentivise disclosures. In 2020, the International Bar Association measured countries with whistleblowing legislation against a list of 20 best practices. The UK met just five of the 20. Meanwhile, the United States, where an Office of the Whistleblower sits within the Securities and Exchange Commission, met 16 of the best practices. That office received 12,300 disclosures in 2022, nearly double that of 2020, and, as its chief stated:
“The significant increase in the number of whistleblower tips and awards since the program’s inception shows that the program, with its enhanced confidentiality protections, is effectively incentivizing whistleblowers to make the often difficult decision to come forward with information”.
This is a cross-party, cross-departmental issue. Whistleblowers are to be thanked for, among many things, uncovering waste in our public services, highlighting poor or dangerous medical practices and conduct, and revealing the laundering, funnelling and theft of vast amounts of public and private money. When people steal from the public purse, it is society that suffers and
our constituents who pay the price. According to law firm Pinsent Masons, His Majesty’s Revenue and Customs received nearly 14,000 tip-offs regarding misuse of the covid furlough scheme. In just one case, £27.4 million of taxpayer money had been falsely claimed by a fraudster who, despite never having been to the UK, registered four companies in London and claimed furlough for more than 2,700 non-existent employees. Some £26.5 million of public money was recovered as a result, in a case that also reinforces the importance of Companies House reform.
We have heard details of the Danske Bank money laundering scheme in previous debates, so I will not delve into the details again, but in that case we know that criminals took advantage of UK limited liability partnerships. That is why the reforms at Companies House and to limited partnerships are needed. However, once again, it was a whistleblower who brought that $230 billion economic crime to light, halting the stream of illegal Russian money laundering. Without him, it might never have been uncovered and might have continued for years.
That was before Putin’s illegal invasion of Ukraine, but we know that illicit finance helped to fund the war and will continue to fund it, unless it is stopped. I welcome the swift action the Government have taken to tackle the scourge of financial crime, first by passing the Economic Crime (Transparency and Enforcement) Act 2022, then by introducing the Bill we are debating today. However, while the Government have introduced measures that will go far in preventing economic crime, as it stands, neither piece of legislation supports those very people who are key to its detection.
Having spoken to many dozens of whistleblowers over the years, I know that someone who reports wrongdoing can risk jeopardising their reputation, their career, their mental health, their wellbeing and that of their family. It is not a decision made lightly. Whistle-blowers who expose economic crime must balance the risk to themselves in the name of doing what is right. That should not be the case.
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The UK was once a world leader in whistleblowing protections, and we were the first EU country to introduce whistleblowing legislation—the Public Interest Disclosure Act 1998. That was seen as a landmark moment for whistleblowers, with protections for workers in employment tribunals and an expectation that wrongdoing would be addressed. However, as I have previously outlined in this place, PIDA applies in reality only to some employees—not contractors, not trustees and not volunteers—and it does not cover those connected to financial crime who may wish to disclose information. In addition, although workers can bring claims to an employment tribunal, just 4% of whistleblowing claims are successful. With results that low and potential risks so high, how can we expect the public to have confidence in the system? That is why we need to take measures to protect and support whistleblowers, which will in turn encourage people to speak up and report economic crime.
I do not intend to press the new clause to a vote, but I note that the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton, intervened on Second Reading to express his wish for whistleblower provisions
to be introduced to the Bill. By supporting the new clause, the Government would be doing exactly that, and I hope that they will feel able to do so.