My Lords, I congratulate the noble Baroness, Lady Kramer, on introducing the Bill and I sincerely hope it might be third time lucky after her two previous attempts. Her Bill is an important contribution to public protection in many areas. It has an absolutely noble and correct objective, which is
increasingly important as fraud, scams and malpractice, particularly in the financial arena, have expanded enormously. We are well behind other countries, which seem to value whistleblowers far more highly than we do. We need to champion their actions as protection from the inside against wrongdoing that may not be apparent until it is too late.
The Bill seeks, rightly, to rebalance the current system and redress the asymmetry of power and cost more in favour of the whistleblower. The burden of proof should indeed be more on the accused and it should absolutely be important to ensure that reported wrongdoing is taken seriously and in a way that protects those reporting it. The Bill’s establishment of the office of the whistleblower is very welcome. My experience during my City career showed me the damage suffered by those trying to report wrongdoing. It can definitely be a career-ending move.
Indeed, a good friend suffered stigma and ostracism after reporting financial irregularities. She had seen colleagues basically telling clients things that were not true or trying to sell them positions that they themselves had already decided to get out of and trying to front-run the price. My friend, however, was willing to come forward only because she had already decided that she was going to retire. She knew, and had seen it with others, that were she to come forward at that stage, she would not have worked in the City again. She certainly believed that. Compensation for losing a current job is therefore not really sufficient for the younger whistleblowers. If they can never work in their sector again, there will not be sufficient support for them to have the courage to come forward.
The PIDA 1998 was well intentioned, but it is clearly inadequate. It merely encourages rather than mandates whistleblower protection and the procedures required. So, its main impact is retrospective rather than supportive and pre-emptive, and the costs of employment tribunals are, as the noble Baroness, Lady Kramer, said, prohibitive. The present regulatory system in financial services does not work well enough to prevent wrongdoing. It does not, and perhaps cannot, pick up internal wrongdoing, and it has so often displayed expertise in bolting stable doors after the horses have long galloped away and trampled on unsuspecting members of the public who cross their path. That is why I believe the Bill is right to seek to impose a proactive duty on employers to take whistleblowing reports seriously and prevent the victimisation of whistleblowers.
I support the aims of this Bill, which mirrors that of my honourable friend Mary Robinson MP, chair of the whistleblowing APPG. I accept that there is criticism. There are concerns, for example, about abolishing the PIDA through Clause 26 before we have this new office well-established, but these can be dealt with in Committee. Part 1’s remit is extremely wide, and perhaps one could limit some of the catch-alls—for example, prescribed “other matters” as the Secretary of State might decide by regulations, or the “misuse” of authority. I think the itemised list is excellent. If noble Lords have problems with one or two, they could be merged. Part 4 on civil penalties is really welcome. Indeed, I might go further—why limit the maximum amount to £18 million? For a very large multinational, this could be perceived as just the cost of doing business.
Overall, I hope my noble friend the Minister will take the aims of the Bill seriously. I know that the Government have promised to come forward with a review of the existing system, but we do not have a timetable, nor indeed the remit of that review, so I would welcome any reassurance that they are willing to take this issue seriously now.
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