Economic Crime and Corporate Transparency Bill

Debate between Baroness Blake of Leeds and Lord Browne of Ladyton

Committee stage
Tuesday 9th May 2023 Grand Committee

[Baroness Blake of Leeds (Lab)]

I add my thanks to everyone who has put so much effort and work into this issue over a significant amount of time. I thank everyone for their contributions, which have given powerful testimony of those who have suffered. We should note the fact that so many noble Lords in this Committee alone personally know people to whom this has happened.

I confirm that we support this amendment and I look forward to the Minister’s comments about the request for creating an office for whistleblowers. As has been said throughout the debate, it is clear that facilitating whistleblowing would go a significant way to tackling economic crime, whether fraud, money laundering or other crimes. I thank the noble Baroness, Lady Kramer, in particular for her comments about the importance of the earliest possible notice of wrong- doing, which is a key point in this discussion.

I emphasise that the stakes remain too high for an informed insider wanting to blow the whistle. This amendment would be a good starting point. I am not convinced that it will solve all the problems, but we need to see some progress. Too many people are suffering and we need to recognise those individuals as well as the impact on the businesses involved. As the noble Baroness, Lady Altmann, said, the sad truth is that too many people wait until they are leaving a company—either moving on to another or, in the case she mentioned, retiring—before finding the courage to stand up.

I understand there is going to be a review, but surely we have an opportunity now, with this Bill, to make some bold change. I thank the charity, Protect, for its briefing under Speak Up, Stop Harm, which has some very important information that we should all consider. To reference the debate that took place in the Commons, there was strong cross-party support, encouraging support and advice for whistleblowers. I am concerned that the government line remains that taking these important steps is too expensive. I really cannot understand that line of argument. Surely, we should regard this as an investment and not a cost. Tom Tugendhat MP promised more discussion on these matters as part of the debate. Can the Minister inform us where this has got to?

We support the creation of an office to give encouragement and support making reports. We want an ability to provide advice and, most particularly, to act on evidence of detriment to whistleblowers where we know that it occurs. The point in the amendment about making an annual report to Parliament is also important. One area on which I think it would be possible to move is to bring forward the requirement for all organisations to have a proper policy in place as a vital and effective route to preventing crime, which would mean that the courts could use evidence of this as good practice.

As I am sure all noble Lords have seen, 65% of callers to Protect’s confidential advice line say that they have suffered for speaking out, which of course is in direct contravention to the Public Interest Disclosure Act and, therefore, as amended, the Employment Rights Act. This is a very serious issue, which should be picked up and dealt with immediately.

On furlough payments, 41% of clients who contacted the advice line who suspected that fraud was taking place were ignored; 90% attempted to raise concerns with their employer before going to the helpline but, unfortunately, many small organisations still have nowhere to go. It is a matter of how these changes could support businesses that want to do the right thing but do not have the wherewithal to do it.

I look forward to the Minister’s responses to all the points that have been made today. Let us treat this issue with the seriousness that it deserves, as it is an important way in which we can help those who have received information that they want to act on. In the spirit of the Bill itself, it is a vital and effective route to preventing crime.

[Lord Browne of Ladyton (Lab)]

I support the amendment and commend the noble Baroness for tabling it, as well as those who support it. I do not intend to go over anything that anybody else has said about whistleblowing, but I agree with them. I am not in any sense an expert on whistleblowing, but I am speaking because I think I have anticipated in two areas what the Government’s response will be. First, I think that we are all conscious that a review of whistleblowing has been instructed. However, I cannot find in any commentary about it or any of the announcements from the Government whether the possibility of that review recommending the setting up of an office of whistleblower is part of its remit. It does not seem to be—and that brings me to the point that I really want to make.

Some of us contributed to the debate on the Private Member’s Bill on the protection of whistleblowing in the name of the noble Baroness, Lady Kramer on 2 December—I think its formal title is the Protection for Whistleblowing Bill—and because Part 2 of that Bill related to the setting up of an office of the whistle- blower, we have had the benefit of the noble Lord, Lord Callanan, telling us what the Government’s position is. I expect to hear that the Government’s position is that the existing framework provides 80 prescribed persons to whom people can legally blow whistles, many of whom are regulators, that the very diversity of that framework does not need this overarching body because it would not be able to deal with the complexity underneath it, and that should a new body have such a function,

“it would require significant staffing resources, with diverse expertise across a range of sectors, to enable it to carry out these functions effectively”.—[Official Report, 2/12/22; col. 2044.]

In other words, it is not necessary.

That can be said, and that framework exists, but to test whether that is right, I ask the Minister in response to tell us just how effective the framework is. What do these existing regulators and others actually do? What does the data show of their effectiveness? How attractive are they to whistleblowers? How many successful processes have there been—how much criminal or other wrong activity has been uncovered by them, say in the last five years or so—and just how effective have those processes been?

I spoke in that debate on 2 December and I spent quite a bit of time looking for that data, but it does not seem to exist anywhere—there does not seem to be any data that shows how successful the existing framework is. Does the Minister have the data on the number of cases that pass through the current regulatory system, as well as the data on the impact of that? If that data shows what I suspect it does—but only from anecdotal evidence because there is no empirical evidence—then this process is ripe for complete restructuring.

For all the reasons shared with your Lordships’ Committee by the noble Baroness, Lady Kramer, so competently and in such an informed way, the obvious restructuring is to follow the success of the United States of America, where the creation of an office for whistleblowing has dramatically improved the effectiveness of whistleblowing to an extraordinary degree.

It seems that the fundamental problem—this is part of the problem we have got ourselves into with economic crime—is that the infrastructure we have in any part, either to prevent, detect or prosecute it, is just not of the scale of what is going on in our country. We need something that concentrates some very special resources in a way that makes whistleblowers comfortable to deal with them, protected by the state when they blow the whistle, and where the information they give is properly acted on so that it has the results that we need. I hope that when, as I expect, the Minister pushes back on this amendment, he will be able to tell us where that is in the existing framework. If it is not there, we need an office for the whistleblower, and when we get it is just a question of time.

This is an opportunity we have now. Most of us in your Lordships’ Committee have experience of just how difficult it is to get opportunities for legislation that makes this sort of fundamental change. We should grasp this one when we have it. If we have to build upon it beyond economic crime later on, so be it, but we should do it now.