MEANING OF "PUBLIC INTEREST DISCLOSURE" (Hansard, 12 July 1996)

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor)
I beg to move amendment No. 2, in page 1, line 7, after 'not' insert `in the exercise of any existing jurisdiction'.

§ Madam Deputy Speaker (Dame Janet Fookes)
With this, it will be convenient to discuss the following amendments: No. 3, in page 1, line 8, leave out `(apart from this Act)'.
No. 5, in page 1, line 14, at end insert— `( ) In this section "existing jurisdiction" means any jurisdiction as it is exercisable immediately before the commencement of this Act'. No. 6, in page 1, line 14, at end insert— `( ) The Secretary of State may by order made by statutory instrument vary the definition of "public interest disclosure" in this section but no such order shall be made unless a draft of the order has been laid before, and approved by resolution of, each House of Parliament'. No. 8, in clause 2, page 1, line 20, leave out from 'not' to `payment' and insert 'obtained'.
No. 9, in page 1, line 21, after 'gain' insert `as a result of making the disclosure'. No. 10, in page 1, line 22, leave out from 'had' to `taken' in line 23.
No. 11, in page 1, line 25, at end insert 'and (e) has complied with the requirement in subsection (1A) below. (1A) That requirement is that, before the employee makes the disclosure, the employer has had a reasonable opportunity—

(a) to investigate the matter for such a period as he considers appropriate bearing in mind—

(i) the nature of the alleged misconduct or malpractice,

(ii) the seriousness of the consequences which could ensue if such misconduct or malpractice were occurring or were to occur, and

(iii) when such misconduct or malpractice might occur or reoccur; and

(b) unless the employer reasonably concludes that no misconduct or malpractice has occurred, is occurring or is likely to occur, to take within a reasonable period such steps as are reasonably practicable—

(i) to remedy any significant consequences of the misconduct or malpractice, and

(ii) to prevent the occurrence or recurrence of the misconduct or malpractice, bearing in mind the matters mentioned in paragraph (a) above'.
No. 12, in page 1, line 25, at end insert— `(1B) If the employer has carried out the procedures mentioned in subsection (I A)(a) and (b), any disclosure relating to the matter in question which is subsequently made by the employee is not a protected disclosure'. No. 13, in page 2, leave out lines 1 to 3.

Mr. Taylor
A number of hon. Members have registered their apologies for early departure, but I shall not be following them in doing that.
744 The amendments go very much to the heart of the Bill, which the Government consider to be flawed. I want to put it on record that the Government are not in favour of the Bill. That is a collective view that is not directed in any personal way to the hon. Member for Islwyn (Mr. Touhig), or to his integrity or good faith, which are unquestioned. It would be candid for me to make it clear that I do not intend to give the hon. Gentleman his Bill, and I intend to speak to the amendments.

§ Mr. Ian McCartney (Makerfield)
The Minister has shown his part in the conspiracy to prevent the Bill going through today. If the Bill falls, how do the Government intend to deal with internal company fraud and commercial fraud? If the Bill were passed, that could be easily identified and action could be taken. If the Bill is not passed, there will be a considerable number of criminal actions to undermine companies in this country, which will now go undetected. What measures do to Government intend to introduce?

Mr. Taylor
First, I am not aware of any conspiracy. I have tried to be open in my dealings at all times on the Bill. The Government do not like the Bill. They genuinely think it flawed, and I am with the Government in that judgment.
Secondly, the Government have, not least in the Department of Trade and Industry, an almost non-stop task of trying to identify malpractice and fraud in the City and elsewhere, and to provide mechanisms for redress, some of which are criminal in nature; others are regulatory, with disciplinary sanctions from supervisory bodies. The Nolan report has strongly recommended and fortified the in-house complaints procedure route so that good employers have mechanisms in place, as codes, with confidential cover for employees who wish to report to a specified officer within the organisation, without redress, to say what it is they are worried about or what they think is irregular or harmful.

§ Mr. Don Touhig (Islwyn)
The Minister said that he is not going to give us the Bill. I very much regret that. Will he explain therefore why he and the Government are not prepared to extend to the citizens of the United Kingdom a privilege that Members of Parliament enjoy—being able to expose something in the public interest without fear of reprisal?

Mr. Taylor
The House, as we have been made uncomfortably aware recently, is in a unique position constitutionally, going back to the Bill of Rights in the 17th century. It would not be fruitful or useful for me to try to go down the avenue of why the entire country is not like the House of Commons. The entire country cannot be like the House. The House of Commons is the unique focus of the whole country, with a special set of rules enshrined constitutionally or by convention that are simply not capable of wider application in any practical or realistic sense.

§ Dr. Tony Wright (Cannock and Burntwood)
Will the Minister just take a moment to explain why the Government are not going to give us the Bill? As the House and the country will know, the Bill has wide cross-party support. It won overwhelming support. Indeed, there was no opposition at all on Second Reading. 745 It went through Committee. At that point, the Government had not tabled rafts of amendments, and the Bill came back to the House. The Bill has had the widest consultation outside the House, including the business community, and there was wide—

§ Madam Deputy Speaker
Order. I am sorry, but the hon. Gentleman is making a speech rather than an intervention.

Mr. Taylor
I thank the hon. Gentleman, but I remind the House that I opposed the Bill on Second Reading and in Committee. I have always tried to table amendments that would improve the Bill. At no stage have I said other than that I am fundamentally opposed to it. I shall try to do justice to the hon. Gentleman, who has followed the proceedings acutely throughout. His credentials as a sponsor of the Bill are beyond question. There are real flaws, but I do not think hon. Members want me to engage in a litany of flaws, although I could do so. I do not say that in any deprecating way because I know that the Bill was brought to the House, and has been sustained throughout, in good faith.
One of the difficulties is to be found in clause 1(a) which, in referring to a public interest disclosure, says that it means a disclosure of information which, because of the public interest, a court would not restrain". That invites the impossible—the use of a crystal ball to say at the time of a disclosure that, if subsequently tested in a court, that disclosure would be sanctioned. However, that decision of the court is not known at the time of the disclosure. It is a great difficulty with the Bill, which I have not been able to remedy or regularise by amendment.

§ Mr. Roy Thomason (Bromsgrove)
Can my hon. Friend confirm that the Bill is riddled with uncertainties? Even in amendment No. 11, the word "reasonable" is used four separate times, in one form or another. There is no clear definition of many of the requirements in the Bill. Is not an uncertain law a bad law?

§ Mr. Ian McCartney
On a point of order, Madam Deputy Speaker. Should not the hon. Member for Bromsgrove (Mr. Thomason) declare an interest relating to his business arrangements, given that there has been a great deal of effort to secure for the public domain a number of issues relating to his companies and activities?

§ Madam Deputy Speaker
I must make it clear that it is up to the Member concerned to decide whether he or she feels that there is an interest to declare.

§ Mr. Thomason
Further to that point of order, Madam Deputy Speaker. I have absolutely no interest to declare in relation to the Bill. I can assure the House of that. It was a disgraceful intervention.

§ Mr. McCartney
Further to that point of order, Madam Deputy Speaker. It was a genuine point of order because there are people, including creditors, who very much want 746 to get into the public domain matters relating to the hon. Gentleman's companies—which, presumably, would have been covered by this Bill had it been in force.

§ Madam Deputy Speaker
Order. We cannot take that matter further now.

Mr. Taylor
I almost lost my place in that flurry of points of order. I support my hon. Friend the Member for Bromsgrove (Mr. Thomason) in his strictures about the original point of order. He has expressed himself entirely appropriately.
My hon. Friend was critical of the uncertainty in the Bill and I agree with his view. Long ago, it was cynically said by a learned judge in England—I am not sure that I whole-heartedly subscribe to his view, but we get the point—"It is not so important that the law be fair, but that the law be certain." My hon. Friend used a more critical idiom than I have used. I have spent a lot of flying hours with Labour Members and I am aware of their good faith in these matters, so I possibly express myself in a more gentle idiom. We have spent many hours together and, rather like hostages and captors, there comes a time when we begin to understand the other man's point of view.

§ Mr. Touhig
I thank the Minister for his kind remarks about me. The whole House knows that there is no personal animosity between us on this matter. He has referred to his attempts to improve the Bill. I have made repeated attempts to meet the Minister and his officials—even before the first draft was completed—so that we might work together to produce useful legislation. The Government failed to respond to all the overtures made by me and other hon. Members, including Conservative Members such as the hon. Member for Chingford (Mr. Duncan Smith), who are all desperately keen to see the measure enacted.

Mr. Taylor
I do not think that I am unavailable or not contactable. The hon. Gentleman came to see me at an early stage in the passage of the Bill. I am sorry that he does not feel that the liaison between us has been sufficiently productive. I am afraid that the Government do not think that the Bill as it stands, and in view of its origins, is perfectible. The flaw in clause 1(a) is perhaps not the least insurmountable obstacle.

§ Dr. Wright
The Minister's answer to my hon. Friend is inadequate. The Minister's raft of amendments is designed to point to inadequacies and imperfections, but from the beginning the Government have resisted consultation and that makes the Minister's position quite indefensible. Do not this morning's proceedings bring the House into massive disrepute?

Mr. Taylor
I do not agree with any of that. I do not think that anything that I say in the next 15 minutes will satisfy the hon. Member for Cannock and Burntwood (Dr. Wright). He and I have different views about this. One of the virtues of this place are that views can be exchanged. I do not think that he will come round to my point of view or that I will come round to his.

§ Mr. Paul Flynn (Newport, West)
Does the Minister agree that we are falling into bad habits on Fridays? Hon. Members have set themselves up as Friday assassins and have made speeches of stunning insignificance. There are 53 Bills on the Order Paper. We have spent four hours discussing two of them, leaving about half an hour to discuss the other 51.

Mr. Taylor
Somebody more authoritative than l will have to rectify human nature or redeem original sin. I cannot do that. I do not often attend on Friday mornings but I know what happens then. Here I am with my amendments and I intend to speak to them, although so far I have not been given much chance to do that. I hope that no one will say that I have been reluctant in giving way.

§ Mr. Ian McCartney
Perhaps we could put in proper context the reason for the amendments. Will the Minister confirm that in Committee on 17 April he did not formally oppose the clause, which was passed unanimously? I assume that in Committee he was satisfied that the clause met the needs of the Government and the Committee. Why has he now tabled amendments?

Mr. Taylor
I am again in the same pass and I shall not be able to satisfy the hon. Gentleman. I have said from the outset that the Government are not happy with the Bill. I may not have sought to amend every jot and tittle at every stage, but I have constantly reflected on what the Government should do to make the Bill better. In trying to do that through the amendments, I cannot avoid the conclusion that the Bill is fundamentally flawed and the Government do not wish to accept it. I do not have total recall about whether I put down amendments at any specific stage in the Bill's proceedings.

§ Mr. Touhig
I have asked the President of the Board of Trade a couple of times about consultations that the Government have had on the Bill. How many representations has the Minister had about his amendments?

Mr. Taylor
I do not have the representations in front of me, but within the past 48 hours I replied to a written question from the hon. Gentleman asking how many representations I have received. From memory—I urge the House to believe that I offer this answer in good faith—I have received about 11, perhaps nine one way and two the other. I do not know, but if it is material,I will check. I do not have the information with me.
I really should say something about the amendments. The Bill is essentially designed to protect employees from being victimised by their employers for making a public interest disclosure. The term "public interest disclosure" is defined in clause 1 as a disclosure of confidential information acquired in the course of employment which tends to show that significant misconduct or malpractice…has occurred, is occurring or is likely to occur and which, because of the public interest, a court would not restrain". Significant misconduct or malpractice is described in the schedule as:

"(i) an offence or a breach of any statutory requirement or legal obligation;
748
(ii) improper or unauthorised use of public or other funds;

(iii) miscarriage of justice;

(iv) danger to the health and safety of any individual or to the environment."

The amendments that I tabled to clause 1, and that were accepted in Committee, achieved a number of things. They made it clear that the definition of public interest disclosure referred to the existing case law on cases in which the courts declined to restrain the disclosure of confidential information. They made the test of what constituted a disclosure in the public interest an objective rather than a subjective one. They extended the coverage of the Bill to cases such as breach of contract cases, where previously it had been limited to formal actions for breach of confidence.
My amendments established that, in line with the Bill's stated aims, its protection would apply only where the information disclosed was confidential at the time when the disclosure was made. They restricted the coverage of the Bill to information acquired in the course of employment and they limited the significant misconduct or malpractice covered by the Bill to the matters set out in the schedule, which originally constituted simply an illustrative list.
In addition, the schedule was amended to remove some terms that were unacceptably vague and open to misinterpretation. Without question, clause 1 is a much better drafted provision than when the Bill was first introduced. However, that said, in the Government's view, the Bill is still seriously flawed in such a fundamental way that nothing short of a complete rethink of its underlying principles could possibly rectify it.

§ Mr. Touhig
In view of the Minister's most recent remarks, what would he say to Lord Nolan, who at the launch of his most recent report said that he strongly endorsed the approach of the Bill?

Mr. Taylor
I am advised that the second report of Lord Nolan, far from endorsing the Bill's approach, fortified, encouraged and emphasised the overriding importance of employers putting in place confidential channels and a designated appropriate officer to receive internal complaints. That was the thrust and emphasis of Nolan, and I think that he was right in that regard.

§ Dr. Wright
Has the Minister had an opportunity to see a recent survey carried out by the reader in law at Middlesex university, who surveyed The Timestop 500 companies to find out whether they had such procedures in place? He found that 83 per cent. did not. His conclusion was that companies would put such procedures in place only if there was an underpinning of legal requirement, that is to say that the law and the good practice would go together. Does that not undermine what he has just told the House?

Mr. Taylor
No, I do not think that it undermines it. I must be honest with the hon. Gentleman and confess that I have not read the article to which he refers. Perhaps it would be to my advantage to make early time to do so. We all receive tremendous amounts of paper to read these days and one has to be selective. I am sorry that I did not see the survey to which the hon. Gentleman refers. I join 749 him in saying that the more that can be done to ensure that the procedures are regarded as the correct, proper, orthodox and expected thing, the better. I support that.
In response to the hon. Member for Makerfield (Mr. McCartney), I should like to add that the letters that I received did not point to specific amendments tabled for discussion today. However, informal contacts and careful consideration of the issues led to the amendments, which would materially improve the Bill.

§ Mr. Ian McCartney
For the record, let me say that my hon. Friend the Member for Islwyn (Mr. Touhig) put that question. Is not the Minister really saying in gentlemanly language that nobody in the business community supports the proposals in the amendments?

Mr. Taylor
No, I stop far short of that. In a plural, free and eclectic society there will be support for almost any proposition at certain times. No doubt the hon. Gentleman could provide me with a litany of highly reputable institutions and companies that, on first reading the intentions of the Bill's sponsors, might say that they favour them in principle.

§ Dr. Wright
It devalues consultation on the Bill for it to be described so casually. There has been extensive consultation. Even in the last week, the Confederation of British Industry told us that it finds no reason for opposing the Bill. The overwhelming evidence from the business community is that the Bill is moving in the right direction. There is sheer incomprehension outside the House that the Government, at the last minute, should feel the need to wreck a Bill that is wanted by everyone else.

Mr. Taylor
That is all very well, but I do not accept that we have taken a casual approach. I was reflecting earlier today how much time and resource costs the Department has devoted to assisting me in trying to overcome the Bill's fundamental flaws. I honestly doubt that the hon. Gentleman would argue when I say that it is one thing to express an opinion on a broad principle but that the devil is in the detail. When one gets down to the detail of the Bill, one discovers great difficulties. While the Bill is unquestionably born of good intention, it has all the potential for failing both the employer and the employee.

§ Dr. Wright
I will respond to the Minister's invitation for a further exchange. The measure began as a ten-minute Bill in my name, then progressed in the name of my hon. Friend the Member for Islwyn (Mr. Touhig). In the interim, it was the subject of extensive consultation with business and financial interests, as a result of which 750 amendments were made. It is not true to say that that process did not happen and that it is suddenly important to make amendments. The Government decided at the outset that they did not want the Bill and have used disreputable tactics to make sure that it wold not progress.

Mr. Taylor
I do not doubt that the hon. Gentleman has put his heart into his side of the argument, as I and those who advise me have put our hearts into our side of the argument. Ultimately, the Government of the day are responsible for what is put on the statute book. As my hon. Friend the Member for Bromsgrove said, if the Bill is left imperfect or unworkable it will not be its sponsors who are blamed but, as ever, the Government. It would be said that we were carried away with what seemed to be an attractive idea, did not address the details and fudged.

§ Mr. Touhig
Other organisations, such as the Campaign for Freedom of Information and Public Concern at Work, have also done a great deal of work on the Bill. It is a good measure. It offers protection to the individual who discovers something that is going wrong and exposes it in the public interest. After the next inevitable financial scandal, tragedy, child abuse case or abuse of an elderly person in care case, what will the Government say when the inquiry reveals that somebody knew what was happening but was afraid to speak up? The Bill could prevent that happening.

Mr. Taylor
I dare say that, on face value, it could. I should tell the hon. Member for Islwyn that if we are going to enact legislation to deal with the situation that he is concerned about, it must be good, it must be workable and it must be certain.

§ Mr. Ian McCartney
My hon. Friend the Member for Islwyn has raised the issue of child abuse, and, some weeks ago, the Government announced an inquiry into child abuse. Hon. Members from both sides of the House are concerned about the lack of measures to protect people who discover child abuse at an early or a later stage and attempt to put that information into the public domain. If the Bill is not passed, the problem will remain. Will the Minister give the House a commitment today that he will refer the proceedings of the debate and of the Bill's Committee stage to that inquiry so that it can consider the procedures in—

§ Madam Deputy Speaker
Debate to be resumed what day?

§ Mr. Touhig
The Government will give no day, so I offer none.