Public Interest Disclosure Bill

HC Deb 01 March 1996 vol 272 cc1108-75

Order for Second Reading read.

9.37 am

Mr. Don Touhig (Islwyn)

I beg to move, That the Bill be now read a Second time.

People who act in the public interest and make the public aware of a crime, fraud or serious malpractice in an organisation currently have no protection in law against reprisals. The Bill that I and my sponsors place before the House today seeks to change that. I hope that, with the support of right hon. and hon. Members from both sides of the House, we can ensure that legal protection is afforded to those people.

I hope, too, that the House will recognise that we need to change the culture in Britain that seems to ignore the message, while questioning the motives of the messenger. There are plenty of examples of that. The official inquiries into the Zeebrugge disaster, into the Barlow Clowes affair and into the activities of the child abuser Frank Beck all show that alarm bells were clearly sounded by responsible employees, but that those in authority failed to act.

The cost of ignoring those messages has been devastating in terms of human lives, public money and private savings, and of a loss of confidence in business and in Government. That situation will not change unless we take action in two key respects. First, we must ensure that people are not deterred from raising concerns about serious malpractice or misconduct. Secondly, we must ensure that those in charge of an organisation recognise that they may have to account for their response to any warning that is given.

The Bill is not a nitpicker's charter; it will not provide a field day for whingers. It will protect only those individuals who, having discovered some crime, fraud or wrongdoing within their organisations, raise their concerns internally. Only then will they be protected from any reprisals. The individual must be seen to have acted responsibly.

If the serious malpractice continues in spite of the initial warning, individuals may feel that they must blow the whistle in order to safeguard the public interest. In that situation, the Bill ensures that they will be protected against reprisals. However, protection for whistleblowing is available only if the courts are satisfied that the disclosure to a regulator or to the press was in the public interest.

In addition, the individual must have satisfied four key conditions: first, he must have raised the matter internally; secondly, he must have had good reason to believe that the information was accurate; thirdly, he must not have acted in bad faith; and, fourthly, he must not have sold the story for profit. The Bill allows responsible individuals to go to court and take out an injunction to prevent dismissal or other reprisals.

Mr. Andrew Robathan (Blaby)

The hon. Gentleman said that individuals must not sell their story for profit. However, the Bill states that an individual must not make a disclosure principally for the purpose of obtaining payment or personal gain. Therefore, could not someone blow the whistle and sell his story later on the grounds that he did not do so principally for personal gain?

Mr. Touhig

We cannot wholly discount that possibility, but the Bill certainly does not encourage that sort of action. It states clearly that people will not be protected if they seek to sell their stories for profit.

The Bill also allows for compensation claims. However, any award can be adjusted to take account of bad conduct on the part either of the individual or of the organisation concerned. Whether the individual raises the matter internally or outside the organisation, he will not be protected under the Bill if he acts in bad faith.

That provision will deter people with grudges and those who are motivated by a wish to damage an organisation rather than by a desire to stop malpractice. It will also deny protection to those who blackmail their organisations by saying that they will keep silent if they are paid off or promoted. It will also bar people who are dishonest. Employees may bring claims before an industrial tribunal. In that case, the £11,300 ceiling on damages will not apply, and the rule barring employees who have not worked for two years will be waived.

The Bill imposes no direct costs on organisations. It does not require organisations to appoint new staff or introduce special procedures for investigating concerns. By requiring individuals to raise concerns internally before taking any other steps, the Bill allows responsible organisations to remedy malpractice without the damaging consequences of an external disclosure. The only organisations which would incur significant costs under the Bill would be those which break the law or otherwise threaten the public interest, and which do not deal with a serious malpractice, but seek to victimise the person who draws it to their attention.

There are many examples of that. Harry Templeton, a Scottish printer and a trustee of the Mirror Group pension fund, was such a victim. He was suspicious of Robert Maxwell, and questioned him repeatedly about the handling of the fund. For his pains, he was sacked, thrown from the pension fund board and effectively blacklisted from the printing industry. Maxwell was able to ride roughshod not only over Mr. Templeton but over pensioners, professional advisers and the public interest, because the law does not protect people who raise genuine concerns.

The consequences of an organisation's ignoring warnings about serious breaches of safety procedures, for example, are almost too awful to recount. Joy Cawthorne, an instructor at an Outward Bound centre in Lyme Regis, was so shocked by the lax standards she observed that she resigned. Before doing so, she wrote to the managing director, warning him that, unless something was done, he would end up having to explain why someone's son or daughter will not be coming home". Tragically, she was proved right. Her warning was ignored, and four children died in a canoeing accident.

Many organisations today recognise the valuable role played by the whistleblower. Unless employees raise their concerns, those in charge may not realise that anything is wrong. In principle, Ministers are accountable to the House, company directors are accountable for the actions of their organisations, and trustees are accountable for what their charities do. Yet, if those who are accountable in law do not know what is happening, it is very difficult to correct or prevent something that is seriously wrong and is done in their name.

Recognising that, the House and the law take a more lenient view when those in charge did not know about the misconduct. As the main thrust of my Bill is to ensure that serious concerns are raised internally, it strengthens the weakest link in the chain of accountability.

I refer, for example, to the case of Beth Lawson. Beth worked at the delicatessen counter of a major supermarket selling dairy produce, cheese and pates—that sort of thing. She discovered that her boss was changing the dates on food that had passed its sell-by date. Beth's colleagues were reluctant to take up the matter with their employer in case it jeopardised their jobs: they believed that it was more than their jobs were worth.

Beth knew that she would be leaving the company to start a new career, so she alerted her employers, who investigated and stopped the practice immediately. We can only imagine the possible consequences if Beth had walked away without blowing the whistle: people being taken ill from eating contaminated food, damaging headlines plastered across the newspapers, and a supermarket chain's reputation in tatters and jobs at risk. What was that action worth?

Unlike many laws, the Bill would impose no costs on responsible organisations, and would affect only those who knowingly engage in serious malpractice. As such, it would impose no red tape, and it would underpin competition, as it avoids any risk of cross-subsidisation of bad businesses by good ones. My fellow sponsors and I have sought to assure all who have bothered to ask, including Ministers, that we are not seeking to place unacceptable regulatory burdens on business and industry.

Last year, my hon. Friend the Member for Cannock and Burntwood (Dr. Wright) introduced a ten-minute Bill which paved the way for today's measure. I am grateful for the work that he has done. He pointed out that many companies have become aware of whistleblowing, and that they now believe in protecting the rights of the whistleblower and opening routes within companies to discover fraud and corruption.

British Telecom, Esso, Lucas and NatWest are only a handful of the major companies which have established a hotline to deal with employee concerns. That is clearly a sensible development for large organisations. Rather than imposing a regulatory burden, the Bill underpins effective self-regulation. It is essential. It recognises the role of a regulatory body only as an option of last resort.

How can self-regulation work effectively if employees are deterred from raising serious concerns about malpractice? When he was director general of the CBI, Sir John Banham wrote of management's responsibility to give support to employees who report wrongdoing which is damaging the company. These whistleblowers should be regarded as a safety net where other forms of regulation fail, and meritorious whistleblowers should be protected. The Government have welcomed the work of whistleblowers. During the passage of the Pensions Act 1995, the Government tabled a "blowing the whistle" clause to ensure that misconduct and malpractice were reported. It provides that auditors and actuaries who have reasonable cause to believe—the same test as in the Bill—that there is a material failure in a pension scheme or a breach of the rules or of the law must report it to the pensions authorities immediately.

In a letter to my hon. Friend the Member for Cannock and Burntwood in August, the Chancellor of the Duchy of Lancaster—commenting on my hon. Friend's Whistleblowers Bill—said that, with regard civil to the service, he was committed to ensuring that there were arrangements that both resolve genuine concerns and sustain the mutual confidence and confidentiality that should exist between all employers and employed. In 1993, the then Secretary of State for Health—the present Secretary of State for National Heritage—published whistleblowing guidance for the NHS to ensure that concerns about patient care were addressed and not swept under the carpet. Last August, in the wake of the misdiagnosis of bone tumours in Birmingham, the present Secretary of State for Health published proposals that doctors should be under a contractual requirement to report to their employer malpractice or misconduct by a doctor.

The Prime Minister says that he is keen to improve the scrutiny of the public sector after the Scott report. The Bill will underpin the recent changes—in particular, the code of practice for open government and the new whistleblowing procedures in the civil service that the Government have introduced in Whitehall and pledged to extend across the public sector.

The core of the Bill is set out in clauses 1, 2 and 3. Central to the measure is the definition of public interest disclosure. Clause 1 states that this is a disclosure that, in an action for a breach of confidence, a court is likely to find was justified in the public interest; a disclosure that an individual disclosing it has acquired subject to an obligation or claim of confidentiality; a disclosure that tends to show significant misconduct or malpractice of a kind including—but not limited to—those set out in the schedule.

The Bill is not intended to blow a hole in the duty of confidentiality, and it rests on the assumption that that duty is important and must be respected. That is why the Bill requires serious concerns to be raised internally. Where the matter is not addressed internally, however, and where the law recognises that it is lawful and justified for an employee to take the matter outside, the Bill protects people who are acting in the public interest. The Bill does not weaken by one iota the importance of the duty of confidentiality.

Clause 2 defines disclosures that are protected in the Bill. A "protected disclosure" is a public interest disclosure where the individual making it is not acting in bad faith; believes on reasonable grounds that the information is accurate; has not made it for the purpose of obtaining payment for personal gain; and has taken reasonable steps to raise the misconduct or malpractice internally first. Clause 3 provides that an individual may not be penalised or be guilty of an offence for making or proposing to make a protected disclosure.

Finally, I return to the idea of changing the culture of Britain. A single Bill cannot change the culture of a country, but it can engender an atmosphere in which the culture can be changed gradually. The creation of that atmosphere is possibly the most important thing that the Bill could achieve. Our entire culture, from cradle to grave, is secretive and silent. Look how, in early years, children become aware of the culture of silence—in the playground, they learn not to snitch. If we tell teacher, we are for ever dubbed "teacher's pet", and are ostracised and victimised. We should "keep mum" and not be "tell-tales".

Unfortunately, that frame of mind continues into adult life, where our language and culture are riddled with phrases and concepts of secretiveness—"keep it under your hat", "keep a lid on things." If we speak out, we have "let the cat out of the bag", or "spilled the beans". "Ignorance is bliss." "Silence is golden." But we all know that ignorance is not bliss, and that silence is not golden, when they lead to tragedies such as Zeebrugge, Piper Alpha and Clapham junction. We cannot continue to support the culture of silence where it affects the public interest.

The shop and factory floor and the offices and computer screens of business are a world away from the school playground. These places require professionalism and commitment, but organisations have become so large that it is impossible for one person—or even one department—to keep track of everything. The Bill seeks to encourage companies and institutions to open up channels of communication.

We do not seek to promote a grudge-bearers charter, or a charter for those acting with malicious intent. We are not trying to foster a world of Orwellian informants. We want to encourage people to speak out responsibly if it is in the public interest. It is easy to understand in the current climate of job insecurity and high unemployment why people are scared to speak out. Many feel that it is more than their job is worth to speak out. But we must encourage them to speak out responsibly. The price of their silence is too high. One should think about the lives lost in the Herald of Free Enterprise or Piper Alpha oil platform tragedies.

Mr. Robathan

I have been listening to great interest to the hon. Gentleman, who has made some good points. But I do not quite understand what he has just said. Is he claiming that the Herald of Free Enterprise would not have gone down had his Bill been enacted before the accident?

Mr. Touhig

Before the Herald of Free Enterprise tragedy, there were five reports of ferries sailing with their bow doors open, and the inquiry made it clear that that information never got beyond a certain level of management—as in the case of Piper Alpha—because people were afraid to report the matters in case their jobs were affected. I cannot say, in all truth and honesty, that the enactment of the Bill would have prevented that tragedy, but people who discover that something is wrong and speak out should be protected in law—that is our duty.

The damage done to business confidence by the Barings collapse, and by the BCCI and Maxwell scandals, is enormous, and too horrendous to contemplate. It only takes serious malpractice in one department to bring down an entire company, and we have had plenty of evidence of that in recent years. The loss of that company may in turn damage a whole community that depends upon it. For their own sake, Britain, British business and the British Government must foster a culture of communication instead of a culture of silence. The Bill seeks to protect those who wish to participate in such a culture of communication in the public interest, and I commend it to the House.

9.58 am

Mr. Iain Duncan Smith (Chingford)

I rise as a sponsor of the Bill, and I hope that my right hon. and hon. Friends will understand from my speech that I am the last person who would rise to support a Bill that imposed greater regulation or any form of scrutiny that allowed people to obtain control over a company without reasonable intent.

I thought long and hard about sponsoring this Bill before I decided to do so, and I had long discussions with the hon. Member for Islwyn (Mr. Touhig), who promoted it—on which I congratulate him. He accepted many of my criticisms in those discussions, particularly on the issue that I was most concerned about and which he has raised today: that the Bill should not be a charter for people in companies who are disgruntled, have an axe to grind or have some grudge against the management. It should not be a charter for them to take up whatever issue they wish, to run outside the company, to create tremendously bad publicity and to cause difficulties for their company.

I was on a company's board, as a business man, before I was elected as a Member of Parliament. I have thought carefully about how we operated then. As in every company, there were always disgruntled employees—the barrack-room lawyers, as they are called in the army; the person who always has an axe to grind. Once most of those people's comments were discounted, I found that much of the time in board meetings was taken up by discussions on what was being said around the company: the rumours, the concerns, and who was saying what about what might be happening.

It was quite often in the course of what seemed to be general discussions that an issue arose and someone would then be tasked with resolving it. If the issue did not reach the board through the normal channels, it somehow still reached the board. That company had a system that allowed people to talk and to have problems and concerns brought to the board's attention.

In many ways, this Bill is about enshrining the best practice that already exists in good companies. The Bill will not change that best practice, but simply says that, if those companies are doing it, so should others, and they should be encouraged to do so. This legislation does not say that they will follow best practice, but that, if they do not, they obviously stand to lose considerably in the long run should problems arise.

I decided to sponsor the Bill after having read it and changed a number of things—particularly in clause 2—because I felt that it would enshrine best practice and not essentially damage good management-worker relations. The key to the Bill lies in the fact that the matters raised by individuals in companies will be in the public interest and not as a matter of public interest: there is a clear divide between the two.

People who are opposed to the Bill might say, "It provides an excuse for someone to say that the disclosure is about public interest, and that it should be in the public domain." That will be no excuse in the courts. If it is clearly proved that the individual raised the matter simply as a matter of public interest, he will have no protection in law against subsequent prosecution by the company.

Mr. Michael Stern (Bristol, North-West)

Does my hon. Friend agree that the great danger in relation to this aspect of the Bill is that the decision whether the employee has acted in the public interest will be made only when the matter reaches court? The damage to the company, the organisation or the civil service may already have been done—because the person concerned was mistaken.

Mr. Duncan Smith

I accept that point, and it was one of my major concerns when discussing the possibility of sponsoring the Bill. I asked myself, "What does the Bill change in the relationship?" It does not change anything. The individual will still have seriously to go through the company's internal procedure. He or she will have to accept in their own mind that they have demonstrated good faith, and they will not suddenly be able to depart from that practice.

If it is obvious, or even marginally clear, that the individual has, from the beginning, sought to raise the matter for other reasons, that will become known. The point is that it will be made clear, in public, that they have no protection. Protection does not exist now, and it will not exist after the Bill's passage.

People are currently doing what my hon. Friend the Member for Bristol, North-West (Mr. Stern) described, because there is a genuine sense that there is no protection. There will be no protection after the Bill, either. People will be in the same position, and they will not be able to use the Bill to draw any excuses for the type of actions he described.

There is nothing to stop the press proceeding like that now, and the Bill will not change that. It simply tells individuals who have concerns—there are two issues that I shall raise shortly—that, ultimately, if they genuinely believe they are right, they will receive the protection they deserve, but not otherwise. People who act because they are disgruntled will not be protected at all.

Mr. Anthony Coombs (Wyre Forest)

I know that this is a slightly paternalistic argument, but if the Bill creates a significant change in culture, as the hon. Member for Islwyn mentioned, some people—who may be totally misguided—may feel that they are entitled, in the public interest, to breach confidentiality with their employers, for example. Because they are so misguided and cannot differentiate, they may find that they not only unnecessarily damage their company but that they unnecessarily damage themselves.

When they come to court and discover the rigorous conditions that the Bill lays down, they may find that they are not protected by it. Therefore, there may be a dual effect: a greater breach of confidentiality, which will damage companies, and possible damage to relatively innocent but nevertheless misguided people.

Mr. Duncan Smith

I understand that. I can only say that what should, and will, be made clear when the Bill is passed is that it does not give people those protections. In other words, people will not be able to believe that, somehow, in the course of this process, they will receive protection simply on the basis of their having raised an issue and breached confidentiality. The Bill clearly states not only that the disclosure will have to be in good faith, but that an employee has a link with the company and its management on the basis of confidentiality in relation to activities that are not in the public interest.

I said earlier that the stress is not only the disclosure being a matter of public interest: it must be in the public interest. Most of the examples that my hon. Friend the Member for Wyre Forest (Mr. Coombs) described will not fall into that category. I am simply saying that the company's internal processes will not change. Its employees have a duty of confidentiality, and that has not been breached. I do not think that someone who currently wishes to pursue matters that he thinks are in the public interest, for example, will not have covered that matter. I am simply saying that the Bill makes that clear.

I do not claim, as does the hon. Member for Islwyn, that the Bill will dramatically change this country's culture. Ultimately, it will simply allow clear protection for people who genuinely seek to resolve a matter that they have been unable to resolve internally. I have two examples that are worth listening to, because they deal with that very issue.

As we examine the Bill, the real question is whether there is a need for it—if there is not, of course it is unnecessary. As the hon. Member for Islwyn said, there are plenty of examples in which, had a company or organisation's internally available information been properly used internally, some disasters or problems would not have occurred.

I recognise, having come out of a business culture, that no good company wants to destroy its management-employee relationship. It certainly does not want to destroy that relationship or its reputation because a matter was raised somewhere else by someone who was not in management. The problem often lies at the middle management levels—often not much higher—with people who are defensive because they did not deal with the issue first, which may make them look rather foolish or reflect badly on their judgment. The problem is getting rid of those blockages at the middle levels of an organisation or company, which are all too common.

I should like to mention two cases as examples of why I believe that legislation is needed. Many hon. Members will have heard of the case of Jenny Watson, the deputy head of Sidney Smith school, in Hull. The school is not in my constituency, but the Minister of State, my hon. Friend the Member for Boothferry (Mr. Davis) asked me to mention this case, because he has been pursuing it on her behalf. Jenny Watson fits exactly into the category of person that we are talking about. The case centred around her investigations, as a deputy head, into the abuse of claims for overtime and extra money from caretakers in the school and in the area. She was ultimately proved to be correct about a string of Spanish practices that were costing the school vast amounts of money and had been going on for years. The special overtime payments that Mrs. Watson studied in the timesheets stretched back over a long period, but the practices were considered acceptable, because no one wanted to challenge the caretakers or their union.

At first, the governors and the headmaster were supportive, but after much pressure brought by the council and the union, they started to back off—particularly the headmaster—although the original chairman of governors remained supportive. An important aspect of the case was that, when the chairman of governors returned to the school one day, he saw a caretaker, who was claiming overtime for that period, sunbathing outside his house. That was the sort of practice that was occurring.

The deputy head was given the responsibility of looking after the budget and sorting out problems, but she found herself unable to raise the problem; she was told that people did not want to hear about it, because there were bigger issues at stake, and she was simply impinging on people's ability to sort them out. Many times, the head said to her, "You have no idea how extreme the pressure is from inside and outside the school to have you removed from anything to do with the caretakers or their budgets".

That set of claims was not addressed—instead, the deputy head was ultimately suspended. An inquiry was held by a tribunal, which immediately recommended that she should be sacked. When my hon. Friend the Member for Boothferry (Mr. Davis) inquired into the composition of the tribunal, he discovered that it consisted of three people, two of whom had close associations with the caretakers. When he complained, another two people were added to the tribunal, but one, if not two, of them were linked with the trade union involved. Such issues are at the heart of the Bill.

Even after the district auditor supported the lady's case and said that great abuse had been occurring, she was not reinstated. Those involved tried to deal with her rather than with the complaint. Eventually, the lady was offered the opportunity to return to the school as deputy head, but her terms of reference were completely changed—all mention of budgets or caretakers was cut out.

When she refused to accept those terms, she was offered other terms of reference that also cut away some of her original responsibilities. She refused those terms of reference, and it was simply announced that she had, in effect, dismissed herself. The woman has to go through the courts to challenge that action. Why? Because the local council decided that it would deal with the person raising the issue rather than the issue itself, because that would have caused too many problems.

I am not raising the case as a party matter simply because it refers to unions or a Labour-controlled council. I raise the case because it involves an organisation deciding that it will deal with the person who has raised the problem, so that it can continue with its cosy relationships and comfortable life without that problem. As a result, an individual was penalised—she is the sort of individual who would be protected by the Bill. If the authority had recognised that the individual was likely to win her case, it might well have tried to deal with the issue—which would not have taken as long—rather than the individual.

Mr. Robathan

My hon. Friend has used a good example, but I am not clear how the Bill would improve the situation. My hon. Friend is talking of a clear case of maladministration, of the system not working, of officials, elected officials and people in the education department, being in cahoots and refusing to take action. The case had to be resolved in court action—or an industrial tribunal. I am not sure how the Bill would make the situation any better for the person involved.

Mr. Duncan Smith

That is the point. My hon. Friend said that the case had to be resolved through court action—why? I am talking of an individual who raises an issue internally. What would any good organisation want to do about that responsible individual? It would want to answer the charge; it would have a structure to deal with the issue. I have just highlighted a case in which the organisation refused to deal with the issue because that would have created bigger problems.

My point does not involve resolving the matter in court—the lady should not have to go to court. She has already spent £21,000 trying to defend her name, and will now, I suspect, have to spend even more money—under clause 3 of the Bill, that could not happen. The lady is being penalised simply as a result of raising the issue—that is an important point.

If the clause was enacted, the organisation would not have been able to take the action it did, because the lady would have been able to claim that it was contravening the new legislation. I am not talking about massive Government expenditure or a new set of regulators, but simply a clause that allows the person involved to say, "Stop: I am an individual with rights and you are abusing them." I do not see how any hon. Member could reject that responsible and reasonable measure in any circumstances.

Mr. Denis MacShane (Rotherham)

The hon. Gentleman has moved from companies to the public sector very quickly. Is not the core of the Bill the fact that the public sector is where whistleblowing is most necessary? Is that why the Government are to oppose the Bill tooth and nail a little later this morning?

Mr. Duncan Smith

I always enjoy interventions from the hon. Gentleman. I have moved into the public sector with this case; I do not know what my hon. Friends on the Front Bench will do—that is clearly for them to decide. I hope that they will allow the Bill to progress into Committee, because I believe that, as long the core argument is retained, much of the Bill can, if necessary, be changed. The Bill is designed to stop great abuses in the public sector and to resolve problems where individuals who could improve organisations have their claims rejected because various people have particular reasons for doing so.

Mr. Robathan

My hon. Friend is extremely generous—this is an important point. We would all support the woman involved in the case that he has mentioned. It is an incontrovertible fact that she has been hard done by—I suspect, illegally—and I am sure that an industrial tribunal will give her due compensation. I think that we all condemn those who, according to my hon. Friend, have behaved unjustly. Clause 3 may give legal backing to the woman. However, were the Bill enacted, she would still have to go to court to obtain recompense, just as she does now. It seems that another regulation is to be piled on top of laws that already exist.

Mr. Duncan Smith

With all respect to my hon. Friend, the Bill is not about piling another regulation on top of existing laws. My hon. Friend says that the woman would have to go to court anyway; I am saying that, at present, there is a process of expenditure whereby, in order to prove his or her case, the person involved has to go to court, which means that lawyers obtain money and nobody else succeeds in obtaining anything.

Clause 3 would mean that the person involved did not have to go to court, as the organisation would not have been able to dismiss her. The issue at stake in the Bill is that it will not be possible to proceed against an individual who blows the whistle. The Bill is not about regulation; it does not impose greater regulations on any company. The Bill simply ensures that it is in an organisation's interests to deal with the matter internally—a point illustrated by the case that I mentioned.

My second case involves one of my constituents, Mr. Bill Sutherland, who used to be a policeman. In July 1988, he had cause to complain about his then chief superintendent, Archie Newlands, who is now deceased. Due to a variety of issues that boiled up at the time, Mr. Sutherland was concerned about his chief superintendent's close association with a wealthy local business man, Mr. Morris, and their close links with the local authority. It is a complex case, and I shall not go into the details.

Having raised the issue, far from being applauded for having taken what he thought was a matter of concern to the appropriate authority, he found that everyone turned on him, and he was gradually forced to back away from his original job. He was transferred away, shunned, and treated as a pariah. He was given menial tasks, such as checking subscriptions to the orphans fund. It was almost as though people felt that he was a specimen with whom they did not want to deal too often, because he had raised a concern about a senior officer, and that simply was not done.

At the end of the day, the case was examined and the individuals concerned were exonerated, but we never found out what happened during the investigation, why they were exonerated and why none of the concerns seemed to have been dealt with.

After a series of problems, the individual who had raised the matter was invalided out of the police force, and in many respects his life is in tatters. He asked only for a proper review of the evidence that he had placed before the investigation, and an open examination in which he could have some faith without necessarily having to suffer. To this day, he continues to attempt to get the police to investigate his original charges reasonably and properly, and believes that the evidence that they turned up in the course of their inquiry showed that he was quite right, but that the real problem was not investigated, and he was punished for raising it.

I support the Bill, although I recognise that it will need some work in Committee.

Mr. Peter Viggers (Gosport)

Will my hon. Friend give way?

Mr. Duncan-Smith

No. I have given way several times, and I wish to conclude, as other Members wish to speak.

If my hon. Friends on the Front Bench take a positive view of the Bill, they will realise that it is not about regulation, and that, in effect, by giving people some protection, we shall be deregulating. The Bill will encourage people to look at their own companies, exercise best practice, follow the best procedures, and not cut corners. That will reduce the necessity for the overbearing regulators we always hear about, and could even do away with many of them. I speak in a constructive spirit, in the hope that my hon. Friends will accept the Bill and allow it to reach Committee.

10.21 am

Mr. Mark Fisher (Stoke-on-Trent, Central)

I am grateful for the opportunity to support the Bill. It is an excellent measure, and I congratulate my hon. Friend the Member for Islwyn (Mr. Touhig) on picking up a Bill of such importance so early in his parliamentary career and presenting it with enormous clarity and conviction. I hope that Ministers were as impressed as the rest of the House by the responsible and measured way in which my hon. Friend introduced it.

As my hon. Friend acknowledged, the House is also in the debt of my hon. Friend the Member for Cannock and Burntwood (Dr. Wright), who set the framework for the Bill, and, as we are on the subject of congratulations, of one or two people outside the House. The measure would not be possible but for the work of Mr. Maurice Frankel and the Campaign for Freedom of Information, who has campaigned tirelessly for the past 10 or 15 years, and, more recently, the work of Lord Borrie and Public Concern at Work.

There is a tide of opinion in the House and outside that we have to open up society, not only for reasons of principle but for good pragmatic reasons. It is inefficient, and often worse, to continue to be a secretive society, as too many institutions and companies are, in the public and private sectors. Secrecy and non-disclosure are in the bones of our society, and it is about time we got rid of them once and for all.

As my hon. Friend the Member for Islwyn acknowledged, the reasons are not simple, and not all of them can be addressed by legislation. He was very clear about the tradition of non-disclosure that runs through our culture. Institutionally, there is a tradition of deference in organisations, where the employer, the boss or the person who is better qualified or more in control of information is assumed to know best and inquiries or fears are often set aside because people are told, "It is more complicated than you understand—don't worry, we shall sort it out".

There is a patronising, paternal element in too many of our public and private institutions, which suppresses the tendency for people to be worried and to speak up. That institutional culture is difficult to address.

As my hon. Friend also acknowledged, there is a long-running personal culture in Britain. People often have too much loyalty to the team; they want to be liked, and do not want to be difficult. People are inhibited if they know that they may put the jobs, reputations or salaries of colleagues at risk by speaking out.

Those cultural and personal reasons tend to reinforce the desire not to speak up. Legislation cannot address those factors, but it can—as the Bill does very well—provide a framework, so that, when people are driven to raise an issue as matter of last resort because they recognise its seriousness and its implications, they can at least feel that they have some protection in law.

The seriousness and the scale of those problems has been illustrated by my hon. Friend, and I suspect that other hon. Members will do so throughout the debate. Financial fraud, such as that in Barings bank and Mr. Leeson's 88888 account, and the laundering of money, particularly in drug trafficking, are enormous problems that are difficult to bring to light. Unless people feel that they have some protection, we shall never find out what happens. Members on both sides of House are concerned about the laundering of money in drug trafficking. There is no way in which it can be addressed without such protection.

No doubt my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson) will speak movingly about the Lyme Regis problem, and my hon. Friend the Member for Leeds, Central (Mr. Fatchett) will deal with the problems in the health service. As the hon. Member for Chingford (Mr. Duncan Smith) is interested in European matters, we should also consider the European perspective.

Hon. Members on both sides recognise that the scale of fraud in the European Union is enormous. It has been estimated at 1 billion ecu, which is more than 1 per cent. of the total European Union budget. It occurs particularly in agricultural subsidies, where it is extremely difficult to bring to light and wastes huge sums of money throughout the European Community.

Unless people have some protection in calling its perpetrators to account, we shall never get to the bottom of the scale of European fraud. Of course, as Mr. Leeson's work showed, new technologies will create the potential for fraud and malpractice that we have never before encountered, so it is important to provide a protective legal framework.

My hon. Friend has responsibly and sensibly drawn the Bill very tightly. There must be an absolute requirement to raise matters internally, and it is crucial that the public interest element is brought to the attention of the appropriate regulatory authority.

Mr. Robathan

The hon. Gentleman is making some sensible points. I am not trying to undermine them, but he has raised as an example of how useful the Bill will be the case of Nick Leeson's hidden account 88888 and Barings' downfall. In what way would the Bill have protected Barings? His second example, in which I am particularly interested, was European fraud. Would the Bill have protected Mr. Connolly, who was sacked for the European Commission for speaking out in a way that he believed was honest and true?

Mr. Fisher

It is impossible to say with any certainty that the Bill would have resolved those cases, but in those two cases and countless others, people who knew what was happening thought, "I ought to say something about this, but I am frightened to do so, because I might not keep my job and could put other people at risk."

Uncertainty, fear and the lack of legal protection is inhibiting. Whether it is Barclays or the abuse of European Union agricultural subsidies, there are people who know what is going on. Some of them will never blow the whistle on malpractices, but there must be good people out there who would like to blow the whistle but are frightened to do so. My hon. Friend's Bill will address and attack that element of fear.

My hon. Friend has drawn his Bill well, and he is almost certainly right about the question of profit. Similar legislation and practice in other countries, and some practices in this country—particularly in respect of crime—allow for reward. The question whether people should be allowed to benefit is difficult to answer.

In the United States, substantial rewards are offered for whistleblowing in customs and excise matters. The USA authorities feel that they would be unable to tackle the scale of customs and excise fraud without being able to offer fiscal incentives. My hon. Friend has correctly erred on the side of caution and has taken a simple, no-profit approach. He understands also that whistleblowing is a last resort, which is most proper.

The European Union and other countries are moving in the direction of my hon. Friend's proposed measure. Spain and Portugal recently introduced similar legislation, and in the Republic of Ireland the Dail is considering doing the same. The Netherlands and Denmark are considering similar legislation. Recent important court decisions in Germany, Belgium and the Netherlands recognised for the first time that it is in the public interest to protect whistleblowers. Two relevant European Union directives issued recently, on drug trafficking and health and safety, place a duty on people to report malpractice. There is recognition throughout the western world that the issue must be addressed now.

My hon. Friend's Bill is not a panacea. It cannot solve the cultural problems, but it will provide a framework. I hope that my hon. Friend the Member for Makerfield (Mr. McCartney) will support the Bill when he speaks from the Front Bench and will give an undertaking that the freedom of information Act that my right hon. Friend the Leader of the Opposition has time and again said a Labour Government will introduce—which I hope and expect will be based on the right-to-know Bill that I introduced some years ago—will incorporate the Bill's important provisions, because they are an essential element of a comprehensive freedom of information Act.

Open government laws are not enough in themselves—what matters is how they are implemented. Those of us who have studied the operation of freedom of information legislation in Australia, Canada, New Zealand and elsewhere know that the framework in law that my hon. Friend seeks to introduce is only a starter for 10. Of great importance is the way in which the Government promote that law and encourage the public, courts and institutions to use it. The spirit in which such a law is operated, rather than the legal framework, is of central importance.

Progress is bound to be slow, but the tide is running with my hon. Friend. His Bill is the first important step to greater openness and sense. I congratulate my hon. Friend, and wish him well.

10.34 am

Mr. Peter Viggers (Gosport)

Anyone hearing the hon. Member for Islwyn (Mr. Touhig) move the Second Reading of his Bill would have found it difficult to disagree with anything he said. The Bill as presented by the hon. Gentleman would rectify serious problems. He highlighted the capsizing of the Herald of Free Enterprise off Zeebrugge, and the Piper Alpha disaster. One thinks also of the Clapham rail crash, the Ashworth hospital scandle, and cancer misdiagnosis. In those and other cases, it can be argued that it would have been possible for whistleblowers to have prevented those incidents.

The word "whistleblowing" sounds like a healthy, hearty, outdoor thing to do, but whistleblowing offers scope for abuse so great that it gives me cause to worry about the Bill. The Library's indispensable research paper, which is well up to the Library's normal standard, refers to the "autocratic environment" in BCCI in which no one dared to speak up. Many companies, and many Governments, are like that. BCCI happened because of the failure of international banking supervisors to co-ordinate, rather than of an individual.

It is generally accepted that, where a cost is to fall on the Government, no one really cares; where it is to fall on a big company, no one cares outside the company; and where it is to fall on a smaller company, that will be of intense concern to the proprietors of the company or organisation.

My hon. Friend the Member for Chingford (Mr. Duncan Smith) gave the example of a school as one type of organisation that could be helped by the Bill. I am the chairman of a sixth form college in my constituency that is quite a sizeable organisation, as these things go. It has a budget of £4.5 million a year. 250 staff and 1,182 full-time pupils. Well over 75 per cent. of all the college's costs are accounted for by the salaries of teachers and other employees. A comparatively small amount of money is left for administration.

It would be devastating if a member of the staff or someone associated with the college sought to take action under the Bill, by reporting an incident of maladministration that the individual believed had taken place. The legal expense and the cost in staff time would be devastating, even though that organisation is of reasonable size.

As to the kind of person who might be a whistleblower, to take one view—or a sneak, to take another—I am worried about members of the awkward squad. 1 refer to the person who does not get on well with his fellow employees or with the boss, and who wants to expose something that he thinks is important. Having done so internally, then he might claim that he is being discriminated against if he seeks to pursue the matter further. I am concerned most about the smaller company.

Mr. Richard Shepherd (Aldridge-Brownhills)

I intervene with great diffidence, because my hon. Friend and I had a relationship with Lloyd's of London. In fact, my hon. Friend served on the council of Lloyd's. Does my hon. Friend agree that, if some of the malpractices in that organisation had been revealed earlier by employees in the Lloyd's market, the cost to investors, the reputation of Lloyd's and the possible survival of Lloyd's might have been assisted? There is sometimes a positive gain. The burden of cost, on the simple side of the account, is not the final determinant. There are wider considerations of public interest.

Mr. Viggers

I declare an interest as an ex-member of the council of Lloyd's, and I retain a connection with that organisation as chairman of its pension fund trustees. I am also a member of the Lloyd's investigations committee—the committee that is tasked with investigating matters that are reported through the regulatory board. There is what is informally called at Lloyd's a sneak's charter, whereby people are encouraged to report matters—if necessary, anonymously—so that they may be pursued.

The problem is that less is reported than should be. Lloyd's has much broader provisions than those in the Bill, but they do not work, because those at Lloyd's do not participate fully and do not make reports that would expose the problems.

Mr. Shepherd

People may be fearful for their jobs.

Mr. Viggers

It is possible at Lloyd's for someone to report a matter anonymously, so that need not affect his job at all. The provisions at Lloyd's are broader than those in the Bill.

Mr. MacShane

I am concerned by the number of anonymous letters that I, as a Member of Parliament, get about malpractice. I had one recently about a public agency in Rotherham, containing serious allegations, but signed simply "The Mole". What do I do? It is extremely difficult to pursue the matter. Were the Bill to be law, and were the mole really to believe he had some cause of complaint in the public interest, he would feel protected as a citizen.

It would still be a big decision for him, but the Bill would at least move us away from the world of sneaks, anonymity and people who were fearful of revealing problems because they were frightened of losing their jobs or some other pressure. The Bill would enhance the individual freedom of the citizen.

Mr. Viggers

The hon. Gentleman makes a fair point. I shall deal in a moment with those who genuinely believe that they have exposed a genuine wrong. The hon. Gentleman puts one point of view, and I will explain the opposite point of view.

I am concerned about the effect on morale in larger organisations. I am especially concerned about those who have become obsessed with an issue. We all know such people, and they are well known to clergymen, doctors, solicitors and Members of Parliament. Such people turn up in constituency surgeries, absolutely convinced that they have had access to some facts that they think need to be in the public domain.

Their obsession can leave them near to the norm in personality or it can take them well away from the personality norm. Someone who has become obsessed with an issue and who may genuinely believe in it, as my hon. Friend the Member for Chingford said, would be able to pursue that obsession more easily.

Such people may have obsessions about major organisations such as the armed forces, the police, airlines and the railways, in which any exposure of potential risk would hit the headlines in a big way. The risk of exposure for such large organisations would be enhanced if individuals knew that they would be protected if they made a complaint.

All that an individual employee, who perhaps does not get on with his immediate superior or his workmates and may even have had a warning about his standard of work, would have to do is say that he proposed to make a protected disclosure. Immediately, he would trigger a mechanism that would prevent him from being dismissed or disciplined.

Mr. Touhig

indicated dissent.

Mr. Viggers

The hon. Member shakes his head. I submit that the Bill would enable an individual who felt threatened to claim that he would make a protected disclosure, and he would immediately become bullet-proof. Clark Kent would become Superman.

Mr. Touhig

The hon. Gentleman has misunderstood the point. An individual would not be able to go to his organisation and say that he intended to make a protected disclosure. The individual would have to raise a concern about some serious wrongdoing or malpractice with the organisation first, and give the organisation a chance to respond or correct it. Only then would the protection follow, if he or she made the concern public. The Bill contains no provision for someone to threaten to make a protected disclosure.

I ran a small company before I came to this place, and I know the difficulties that people who run companies face from employees who have all sorts of complaints, grumbles and grouses. We must ensure that procedures are in place so that people who run organisations can discover what is happening. With respect, the hon. Gentleman has quite misunderstood the main thrust of that part of the Bill.

Mr. Viggers

I accept that I have foreshortened the procedure that the Bill envisages, but, if a disgruntled individual felt threatened in some way, he could explain to his employer the point that concerned him. When the employer, perhaps justifiably, told him that he would have no cause to expose the matter because there had been no malpractice or abuse of authority and none of the points in the schedule applied, at that point the individual would say that he proposed to make a protected disclosure.

That individual would then be protected, and he would be able to say, like a child playing in the playground, "Fainites, you can't touch me." Like the television advertisement, he would have the ring of confidence. He would be invulnerable, because he would have protected himself under the procedures in the Bill.

Mr. Touhig

The individual would have to show that he or she was not acting in bad faith; that is clear in the Bill. The hon. Gentleman's example is clearly a question of bad faith, and, with respect, he has misunderstood the point.

Mr. Viggers

The hon. Gentleman claims that individuals would have to prove that they were acting in good faith, but so much of the Bill is based on subjective judgments. As my hon. Friend the Member for Bristol, North-West (Mr. Stern) has pointed out, claims would remain open until they were settled by the court. An individual who felt he had been victimised could claim the protection of the Bill, and a court would have to decide whether he was justified.

Mr. Stern

I underline my hon. Friend's point. He is right in his analysis of the Bill. If an individual, at the earliest stage, indicated that he foresaw a protected disclosure resulting from his attempt to raise the matter internally, effectively he would totally change the nature of the discussions with the company or organisation that employed him. The company would know that, if it did not accept his view of events, a protected disclosure would inevitably follow.

Mr. Viggers

Following my hon. Friend's point, an individual could complain—I select at random from the schedule—about an abuse of authority. What is an abuse of authority? Who is to decide what is an abuse of authority? No one would know until the question reached the court. An individual could claim the protection of the Bill, and a final decision would have to be made by the court.

Individuals could complain about maladministration. What is maladministration? I might administer brilliantly, someone else maladministers—that is a subjective judgment, and the answer would have to be decided by the courts.

Mr. Duncan Smith

I wish to turn my hon. Friend's point round, because it already happens. If somebody wishes to raise an issue about malpractice, ultimately the courts decide the point. If that individual has been dismissed or internal proceedings have been taken against him, the courts will decide whether that was right. The Bill would warn companies to ensure that they sorted such matters out internally. If a company was certain that it had no case to answer, once the employee made the matter public, the company could be confident that there was no problem. The Bill would remind companies to be certain internally, which does not happen at the moment.

Mr. Viggers

My hon. Friend has business experience. I have never discussed with him what type of business experience he has, but it may have been in larger companies. I am seriously concerned about the burden of the Bill on smaller companies and organisations. Companies or organisation would need to take legal advice on all the issues in the Bill, and that would be a heavy burden. I do not accept my hon. Friend's proposition that such matters are effectively covered by existing legislation. Were that the case, the Bill would not be required.

Dr. Tony Wright (Cannock and Burntwood)

A number of us are trying to assist the hon. Member to understand the Bill a little better. He fundamentally misunderstands it when he says that an individual would announce that he was making a protected disclosure. Nobody would be able to announce that he was making a protected disclosure. All that person would know was that, at some point, a court—after applying the stiffest tests—would decide whether somebody had behaved properly or improperly. That is the task of the court. The hon. Gentleman misunderstands the Bill.

Mr. Viggers

The Bill would change the rules that would apply on proof. It would prepare the ground for an individual to make a claim. The individual would be making exactly the claim that I submitted he would make. He would be submitting to the company that he would be making a protected disclosure.

I am worried about the range of people who would be able to take advantage of the Bill's provisions. Most industrial tribunals protect individuals only if they have been employed by a company for two years. I give the House a frivolous example of how briefly employment can sometimes last.

Many years ago, I spent some time with dustmen in my constituency. I was told one morning that it was not unusual, because of the vigorous nature of the work of emptying dustbins, for an individual to turn up for work for the first time at 6 am on a Monday morning and to have vanished by 7 am. An individual may have had only a very short period of employment. Perhaps a difficult or awkward individual has joined a company with a view to causing difficulty within it. He will be protected even though he has not worked for the company for two years.

I am worried also that interim relief would be available to individuals who have put themselves in the protected position that I have described. They would be able to obtain compensation through an industrial tribunal. They would be able also to claim protection against victimisation and adverse treatment.

Finally, I am especially concerned that the burden of proof would be reversed for public bodies, which would have to show that it would not be in the public interest to disclose information. It would be easy for an employee—even a new entrant—to put a necklock on a public body, thereby causing immense inconvenience, work and cost.

The Bill would impose enormous burdens on private business and even heavier burdens on the conduct of public affairs. Perhaps the burden would be proportionately heaviest on small business. I believe the Bill to be motivated by the heart rather than the head. My preference would be for it to be rejected at this stage. Failing that, it would need substantial amendment in Committee.

10.51 am

Mr. Derek Fatchett (Leeds, Central)

The hon. Member for Gosport (Mr. Viggers) raised certain issues relating to compliance, which I shall take up later. First, I join my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) in congratulating my hon. Friend the Member for Islwyn (Mr. Touhig) on introducing an important Bill. The way in which my hon. Friend introduced it impressed all hon. Members on both sides of the House. I congratulate him also on one further achievement—that of securing sponsors from both sides of the House. That shows the extent to which the Bill is regarded as an important measure.

I speak as a sponsor, and as someone who has been thinking about the issues raised by my hon. Friend essentially through an individual case. I shall not talk at great length about that case, because I have raised it before in the House. It would be an abuse of the House to talk about the matter again in detail.

Individual cases are important, because they stimulate Members to think about general principles. My constituency case forced me to think along those lines. I shall mention only briefly some of the facts about Dr. Chris Chapman, who is a scientist at the Leeds general infirmary.

Before doing so, I wish to emphasise that whistleblowing is hard on the whistleblower. It is an extremely difficult psychological task. It is difficult when one's colleagues are under pressure and members of the management want to impose pressure, doubt the whistleblower's integrity and, in Dr. Chapman's case, doubt his scientific knowledge. A person in those circumstances needs to have tremendous principle and courage in raising issues.

There has been talk of a whingers' charter. As the hon. Member for Chingford (Mr. Duncan Smith) said, there is a cost to the whistleblower. In the end, Dr. Chapman did not face a financial cost because the management of the hospital trust was persuaded to pay for his re-engagement in the national health service. Something more dear to Dr. Chapman was the loss of his scientific reputation. That was dear to him because it went to his career and to something that he considered to be part of himself—his ability to express himself as a scientist with a contribution to make to the NHS. That was lost to him, and that was a real and significant price.

Why did Dr. Chapman have to pay that price? He acted as a whistleblower. As has been said, that is no outdoor sport. It is a psychological test of strength and integrity. Dr. Chapman exposed a scientific fraud in an important scientific project. It is not easy to expose immediate colleagues and to say to others, "I know that my colleagues are fiddling under the name of science." That was happening, and there were real difficulties in the process in which Dr. Chapman involved himself.

The individual constituency case taught me, that when an individual starts to expose difficulties, he often runs into difficulty with the management structure. That is not because individual managers are evil people, but because they often find the truth embarrassing. They sometimes find it much better to pretend that the bearer of the truth is responsible for the problem rather than to deal with the problem and the truth. The issue is often swept under the carpet, and the messenger is made into the troublemaker. That is what happened at the Leeds general infirmary. The management was not capable of dealing with the issue by going through the management structure.

The long-term solution to Dr. Chapman's problem has been to set up an inquiry. I thank my colleague, Lord Merlyn-Rees, who has been involved in setting up the inquiry. I thank him for the work he is doing in Dr. Chapman's case. I am grateful also for the work that was undertaken by the previous chairman of the United Leeds teaching hospital trust, the late Tony Clegg. Perhaps this takes up the managerial points made by the hon. Member for Gosport.

Tony Clegg and I disagreed on many issues. He was the largest private contributor to the Conservative party. We had substantial political differences. When he saw a real and important issue, however, he had the courage to say that his management was wrong, and that it was necessary to find a procedure to deal with what was at fault. I wish to thank him for what he did. A whistleblowing Bill would have been one way of dealing with the problem that he recognised as a manager.

The general points that emerged from the Chapman affair and from other individual cases are covered by the Bill. I tried to introduce a Bill three or four years ago that was built on the Chapman experience. It had the same underpinning principles that provide the foundation for this Bill. They are the four principles to which my hon. Friend the Member for Islwyn referred. First, the whistleblower, the person at the eye of the storm, must go through internal managerial procedures. That must be right. That requirement deals with all the points that have been made about a whinger's charter.

Secondly, the whistleblower must act in good faith. That overcomes the point made by my hon. Friend the Member for Rotherham (Mr. MacShane) in an intervention. People may feel that they have a grievance—all of us may have that feeling—but they can act in good or bad faith. The issues that the Bill would address must be raised in good faith.

Thirdly, there must be accuracy. We all receive letters about, for example, the social security office, the housing manager and other Members. We know that, very often, the letters are wildly inaccurate. We are saying that accuracy must accompany whistleblowing. There must be accuracy in what is said. My hon. Friend the Member for Islwyn has dealt with that requirement in his Bill.

My hon. Friend has provided a fourth condition, and rightly so—that the individual involved should not be selling his or her story for profit. That is a right and sensible condition to apply.

It has been suggested that whistleblowing will become a habit and a general malaise in society. I would not necessarily see it as a malaise, but general it certainly will not be. There will be only a few cases. There are appropriate circumstances in which whistleblowing can and should take place in the public interest. It is to the betterment of society as a whole that those whistleblowing cases occurred, although it would be much better for society as a whole had they not had to take place, and we had a culture in which people could express their concerns in a much more open way.

In an ideal world, all management will listen to issues that are raised by their subordinates. In practice, that simply does not happen in businesses throughout the country. There are examples of good firms, but there are many examples of senior management, for whatever reason, who will not listen. We need a mechanism whereby individuals who raise issues with conditions attached are protected. The issue is protecting the individual.

I shall finish on two points—first, the compliance cost. Conservative Members tried to make an argument that this is a recipe for—

Mr. Tam Dalyell (Linlithgow)

On a point of order, Madam Deputy Speaker. Under the rules of the House, points of order must be raised at 11 o'clock. Following the request from my right hon. Friend the Member for Bishop Auckland (Mr. Foster) and myself, have you had any request from the Government to make a statement on what purports to have come from the office of the Prime Minister's press secretary, Mr. Jonathan Haslam, that, whereas Ministers have been acquitted, civil servants have not, and disciplinary consequences are likely to follow?

Madam Deputy Speaker (Dame Janet Fookes)

The hon. Gentleman is mistaken in thinking that points of order must be raised at 11 o'clock. I think that he is referring to Government statements, which would be made at 11 o'clock on a Friday morning, so I would have preferred him to allow his hon. Friend the Member for Leeds, Central to complete his speech. However, let me deal with the point that he has raised.

I was present in the Chamber when Madam Speaker made her ruling on this. I can tell the hon. Gentleman that I have not had any subsequent indication, and no indication has been given to Madam Speaker, that the Government wish to make a statement; but, of course, the Minister who is present will have heard the point that the hon. Gentleman has made.

Mr. Derek Foster (Bishop Auckland)

Further to that point of order, Madam Deputy Speaker. I apologise to the House and to my hon. Friend the Member for Leeds, Central for intervening on his excellent speech, but I see that the Minister is present, and my hon. Friend's point of order referred to the fact that he might make a statement. I think that the House would agree that, if no Minister took responsibility, it would be shameful for the Government to try to offload all the responsibility for the Scott report on civil servants. The House deserves a statement, either now or later.

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor)

I intend no discourtesy to you, Madam Deputy Speaker, to the House, to the hon. Member for Linlithgow or to the hon. Member for Bishop Auckland. You are right, of course, to say that there has been no ministerial request to make a statement this morning—least of all, if I may say so, by me. I shall certainly report the exchanges this morning to my right hon. Friend the President of the Board of Trade. I give the House my word on that.

Madam Deputy Speaker

That deals with the matter. We may now return to the speech of the hon. Member for Leeds, Central.

Mr. Fatchett

We have almost reached the second half of the game, but in no sense do you, Madam Deputy Speaker, need to protect me from my hon. Friend the Member for Linlithgow. I do not bear a grievance against him, because I know that his intervention would have fallen totally within the remit of the Bill. My hon. Friend's intervention was accurate and in good faith, so I was delighted to have it. It also enabled me to have a few minutes to think before I came to my final comments, so it had another benefit.

I now deal with the compliance cost and the nature of management and secrecy in our society. The hon. Member for Gosport made much about the potential compliance cost to business. My hon. Friend the Member for Islwyn said, correctly, that his Bill will not add to those costs. He also talked about his own experience of running a small business. It will not set up a new regulator, as the hon. Member for Chingford made clear, and I suspect that we would have had great difficulty in persuading him to be a supporter of the Bill if any regulation had been involved.

The Bill directly will not impinge on the overwhelming majority of employment situations—one could almost go as far as to say 99.999 per cent. of them. We are talking about a handful of cases, and for those companies, yes, there will be a small compliance cost if they do not listen to the truth and the whistleblower. The fact is that, if those companies were sensible, there would be not a compliance cost but a compliance gain, because the new practices would enable them to find out what is going on in their organisation much more effectively.

My final point is about what my hon. Friend the Member for Islwyn called the culture of secrecy in our society, in which there is power for those who hold information, and a lack of power for those who do not. We need to change that. Those who have read the Scott report should forget the activities of individual Ministers and civil servants. What comes out of the report is a structure, a web of secrecy, a web of confidentiality, not because, in the vast majority of cases, people have been malicious or difficult to others, but simply because that is the way in which we expect to administer business in our society. We need to change that culture, and good business organisations are already changing that approach. My hon. Friend mentioned some of the companies that have changed their style.

One of the most interesting things about the past few years has been the way in which good private sector organisations have flattened their hierarchies, opened up their communication systems and made it much more possible for the individual to be a team player and to express ideas and provide information.

One thing that desperately worries me is that, while the private sector has adopted good industrial practices in terms of management, the public sector has gone in the other direction. I worry about NHS trusts, for example, which have a new, macho style of management, in which there is an expectation of compliance on the part of the individual. There are real dangers in that. We need to change to a much flatter structure, one that is much more open, and do so in a way that will allow individuals in our society to be creative. My hon. Friend's Bill will open up the valve for those creative abilities, will allow more people to play a real part, and will change the culture of management.

I hope that the Bill gets a Second Reading and becomes law, because it is important for a few individuals, but also because it is important for secrecy, information and management in our society.

11.7 am

Mr. Michael Stern (Bristol, North-West)

I join colleagues on both sides of the House in congratulating the hon. Member for Islwyn (Mr. Touhig) on raising what is undoubtedly an important subject for debate.

The diversity of the debate so far has shown the extent to which the arguments need to be refined, and perhaps narrowed, before we draft a Bill to deal with the abuses that the hon. Gentleman has rightly dealt with, while at the same time not catching a great deal that does not need to be dealt with or that could be positively damaged by the Bill as drafted.

I mean no disrespect to the hon. Gentleman when I say that I am unhappy about some aspects of the Bill. The public might gain if the Bill went into Committee, but I do not believe that the arguments have been defined with sufficient clarity to enable the Bill to become law in the next few years. I shall express my doubts about some parts of the Bill, and my absolute abhorrence of one part.

I deal first with commercial confidentiality. It is easy to dismiss the effects that the Bill may have on companies and on the climate within those companies, as the hon. Member for Leeds, Central (Mr. Fatchett) just did, by saying that there will be few cases, that they will improve the climate within the company and that they are likely to have little effect. I accept that there are cases in which the hon. Gentleman's description of the climate that would be created by the Bill is correct. However, I hope that he accepts that there are an equal number of cases where the climate created would not be as he described.

One of the largest employers in my constituency is British Aerospace. British Aerospace, especially in major aviation construction on which it concentrates in Filton, faces extremely difficult, cut-throat competition from aerospace industries throughout the world. What typifies that competition is the desire of the company's competitors to achieve a competitive advantage, by whatever means, and to obtain or influence a contract that will provide employment for many thousands of people for many years. The fear that would be generated by the Bill in circumstances of such extreme competition is that it would be open to an employee, by making a disclosure under the Bill, to destroy the competitive position of the company that had been built up over many years.

At the moment, there are disadvantages for an employee who may be acting in good faith—or who may not be. Only the courts can decide. Those disadvantages would be lessened under the Bill and the danger to commercial confidentiality would therefore be increased. I have made the next point before and I make it again. No one can tell whether the complaint is justified until it has been accepted or has reached the courts. There is no magic process that sifts a complaint and says, "This is in good faith, this is without bribery and this is a genuine complaint." There is no magic process that separates out, before it can do damage, a complaint that is not made in good faith, that is not made on reasonable grounds or that does not have financial backing.

My first worry about the Bill is that, in attempting to deal honestly with a number of cases where there is a need for an employee to have additional protection against unfair dismissal, it mixes in cases that will open up to an employee, for whatever reason, the opportunity to do damage out of all proportion to the original complaint.

Dr. Wright

I had not intended to intervene, but I do not want the House to be led to misunderstand what is going on. What the hon. Gentleman describes bears no relation to the Bill. He is describing how the law of confidence has operated for the past 100 years. There is nothing different now, because there is a test of public interest in each case. All that the Bill does is to say that, when the public interest has been established, people will be protected from victimisation. All it does is to square that circle.

Mr. Stern

I am afraid that the hon. Gentleman shows in this intervention, as in his previous intervention, that he completely fails to understand my point. He refers to the complaint being in the public interest. I am saying to him and to the promoter of the Bill that there is no way of establishing whether it is in the public interest until, under the Bill, the matter is tested in the courts. The public interest—I will come on to this in more detail later—is not written in the ten commandments and it has not been established for all time and in all circumstances. It can be tested only in the courts or, under our present system, on a question of fact.

Mr. Duncan Smith

I approach the matter from a slightly different angle. The Bill changes nothing in that process. Currently, without the Bill having been enacted, it is the courts that ultimately decide. If people wish to raise a matter in public, they will do so and the courts will decide. The Bill simply takes the matter from the point at which the courts decide and says, "If it is proven, there are clear protections for individuals if they have been penalised by the company in the process of raising an objection." The Bill does not change the final process. It says, "Here is a legitimate protection once the complaint has been proven." It also says to the company, "If you are certain that the matter is not in the public interest, stand on your certainty. That means that you have internal structures to prove it. If you do not have, be warned."

Mr. Stern

I hesitate to argue with my hon. Friend, who I believe has a background as a distinguished lawyer as well as a business man. I learned early in my business career that people who argue with lawyers lose money. Nevertheless, I challenge my hon. Friend on one point. The Bill will bring into the legal test a definition of what is in the public interest. Currently, in disputes about whistleblowing, the courts do not have a duty to do that. I suggest that, if the Bill became law in its present form or anything like it, providing an additional test for the courts of what is or what is not in the public interest would, among other things, provide a great deal of meaty work for lawyers over the next 50 years. That is not necessarily in the public interest.

Clause 2 is the core of the Bill. It defines the disclosures that are protected under the Bill and three cumulative cases are given to explain how a protected disclosure is to be defined as being in the public interest. I fear that I have doubts about all three. They all give rise to argument and not only protect the whistleblower, but give rise to additional grounds for the hard case, as defined by my hon. Friend the Member for Gosport (Mr. Viggers), to take advantage of the additional rights granted by the Bill for his or her own purpose.

Clause 2(1)(a) says that a "protected disclosure" is in the public interest where, among other reasons, the individual is not acting in bad faith". That provision goes to the heart of the objection that I have described. How on earth is anyone to define with pin-point legal accuracy whether a person is acting in good faith or bad faith?

Mr. Touhig

The test appears in the Banking Act 1987, as a precedent, and also in the Arbitration Bill, which is currently before the other place.

Mr. Stern

I fully accept that. The Bill extends what must be a doubtful test over a far wider area. The fact that, for example, capital punishment was found necessary as a penalty for arson in Her Majesty's dockyards does not mean that the House should necessarily extend that penalty or the process of decision that led to it. To ask a court to decide what is in good or bad faith must be a weak process that cannot arrive at a certain conclusion. The House must be reluctant to extend that process, except where necessary.

The second test in clause 2 asks whether a 'protected disclosure' is a public interest disclosure where the individual making it … (b) believes on reasonable grounds that the information is accurate". How on earth can the courts be expected, in extended cases, to rule on an individual's belief when a disclosure was made? Beliefs often change daily. With the best of intentions, the hon. Member for Islwyn is extending the law-making process too far.

The third test in clause 2 is where the individual making a protected disclosure (c) has not made it for the purpose of obtaining payment or personal gain". I agree that that is a worthy aim, but a National Audit Office report published this morning on auditing the means test for civil legal aid procedures states that it is virtually impossible for such an effective audit to be undertaken and that the means test will inevitably allow a number of people to escape the net. Similarly, to ask the courts to inquire into whether a person has made a disclosure that is affected by the possibility of personal gain inevitably builds in a process where a significant number of people will escape the net by doing exactly what the hon. Gentleman is trying to prevent.

It has been assumed in the debate that public interest will usually be easy to define. I am a proud member of the Public Accounts Committee, which frequently considers difficult cases involving public spending where the public interest has been a factor to take into account. Part of the Committee's rationale is that it considers the extent to which the public are receiving reasonable value for money for public expenditure. It therefore considers the public interest in that respect.

From memory, I shall refer to two cases involving health authorities where the public interest was involved in the Committee's conclusions. The first involved the Committee's investigation, conducted with the help of the National Audit Office, into goings-on—I can think of no better word—at Wessex health authority. A senior health authority employee had been dismissed because, to use the words of the authority's chairman, she was too good at her job. As part of her dismissal, she was subjected to a gagging clause under which she was not allowed either to speak about her work for the health authority or—the clause went further—to seek employment elsewhere in the national health service for a significant period.

The hon. Member for Islwyn might think from that description that the public interest was against the health authority and in favour of the individual, but it was argued strongly before the Committee that it was in the NHS's interests that the lady be gagged and debarred from further employment in the health service. Despite the overall circumstances of the health authority, which has been almost universally condemned, there is still considerable disagreement about where the public interest lies. For an essential part of the Bill to rely on such a diffuse concept as the public interest is merely to create a recipe for litigation.

The second example shows an even clearer divide and involves the Committee's investigation into the affairs of West Midlands regional health authority. We found that South Birmingham health authority had been badly mismanaged over a period. As a result, it had spent considerable sums on providing services for other health authorities without the administrative ability to rebill. That was the explanation of why services had to be seriously cut in south Birmingham.

The Committee asked why the money had not been recovered from the other health authorities. It was explained that South Birmingham had not billed the other health authorities, which, in their wisdom, had chosen not to remind it of that fact. Does the public interest lie in correcting the management problem at South Birmingham and accepting that the money that had not been billed to the other health authorities had been lost, or does it lie, as many Committee members argued, in the other health authorities' duty to volunteer to accept a liability to pay South Birmingham and so get it out of its difficulties?

The public interest is a huge concept and the last thing we should do is place an even greater burden on the courts to define it. The courts are the last place to which we should take the public interest concept. In this morning's press, it was defined by one court as being in the public interest to release a thief and gaol the thief-taker. Our legal system is sufficiently fragile that I would be reluctant to place such further nebulous burdens on it.

Mr. Duncan Smith

I keep saying to the people who oppose the Bill that it does not change any of that, because the courts must already consider public interest. If it is raised as an objection, they must define it. I agree that it is a difficult concept to define, but they are already doing it. The Bill simply hangs on a term that already exists and is before the courts. The Bill tells companies and organisations that they must secure in their minds through internal structures that, when someone goes beyond the internal investigative procedure, they are not acting in the public interest. If they are certain they are not, they rest on sound ground.

Mr. Stern

I can repeat to my hon. Friend only that the fact that the courts are already charged with that duty in certain matters is not an excuse for extending it. The Bill would extend to large new areas an attempt to define the public interest. I have tried to describe to him areas, particularly in the public sector, where it becomes almost impossible to define where that interest lies. The fact that we are charging the courts with that does not make it any more satisfactory.

Clause 8 is the most obnoxious clause in the Bill. I use the word "obnoxious" advisedly. I apologise to the hon. Member for Islwyn, because, owing to a constituency engagement, I shall be unable to remain until the end of the debate, but if he will undertake to remove clause 8 in Committee I shall change all my constituency arrangements and stay to vote to give his Bill a Second Reading. I notice that he does not rise to reply.

Clause 8 is not only obnoxious but is one of the significant reasons why the Bill, as drafted, must not be passed. It seeks to go beyond creating additional rights for whistleblowers by creating additional rights for journalists, but the two do not have the same moral authority. Those of us who have been in the House for some years have seen the extent to which the balance of power in our society has changed against Parliament and in favour of greater powers by the media to influence the direction of society.

The clause would effectively give additional protection not just to the honest but to the dishonest journalist in cases where, as is not unknown, there are financial inducements for a journalist to produce a particular story irrespective of whether it is true. That totally changes the character of the Bill and the hon. Member for Islwyn was most unwise to include in a measure, some of which many of us support, a concept that makes it unsupportable by those who wish to preserve the rights and obligations of the House.

11.30 am

Mr. Tam Dalyell (Linlithgow)

Like my hon. Friends the Members for Stoke-on-Trent, Central (Mr. Fisher) and for Islwyn (Mr. Touhig), I pay tribute to that tireless campaigner, Maurice Frankel, with whom I have worked on and off for 15 years. We would not be debating this subject today were it not for his work.

I shall concentrate on one aspect of the matter—the position of those who try to prevent the deception of the House of Commons. It is not only a question of trying to prevent Ministers from being economical with the truth. In cases of deep deception, the function of the whistle-blower is perhaps to prompt questions that ought to be asked, which no politician would know how to ask if there were not some inside information. I defy any of my colleagues to ask the right questions without a basis of information.

The Bill is not a panacea but, as my hon. Friend the Member for Islwyn said, it would create an atmosphere in which it would be clear that corners should not be cut. I say to the Whips that it would be discreditable to politicians in general if the Bill were snuffed out and not allowed to go to Committee. That would bring us all into disrepute.

My parliamentary colleagues will forgive me if I speak with passion and emotion, but succinctly, about public disclosure. In late January and early February 1985, I spent 11 uncomfortable days in the Old Bailey dreading that what I had done, which I believed to be right and still believe to be right, would land in gaol for some years a civil servant who had placed his higher duty to the British Parliament above his obligation to Ministers.

Let us be clear about the circumstances of the case of Clive Ponting. It was not a question whether he held views on the merits or demerits of sinking the Argentine cruiser Belgrano. Actually, he did not dissent—his views were not all that different from those of Ministers—but he knew that questions that had been put legitimately by me in the elected Parliament of our democracy were being given answers that were truncated to the point of distortion or, in some key areas, being untruthfully answered to avoid political embarrassment. It was the deception of Parliament, not disagreement with military action, that motivated Ponting.

The Bill has the potential to make it more possible for a civil servant to ensure that Parliament is not misled by Ministers. Furthermore, the mere existence of the legislation could be a deterrent that might make Ministers think twice before cutting comers in their answers to parliamentary questions.

In the autumn of 1984, I received an anonymous letter in my constituency post. Most anonymous letters go into the waste paper basket, but this one was different. It was concise and precise and from my, at that time, encyclopaedic knowledge of the circumstances surrounding the sinking of the Belgrano, I realised that it could have been formulated only by someone who was at the very heart of the Foreign and Commonwealth Office, the Cabinet Office or the Ministry of Defence. It was no ordinary letter.

I shall deal, first, with what I was told as the receptacle for Ponting's then anonymous information and what I ought to have done as a Member of Parliament; and, secondly, with what Ponting was told in the High Court he ought to have done—because the unrealistic nature of that advice makes the case for allowing the Bill to go to Committee.

First, I was told that I should have handed the letter to the Ministry of Defence, but who would ever again trust an MP who took such action, dropped his sources into the cart, and allowed the fingerprinting of documents and their subjection to modern techniques that can easily lead to identification?

I behaved "responsibly". I did not go to Chris Moncrieff or to any newspaper. I had the nous to keep the information as a proceeding in Parliament, but I naively supposed that the Chairman of the Select Committee on Foreign Affairs, which the Ponting information revealed had been deceived above all others in the course of an investigation, might be interested in making use of the information to expose the deception of his Select Committee.

Not one bit of it. Without consulting the members of his Committee or even its senior members such as the late Ian Mikardo, or my hon. Friend the Member for Newham, South (Mr. Spearing), or his Conservative colleagues, the Chairman handed my letter to his ministerial chums—I use that word on purpose—in the Ministry of Defence. It transpired that the Chairman was far more concerned to find the source of the leak than to bother himself about whether the Select Committee which he had the honour to chair had been lied to.

As soon as the Ministry of Defence got its hands on the letter, Ponting was identified and confessed. I remember shaving on the Saturday morning and hearing on the 7 o'clock news the headline that a civil servant by the name of Ponting had been suspended and charged. That was the first time that I heard the name of Clive Ponting.

The moral of all that is that it is wishful thinking to suppose that Select Committees will perform the task of serious inquiry that is necessary and which may be made more possible by the suggestions in the Bill.

Mr. Robathan

The hon. Gentleman has been pursuing this issue for some years. He says that Select Committees are not able properly to carry out their tasks. Does he believe the corollary, that the press is the right body to pursue justice in the public interest? That is surely what he suggests.

Mr. Dalyell

I am suggesting support for the serious mechanisms that are set out in the Bill. I emphasise that I did not run to Chris Moncrieff. I dwell on that case because, as a cause celebre, it is important in the continuing argument.

To say that Members of Parliament have scope for righting wrongs done to Parliament by the Executive was not real then and is not real now. On crunch issues, Select Committee Chairmen and members inevitably put party before public interest. That is the response to the intervention by the hon. Member for Blaby (Mr. Robathan).

If the Chairman of the Select Committee had been primarily concerned with the public interest, he would have used Ponting's information to formulate the right questions to ask on the basis of the insider information with which he had been provided. That he did nothing of the kind tends to make the case for the Bill.

So much for what a Member of Parliament should have done. What was Ponting to have done? He should have complained through the normal civil service channels. He did complain to his immediate superiors—my hon. Friend the Member for Islwyn said that the Bill would cover that—but to go on and on that route and nag at them would simply have damaged his career, was he would have become known as a troublemaker, making waves of difficulty.

It was suggested to the Old Bailey that he should have gone to the head of the civil service. That makes the imagination boggle. Just imagine a grade 5 civil servant going along, without telling anyone what it is about, and knocking on the door of the then Sir Robert Armstrong, now Lord Armstrong of Ilminster. [Interruption.] I see my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) laughing. He has ministerial experience. He can easily imagine the scene.

What was a man in Ponting's position to say? "Please Sir, Ministers are telling porkies to Tam Dalyell MP to protect the position of the Prime Minister, at Mrs. Thatcher's very personal insistence"? What would have happened to a civil servant who had done that? His feet would not have touched the proverbial ground until he was out of the civil service. It is unreal to suggest that anyone below the rank of a grade 1 civil servant can sail into the office of the Cabinet Secretary and the head of the civil service and complain that the Prime Minister is lying to the House of Commons on politically delicate matters. There must be machinery along the lines that my hon. Friend for Islwyn suggests.

It is all very well for the hon. Member for Blaby to ask what happens to a Member of Parliament who pursues such matters. Surely, he implies, the House of Commons should do something. An hon. Member who pursues such matters is thrown out of the House of Commons when he becomes very blunt, as he has to, and, having been thrown out five times, I know what it is about. It is not a pleasant experience. I should like some machinery, such as that proposed by my hon. Friend the Member for Islwyn, which would have prevented my being thrown out of the House five times for making an argument that has subsequently turned out, in the case of the Falkland islands and of Westland, to be accurate.

That, my colleagues may say to me, is history; but the Scott inquiry is not history. I tabled two questions: To ask the Secretary of State for Trade and Industry what steps he took to satisfy himself that the die-forging plant to be built by Matrix-Churchill would not be used in producing parts for ballistic missiles or the supergun project Babylon before he issued an export licence. To ask the Secretary of State for Trade and Industry what consideration was given to the site at which, and the purposes for which, the lathes produced by 600 Services of Colchester for al-Hillal were to be used before he issued an export licence."'—[Official Report, 8 May 1990: Vol. 172, c. 64–66.] I shall not take up the time of the House with the answers to those questions other than to say what Lord Justice Scott said. In paragraph D4.42 of his report, he said: The answers to parliamentary questions, in both Houses of Parliament, failed to inform Parliament of the current state of Government policy on non-lethal sales to Iraq. This failure was deliberate and was an inevitable result of the agreement". I repeat, he said that that failure was deliberate. In paragraph D4.40, he said: In April 1990 Mr Tam Dalyell MP put down two questions for the Secretary of State for Trade and Industry. The report outlines the precise significance of those questions.

I knew at the time that they were highly significant questions—otherwise, I would not have tabled them. I also knew that the answer was totally unsatisfactory. Why did not I pursue the matter further? Bluntly, I was stretching the patience of the previous right hon. Member for Islwyn, Mr. Kinnock, who had a quiet word with me and said, "If you are thrown out of the House a sixth or seventh time, you will simply bring the Labour party into disrepute." Such peer pressure from colleagues is very strong.

A real problem exists. What is to happen when both those who draft the answers and, in my case, the recipient of the answers, know that, bluntly—I do not want to get into difficulty on parliamentary expressions—they have not been told the truth; I ought to say, have been lied to? The Bill, as I see it, is a mechanism that will reduce the increasing habit of ministerial parliamentary lying.

It is very important that there should be protection for deep throats. It would be very unfortunate if the Bill were not allowed to be pursued further. It is not only a matter of Scott. There are other matters, such as the information concerning Mr. Thurman of the FBI and Dr. Whitehurst about Lockerbie that is coming out. I shall not go into that, but I should be genuinely extremely upset, as a long-standing Member of the House, if the House were denied the opportunity of a Committee stage to consider the significant issues that my hon. Friend the Member for Islwyn has mentioned.

11.47 am

Mr. Andrew Robathan (Blaby)

I pay tribute to the hon. Member for Linlithgow (Mr. Dalyell), who has been doggedly pursuing the sinking of the Belgrano for about 14 years. It was a tragic action, which was taken in the public interest of people in this country and the people of Argentina, who, as a direct result of the victory of the British forces in the Falklands, now have democratic government. Many of us would consider that the example that the hon. Gentleman chose of Mr. Ponting might add to the unease we feel about the Bill.

I congratulate the hon. Member for Islwyn (Mr. Touhig) on his speech. He took an extremely measured and sensible approach, and I found it difficult to disagree with the thrust of what he said. I also congratulate him, as a Welshman, on moving the Second reading of the Bill on St. David's day. He may not be aware that many of my ancestors on my grandfather's side came from Risca in his constituency, and if the cold weather had not kept back my daffodils, I should have ripped one out of the garden and worn it this morning.

I rarely attend on Fridays, but this has been an extremely sensible and useful debate—much more interesting than many that one hears in the House, and more useful than many we hold.

Perhaps the hon. Member for Islwyn should have declared a special interest in the debate. I hasten to add that he has no pecuniary interest, but I understand that he has a background in journalism and newspaper publishing. I do not impugn his motives in any way, but he views the issue from the perspective of a journalist and a newspaper publisher, and I believe that that is germane to the debate.

The Bill before the House is superficially extremely attractive. One can envisage the crusader for justice—the whistleblower—acting in the public interest against the secretive, malicious, bullying and dishonest public servants and companies. The hon. Gentleman referred to a culture that he believes is unduly secretive and protects the incompetent fat cats or bureaucrats. I agree with the hon. Gentleman that illegal or dishonest acts should be brought to the attention of the company concerned, and, if necessary, placed in the public domain.

However, I must strike a contrary note. Although the Bill may have good intentions, it may become a charter for the malicious, those with grudges and the greedy who are looking for rewards from the tabloids. The gentlemen of the press—to whom Private Eye correctly refer occasionally as "the reptiles of the press"—care not what they destroy, and will plead public interest and the public's right to know. The public have a right to know many things, but do they need to know about matters that may undermine legitimate commercial behaviour and confidentiality surrounding many decisions and workings of the state?

The Bill's schedule refers to illegal matters and to the misuse of funds—no one would disagree with that. However, I believe that its case for the abuse of authority is fairly subjective. The Bill refers to miscarriage of justice which, except in the courts, is quite subjective also, as is maladministration. It refers also to danger to the health or safety of any individual or the environment. I can plead in good faith that I believe that many things are damaging to the environment, while others do not consider them to be a problem. Those categories are open to interpretation, and I suggest that the courts would have a field day with them.

I turn to the case of the malicious employee who has been sacked and who then takes his story to the press. As a Member of Parliament—I am sure that most hon. Members have had similar experiences—I have been threatened with exposure in the press, and that has occurred. In 1993, before the hon. Member for Islwyn came to the House, that well-known and respected organ of freedom and champion of public good, The Sun, established "The Sun MPs' Line"—I think that that is what it was called. It invited people to report their Members of Parliament for the mistakes they had made.

The helpline was run by a rather tired and past-it former Army officer. The newspaper was interested in a very sad constituency case involving a woman who had told me that Nigel Lawson and my constituency agent were part of the conspiracy against her. I was named in The Sun as not carrying out my duties as a Member of Parliament. When I was contacted by the gentleman concerned, I told him that he should drop the matter, as it would cause hardship to that woman. My point is that many people will go to the press for all sorts of reasons.

Mr. Peter Luff (Worcester)

My hon. Friend may be interested to know that my experience of the parliamentary commissioner from The Sun was rather different. I was entirely vindicated of a constituent's complaint. He is not all bad.

Mr. Robathan

The former military officer who was responsible for the helpline dropped the matter when I explained the case to him. My point is that many people go to the press for all sorts of reasons, while claiming that their actions are in the public interest.

Not a day goes by without some unknown person trying to make money out of a story in the press. The Bill states that a case will not be heard if disclosure is made principally for private profit. However, if the whistleblower gains any profit at all, that must be an inducement to others to take a case to the press while claiming that it is in the public interest. That is a very worrying aspect of the Bill. One may ask who is worse in that circumstance. It is probably the reptiles of the press who would publish the story, rather than those who go to them with tittle-tattle, rumour, slurs and innuendo, while perhaps bearing a grudge.

Most disclosures of that kind will be printed, because the press always take the line "publish and be damned". That was probably first said in the public interest, but much of what I read in the newspapers today is certainly not in that category. Does the hon. Gentleman believe that the press always adopt a responsible attitude to such matters? I think not.

My hon. Friend the Member for Bristol, North-West (Mr. Stern) described clause 8 as "obnoxious". I believe that the courts should have the right to know who has betrayed a confidence, and the right to force a journalist to reveal his sources. It may be in the public interest to know who has betrayed a confidence, even in good faith. The courts have a right to make that decision. While I do not always agree with the judgments of our courts, I must pay them some credit.

We all agree that illegality should be exposed, and I was impressed by the hon. Gentleman's approach to this and to many other aspects. Let us turn to the Official Secrets Act 1989 as an example. I hope that even some Labour Members will accept that not all decisions should be taken in the public domain in a glare of publicity. The hon. Gentleman may not know it, but I am still covered by the Official Secrets Act. Some 10 years ago, I was working in Chelsea—it was a very pleasant occupation—as a staff officer dealing with North Atlantic Treaty Organisation matters during the cold war, when the Soviet Union posed a real threat to NATO and to the west.

It is well known that certain documents were given the charming classification "Cosmic Top Secret"—I always smiled about the connotations with "Star Wars" or "Star Trek". Another category was "Top Secret: UK Eyes Only". Luckily, I can never remember which documents were classified under those categories, so I cannot betray any secrets.

Many issues involved planning to break the law in the lead-up to a war. No material in those categories was malicious, and my conscience was not pricked, but some of it involved illegal deception in order to assist United Kingdom and European security in the face of a real threat. It would have involved some form of fraud.

It could be claimed that that should have been revealed in the public interest—and I could have done so. However, my abiding memory is of the decency, integrity and honesty behind those plans, and the overriding motivation was the protection of the public interest of all United Kingdom citizens. It was not a matter of a judge saying in court that something was in the public interest. Some of the material would certainly have made a very good feature story in a Sunday supplement. For the record, I must state that there was no actual illegality as far as I can recall.

The Bill could assist people who are covered by the Official Secrets Act and who wish to break their word and the trust that they enjoy, and, for reasons known only to themselves, betray secrets to the press in the public interest. They might tell their superiors that they were unhappy with the situation, and that might be enough to establish that they had acted in good faith.

Mr. Touhig

The hon. Gentleman is missing the essential point. Anyone who feels that he or she ought to raise a matter that is in the public interest must first follow a proper procedure and take the matter to the organisation concerned, which must be given a chance to rebut the allegation. The Bill is not a licence to run to journalists or newspapers.

Mr. Robathan

I do not doubt the hon. Gentleman's intentions. In the armed forces, one takes one's unhappiness to one's superior. What happens, however, if the superior dismisses those worries? Does one then run to the press? That is not answered in the Bill.

Mr. Touhig

The Bill deals with serious wrongdoing, malpractice, fraud and criminal activity—not with someone running to a commanding officer to complain about the colour of the linen in the officers' mess.

Mr. Robathan

I do not doubt the hon. Gentleman's good intentions—my point is what effect will the Bill have. Illegality can presently be revealed to the press if necessary, and can and should be taken to the proper authorities. The intention of the Bill is one thing—the reality might be something else entirely.

Mr. Luff

My hon. Friend has put his finger on an important point. There is no mechanism in the Bill to reconcile a conflict between an employee and an employer when the employee is unhappy with an answer that may be the correct one. The employer and the employee must have some ability to reconcile that, other than by the public disclosure of information.

Mr. Robathan

The intention behind the Bill is excellent. If something untoward is happening in a company or a public body, the matter should be taken up the chain. If it is not dealt with, I would defend the right of an individual to take the matter to the press.

The hon. Member for Linlithgow (Mr. Dalyell) referred to an individual who could not take information to Sir Robert Armstrong, and went to the hon. Gentleman with his complaint. These things currently happen, and we all get letters saying that this or that is wrong.

Mr. Touhig

We all receive odd letters. I constantly receive letters from a gentleman who tells me that he is the king of the world and is having trouble contacting his relative the Tsar of Russia. The hon. Gentleman is clearly missing the point. A proper mechanism is set out in the Bill for raising concerns and grievances within an organisation, and gives the organisation a chance to respond. The Bill is not providing an opportunity for someone to run straight to the media to complain.

Mr. Robathan

I repeat that I do not doubt the hon. Gentleman's intentions, but I see no proper mechanism in the Bill to deal with my worries. I see good intentions, but we all know what the road to hell is paved with. I hope, incidentally, that his constituent finds his relative, the Tsar of Russia, soon.

Dr. Wright

The hon. Gentleman's argument is that all good organisations—public and private—should have good internal mechanisms to deal with these matters, and that the law should not intervene. Does he think it more or less likely that public and private organisations will develop good internal mechanisms if the Bill is enacted?

Mr. Robathan

I am not opposed to all the measures in the Bill becoming law—I am picking up the weaknesses in the Bill. The hon. Member for Cannock and Burntwood (Dr. Wright) proposed the Whistleblower Protection Bill in the previous Session. I understand that the Bill was supported by major public companies. If that is the case, surely it would be better to encourage good practice. The Bill might easily encourage those with a grievance who do not receive satisfaction from the mechanism of a company or a public body to take the matter to the press, and that concerns me.

Dr. Wright

The hon. Gentleman makes an interesting point, to which there is an interesting answer. He is absolutely right to say that we consulted extensively throughout the public and private sectors in dealing with the Whistleblower Protection Bill. Seeboard—a major electricity company—said on the subject: If enacted, this measure would certainly have the effect, in responsible organisations, of promoting internal reporting systems and discouraging managers from taking inappropriate action against whistleblowers. That company thinks the measure is a good thing—I am surprised that the hon. Gentleman does not.

Mr. Robathan

I do not disagree with everything in the Bill. There are many aspects with which I am unhappy, and I am not alone in that. Far from encouraging good practice, it may encourage those with a grievance or a grudge to take that grudge to the press if they do not receive satisfaction through the proper mechanism.

Another thing that concerns me is that the Bill could be a dream for lawyers, and I can see public interest being used as a defence in many circumstances. Although I do not believe that it is the intention of the Bill, it might easily encourage further litigation, and we are already litigious enough in this country. My hon. Friend the Member for Chingford (Mr. Duncan Smith) said that one should not have to go to court, but I would suggest that the enactment of the Bill might encourage people to go to court with cases which were not justified. That is particularly the case if they claim to be acting in good faith and in the public interest—both of which are subjective.

My hon. Friend the Member for Chingford raised the case of a school in Hull, but I do not believe that the Bill, if enacted, would help that deputy head teacher. In that case, the LEA, the school, the governors and the head teacher were behaving improperly, and I cannot see how the Bill could change that.

Mr. Touhig

The sponsors of the Bill and I have no wish to give any work to lawyers or to the legal profession. If an organisation does not respond when a matter is raised internally by an individual, he has the option to make the matter public. But the hon. Gentleman ought to bear it in mind that an individual might go to court or to an industrial tribunal only if, as a result of raising the matter, he could demonstrate that reprisals were taken against him.

Mr. Robathan

I take that point, and I accept again the good intentions behind the Bill. Supposing, however, that, having raised the matter, an individual was not promoted? The individual might have raised the matter in good faith, and the company or body might not disagree. But if the individual was then not promoted, he might say that he was being penalised for raising the matter.

The hon. Member for Islwyn also said that he wishes to change the culture of Britain, but I fear that it might be a change for the worse. I do not get many letters complaining about our culture, or about secrecy in general. I do not believe that everything is perfect in this country, but I am not labouring under the impression that everything is imperfect. Would he trust the press with our culture? They are the last people that I would trust. He stated that we must encourage people to speak out. I would say it is their duty to speak out where there is illegality and malpractice.

Companies must be made to address illegality, and several examples of that have been raised. The hon. Member for Islwyn referred to the case of Beth Lawson, who reported a supermarket manager for changing sell-by dates. That was her duty, and action was taken by the supermarket chain. That seems to be a good example of a case in which whistleblowing has worked perfectly well, without a change in the law being required.

The Maxwell case was also mentioned. The gentleman involved was sacked, and I am sure that he then went to the press. What more could he do, apart from going to court, which, again, is litigious? He could have gone to an industrial tribunal—I am not sure whether he did.

Those involved in the Zeebrugge and Piper Alpha disasters had a duty to report defects, and should have done so. Safety measures and regulations already exist.

Mr. Touhig

Does the hon. Gentleman accept that the report on the Piper Alpha disaster recorded that people who were working on the oil platform were aware of safety deficiencies, but, because they were afraid that they might lose their jobs, they did not raise the issue? The Bill seeks to remove the culture of fear in which many people believe that, if they go to their boss or employer, they will get into trouble.

Mr. Robathan

The hon. Gentleman makes a fair point. I also wish to see the culture of fear removed, but whether the Bill will remove it is another matter.

Mr. David Jamieson (Plymouth, Devonport)

The hon. Gentleman mentioned the Zeebrugge case. Paragraph 57 of the Sheen report states: Fictitious entries were made in her official log book. Does the hon. Gentleman think that we should have a Bill to protect the employee who blew the whistle on that fact?

Mr. Robathan

The hon. Gentleman raises an important point. I am not a lawyer, but I suspect that the person involved was covered by other aspects of law.

Mr. Luff

My understanding is that section 28 and schedule 5 of the Trade Union Reform and Employment Rights Act 1993 already provide considerable protection to individuals in such circumstances.

Mr. Robathan

I am grateful to my hon. Friend.

I know that the hon. Member for Plymouth, Devonport (Mr. Jamieson) intends to speak in the debate, and he might raise the point in his speech. The Bill adds to the law, and we have a duty not to make bad law.

As a result of the Lyme bay disaster, we now have the Activity Centres (Young Persons' Safety) Act 1995. As I understand it, the instructor who complained in the Lyme bay case resigned because she was so unhappy about the situation. What would the Bill have done for her? She had already resigned. The courts worked in the Lyme bay case: the person who ran the centre was sent to prison for two or three years. The hon. Member for Stoke-on-Trent, Central (Mr. Fisher) mentioned the Barings case. It was a sad, disgraceful case, for which Mr. Leeson is now spending six or seven years in gaol in Singapore. The Bill would have changed nothing in that case.

The Bill could assist in many cases, and there is much good in it, but it could help to create an atmosphere of mistrust—the aspect that I find most worrying. If I believed that the Bill would lead to greater internal responsibility and investigation within companies, I would support it, but I fear that it could undermine the trust between people working together in the same enterprise, whether it be public or private. I fear that it may be a charter for those with a grudge; it is certainly a charter for further press abuse.

The Bill would undermine loyalty—a word used by the hon. Member for Stoke-on-Trent, Central. People could be disloyal on the grounds that public interest was involved. I would wish them to be disloyal if public interest were involved, but the Bill would give them an excuse, which they might use. If that is what the hon. Member for Islwyn means by changing the culture of Britain, I do not want trust, loyalty and confidentiality in this country to be undermined in that way.

The actions of the House can have a cumulative effect on our culture. I fear that the Bill is unlikely to have a positive impact on our culture. The House has a responsibility to pass good laws, which have been well thought out, and the consequences of which have been carefully considered. I have yet to be convinced by the Bill.

12.13 pm

Dr. Tony Wright (Cannock and Burntwood)

I was interested in the speech of the hon. Member for Blaby (Mr. Robathan). I was delighted to know that my safety had been in his hands for some years before I entered this place. I found it difficult to understand how he could say that people had a duty—his word—to speak out, while not providing them with the protection they need to enable them to fulfil that duty. That is all the Bill seeks to do.

Members of Parliament are never happier than when they are congratulating each other. I was delighted to be congratulated by my hon. Friend the Member for Islwyn (Mr. Touhig) on being the parent or grandparent of the measure in its original form. I, in turn, congratulate him on his courage in picking up the measure when he secured a place in the ballot.

It would surely be churlish of the House—I put it no higher—to deny a Welsh Member, on St. David's day, the chance to have a fair run with such a Bill. If we are allowed today to flaunt our spurious Welsh credentials, I should say that I married into Welsh-speaking Wales 25 years ago and my children have gone to school today sporting daffodils and leeks—perhaps there is a root from leeks to whistleblowers.

There is always a public interest in secrecy and confidentiality, and there is also a public interest in information. The question for all of us is how to reconcile those two public interests in specific cases and how to decide where the public interest lies when there is a conflict between the two. To those hon. Members who say that they have difficulty in knowing what the public interest is, I say, "So they should—it is a difficult concept." But if hon. Members say that it is too difficult a concept to establish, what on earth are those hon. Members doing here? Is not that precisely our job as Members of Parliament? It is also a job in which we ask the judiciary to assist us in a range of cases—and it has been doing so in relation to the law of confidence for the past century and a half.

If people think that the phrase "a culture of secrecy" is simply a glib slogan in this country, I invite them to fortify themselves and read Sir Richard Scott's report, which contains everything. I also invite them to reflect on the fact that it has now emerged that there was a certain letter from someone whom we might now describe as a whistleblower, who was working at Matrix Churchill in 1988. The person wanted to tell someone in authority about the products being produced and for whom. I think that Lord Howe managed never to respond to that letter.

If that information had been acted on, and if the whistleblower had blown the whistle publicly, we might have been able to dispense with Sir Richard Scott. We might have saved three years and several millions of pounds; we might even have saved the Government some huge embarrassment, and we might have saved civil servants the prospect of the most monstrous disciplinary action.

Mr. Robathan

May I link the hon. Gentleman's point about Sir Richard Scott with what he said about determining the public interest? If the Scott report does nothing else, it reveals the subjective way in which judges inevitably examine a case. For example, half a dozen judges said that my right hon. and learned Friend the Attorney-General had behaved properly, yet Sir Richard Scott said that he had not. That is the difficulty of deciding what is in the public interest. The House should determine such matters, but it would be dangerous to give them to the judiciary, as the Bill proposes.

Dr. Wright

My antennae tell me that this is not the moment to rerun the Scott debate. Sir Richard Scott simply presented the evidence and asked the House of Commons to determine the balance of public interest. The House failed in that task, which damaged the Government and will damage the reputation of the House for a long time to come.

Mr. Llew Smith (Blaenau Gwent)

As my hon. Friend is discussing Sir Richard Scott, and having read the report, does he agree that we are all secretive? The day before the report's publication, I received a reply from the President of the Board of Trade, whom I had asked to provide me with information on its printing costs. The right hon. Gentleman refused to give that because it was a state secret, or a matter of commercial confidentiality. One gets the feeling that the Government sometimes go over the top in regard to secrecy.

Dr. Wright

Sir Richard Scott stumbled into a world that was so in the grip of secrecy that it took him three years to unravel it, and he was so shocked by what he discovered that he asked the House to consider what should be done.

In some respects, the Bill is in the spirit of what the Government have already attempted to do. About two years ago, they introduced an open government code in an attempt to insert a public interest test into the balance between the need for proper confidentiality and the need for disclosure. The Government are already ahead of the Bill in that respect, as they have determined what test should apply.

I regret, however, that the promises in the open government White Paper of July 1993 have been honoured only in the breach. We were promised two new information statutes, one on access to personal records and one on health and safety information. We now discover that there has been no progress whatsoever on that proposed legislation. This is not the moment to explore the reason for that, but, particularly in the wake of Scott, it seems odd that there has been no progress on those pledges.

In the White Paper, the Government promised to review some 250 existing statutes that prevented the disclosure of information and, wherever possible, to insert a harm test to establish the correct balance between confidentiality and disclosure. Although they invented a new deregulatory mechanism to get measures through the House speedily, it was not used to insert a single harm test into that vast volume of legislation.

The fact that there has been no publicity whatsoever for the Government's own open government code would make Sir Humphrey smile. The fact that the Government established an open government code and then did their best to tell people that it did not exist is a consummate exercise of the culture of secrecy. Of course, there will be bigger and bolder measures, but the story is the same. The Bill aims to strike the correct balance between the proper duty of confidentiality and the public interest in disclosure.

We have learnt a great deal from inquiries into major disasters by the Audit Commission and the Nolan Committee. I ask the House to consider some of the stronger passages in the Nolan report on how some of the major malpractices in public bodies came to light through whistleblowing. All the cases in which Public Concern at Work has been involved, the fraud PCW unearthed in the defence procurement industry and elsewhere and other evidence show that the most effective way of uncovering fraud and malpractice is from within organisations. I might even suggest—then quickly erase it from the record—that, if there were to be malpractices in the House by Members of Parliament, hon. Members themselves would know more about them than anybody else.

There is public interest in confidentiality and public interest in disclosure. The Bill addresses the problem that the former is safeguarded whereas the latter is not. Lord Griffiths memorably said in the "Spycatcher" case that wrongdoing may lurk beneath the cloak of confidence. The law of confidence should and must not be used—as it is now—to conceal wrongdoing, or to punish and victimise people who, in the public interest, try to tell us about things that should not be happening. The law of confidence is used by many employers in that way. Gagging clauses are found in public and private organisations alike. Disciplinary procedures are used when people try to tell it like it is.

Last year, a consultant surgeon in Surrey wrote a short letter to The Times, not about his own hospital or trust but to express his concern about the lack of intensive care facilities in south-east England. He was hauled up before the trust for which he worked for committing a disciplinary offence and given a formal warning. When hon. Members read about such cases, I hope that they feel deep outrage, because when they occur, public interest is the loser. The public, including Members of Parliament, lose the ability to learn things that we ought to know to enable us to make good policy. The reputations and careers of people who exercise their duty are also damaged.

Many people live in a culture of fear. Many jobs today are insecure, part-time or short-term. Growing insecurity and fear in the labour market makes it much less likely that people will feel able to exercise their duty. The Bill is all about our interest in protecting that duty.

When I introduced a ten-minute rule version of my hon. Friend's Bill some months ago, I was inundated with letters, not from cranks, troublemakers or malcontents but from people who felt that they had done their duty, or had tried to do so, and had suffered the consequences. From that, I knew that the House had to legislate.

I refer to a letter from a man in Staffordshire, who reported that the chief executive of the major organisation for which he worked was engaged in malpractice. The chief executive resigned and took a golden handshake. He says: I was suspended from work for five months, during which time a concerted effort was made to discredit me. I finally had my contract terminated … I have been unable to find work since that date and believe that I have been blacklisted … I do not write to you out of bitterness or malice, but solely to offer my support to your cause. The decision I took to report this man's conduct was something that took a great deal of soul searching and many months of deliberation. I only wish your Bill had been passed several years ago. I could give the House instance upon instance of people, working in the voluntary sector or in private organisations, describing in their own words how they came to feel that they had a duty to perform. They tried to perform that duty, and the result was the trail of misery, victimisation and persecution that shines out from the letters I have received. We need to square the circle and to get the balance right. When we consulted on the original Bill, we found vast support from the public and private sectors and professional bodies.

In congratulatory mode, I wish to congratulate the hon. Member for Chingford (Mr. Duncan Smith), who made an excellent contribution earlier. One of the reasons why the Bill should be passed is that it does not impose a regulatory burden. No new apparatus would be established by the Bill, and hugely stiff tests would be applied to anyone who claimed that they had made a protected disclosure.

Some people think that the Bill is not muscular enough, and I could wave at the House some of the similar legislation that has been introduced elsewhere. I recently returned from Australia and New Zealand clutching copies of huge measures that run to hundreds of pages and set up a vast machinery to protect whistleblowers. We have a modest little Bill that would build on the existing law of confidence. It may prove not to be effective or powerful enough, but it would be a start. The House and the country would want to know that a start has been made.

The Bill would not even require organisations to set up internal machinery. I wish that it would, but it would not. It would not even impose that tiny, useful regulatory burden. So I am not sure why the Government should have difficulties with the Bill.

We are told that the Deputy Prime Minister would not even meet my hon. Friend the Member for Islwyn to talk about the Bill. I find that extraordinary, and I wonder which of his many hats the right hon. Gentleman was wearing when he felt so disinclined. He cannot have been wearing his competitiveness hat, because we know that ethical business is good business these days. He cannot have been wearing his deregulatory hat, because the Bill would be deregulatory. He certainly cannot have been wearing his presentation hat, because I can assure the Government that to be seen to oppose the Bill would do nothing for their reputation and credibility.

The Bill is absolutely not—as has been said—a charter for troublemakers and malcontents. It would simply give a modest measure of protection to the most responsible and diligent whistleblower.

Good companies and organisations are already introducing such measures. I shall give the example of a good company—British Airways. Its code of conduct tells employees to Ask whether you would feel comfortable explaining your decision or behaviour to your boss, your family or the media. Be prepared to challenge if you believe others are acting in an unethical way. Create the climate and opportunities for people to voice genuinely held concerns about behaviour or decisions that they perceive to be unprofessional or inappropriate. Do not tolerate any form of retribution against those who do speak up. Protect individuals' careers and anonymity if necessary. Encourage an environment of learning from mistakes and mutual trust in each other's motives and judgments. That is excellent.

Mr. Robathan

Will the hon. Gentleman give way?

Dr. Wright

I shall succumb to temptation and not give way.

Mr. Anthony Coombs

This is the longest peroration in history.

Dr. Wright

It is a culminating peroration; we are getting in sight of the end.

The end is this: there is a movement afoot towards more ethical business; there is also a movement afoot towards more information. These two movements together are capable of changing the corporate world. They are capable also of changing the public world. In this instance, culture and law, as in so many other instances, go hand in hand. If we had a law-abiding culture, we would not require laws. We require laws and cultures to move together.

If we want companies to develop the good internal machinery of the sort that British Airways has adopted, the Bill, if implemented, will produce it. If the Bill is enacted, we can be sure that such systems will come into place. They will grow like daffodils on St. David's day.

12.36 pm

Mr. Anthony Coombs (Wyre Forest)

On St. David's day, I congratulate the hon. Member for Islwyn (Mr. Touhig) on introducing a valuable measure that should be considered in Committee. I congratulate him also on doing so with a quality that is not common to many Welshmen—succinctness. I say that as someone who is eligible to play for Wales. My grandfather was born in Bryn-mawr and my great-grandfather in Ebbw Vale. Recently, I found myself supporting the Welsh rather than the English at Twickenhan. The hon. Gentleman's presentation was excellent.

The longer I have listened to the debate, the more I have been convinced, especially by some of my hon. Friends—many of whom have come to the Chamber, rather like Mark Antony, to bury the Bill and not to praise it—that the Bill has merit. It strikes a balance in the need to protect against victimisation those who reveal substantial malpractice, so long as the malpractice can be proved to be against the public interest.

Although I rarely agree with the hon. Member for Leeds, Central (Mr. Fatchett), I think that he put his finger on the key issue—as did the hon. Member for Cannock and Burntwood (Dr. Wright)—when he emphasised the great personal sacrifices that many people make when bringing to the public's attention examples of malpractice that are against the public interest. Those sacrifices can easily be overlooked. The term "whistleblower" has pejorative connotations, which often obscure the value of disclosure.

The Bill would protect confidentiality in both private and public organisations, and that is proper. As the hon. Member for Islwyn said, the Bill is not a nitpicker's charter. I was pleased to hear my hon. Friend the Member for Chingford (Mr. Duncan Smith), for whom I have great respect—there goes his parliamentary career—say that he sees the Bill as a deregulatory measure. Unlike the legal frameworks that have been set up in other countries, especially in Australia and even the United States, the Bill is a spare measure in legislative terms. It would build on the existing law of confidentiality in a way that I would find helpful. That does not mean that I think that it should not be amended in Committee, but I am saying that it should be allowed to get to Committee to be amended.

It is rather a pity that such a measure is necessary, because, as many hon. Members have said, any good organisation, whether in the private or the public sector, listens to its staff, particularly to the people who are closest to the line of fire—to the coal face. Therefore, as has been emphasised in the briefing on the Bill, it is not surprising that a significant number of private sector companies, such as Forte, Cadbury, BT and TSB, support it.

Although I had not heard it before, the story of Beth Lawson, mentioned by the hon. Member for Islwyn, was instructive. By doing what she did, she benefited the company in the longer term and saved it from penalties that would have been grossly against its interests.

Mr. Robathan

This is my biggest concern. All these marvellous examples are given, but I do not see how the Bill would benefit such people one way or the other, because, in the case that my hon. Friend just mentioned, the young lady concerned—Beth Lawson—reported the issue and the company took action.

Mr. Coombs

That is the obvious riposte to such an argument. The point is that the Bill represents certainty. It gives reassurance to those people and therefore makes it more likely that they will act in a way that will, in the longer term, be in the interests of the company for which they work.

It is a pity that such a measure is necessary. I agree—although I do not do so very often—with Christine Hancock of the Royal College of Nursing, who said in a Health Service Journal article in 1994 that, if such a measure were followed in practice, in the longer term, all whistleblowing would be made relatively unnecessary. Indeed, the parents of Carol Starkie—the doctor who misdiagnosed some 42 cancer cases at the Birmingham royal orthopaedic hospital before 1993, which no consultant detected and reported through official channels—live in my constituency. I believe and support the Department of Health—there should be a contractual obligation on consultants and doctors in the health service to report on their colleagues' performance, and not just a sign of good practice vis-a-vis the General Medical Council.

In broad terms, I am strongly in favour of the Bill, but I have one or two reservations about it. I do not say that like Mark Antony, because I support the principle of the Bill and would like to see it go to Committee. My first worry relates to clause 2.

My hon. Friend the Member for Blaby (Mr. Robathan) was right when he intervened during the speech of the hon. Member for Islwyn. Clause 2(1)(c) defines a protected disclosure as being one where somebody has not made it principally for the purpose of obtaining payment or personal gain". I cannot see why the word "principally" should be necessary. If somebody is acting in the way that we have described, I do not believe that they should be going for any personal gain whatever.

Mr. Luff

I think that my hon. Friend might be misguided. The word seems to be a useful safeguard, because the individual may obtain fees of some kind from a subsequent television interview, which was not the intention when he or she blew the whistle. That word safeguards against false allegations that might be made subsequently.

Mr. Coombs

I disagree with my hon. Friend. If the subsection read, "has not made it for the purpose of obtaining payment or personal gain", it would cover the situation adequately.

My next point relates to clause 3. Several hon. Members have said that adverse treatment should be monitored, and they have discussed the extent to which, for example, failure to provide promotion could be identified as a reason for using the remedies in the Bill. My worry is that the provision may have a long tail. It could be many years after an event that people decide that they have not got promotion and that, therefore, they have been adversely treated. I suggest that there should be a time limit within which people can take action about adverse treatment and within which they are be protected by the Bill.

Under clause 7, if an agreement is made, confidentiality cannot be a condition of it. I can imagine the following situation. Somebody makes a disclosure on an internal basis and the company agrees to change its procedures to right the wrong. Under the Bill, that change of procedures would not be allowed to remain confidential. In other words, the person making the complaint could make it open, subsequent to the event. I do not see why that should be the case. If someone makes a complaint and has it resolved via the internal procedures, he or she should be required to ensure that the matter remains confidential. If not, the constructive climate about which we have been talking may not be possible.

I strongly agree with clause 6. It deals with the burden of proof for civil servants and changes the law so that the burden of proof is on the Government to show that it is necessary to make evidence confidential. I was extremely concerned when my right hon. Friend—I am sorry, I anticipate—

Mr. Robathan

It is only a matter of time.

Mr. Coombs

I anticipate. My hon. Friend the Member for Blaby talked about his activities in the Army and said that what people did there was all right because they were only planning illegal actions and not actually carrying them out. Bully for them, frankly. The more my hon. Friend talked about that instance, the more he made the case for the protection that clause 6 offers.

Mr. Robathan

My hon. Friend should understand that the plans we were making related to a time when we might have been moving towards general war. I am sure that he supports me in saying that it is better that some minor infringements of the law might have taken place than that we might have been disadvantaged in a general war, as we might once have had with the Soviet Union.

Mr. Coombs

That is a very large question. I believe that overlooking illegalities would be more inclined to undermine parliamentary democracy, even in extremis—

Mr. Robathan

Planning.

Mr. Coombs

Planning illegalities, even in an emergency, is more likely to undermine parliamentary democracy than keeping close to the letter of the law.

It would be helpful if it could be confirmed that public interest, not significant malpractice and misconduct, would allow whistleblowers to get away with semi-political opinions about which many of my hon. Friends have spoken. The schedule tries to define Misconduct or malpractice constituting public interest disclosure". I am slightly concerned about paragraphs (iii) and (v), which deal with "abuse of authority" and "maladministration" respectively. Those terms are subject to a wide interpretation.

That does not mean that I disagree with the Bill, because I understand that the courts already have to take such decisions. However, we all know misguided, but well-meaning, individuals who may have a slightly eccentric turn of mind who come to us and genuinely feel that there has been an example of maladministration or an abuse of authority. They may cause untold damage to organisations—while wrongly relying on the Bill—unless some guidance is given on how far the provisions stretch. It is for that reason that a code of practice with specific examples should be drawn up to supplement the schedule and to give guidance, not only to the courts, but to people who may wish to rely on the Bill if it becomes law.

As I said in my intervention on my hon. Friend the Member for Chingford, unless there is a code of practice, many companies—possibly the public sector—will be damaged by people making disclosures that they think will be protected by the Bill, but are not. Those people will be hurt by their misguided apprehension of what the Bill means, and we will need an enormous amount of case law before the penny finally drops as to the grounds for revealing previously confidential information that the Bill seeks to cover. A code of practice would therefore be extremely useful. That might be discussed if, as I hope, the Bill reaches Committee.

I have similar reservations about clause 8, which I hope will be dropped in Committee. If he has the opportunity to make a winding-up speech, perhaps the hon. Member for Islwyn will give assurances on that matter, which is not integral to the problem that he is trying to solve.

The Government would be unwise to try to block the Bill before it reaches Committee, because it is generally recognised that there is in both the public and private sectors a climate of secrecy that needs puncturing and cannot be justified on the grounds of public interest, the national interest, national security or competitive self-interest in the private sector.

I agree with my hon. Friend the Member for Chingford that passing the Bill will not change the climate of opinion so much that everyone will become a potential damaging whistleblower. As he said, suitably amended, the Bill would give specific protection and reassurance to individuals who, under great stress, reveal substantial malpractice that is against the public interest. The individual would be protected from large enterprises or, in particular, from the state. That is a sound Conservative principle. As such, the Government should adhere to it by accepting the Bill and supporting its passage to Committee.

12.52 pm

Mr. Chris Davies (Littleborough and Saddleworth)

I warmly welcome the Bill. I am sure that that sentiment is shared by my Liberal Democrat colleagues in the House and outside. I welcome and endorse the sentiments of the hon. Member for Wyre Forest (Mr. Coombs). They were a pleasant contrast with the speeches of some Conservatives Members, who gave the impression that they seek only to nitpick and damn the Bill with faint praise. I hope that they will allow the Bill to receive its Second Reading, so that some of their more detailed and specific criticisms can be considered in Committee.

It could be argued that the Bill represents a small step towards sweeping aside some aspects of secrecy that are deeply embedded in this country, but that would, perhaps, be to go far beyond the reality. As its title aptly suggests, the Bill proposes that the public interest matters more than malpractice, more than covering up the fraudulent behaviour of a colleague and more than a company's embarrassment if it is revealed that it is cutting corners with its safety practices. Those principles should be self-evident to Members of Parliament. Surely we are all here because we want to protect and enhance the public interest. That does not seem to me an especially difficult concept to grasp.

Definitions of what represents the public interest will be a matter of subjective judgment, but, as we have heard, the concept of public interest is already included in statute and addressed as a matter of course by the courts.

It is important for hon. Members to recognise that, for reasons which I shall shortly cover, the Bill would not lead to extensive litigation. Rather, the Bill would help to change the attitudes and culture of organisations. It would encourage them to ask, "Are our actions in the public interest? Would we be embarrassed if our actions were exposed to public gaze?" If the answer to the second question is yes, the knowledge that a law of this kind exists will encourage a change in performance and approach.

For too long, the law has given tacit approval to the corporate or bureaucratic culture which smiles and encourages employees to see no evil, to hear no evil and, above all, to speak no evil, even when they know it exists. The Bill would help to break that approach but, as framed, it is also practical and responsible. Employees would not be able to run off to the authorities or to the press for the fun of it or out of malicious intent. As a first step, they must report their concerns to the employer and only if no action is taken and the malpractice continues may they take the matter a step further.

That seems rational and sensible in theory, but how very different the process would be for a person who tried to put it into practice. People who blow the whistle in circumstances that are covered by the Bill are bound to be rare, and what they reveal may be all the more significant, important and crucial to the public interest because of that.

Imagine the emotional turmoil that must affect an employee of a company or a large organisation who plucks up the courage to tell his employer about his concerns. The hon. Member for Linlithgow (Mr. Dalyell) gave a clear illustration of what that might involve and of how difficult it might be for an employee to face a hard taskmaster in so doing.

Once an employee has plucked up the courage and addressed his employer, he will at least feel that he has done his duty and his conscience can rest easy. But what if he realises that the malpractice is continuing and that nothing is being done to curb it? The next step, which is to go to another authority, would inevitably imply criticism of the employer or line manager, and that is serious. That step would be a great leap in the dark for the person concerned. It would mean risking career prospects, facing abuse and being put under a range of discreet pressures which no legislation, however well framed, could ever properly prevent.

The term "whistleblower", pejorative and dramatic as it may sometimes sound, will not be welcomed by conscience-racked individuals who find themselves in such situations. They will take the next step perhaps only after months of angst, of doubt, of worry and of sleepless nights spent tossing with concern as they try to determine the next appropriate best step. In very few cases will a person take the next step with a glad heart.

Public interest must take precedence over any misplaced sense of loyalty to an employer who deserves no credit for his actions, but none of us wants to create a nation of sneaks. I am pleased to say that the Bill will not do that. It encourages responsible behaviour. Loyalty to an employer is good, loyalty to truth and the wider public interest is better—and general recognition of that principle will improve the attitudes and performance of every organisation in the country.

I strongly endorse the Bill. I hope that it receives a Second Reading in the next hour or so.

12.59 pm

Mr. Peter Luff (Worcester)

It is often said—perhaps rather unkindly—of my hon. Friends in the Whips Office that they are anxious for colleagues not to listen to arguments that are made during debate for fear that doing so might change their view.

I have a confession to make. When I came here, I was sceptical about the Bill, but I have become a supporter during the debate, although I continue to have reservations, and I believe that it will need careful scrutiny in Committee to ensure that those reservations are fully addressed. My heart has claimed victory over my head, and I pay tribute to all those whose persuasive speeches brought about that change of heart.

It is a curious counterbalance to have on Friday a debate about secrecy, when, arguably, Monday's debate on the Scott report was about another aspect of secrecy.

I became rather worried as I heard the hon. Member for Islwyn (Mr. Touhig), introducing the debate, criticising and mocking tell-tales. I was thinking at the time that loyalty was worth while, and that he was mocking loyalty. That judgment was harsh and wrong, and I apologise even for reaching it privately at that stage.

I was brought up to believe that one of the greatest compliments one might pay someone is to ask them, "Can you keep a secret?" Coming to this place gave me a wonderful way of keeping a secret—making a speech about it in the House of Commons. That is about the best way I know of keeping a secret in Britain, partly due to the deplorable level of reporting of our debates in the national press these days. It will probably be a secret, when we read tomorrow's newspapers, that a thoughtful and civilised debate has taken place in the House today on such an important issue.

There is a real irony about debating secrecy in a House where to make a speech about it is to keep a secret so effectively, but where secrets may be easily spread by one selective leak to a journalist in the Members' Lobby. The amount of whistleblowing that goes on there must warm the heart of the hon. Member for Islwyn. It is a proof of the definition "a secret is something you tell one person at a time," and that is what happens there regularly.

Mr. Duncan Smith

Not always.

Mr. Luff

Indeed.

It is regularly alleged that the country suffers from a culture of secrecy. Many hon. Members feel that sincerely. Some would argue that the Bill is but a tiny part of a wholesale package of reform that is necessary to tackle that culture of secrecy. I know that many hon. Members support the idea of a freedom of information Act.

It is the duty of the House to protect as best it can the rights of every British citizen; that is what we are here to do. That is why, originally, I welcomed the opportunity to debate the Bill, and now I think I must welcome it.

A Bill that sets out to protect the rights of all our nation's workers, wherever they work, would enhance the safety of all the nation's people and directly strengthen business life and confidence in public life. I believe that I have convinced myself of that argument; I need time to be sure.

The Bill is about not only secrecy but trust. Can one do anything to build trust in an organisation simply by offering legal protection to employees? An organisation in which an individual feels that he must blow the whistle is an organisation in which trust is sadly lacking, and cannot work effectively. Our objective must be to build organisations that work on a basis of trust.

Mr. Malcolm Bruce (Gordon)

The hon. Gentleman makes a valid point. Does he agree that a marked strength of the Bill is the requirement that an internal route should be available before an external route is used? Is it not in the interests of senior management to ensure that such a route exists, because they carry the can if middle management do not carry out the safety instructions that are supposed to be in place, which are sometimes flouted?

Mr. Luff

I agree entirely with the hon. Gentleman. I was slightly amused to hear the hon. Member for Cannock and Burntwood (Dr. Wright) praising British Airways in that regard. It has a robust record in encouraging its employees to discuss their concerns internally—and rightly so, as safety is crucial to an airline. I would love to know what code it had in place before it was privatised—but perhaps that is a cheap, partisan point. I suspect that the private sector motive is driving British Airways: it knows that it must be seen to be completely safe, and that is a powerful incentive for being accountable and for creating the code of conduct which the hon. Gentleman has praised.

Having listened to the debate, I accept that workers may hesitate before blowing the whistle, for fear of reprisal. However, we must remember that statutory protection exists for individuals in some circumstances, and it is correct to draw attention to it. There is protection for employees in the areas of health and safety, the assertion of statutory employment rights, and discrimination on grounds of race or sex. The Library note helpfully reminds us that section 28 and schedule 5 of the Trade Union Reform and Employment Rights Act 1993 provide a great deal of protection to whistleblowers in the specific spheres of health and safety—which is probably the area that most concerns hon. Members.

The Act gives all employees—regardless of length of service, hours of work or age—the right not to be dismissed, selected for redundancy or subject to any other detriment for a number of reasons, two of which are relevant to today's debate. The first is: bringing to their employer's attention, by reasonable means and in the absence of a representative or committee who could do so on their behalf, a reasonable health or safety concern'". The second refers to: circumstances of danger which they reasonably believed to be serious and imminent, taking or proposing to take appropriate steps to protect themselves or other persons from the danger". The latter provision is very useful, although it is probably flawed by the use of the phrase "and imminent". Security would not have been offered to the individuals involved in a number of cases referred to this morning, because the danger could not reasonably be said to be "imminent".

I emphasise that the Act refers to people's taking action to protect themselves or other persons from danger. There is protection on the statute book, and employees who suffer detriment as a result of taking such action have the right to appeal to an industrial tribunal. If the complaint is upheld, the tribunal must award such compensation as it considers just and equitable in the circumstances, having regard to the infringement complained of and to any loss suffered by the employee. There is no limit to the amount of compensation that is payable under that provision. It is important to remind people that there is protection on the statute book for employees in that area.

The Bill seeks to take that protection one step further: if the whistleblower acts in good faith, believes that what he is saying is accurate, and is not acting for personal gain, he will get extra protection. I have come to the conclusion that that is right: clearly, anything that discourages honesty could put public safety at risk. However, some of the Bill's supporters may be exaggerating their claims. I wonder whether the dreadful disasters to which they referred would have been prevented by the legislation. I suspect that the lesser issues will be addressed really effectively.

I do not believe that the Clapham rail disaster, the Piper Alpha explosion, or the sinking of the Herald of Free Enterprise would not have occurred if the legislation had been on the statute book. That is taking the claim too far. I believe that the Bill will be useful in cases such as the earlier example of the woman who noticed that food sell-by dates were being changed in a supermarket. That is a serious issue with potentially serious health and safety consequences, and the legislation would assist in those circumstances.

Although businesses recognise the need to be accountable and to institute the best possible procedures, it is correct to say that the Bill would increase their accountability. They would have to be more careful when examining internal disclosure procedures, thus preventing problems—and perhaps disasters—from occurring. I have a reservation about the conflict that exists in this place, and in any organisation, regarding confidentiality and commercially sensitive information. The sponsors believe that the existing law on confidentiality will not be affected by the Bill, but that is not clear, and we must look at it in Committee.

Some would argue that the important thing is that the Bill would strengthen the reputation of private companies and of government. Employees who fear punishment or sense a lack of concern when raising controversial matters internally are often forced, tragically, to sacrifice their reputations—and possibly the existence of the company—by blowing the whistle externally. The introduction of a discipline on companies to improve their internal procedures is valuable, and is possibly the most attractive aspect of the Bill. The Bill will provide a system of legal and ethical checks and balances to protect the worker and the reputation of the company or public body concerned.

Who knows—perhaps this is a bad day for the lawyers of the United Kingdom, who will see a rapid diminution in lawsuits as the Bill's provisions for pre-emptive action result in the matters not going to court in the first place. I understand the argument that trust, loyalty and commitment will all be enhanced in the employer and the employee at no cost, and possibly with some saving in cost. The Bill may be a wonderful reflection of our commitment to the rights and safety of our people and to strengthening trust in business—something that matters to Members on both sides of the House and should not be overlooked.

I have three specific reservations that justify the need to take the Bill to Committee, and I shall briefly run through them. First, is there a danger that the Bill might increase the probability of employees making allegations in public that, by virtue of their selectivity, could damage the reputation of a company? Secondly, could the Bill make for worse decision-making in Government? Thirdly, I am worried about the malpractice schedule in the Bill.

On the selective reporting of alleged malpractice, we know that there are rotten apples and troublemakers in companies. It would be unfair to name them, but I have worked in companies that had such individuals. There are also companies with sincere but misguided employees who simply do not understand the issues with which a company is wrestling, either because they choose not to or because they are incapable of understanding. I am slightly worried about the test for bad faith. Perpetual troublemakers and the misguided always argue that they have acted in good faith. Is the test sufficiently robust?

The Bill offers four tests for protected disclosure: bad faith; reasonable grounds to believe the disclosure is accurate; not acting for personal gain; and taking reasonable steps to raise the matters internally. These are sensible provisions, which I support, but we need to be clearer on what the bad faith test would mean in practice, and we can discuss that in Committee.

What happens if an individual who raises a matter internally is not satisfied with the explanation he receives? What if he misunderstands the explanation offered? What if—having fulfilled all of the tests in the Bill—he goes public with an accusation, but deliberately misses out the defence that the organisation offered him?

I was quick to praise The Sun in an intervention on my hon. Friend the Member for Blaby (Mr. Robathan), but the press is not always free from blame. It tends to jump to conclusions—-particularly pessimistic and negative conclusions. An unkinder person might describe it as mad journalism disease. Damage can quickly be done to an organisation's reputation, and corrective action can be difficult to take.

I can give a practical example, relating to rail safety in my constituency. The turbo trains operated by Thames Trains serving Worcester are having problems with their braking systems. No one has been injured, and the company is taking more than adequate corrective action to deal with the problem. A conductor—as we must call guards nowadays—mentioned the matter to a local journalist who was travelling on one of the trains.

Fortunately, the journalist was a responsible individual who sought an explanation from the company. He was told that the problem is that the trains offer a better ride than the old-fashioned ones, which means that the rails and wheels are less worn. As a result, braking is more of a problem. The improvement in quality has created the braking difficulty. The company explained the circumstances in full, and described the action that it was taking to correct the problem, including driver training and the provision of sanding units to improve the adhesion between rail and wheel. I believe that I have got that technically correct, and the journalist was satisfied with the explanation.

Let us say that the problem had been a bit more complex and serious and that the conductor had not chatted to a reliable journalist on the train about it, but had raised it internally under the terms of the Bill, and met those tests. Let us say that the conductor did not accept or understand the explanation given, acted in good faith and publicly revealed only part of the information to a journalist who was up against press deadlines, which made it very difficult to check the facts, and the journalist wanted to get the story into the public domain quickly, because it was a good story. In that situation, there is a huge potential for damage and a loss of good will. I do not want that to happen, unless there are very good reasons for it.

The Bill must have built into it some protection against whistleblowing that is well meaning and in good faith, but misguided. The individual might consult internally or even say that he is partially satisfied with a company's explanation, but then change his mind and go public, so that the organisation is not prepared for his going public. That person would have met all the Bill's tests, but, in my judgment, he would have behaved irresponsibly, possibly by misunderstanding something that he was told.

We could deal with that problem. The solution I recommend to the hon. Member for Islwyn is to impose on the individual who intends to blow the whistle a duty to inform the organisation of his intention. That requirement is currently not included in the Bill. It should perhaps even go to the extent of requiring him to say when he intends to make the statement, which would enable the company to prepare its case for the defence and to respond rapidly to the allegations. If the allegations are a result of a misunderstanding, the damage would then at least be limited. Perhaps that requirement could be considered in Committee.

I am also slightly nervous about situations in which an organisation is falsely accused by an individual, not out of bad faith but through misunderstanding. The individual would quite likely be able to gain legal aid for a court action, whereas a medium or small-sized company would probably have very heavy legal costs imposed on it.

I am worried about that, and I cannot see a remedy. It may be easier for the individual to pursue his grievance than for the company to defend itself. I notice that many supporters of this measure are large companies, for which it would not be a great problem, but it may be a burden for smaller and medium-sized companies. I sincerely hope that there is a way to solve that problem.

I am aware that I am taking up a good deal of the House's time, so I shall move rapidly on to my second concern: good government. Good government always involves examining all the options, even those that are unthinkable, If we lose the ability to think the unthinkable, we diminish the quality of government, because reductio ad absurdum techniques in debate often illuminate the wisdom of a particular course of action.

I fear that leaks from Government, whether as a result of whistleblowing or for more clandestine reasons, can make the process of government extremely difficult. I have been critical in the House about the way in which one Opposition Member incited civil servants to leak to him on the subject of rail privatisation—it was shameful and wrong—because I do not believe that civil servants should be incited to leak.

It is a slightly partisan point, but I was alarmed by the comment by the hon. Member for Bolsover (Mr. Skinner) on that occasion, in October last year: the road to socialism is strewn with photocopies and brown envelopes."—[Official Report, 18 October 1995; Vol. 264, c. 360.] That has a certain—

Mr. Anthony Coombs

Resonance.

Mr. Luff

As my hon. Friend says, it has a certain resonance.

I fear—I want to be proved wrong—that this Bill could turn that anonymous leaking into a torrent of information. This is not a party point. I think that secrecy has a crucial role to play in the process of decision making, and that people in Government, whether Ministers or civil servants, will be more reluctant to express a point of view orally—never mind in writing—if they believe that that point of view will be reported too widely. It may even be a point of view; it may be a point of argument that could be publicly misrepresented as a point of view. So I think secrecy is essential to good government.

We know that there has recently been a great deal of debate about this issue in the civil service, not only as a result of the so-called arms-to-Iraq affair but also as a result of the Nolan committee's work in this sphere. I think that the new civil service code of conduct is right when it says: Civil servants should conduct themselves in such a way as to deserve and retain the confidence of Ministers and to be able to establish the same relationship with those whom they may be required to serve in some future Administration. They should comply with restrictions on their political activities. The conduct of civil servants should be such that Ministers and potential future Ministers can be sure that confidence can be freely given, and that the Civil Service will conscientiously fulfil its duties and obligations to, and impartially assist, advise and carry out the policies of the duly constituted Government. Those are wise words of advice. I should like an assurance from those who support the Bill that nothing contained in it will undermine that important constitutional principle.

Collective responsibility matters in any organisation, not just in government. If doubts about proposals or ideas are revealed before decisions have been reached, the decision-making process can be damaged. Perhaps the Bill should make some distinction between exposing potential problems during a decision-making process—which is difficult—and decisions themselves which, when implemented, become policy. Perhaps a distinction can be drawn—I am not sure, but I hope so.

My hon. Friend the Member for Blaby talked about the schedule, and I am concerned about its omnibus nature. As my hon. Friend rightly said, the schedule contains some grey areas; it mentions abuse of authority, miscarriage of justice and maladministration, which are all matters of subjective judgment for individuals. I accept that the other three issues mentioned in the schedule are not.

I am worried not merely about the subjectivity of the schedule, but about clause 1. It states that a public interest disclosure can be justified using the schedule, but it also states that it is not limited to that described in the Schedule to this Act". Misconduct or malpractice beyond the already nebulous list would be justifiable when claiming public interest disclosure. I think that we should be a little more sure about the implications of the provision.

Secrecy is never good of itself, but it is sometimes a necessary means to an end. Mature democracies such as ours should be better able to deal with openness. I prefer a non-legislative approach. It is for the good of democracy and business to be as open as possible—in that way, both will win the confidence of the individual.

I shall conclude by quoting the remarks of one of my constituents. The then Sir Gordon Borrie, now Lord Borrie of Abbots Morton—writing in a document for Public Concern at Work which was published earlier this year and is entitled "Four Windows on Whistleblowing"—said: A cynic might take the view that the phrase 'business ethics' is an oxymoron, i.e. the conjunction of two words of conflicting meaning, like 'deafening silence' or 'jumbo shrimps'. I believe that, at any rate, in a competitive market place, a company's own enlightened self-interest dictates that it should behave in an ethical manner. If a commercial organisations wants to create a good long-term reputation with customers, employees and other"— I apologise to my hon. Friends for the next word— 'stakeholders', it should, as a matter of its own choice, do more than comply with the bare requirements of the law. One of the key ways of competing for market share may well be to demonstrate high ethical standards … The adoption of ethical conduct by a business, including the development of transparent and usable mechanisms through which employees can disclose malpractice without fear, may be seen as synonymous with enlightened self-interest. In genuinely competitive markets I am confident that one needs no more than enlightened self-interest to promote and deliver ethical conduct and it cannot be doubted that it is in the interest of the business itself (as well as in the public interest) that its leaders are made aware of any malpractice in its midst. Whatever happens to the Bill today or during its further progress through the House—whether it succeeds or fails—both the Government and business would do well to heed the wise words of Lord Borrie.

1.23 pm

Mr. Alan Howarth (Stratford-on-Avon)

It is reasonable to assume that the disclosure of malpractice is a public benefit. The Bill does not devalue the duty of confidence, but it recognises that there is an overriding benefit in disclosing danger to the public, fraud or other sorts of illegal and improper conduct, and that protection under the law is needed for the public-spirited individual who discloses such matters.

As hon. Members have observed, it is not easy to blow the whistle. The individual who contemplates doing so experiences conflicts of loyalty, and it may not be easy to muster the confidence to act in the public interest. The Bill encourages only the individual who is genuinely and seriously concerned for the public interest. It is not a charter for the mischievous, the sneak, the opportunist or the opinionated individual who thinks that he or she knows better than the policy of the organisation. It is a thoroughly responsible measure that has been carefully drafted to limit the conditions in which whistleblowing is encouraged. It would ensure that the public interest is the test and would encourage no more than the minimum public disclosure consistent with the public interest.

The law as it stands is a mess. The DTI inspector's report on Barlow Clowes usefully reviews the state of the law and its inadequacies. Recent statutes have provided piecemeal exemptions from the law of confidence. Some measures have required disclosure in certain circumstances. They include the Companies Act 1985, the Insolvency Act 1986 and the Criminal Justice Act 1993. Other legislation has authorised but not required disclosure. It includes the Drug Trafficking Offences Act 1986 and the Prevention of Terrorism (Temporary Provisions) Act 1989.

Case law provides justification for those who break confidence in the public interest, but, none the less, there is great risk for an employee who relies on it. The inspector's report on Barlow Clowes states: It is clear that a number of employees of Barlow Clowes could have disclosed their suspicions without acting in breach of their terms of employment… It has to be recognised, however, that they were under no legal duty to do so and the position of the whistle blower is frequently extremely uncomfortable. The most likely result of such whistle blowing would be an immediate if wrongful termination of employment and the prospect of a protracted dispute.". Increasingly, businesses recognise that they stand to benefit from satisfactory internal procedures for the exposure of malpractice. Freedom for business must be accompanied by responsibility among all staff. That is one aspect of stakeholding, and Conservative Members are unwise to mock the principle of socially responsible business practice.

Mr. Luff

Will the hon. Gentleman give way?

Mr. Howarth

No. The hon. Gentleman has taken up a great deal of time already.

In their own terms, the Government do not want to impose regulation on businesses, and, as has been argued, the Bill would strengthen self-regulation.

Let us consider the Government themselves and whistleblowing. The damage to democracy through the failure of accountability and the poor quality of decision taking arising from the culture of secrecy has been glaringly exposed in the Scott report.

The report's exposure of one particular episode demonstrates the potential value of whistleblowing. On 22 June 1988, a whistleblower within Matrix Churchill wrote to the Foreign Secretary to warn him that the company was supplying weapons making equipment to Saddam Hussein. The letter is quoted by Scott at paragraph D2.318, which states that the writer of the letter wrote to Sir Geoffrey Howe and said the company was 'working on a thirty million pound order for CNC lathes to be used for munitions production in Iraq,' and that 'these machines are going to be used to machine shell cases'". Scott tells us that neither the Foreign Secretary nor any other Minister was shown the letter or informed of it, nor was any action taken on it then. Three years later, as the trial approached in 1991, a DTI official minuted internally in terms of the utmost cynicism, and that document is quoted by Scott at paragraph G10.29: The difficulty of course is not simply that the letter exists, but that the writer of the letter no doubt still exists and even if he has not so far been involved in the proceedings by either the prosecution or defence he may well make the existence of his letter public. The chances of his doing so will no doubt be all the greater if he is one of those who has already been made redundant or will be made redundant next month. It is tempting to suggest that we might claim PII"— public interest immunity— for document 4"— disclosing the receipt of the employee's letter— but I fear that doing so in the face of the possibility that the information in it may well appear across the front of the tabloid press during the course of court proceedings, makes me somewhat diffident about suggesting it. It was the Matrix Churchill whistleblower's letter that caused alarm bells to ring with the then President of the Board of Trade, now the Deputy Prime Minister, when he was told about it. He sidelined five times a sentence advising him: Assuming the writer retains his public spirited interest it may well be that as the details of the case get into the public domain he may feel moved to write again, but possibly to the press. The right hon. Gentleman shrewdly realised the risks of being seen to be party to a cover-up.

That episode demonstrates powerfully the case for systems in the civil service and all organisations to ensure that alerts to malpractice are effectively acted on and that there is protection for whistleblowers. How different and how much happier for the Government the story would have been if that letter had been acted on in 1988. As my hon. Friend the Member for Islwyn (Mr. Touhig) said, the costs of ignoring such messages in human lives, public money, public shame and the reputation of government or business are immense.

While Ministers defiantly snarl that they have been acquitted by Scott, civil servants are deeply worried. Elizabeth Symons, general secretary of the First Division Association of Civil Servants, wrote in The Guardian on 8 February: It has always been unclear as to the course of action open to a Civil Servant who knows that a Minister has sought to evade ministerial responsibility by, for example, misleading either deliberately or unknowingly the House of Commons. That was the issue raised by the Westland affair, and is one of the major issues of debate in relation to Matrix Churchill. It does not appear that the Scott report offers help to civil servants in that difficulty.

Paragraph 11 of the new civil service code states that a civil servant who is required to act improperly should report the matter in accordance with procedures laid down in departmental guidance or codes of conduct. A civil servant should also report to the appropriate authorities evidence of criminal or unlawful activity or other breaches of the code. Those provisions are not sufficient. They do not clearly cover activities that, although not criminal or illegal, are unethical or unconstitutional.

The code does not make it clear what duties or rights a civil servant has when a Minister misleads Parliament—one of the crucial issues in the arms to Iraq affair. What is a civil servant entitled to do when he or she is required to draft letters, parliamentary answers or statements to Select Committees that tell half a truth or less than the truth and effectively mislead Members of Parliament? What can a civil servant do when he or she knows or reasonably supposes that official statistics are being abused?

These are growing difficulties for civil servants in fulfilling their duty, as described in paragraph 1 of the code of conduct, to assist the Government with integrity, honesty, impartiality and objectivity. With contracting out, civil servants do not have the same access to information in areas for which their Ministers remain responsible. The "commercial: in confidence" formula is extensively used—far more in this country than in the United States—to prevent officials and politicians from knowing what is going on.

In a context of increased competitiveness—market testing, contracting out and time-limited personal contracts—pressures increasingly drive officials in the direction of expediency and self-serving survival. In an increasingly marketised public service, the ethic of public service for which the British civil service has been justly famed, and which has been the envy of Governments and peoples in many other countries, is harder to retain and to transmit to new generations of public officials.

Mr. Gladstone famously said in 1879 that the British Constitution presumes more boldly than any other the good sense and good faith of those who work it. Even after Scott, the Government appear to be unrepentant. Grimly, the new code of practice's final paragraph states: Where a matter cannot be resolved by the procedures set out in paragraphs 11 and 12 above, on a basis which the Civil Servant concerned is able to accept, he or she should either carry out his or her instructions or resign from the Civil Service. It adds: Civil Servants should continue to observe their duties of confidentiality after they have left Crown employment. We need to support the good sense and good faith on which Mr. Gladstone wanted to rely. That means providing legal protection for whistleblowers, so that, if they cannot achieve their purpose in the public interest through internal channels, they may make public their criticisms—always provided that they are properly founded and are made in good faith.

Alongside protection for whistleblowers, we should have freedom of information legislation to limit the scope for unnecessary secrecy and the abuses that it allows, and to limit the occasions on which whistleblowing may be necessary.

The position of the whistleblower would seem, in some ways, less unfavourable in local government than in Whitehall. The Audit Commission has done much to encourage responsible whistleblowing. The 1995 update of the Audit Commission's publication, "Protecting the Public Purse: Ensuring Probity in Local Government", stresses the principle that employees should be encouraged to come forward if dishonest acts are identified or suspected. The document reproduces and endorses 16 recommendations to local authorities put forward by Public Concern at Work.

Yet the experience of Mr. Bernard Crofton provides a disturbing cautionary tale. Mr. Crofton has been reinstated as director of housing in Hackney, but when he set out, energetically and courageously, to deal with fraud within the authority, he was sacked on the grounds of racial harassment and gross misconduct. In the immensely valuable evidence that he recently submitted to the Social Security Select Committee, he threw much light on the circumstances in which fraud thrives unchallenged in organisations and the reasons why people keep their heads down.

In the national health service, the situation is also confused and creates enormous difficulties for conscientious staff who have become aware of malpractice. I applaud the Secretary of State for Health for encouraging doctors to blow the whistle, but I am not clear that he has similarly encouraged, let alone protected, other staff. Ms Sue Machin, a social worker, exposed maltreatment at Ashworth special hospital in 1993 and was sacked. In 1995, after two years of injustice, an industrial tribunal ruled that she had been unfairly dismissed.

The journal Adviser, in 1994, commented on the Royal College of Nursing's whistleblower scheme. It stated: Many nurses are using the scheme in order to vent their frustrations at their inability to speak out, and the scheme has revealed just to what extent nurses are frightened and unhappy about the conditions in which they have to work. There is a tension between contracts of employment that insist on strict confidentiality and the nurses' code of professional conduct. The code calls on Each registered nurse, midwife and health visitor … above all to safeguard the interests of individual patients and clients". If nurses do not speak out, their patients may suffer. If they do, they themselves are liable to suffer.

Some trusts, such as the King's Healthcare trust are admirably enlightened about whistleblowing. But Christine Hancock, general secretary of the Royal College of Nursing, writing in the Health Service Journal last September, felt obliged to say: In recent years, nurses have found it increasingly difficult to discuss standards of care openly because of a prevailing culture of secrecy compounded by confidentiality clauses in employment contracts. She continued, pertinently: If the Government's proposals are to work without inspiring a climate of fear, health services must encourage openness about professional concerns. Over the long term, this would make almost all whistle blowing unnecessary. Who is to decide where the public interest lies? That is a question that the Government posed on page 31 of the White Paper on open government and conspicuously failed to answer. It is a question that Ministers and high officials, even if they are not complacent, find it painful to consider. It needs humility to accept that the low-ranking member of staff or the mere public-spirited citizen may point out the defects of their judgments and systems. The emperor resents the little boy who observes that he has no clothes.

Ministers and their advisers find it equally unendurable that the courts should be set over them. Governments are jealous of power and they resent the judges who now so frequently find themselves obliged to strike down Government decisions.

The Matrix Churchill affair is only the latest and most notorious in a series of instances that have shown that the responsibility for determining the public interest cannot safely be left in the hands of the Government alone. We shall find a greater safety through a wider diffusion of information and a plurality of responsibility. The legal protection for responsible whistleblowers that the Bill would provide would be a valuable additional protection to our liberties and to public safety.

1.39 pm

Mr. David Jamieson (Plymouth, Devonport)

I congratulate my hon. Friend the Member for Islwyn (Mr. Touhig) on securing a high place in the ballot and on the way in which he presented the Bill. My hon. Friend has provided us with an example of the careful and measured approach that can be taken in introducing a private Member's Bill. I hope that on that basis it will command the support of right hon. and hon. Members on both sides of the House.

I am aware of the difficulties in presenting a Bill, because I was successful in having a private Member's Bill enacted last year. I can assure my hon. Friend the Member for Islwyn that, once he has been through the entire process, he may participate in the ballot next year while silently praying that he does not secure a high place in it.

I wish only to clarify one or two matters that are related to the Herald of Free Enterprise tragedy in 1987 and to raise one other case.

The Bill seeks to lift the burden on employees and other people in similar circumstances when there is a conflict between the narrow interests of an employer and the wider public interest. I am pleased that the Bill would rule out any malicious claims. Any claims would have to be made in good faith. The Bill would assist greatly people such as Joy Cawthorne, who had to search her conscience as she encountered a huge moral dilemma. In the face of wrongdoing, was she to break the loyalty that she felt to her employer? Was she to be silent and put other people at risk by turning a blind eye to what was clear wrongdoing?

I learned during the passage of the Bill which I introduced last year that the whistleblower needs the ability to draw attention to the wrongdoing—I am talking of an allegation made in good faith—without fear of reprisal and, secondly, needs someone who can take action following the claim. If there is no one in the organisation who can take action and the necessary systems are not in place, there is a need for the whistleblower to have protection when making a statement outside the area of employment.

There was the appalling tragedy of the Herald of Free Enterprise on 6 March at Zeebrugge harbour. We know that 188 lives were lost—150 passengers and 38 crew. It was well known following Mr. Justice Sheen's inquiry that the ship capsized because it put out with the bow doors open. The then Secretary of State stated clearly that it was the failure of the company to take note of safety measures that caused the ship to go down. But on 24 July, he said: The report draws attention to the failures on behalf of the management of the company to give attention to warnings from the masters of the vessels in their fleet or suggestions of ways of improving safety."—[Official Report, 24 July 1987; Vol. 120, c. 678.] Effectively, the company ignored warnings from the masters and from the joint committees that existed on each ship, which had a remit to consider safety matters. Crew members were predicting that a disaster would take place because of shortcomings in safety measures.

Last Wednesday week, the hon. Member for Dover (Mr. Shaw), who represented Dover when the Sheen report was made public, sadly tried to rewrite the history of the Zeebrugge disaster. I gave the hon. Gentleman notice that I would raise the matter. Regrettably, on 21 February, he said that there was one simple, basic reason why the ship went down. He referred to alcoholism among certain members of the crew. He said: In reality, the officers were not in control—extreme left-wing trade unionists were in control of the ship."—[Official Report, 21 February 1996; Vol. 272. c.291.] His allegations, unlike many of those made by whistleblowers, were made under the privilege of the House.

It is sad that his statements were entirely untrue and without foundation. Nowhere in the Sheen report and nowhere in the Secretary of State's statement was there any reference to alcohol or unions having caused the ship to go down. The hon. Gentleman's comments were cruel, bearing in mind that some of his constituents were crew members. They were the people who warned that the disaster could happen. The hon. Gentleman has accused them of being alcoholics. He was talking about people who either fought bravely and lost their lives or who suffered long-term psychological damage by being involved in an appalling tragedy.

In response to my early-day motion 522, which condemned the hon. Gentleman's unwarranted and distressing comments, an amendment was tabled admitting that only one crew member admitted having a drink. That is a long way from rampant alcoholism having caused the ship to go down.

With the ninth anniversary of the disaster approaching next Wednesday, I hope that, on mature reflection, the hon. Member for Dover will reconsider his comments and withdraw them and apologise, particularly to the crew who tried to blow the whistle to save the lives of the people who were killed in that tragedy. Parliamentary democracy is not served by bogus attempts to reveal wrongdoing under privilege of the House.

The other case to which I shall refer came to light during the passage of my Bill, which is now the Activity Centres (Young Persons' Safety) Act 1995. It was the most distressing and harrowing case of a whistleblower who made every attempt to do what she thought was right. She predicted, with chilling precision, what would happen if safety measures were not put in place at the St. Albans venture centre in Dorset, back in 1992. In a letter to the managing director, she said: There is most definitely not one person here on this site technically qualified to instruct … As for sending out people on oversized classes on the water, I really do feel you are cutting it fine". She goes on to say: At present we are walking a fine line between 'getting away with it' and having a very serious incident. She litters her letter with similar comments. Near the end, addressing the managing director, she says: We feel that you at head office could sort out some of these for us … we think you should have a careful look at your standards of safety. Otherwise you might find yourselves trying to explain why someone's son or daughter will not be coming home. Nobody wishes or wants that to happen, but it will sooner or later. Within six months, four of my young constituents died in the Lyme bay tragedy.

In his reply to Joy Cawthorne, the managing director said: You can be assured that we are concerned that any problems that are identified are resolved as quickly as possible. He served 14 months of a three-year sentence for manslaughter. His was the first company found guilty of corporate manslaughter.

That case is vital in the context of this debate, because had Joy Cawthorne still been employed by that company, she would have been very afraid that her actions would have resulted, perhaps, in her sacking, or other things being brought down on her head.

The whistleblower needs protection, like Joy Cawthorne. She needed someone to whom she could go. For those reasons I support the Bill. By supporting the Bill, we shall protect and support those who have to search deep into their conscience to do what is in the best interests not of themselves but, ultimately, of others.

1.48 pm

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor)

This has been one of the most interesting debates that I have had the privilege of listening to in the House.

I come to the Dispatch Box aware of the necessary courtesies involved in the Government responding to an important private Member's Bill. I am also aware of the fact that I am bound to fail, because if I tried to address every single argument that has been deployed in the debate, I would assuredly threaten eternity, and I do not believe that those who have good will towards the Bill want me to do that. I can tell the House that I shall not threaten eternity, but part of the price for that is that some hon. Members may feel that I have not addressed everything that was said. I accept that risk.

Our debate began with a lucid presentation by the hon. Member for Islwyn (Mr. Touhig), who was ably supported by my hon. Friend the Member for Chingford (Mr. Duncan Smith). He in turn took some interesting interventions from my hon. Friends the Members for Blaby (Mr. Robathan) and for Bristol, North-West (Mr. Stern). There was further support from the hon. Member for Stoke-on-Trent, Central (Mr. Fisher), but my hon. Friend the Member for Gosport (Mr. Viggers) shared a number of anxieties with the House. The hon. Member for Leeds, Central (Mr. Fatchett) supported the Bill, but my hon. Friend the Member for Bristol, North-West developed his reservations.

The hon. Member for Linlithgow (Mr. Dalyell) revived some of our favourite memories of him, not lightly, I grant, but in the most serious vein. My hon. Friend the Member for Blaby had serious misgivings. The hon. Member for Cannock and Burntwood (Dr. Wright) returned to some themes that he has been working on and maturing over time. He has form, as they say in the criminal world, in these areas of activity. He has been here before—[Interruption.] I did not hear those interventions, but I think that they were probably quite amusing.

My hon. Friend the Member for Worcester (Mr. Luff) gave the impression that he had come as a sceptic and had become a convert. The hon. Member for Plymouth, Devonport (Mr. Jamieson) made a serious and important contribution to our debate, although it was not the longest. He rightly has the credit for the Activity Centres (Young Persons' Safety) Act 1995 which followed the tragedy that was visited on four of his young constituents; he will always have the credit for that.

The hon. Member for Stratford-on-Avon (Mr. Howarth)—I would still like to call him my hon. Friend so I refer to him now as my hon. Friend the Member for Stratford-on-Avon—was as lucid today as he always is. If he had been in his place, I would have assured him on the following point. Hon. Members will appreciate that he spoke about humility and touched on the analogy with Hans Christian Andersen's story about the emperor and the little boy. I wanted to tell him that, when I stand at the Dispatch Box, I am the veritable embodiment of humility. In that spirit, I acknowledge, once again, that I could not answer all the points in this interesting debate without taking far longer than any of the friends of the Bill would want me to take.

I have considerable sympathy with the objectives of the Bill; who could not have? The hon. Member for Islwyn has told the House of the support he has received from interested parties and the debate has shown that that support is reflected by hon. Members. However, although the Government broadly agree with the principles of the Bill, they see considerable difficulties in going down the road of legislation.

Legislation should always be approached with great caution and should not be entered into hastily. It should be a final step to meet an inescapable need. People should be encouraged to put their own houses in order without the constraint of statute, and that is especially true when it comes to employers running businesses. Only in particular and extreme circumstances where that approach does not work should legislation be considered.

There has been much discussion about whether the Bill is or is not deregulatory. It may be worth repeating the Government's position on regulation, the objectives behind the deregulation initiative and the tools that we are using to achieve those objectives. We are not opposed to regulation; well-thought-out and sensibly enforced regulations, limited in scope to what is truly necessary, are consistent with an open, innovative and growing business community. Bad regulation has the opposite effect, as it stands in the way of innovation, investment and jobs. Our deregulation objective is to reduce the burden of existing legislation and paperwork, and to minimise the burden of new legislation.

The Government's approach to good legislation is based on the three principles of the deregulation task force. The first is proportionality, which means that the benefits of any measure must outweigh the costs it imposes. The second is "think small first": regulations that cover small firms must ensure that they are able to comply with them. The third is goal-based regulation: the aim is to specify the provision's objective and to leave as much flexibility as possible, so that businesses have the freedom to comply in the way that best meets their individual circumstances.

The new system is more rigorous. It requires the Government's compliance cost assessment requirements to be undertaken. They ensure that all proposed regulations that affect businesses are thoroughly costed. Ministers will consider the compliance cost assessments personally and certify that the balance between cost and benefit has been appropriately struck. Special consideration must be given to the Bill's effects on small firms that do not have the resources or time to deal with elaborate measures.

In accordance with those principles, employment protection legislation sets out a minimum necessary framework of protection, on which employers can build as suits their circumstances. That framework already provides protection for individuals that the Bill aims to cover. The protections that exist in law include the civil service and health service codes, the rules relating to pension trustees and activity centres, which I have already mentioned, the body of health and safety legislation and civil law, not least in its applications to unfair and wrongful dismissals.

The two-year service requirement for most unfair dismissal complaints is necessary to ensure that unfair dismissal provisions do not weigh too heavily on business. We recognise, however, that some circumstances are so crucial that the two-year period should not apply. Some of those do not concern our debate. Two exceptions, however, relate directly to whistleblowing. They show that we are always ready to consider sympathetically the case for specific protection where that is justified.

The first exception is health and safety. Hon. Members have mentioned the Piper Alpha tragedy. It led to the provision of strong protection for employees working on oil rigs through the Offshore Safety (Protection Against Victimisation) Act 1992. That protection was enhanced and extended to people working onshore from August 1993. The provisions make it automatically unfair to dismiss, to select for redundancy or to subject to any other detriment any employees, regardless of their length of service, hours of work or age, in particular circumstances.

Similar protection will apply from next year to employee pension trustees to ensure that they feel free to undertake their duties without fear of reprisals. Hon. Members have mentioned the Maxwell case. Those existing measures show the Government's preferred approach to whistleblowing. Those protections deal properly with the worst cases that may be relevant to the Bill. They build on the Government's belief that internal procedures are the best way of dealing with such problems and that employees should always follow those procedures before considering whether to breach their duty of confidence by talking to the press.

Paragraph 114 of the first Nolan report states: On the other hand, we would not wish to encourage vexatious or irresponsible complaints which undermine public confidence in institutions without due cause. We believe"— this is the important quotation— the best way to achieve this balance is to develop sound internal procedures backed by an external review. Statutory measures are not employees' only recourse. Those who are victimised for raising ethical concerns may have civil remedies. They could sue for breach of contract or wrongful dismissal, or claim damages if their employer provides an inaccurate reference maliciously or without exercising a duty of care. There are other possibilities.

Mr. Hartley Booth (Finchley)

While I support the Bill's principles, may I ask the Minister to address the scope under common law for widening the clauses in employment contracts to cover the concerns that have been expressed?

Mr. Taylor

In general terms, the Government's philosophy is that a contract of employment is a discreet matter between the employer and the employee and that it should be worked out by them to their mutual satisfaction in the circumstances of the industry or area of employment in which they are engaged. I should not want the Government to intrude by gratuitously specifying terms that should be in such contracts. I would prefer the parties to the contract to work it out for themselves.

The law is not a panacea for all the ills that surround the issue. We need to create and encourage openness and dialogue within businesses, so that employees are encouraged to express their reasonable concerns in a climate in which constructive comments are welcomed. Some may ask what the Government are doing in their role as employers. Successive debates on the Nolan and Scott reports have focused attention on the civil service and its relationship with Ministers. We heard a good deal about that today.

Until recently, it might have been argued that procedures for civil servants to voice concern within Government did not command universal confidence, but the Government have recently responded to that issue. The civil service code, which was introduced on 1 January 1996, contains broad-ranging provisions whereby a civil servant can report—first within his or her Department and ultimately to the independent civil service commissioners—a breach of the code or a requirement to act in a way which, for that person, raises a fundamental issue of conscience.

In preparing the code, the Government's objective was to maintain and build on the consensus that greeted the original draft code that was produced by the Treasury and Civil Service Select Committee. The Government accepted the substance of all the recommendations of the Nolan committee on the code. Those were: that the code should cover wrongdoing of which a civil servant is aware although in which he is not personally involved; wider reporting of appeals by the civil service commissioners; and a confidential appeal channel that is independent of a civil servant's line management. We also accepted that the recommendations should be introduced as soon as possible.

The Government produced a revised draft in July 1995 to allow comment on the text by the civil service unions and others. This further consultation resulted in only a few minor amendments and meant that, by the end of last year, a text had been arrived at which in all substantive respects commanded near-universal approval. Given that consensus, the code is a precious asset.

The important measures in the code are followed in key areas of the public service. In themselves they provide a response to the sort of issues that were raised by Public Concern at Work, which is one of the Bill's main backers. In this respect it is worth noting what the Nolan committee said in its first report. The committee made it clear that it would not want to encourage vexatious or irresponsible complaints which undermined public confidence in institutions without due cause. It said that the best way to proceed was through development of sound internal procedures that were backed by external review.

In its submission to the Nolan committee, Public Concern at Work noted: Rather than advocate that the whistle should be blown outside—our pre-eminent aim is that the concern should be raised internally with those accountable for the organisation … but as this submission seeks to show, we consider that in many areas of public life there are presently no, or no adequate, alternatives for such concerns to be raised. Those alternatives have now been provided. Therefore, a Bill that sanctions public whistleblowing is unnecessary in areas of the public service, as effective procedures have already been established for the undoubtedly preferable option of internal whistleblowing.

I shall now consider the Bill's provisions in more detail. I appreciate the great care with which the Bill was drafted, but I have several anxieties about the detail, which are more than quibbles. I cannot envisage how the Bill might be amended to meet those concerns.

First, despite what the hon. Member for Islwyn said, the Bill would impose a considerable burden on business. I heard the hon. Gentleman's argument that the Bill was intended to be deregulatory, but his explanation was not convincing.

Any statutory imposition on employers is a burden on all those who have to find out about the legislation and on those who would wish to tackle the issue in their own way. Legislation such as licensing and other statutory controls would be the appropriate response in only a tiny proportion of cases in which an individual has been hesitant about drawing attention to a worry. The majority of cases can and should be sorted out by the employer.

The Bill is all the more burdensome—to my mind, unacceptably so—because of the enormous uncertainty about its effect. In any specific case, individuals will not know whether they will be protected because they are unlikely to be experts in what the courts might consider to be the public interest. One may say that that is their concern; the Bill aims to take only a small first step and it is up to the responsible individual to be sure that he or she is acting in the public interest.

However, employers will be equally uncertain. The misconduct that the Bill might cover is very loosely drawn—in fact limitless, because the matters listed in the schedule are only examples. In what circumstances can maladministration in a private firm be a matter of public interest? If a public company's shareholders are interested, does that constitute a public interest? When does its injustice to an individual become such a matter?

A solicitor specialising in the field may know the answer, but employers, individuals and many of their advisers will not. The circumstances are crucial, and in many cases neither the employer nor the individual would know whether the protection applied until it was too late, the disclosure had been made and a court had been asked to decide.

The Bill as drafted is likely to cut across many professional rules. Its effect is to impose blanket provisions regarding, for example, the steps that a whistleblower must take to draw attention to a matter internally, but certain professions have their own rules on that matter. Auditors are an example.

There is anxiety that the Bill may permit professional advisers to disclose confidential information, not only to a proper authority, but more widely. Any regulation should have regard to the position of the different advisers in question. It is undesirable simply to cut across professional rules applying to the disclosure of confidential information, which had been worked out to suit a specific profession, by imposing different universal standards, which may well be inappropriate.

The individual's motives may be finely balanced and difficult for the courts—never mind the employer—to decide. As I read the Bill, the onus of proof on bad faith is on the employer. Other queries surround the proposed remedies.

Although the hon. Member for Islwyn optimistically hopes that the Bill, if passed, would be invoked rarely, I cannot be so sanguine. The uncertainty in its effect would be likely to lead to a considerable volume of difficult cases, and meanwhile neither employers nor individuals could be confident about where they stood. Inevitably, a proportion of cases—perhaps a large proportion, in such an uncertain area—would be found to be without foundation, putting employers to unnecessary trouble and expense.

The hon. Member for Islwyn told us of the support that the Bill has received from business. I wish to make a couple of points about that. First, we welcome employers who are prepared to meet the cost of introducing their own systems and would encourage them to do so, but we do not consider it right to impose blanket legislation on all employers, requiring those who cannot afford the burdens to bear them as well as those who can. Secondly, I invite the hon. Gentleman to examine carefully the terms in which employers have offered support. In general, I believe that he will find that they support the principle that individuals who raise matters of public interest through appropriate channels should not be penalised as a result.

As I have said, who could fail to support such a principle? That is probably why my Department has received no letters objecting to the Bill. However, when employers examine the proposed legislation in a little detail, the hon. Gentlemen may find that they will express considerable doubts and fears about the practicality of such a measure, for the reason that I have just given. The Government certainly have those doubts and it may be why, of the letters supporting the Bill sent to my Department, only one is from an employer or employers' organisation.

The Government encourage open communications and employee involvement in the workplace. That must be the key to the problems that I have identified today. We do not merely encourage open communications and employee involvement, but rather see that as an essential element in achieving and maintaining competitiveness. Involving employees makes good sense for all sorts of reasons—not simply those that we are discussing today. Companies that involve their employees and have open communications are much less likely to have problems in the areas that we are discussing.

Employers and professional bodies are increasingly recognising the benefits of having their own systems. Concerned individuals can make their worries known though a large number of existing avenues. Increasingly, the complicated and unclear provisions proposed in the Bill will be rendered redundant by more appropriate voluntary schemes.

When I began my remarks, I knew that I would be unable to reconcile the time available to me with my obligation to try to answer all of the questions. I shall keep faith with my endeavour not to trespass on eternity, as I believe that that is the priority—I think that the House will agree with that.

In conclusion, I applaud the motives of the hon. Member for Islwyn in bringing forward the Bill. I welcome the highlighting of an important issue which will draw employers' attention to the need to establish ready, suitable procedures through which their employees can pursue such matters should that prove necessary. However, I do not believe that the Bill is a practical or desirable way forward—even though I know that it is well intentioned.

2.12 pm

Mr. Ian McCartney (Makerfield)

I thank my hon. Friends for cutting their congratulations short, but the Minister has left me only four minutes in which to respond to the debate. I congratulate my hon. Friend the Member for Islwyn (Mr. Touhig) and the hon. Member for Chingford (Mr. Duncan Smith) on their presentation of the Bill. This is the first time in eight and a half years of debate in the House that the argument in favour of proposed legislation has been won so comprehensively.

Even those who oppose the Bill—such as the Minister, who does not want it to receive further consideration in Committee—have been forced on to the back foot. They have had to accept both the concept and the principle behind the Bill. There is therefore no reason why Ministers should prevent the Bill from receiving further consideration in Committee and returning to the House. If the Minister is serious about taking a cross-party approach to the issue of ethics in the public and private sectors, he should support consideration of the Bill in Committee.

In truth, the Bill is about good governance, whether in the public, the private or the voluntary sector. It would assist in establishing better management techniques; it would be an aid, not a drag, on management. Over time, it would assist companies to change their culture and to ensure good practice and good management internally. As fraud was rooted out, companies would prosper: they would not be weakened or lose out as a result of fraudulent activities.

The Bill would ensure the provision of good quality public services. The managers of those services would be accountable for the way in which they managed and for the contractual arrangements that were agreed between them and the service providers. The Bill would also ensure good codes of practice in the voluntary sector when managing public resources.

As Members of Parliament, we have absolute privilege and, in the past eight and a half years, I have seen hon. Members on both sides of the House use that privilege to great effect. They have examined statutory requirements and breaches of legal obligations—such as the improper use of public and private funds, the abuse of authority, miscarriages of justice and maladministration. As hon. Members, we have a privilege—we are protected in law. That is not the case for the ordinary citizen or employee, who can be the victim of internal gagging or disciplinary procedures; who can be accused of breach of contract; who can lose their employment; who can be stripped of their self-esteem; and who can have their professional confidence undermined and their public duty ridiculed. That is not acceptable in any circumstances.

Four days after the debate on Scott, it is this House's duty—the public would demand it of us—to give the Bill a fair wind and allow it to go into Committee. We must be serious about European and corporate fraud, public safety, quality in the caring professions and ensuring that support services exist. We must ensure that policing arrangements are fair and above board and that police officers can look into maladministration without suffering attacks on their personal integrity. Civil servants must be able to raise successfully with Ministers issues that they believe go against the code of conduct, and do so in a way that will not destroy their reputation or career.

For all those reasons, I ask the Minister to support the Bill in a meaningful sense—allow it to go to Committee and then back to the Floor of the House for further consideration.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 118, Noes Nil.

Division No. 65]	[2.15 pm
AYES
Abbott, Ms Diane	Howells, Dr Kim (Pontypridd)
Ainsworth, Robert (Cov'try NE)	Hughes, Kevin (Doncaster N)
Anderson, Ms Janet (Ros'dale)	Hughes, Simon (Southwark)
Austin-Walker, John	Jackson, Glenda (H'stead)
Banks, Tony (Newham NW)	Jones, Jon Owen (Cardiff C)
Barnes, Harry	Jones, Lynne (B'ham S O)
Barron, Kevin	Jones, Martyn (Clwyd, SW)
Bennett, Andrew F	Jowell, Tessa
Benton, Joe	Keen, Alan
Bottomley, Peter (Eltham)	Khabra, Piara S
Brown, N (N'c'tle upon Tyne E)	Livingstone, Ken
Bruce, Malcolm (Gordon)	Lloyd, Tony (Stretford)
Burden, Richard	McCartney, Ian
Byers, Stephen	Mackinlay, Andrew
Campbell-Savours, D N	McMaster, Gordon
Carrington, Matthew	McNamara, Kevin
Clarke, Tom (Monklands W)	MacShane, Denis
Clwyd, Mrs Ann	Madden, Max
Cohen, Harry	Maddock, Diana
Cormack, Sir Patrick	Marek, Dr John
Corston, Jean	Marshall, Jim (Leicester, S)
Cousins, Jim	Meacher, Michael
Cunningham, Jim (Covy SE)	Michael, Alun
Dafis, Cynog	Miller, Andrew
Dalyell, Tam	Mitchell, Austin (Gt Grimsby)
Davies, Chris (L'Boro & S'worth)	Morris, Rt Hon Alfred (Wy'nshawe)
Denham, John	Mullin, Chris
Dowd, Jim	Murphy, Paul
Duncan-Smith, lain	Oakes, Rt Hon Gordon
Dunwoody, Mrs Gwyneth	O'Brien, Mike (N W'kshire)
Eagle, Ms Angela	O'Hara, Edward
Ewing, Mrs Margaret	Pearson, Ian
Fisher, Mark	Pike, Peter L
Flynn, Paul	Powell, Ray (Ogmore)
Foster, Rt Hon Derek	Prentice, Bridget (Lew'm E)
Gapes, Mike	Primarolo, Dawn
Gerrard, Neil	Purchase, Ken
Gill, Christopher	Quin, Ms Joyce
Godman, Dr Norman A	Rathbone, Tim
Gorman, Mrs Teresa	Roche, Mrs Barbara
Greenway, Harry (Ealing N)	Ruddock, Joan
Hain, Peter	Sedgemore, Brian
Hall, Mike	Sheerman, Barry
Harman, Ms Harriet	Shepherd, Richard (Aldridge)
Heppell, John	Shore, Rt Hon Peter
Hill, Keith (Streatham)	Simpson, Alan
Hodge, Margaret	Skinner, Dennis
Howarth, Alan (Strat'rd-on-A)	Smith, Andrew (Oxford E)

Smith, Chris (Isl'ton S & F'sbury)	Watson, Mike
Smith, Llew (Blaenau Gwent)	Wicks, Malcolm
Soley, Clive	Wilkinson, John
Spearing, Nigel	Williams, Rt Hon Alan (Sw'n W)
Strang, Dr. Gavin	Williams, Alan W (Carmarthen)
Sutcliffe, Gerry	Winnick, David
Thompson, Jack (Wansbeck)	Winterton, Nicholas (Macc'f'ld)
Timms, Stephen	Wise, Audrey
Touhig, Don	Wright, Dr Tony
Turner, Dennis
Walker, Rt Hon Sir Harold	Tellers for the Ayes:
Waller, Gary	Mr. Derek Fatchett and Mr. David Jamieson.
Walley, Joan

NOES
Tellers for the Noes:
Mr. Derek Conway and Mr. Michael Bates.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).