Whistleblowers: should they get more protection?

The process could be simplified.

With the current emphasis on corporate governance and paying your fair share of tax, whistleblowing is centre stage - isn’t it time the government revisited our laws in this controversial area?

With major scandals affecting our MP’s, financial institutions, the media and the police it is little wonder that by the end of 2012 corporate governance was the new “black” in the business world and looks set stay. The emphasis upon appropriate corporate controls and culture has been reinforced by the highly publicised tax offensive targeting the former no man’s land of offshore companies and bank accounts.

The overriding theme is clear - times are difficult, mistakes have been made and businesses and individuals have a duty to do the right thing.

Unfortunately, there is not a lot of money available to help promote this cultural shift and so 2012 also saw publication of the government’s plans for the introduction of deferred prosecution agreements – the newest weapon in the cash strapped armoury of the Serious Fraud Office (SFO) – where, if the case is suitable, entities self reporting on fraud can hope to do a deal. It is no coincidence that this has been put in place with an anticipated 2013 focus from the SFO and its new director on enforcing the provisions of the Bribery Act.

One has only to look carefully at the UK government’s guidance on whistleblowing to see where the problems lie

The SFO’s confidential reporting hotline is also doing brisk business and the soon to be reconfigured FSA has had a whistleblowing hotline for many years. So-called “bounty payments” by HMRC have also been in the press where informants have received discretionary payments for information that has led to additional tax recoveries.

In this climate the role of the whistleblower has never been more prominent and yet UK legislation does little to recognise the increased importance of this role. Any auditor will tell you that two of the most effective weapons a business can deploy against fraud are the establishment of a zero tolerance culture backed up by a fraud reporting hotline available to employees, customers, suppliers and anyone else who has dealings with the company.

In the UK whistleblowing legislation is set out within the Public Interest Disclosure Act 1998 although this will be amended by Vince Cable’s Enterprise and Regulatory Reform Bill which is expected to become law later this year and will remove a loophole where concerns about a personal employment contract could be raised.

Unfortunately, it is proposed the whistleblower will now also have to decide what is in the public interest.

In an environment where government, regulators and prosecutors are seeking to both reinforce and enhance controls within the business and wider community a more fundamental review of whistleblowing legislation in the UK is long overdue.

One has only to look carefully at the UK government’s guidance on whistleblowing to see where the problems lie. Potential whistleblowers are invited to check their employment contract or HR department to ascertain if their company has a whistleblowing procedure.

If I were an employee I would already be worried – the process seems likely to become legal and HR departments are not renowned for supporting the employee in a matter involving the behaviour of management. What do I do if I’m not an employee but a third party or a sub- contractor and if I am an employee what do I do if there is no whistleblowing policy? Government guidance fails to clearly address these points and the law itself is unclear.

The rest of this article appears on economia.

whistleblowing is centre stage. Photograph: Getty Images

Paul Smethurst is a partner in the forensic and investigation practice at accountancy firm, Carter Backer Winter LLP

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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