Public Interest Disclosure Bill

House of Commons, 24 April 1998.

COMPENSATION FOR UNFAIR DISMISSAL

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

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

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to discuss amendment No. 1, in clause 8, page 7, line 30, leave out from beginning to end of line 17 on page 8.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

It gives me great pleasure to move new clause 1, which concerns an important aspect of the Bill—compensation for unfair dismissal. As I have not had the opportunity to speak on the Bill before, may I welcome the Minister to the Dispatch Box? I know that he has been burning the candle at both ends—indeed, rumour has it that he attended a £500-a-plate dinner at the Hilton last night. I hope that that will not slow his responses or dim his perception. The paucity of Labour Members present suggests that few survived last night, and the fact no Liberal Democrats are here to participate in what I believe to be an extremely important debate gives rise to the question of what they, too, were up to last night. I hope that the Minister, who has a pivotal role in the Bill, will listen carefully to the arguments this afternoon, and that my colleagues and I can persuade him of the merits of the new clause and of amendment No. 1. I pay tribute to the work that has been conducted on this measure by Public Concern at Work, and I pay special tribute to Mr. Guy Deyn, who has provided advice to all parties involved in the Bill. The matter of compensation for unfair dismissal was aired only briefly in Committee, when the Minister told us that he had already discussed the issue at length with my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd)—who is to be congratulated on bringing the Bill before us. That means that the discussions that have taken place between my hon. Friend—the Bill's promoter—and the Minister have taken place in private. Instead of questioning whether that is right, let me express the hope that, in his reply, the Minister will reveal the details of his apparent objections to the new clause and the amendment, not least in light of the fact that—as I believe the Minister has admitted—the majority of the organisations consulted on the Bill came down in favour of the unlimited compensation proposals. The matter was discussed in greater detail in the previous Parliament, in 1996. If my memory serves me right, the Minister was involved in the proceedings on that occasion, and gave some indication that he supported such measures. I hope, therefore, that the Minister will tell us why he has apparently changed his mind. As he has changed the side of the House on which he sits, he has conveniently moved into another mode, now objecting to a measure that he purported to support when the previous Government were in office.

Ian McCartney (Labour, Makerfield)

When I respond to the new clause, I shall respond in kind to what the hon. Lady said about last night. May I say that she has got the historical record completely wrong? The previous Government would not accept the proposals that were in the Bill; indeed, they scuppered it, and it has been left to the incoming Administration to sit down with Public Concern and hon. Members on both sides of the House to come up with a workable proposal. As the hon. Lady was involved in that Government, I assume that she was party to the decision that scuppered the Bill in the previous Parliament.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

I know that the Minister has had a heavy night but, if my memory serves me well from my reading of the report of the 1996 proceedings, my hon. Friend the Member for Solihull (Mr. Taylor), then Minister for Competition and Consumer Affairs, said that he had no intention of scuppering the Bill. Moreover, a reading of the proceedings—you will correct me if I am wrong, Mr. Deputy Speaker—reveals that the hon. Gentleman who is now the Minister was on his feet when the Bill ran out of time. I believe that the Minister is making a brave attempt on the morning after the night before, but I find it slightly incredible that he should try to use that argument at this stage, especially when I hope to persuade him of the merits of new clause 1 and amendment No. 1. It may help the House if I give some background, especially to clause 8. Clause 8 provides that compensation for employees who have been dismissed for making a protected disclosure will be determined by regulations. That is the approach indicated in clause 4 for a worker who is disciplined or demoted, but not sacked. The worker will receive such compensation for his actual loss as is just and equitable. Where the worker has been at fault himself, or where he has failed to mitigate his loss, the award may be reduced. The awards for victimisation short of dismissal are subject to neither a minimum nor a maximum sum. The Government's preferred approach appears to be that compensation for dismissal under the Bill should follow the precedent for health and safety representatives under the Employment Rights Act 1996, as the Minister has indicated. A sacked worker would receive his financial losses up to £11,300 plus, in exceptional cases, the penalty award of between £16,545 and £33,800. My hon. Friend the Member for Aldridge-Brownhills, in his magnificent tour de force in the hour-long Committee stage, certainly raised his concerns on the matter. There is still a great deal of doubt that what the Minister is planning will satisfy the Bill's supporters. The Bill will not meet the actual losses of a higher-paid individual, or of the whistleblower who remains unemployed for several years after being dismissed. With the maximum, the Bill could have far less effect—for example, in the City. Cases such as that of BCCI, Barlow Clowes and the late Robert Maxwell's companies have been cited in support of the argument that we are making today. There may be natural reticence about providing employment to an individual involved in a high-profile case such as those I have mentioned. Our proposals enjoy the support of the CBI, the Institute of Directors and the TUC. The Minister is aware that I have received a letter from Sarah Veale, the senior policy officer of the TUC. The House deserves the courtesy of hearing what the TUC has written about the matter. Ms Veale wrote that she noticed with interest the amendment on compensation tabled by my hon. Friends and me. She continued: As you may be aware, there is near-unanimous support across industry for compensation for unfair dismissal for public disclosure to be uncapped. We fully support your amendment. We believe that the employment tribunal should be able to assess compensation and damages according to their assessment of the loss suffered by the employee. This is how compensation is assessed in discrimination claims and, in our view, is how it should be assessed for all breaches of employment legislation. We have made our views on this clear to the Government and to the mover of the Bill". That is not an ambiguous letter couched in half-hearted terms—it is an expression of full support. If the Minister cannot be persuaded by my argument—or by those which will be deployed by my hon. Friends in the debate—I hope that he will be fully persuaded by the TUC. If he is not, I would hope to be a fly on the wall at the next meeting between the Minister and the TUC general secretary, John Monks. I am sure that the TUC will have words to say if the Minister does not listen. The same view is held by the CBI and the IOD, and that shows that it is a reasonable measure. The Minister will no doubt argue that his stance shows that he is not in the pockets of the unions. That would be a trivial response to a proposal that would make the difference to many people. It would strengthen the Bill and ensure that it has the effect that my hon. Friend the Member for Aldridge-Brownhills intended and that all right-minded employers and employees would wish it to have.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

My right hon. and learned Friend is right to raise the issue. The answer is no, I have had no indication from the Minister. I did him the courtesy of discussing the matter briefly with him outside the Chamber before the debate. I hope that he retains an open mind. He gave me a mere glimmer of hope. We shall have to wait until he responds. As with so much legislation, it seems that power is being retained by Ministers. Power is being held at the centre, giving Ministers much more control—whereas, in this case, it would be perfectly reasonable to devolve power to the tribunals, as we do with sex and race discrimination cases. I live in hope that the Minister will be persuaded by my argument, and does not have a closed mind on the matter. I shall not delay the House for too long. The new clause provides a greater incentive for well-paid employees—those arguably more likely to have access to potentially "blowable" information. It provides for a fair and just compensation award that recognises not only salary but the additional benefits. It passes discretion to the tribunal, which is fair and equitable. In the light of the consensus of opinion among all the organisations that were consulted on the measure, I hope that the Minister will see that it is reasonable to accept the new clause. I shall listen carefully to the response.

Peter Atkinson (Conservative, Hexham)

Will my hon. Friend clarify one point about the new clause? As well as taking away a maximum limit of compensation which the Employment Rights Act 1996 included, it does away with the minimum amount that is in the Bill, as amended. Many people might be concerned that, if there was a minimum amount to be gained by blowing the whistle, perhaps unjustifiably, it would encourage dissident employees to make false allegations against their company, in the hope that they might make some money out of it.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

My hon. Friend is exactly right. The new clause removes that incentive, which might result in vexatious cases being brought. I have taken enough of the House's time. I am keen to hear the Minister's response, but I know that many of my colleagues are keen to discuss this important matter and deploy further arguments. I shall listen carefully to the Minister.

Edward Garnier (Conservative, Harborough)

I am not sure that I agree with the point made by my hon. Friend the Member for Hexham (Mr. Atkinson), and I am not sure that my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) was right so readily to agree with him. The Bill presented by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) makes it clear that those who make unjustifiable or malicious whistleblowing allegations will not be susceptible to the protection of the Bill, so I do not believe that the removal of the minimum will encourage people to make false accusations.

Peter Atkinson (Conservative, Hexham)

The problem is that industrial tribunals attract a great deal of uncomplimentary publicity for the company that is accused. That company may instinctively pay out rather than face bad publicity and an inevitably one-sided report. I believe that some minimum would encourage people to bring cases before tribunals and encourage companies to give way to blackmail.

Edward Garnier (Conservative, Harborough)

I know where my hon. Friend is coming from, but I do not accept that that underscores his objection. Defendants who are relatively better off than the complainant bringing proceedings against them are always placed in the difficult position of having to decide whether it is commercially worth while to defend the action on its merits or whether it is better, on economic grounds, simply to pay the complainant to go away. Companies and better-off defendants currently face that problem with complainants who are on legal aid. The situation is no different in industrial tribunals, although I understand that no state assistance is provided for litigants on either side of the argument.

Patrick Nicholls (Conservative, Teignbridge)

May I put the point to my hon. and learned Friend in a different way? It will not always be a choice between no case on the one hand and an extremely blowable case on the other: there will be marginal cases. In those circumstances, employees may think that it is not worth the hassle bringing a case. However, if, on a balance of probabilities—my hon. and learned Friend may correct me if I have misremembered it—an employee can make the case stick and he wins £16,000 in one go, that will act as an incentive to take to tribunal the marginal cases that should never be heard.

Edward Garnier (Conservative, Harborough)

If that is my hon. Friend's argument, he should support our new clause, which will remove the minimum. If our new clause becomes law, anyone who puts a marginal case before the tribunal will recover rather less than the current minimum—indeed, he may recover a verdict but no reward. I do not know what cost penalty would be involved in those circumstances, but I think that the complainant would leave the tribunal hearing badly out of pocket, with his reputation as an honest broker somewhat impaired.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

The issue is summed up partly by the comments of the hon. Member for Aldridge-Brownhills (Mr. Shepherd) in Committee. He said: My concerns are that the minimum award of £16,545 would be made irrespective of any loss and thus may be made in circumstances in which the tribunal does not think it just. As such. it might encourage claims that, otherwise, would not be brought"— [Official Report, Standing Committee D, 11 March 1998; c. 13.] That is a good summary of the Bill from the short Committee stage.

Edward Garnier (Conservative, Harborough)

I prefer to call the hon. Member for Aldridge-Brownhills my hon. Friend. Although his name is not attached to our new clause, I think that he would support the general thrust of our arguments. We shall have to wait and see. The Minister gave me some comfort in Committee when he referred to an increase in the current levels of compensation under the Employment Rates (Increase of Limits) Order 1998. He told the Committee that the new arrangements from 1 April this year will mean a basic award of £2,000—or what we would call nowadays four places at dinner—a compensatory award and a special award of —14,500. The Minister went on to say that there will be a maximum award of £1220 multiplied by 30 weeks, which amounts to £6,600. A compensatory award of £0112,000 will be added to that, together with a special award of £29,000. Therefore, under the current order, the total, maximum figure is £47,600. That is good news as far as it goes, because it increases-if only marginally—the levels of compensation available under the Employment Rights Act 1996.

Ian McCartney (Labour, Makerfield)

The hon. and learned Gentleman should not be so derisory about the increase. He was a member of a Government who refused to make any increases, and it was up to this Government to bring compensation in line with what is reasonable in today's marketplace. The hon. and learned Gentleman supported a Government who refused, year after year, to increase those limits.

Edward Garnier (Conservative, Harborough)

I am sorry if the Minister misunderstood me. He is being a little over-sensitive. I appreciate that he has had to wait a little before we reached this debate, but I was saying that I was pleased to note—that was the intention that I was trying to get across—that the order has increased the limit, but that the limit should be done away with altogether, so that people can be better and more adequately compensated for the losses that they suffer as a consequence of doing their public duty—exposing misdemeanours, crimes, breakdowns in health and safety, and so on, as set out in earlier clauses, which define a permitted disclosure. I do not want to have a row with the Minister, as that would not be helpful, but if he would like one, we can arrange to have it in due course. For the moment, I shall concentrate on the merits or demerits of the arguments in favour of my new clause, which is supported by two of my hon. Friends. As my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) said, the Employment Rights Act 1996, which the Bill seeks to amend, is incredibly complicated. One has to look carefully at sections 117 to 127, which set out the compensation regime. One does not have to be a nuclear physicist—but quite close to it—to be able to devour all that and regurgitate it in a sensible form for a lay client. The people who need advice under the Act will not necessarily be those most readily able to understand those sections. I dare say, but I may be completely wrong, that the category of person we are seeking to protect may be somewhat different. It is likely to be those who have deliberately decided to expose something that they think is wrong rather than the unwitting victim of bad conduct by an employer, be it a commercial concern or an individual. I suspect that the individuals we are seeking to protect are better equipped to understand the sections to which I referred, and may be in the higher income brackets. I am sure that my hon. Friend the Member for Aldridge-Brownhills, who is promoting the Bill, is not doing so to protect one economic class. I have never heard him suggest anything of that sort. That is not how he thinks or works. However, it is inevitable that we shall disfranchise quite a cohort of people who earn rather more, or who stand to lose rather more, than the current maximum under the order, which was sensibly increased by the Minister the other day. There will be a huge number of people-in the health service, local and central Government, as well as in the City, as my hon. Friend the Member for Chesham and Amersham made clear-who earn the £47,000-odd maximum in a week or two. I regret to say that I do not. They will be disinclined to expose wrongdoing, in the City or in other areas where high salaries exist, because of the relatively low limits provided in the order. I have a horror of government and legislation by regulation. I prefer those enactments to be on the face of the Bill, but that is another week's work. I see that the hon. Member for Dudley, North (Mr. Cranston) is keeping a close eye on me, so I shall be careful in what I say. In common law, in actions for breach of contract or wrongful dismissal, there are areas available to a complainant or plaintiff that would allow higher awards for damages. If translated into the Bill, they would allow the tribunal to give a fairer assessment of the loss to the unfairly dismissed complainant in the event of his being in need of compensation. 1.30 pm Some employees who are dismissed for whistleblowing may be fortunate enough, because of the publicity surrounding the way in which they made the disclosure, to be re-employed pretty quickly. Let us take the example of someone working in the national health service who exposes misconduct by a consultant or a department in a hospital, who as a result of that disclosure receives tremendous publicity in the newspapers. Much of that publicity will denigrate the person who made the disclosure for speaking out of turn. No doubt that person and his or her family will have to undergo the most appalling public criticism from some for letting the employer down or letting the side down and not being a team player. On the other hand, there will be another group of people whose views will, no doubt, be reflected in and approved by the media. They will applaud the person for exposing a particular wrong or a series of examples of misconduct. Given that treatment in the public prints, it may be that the person concerned will attract employment from another employer in the health world, perhaps in the private sector, which means that he will not lose as a consequence of having lost his previous employment. In such cases, the money question does not bite. I am mindful of the strict laws in Switzerland that apply to telling tales out of school, which mean that an employee can be dismissed summarily without compensation, as I understand them. The chances of such a person being re-employed in Switzerland, in the financial sector or in any other economically meaningful sector there are pretty small, if not impossible. Hon. Members will no doubt recall the case in Switzerland two or three years ago of a man who was eventually driven to suicide by his inability to come to terms with his failure to be re-employed. He felt that he had let his family down by exposing them to penury. In some senses, it was felt that he had let his country down by talking out of turn. I produced that case to simplify my argument, but given that extreme case, I suggest that the Bill, as drafted, does not assist very much. A man on a basic salary of £100,000, who may be entitled to bonuses—they are not unheard of in the City, even under a new Labour Government—of £200,000, £300,000, £400,000 or £500,000, in addition to share options, private medical health insurance and other perks such as cheaper mortgage rates or subsidised mortgage rates, will find it extremely difficult to work out where his best interests lie. Would that person's interests lie in public disclosure, following a proper assessment of his public duty, in relaying to the proper recipient of information the fact that some wrongdoing, fraud or misconduct is taking place within his firm or within the sector of the City with which he is concerned, or would he say, "There is no point, no matter how bad I feel about it and no matter how bad I think what I know is—1'm not going to give up my package of half a million pounds for maximum compensation of a little under £50,000"? It would be unrealistic to expect that to happen. One or two public-spirited people—not the majority—would cast aside thoughts of the likely compensation, either because they are independently well off or because they have made arrangements to meet their family's commitments. The compensation levels in the Bill would discourage public-spirited, law-abiding people from coming forward to give a good account to the proper authorities of what has happened, so that the public would be better protected from misdeeds in high places or in places to which they do not usually have access. My next point concerns another aspect of the common law. Again, I look to the hon. Member for Dudley, North—I hope that I do not embarrass him by saying that he is a noted commercial lawyer—to discover whether I am right that the courts can take into account loss of reputation as a consequence of unfair dismissal. My right hon. and learned Friend the Member for North-East Bedfordshire will remember from law school the case concerning Addis v. the Gramophone Company, from which an employee was dismissed in humiliating circumstances. In 1909, the Judicial Committee of the House of Lords decided that, even though he was dismissed in abhorrent and objectionable circumstances that struck at his reputation, he could not recover damages under the unfair dismissal claim for the increased hurt to his feelings caused by the manner in which he was dismissed. We must distinguish between feelings and reputation. A man's reputation can be destroyed by being sacked for whistleblowing perfectly properly and in the public interest, and the tribunal should take into account the damage to his reputation in his sector of employment. In the City, for example, trust and financial confidentiality are important. A stockbroker, banker or dealer may be thought by his peer group to have gone outside regimental ethics and breached—properly, in one sense, but improperly in the in-house sense—the parameters within which such matters are considered in the industry. Such a person should be compensated, or the court should at least have available to it a means of compensating him for the additional injury to his reputation. As a consequence of going outside the laager and speaking against his colleagues, even though some of them may grudgingly admire him, such a person would never get a job in that sector again.

Sir Nicholas Lyell (Conservative, North East Bedfordshire)

I am most grateful to my hon. and learned Friend for referring to the common law position, which is confined to the damages that are relevant to the notice period, which may be two years or six months, or even a week or a month. The sum would be modest. The question is whether someone who, in the public interest, puts at risk his future livelihood and ability to work again should be confined to compensation under employment rights legislation. The first step was taken by Lord Howe with the 1971 industrial relations legislation, which is relevant to the debate.

Ian Stewart (Labour, Eccles)

Will the right hon. and learned Gentleman give way?

Ian Stewart (Labour, Eccles)

I have tried not to intervene on the hon. and learned Gentleman, because I know that he is sincere. However, it is a bit rich for Opposition Members to show such concern for a section of the work force that is in a high wage bracket. I remind the hon. and learned Gentleman that his Government removed protection from millions of workers, by raising the qualifying period for industrial tribunals from six months to two years. Perhaps I could put the matter in context. Since the industrial tribunals legislation was implemented, less than 25 per cent. of applicants have been successful, and the average award has been of hundreds rather than thousands. Opposition views would be more appropriate if the previous Government had shown for low-waged people who were unfairly dismissed the sympathy that the hon. and learned Gentleman expresses for higher-waged people.

Edward Garnier (Conservative, Harborough)

As the hon. Gentleman is an experienced and respected trade union official in the north-west, his comments are not surprising. I wish that he could make them to the previous Government but, sadly, they are the previous Government and there is nothing that I can do about that, much as I regret their demise. I advise the hon. Gentleman to visit the Vote Office and look at section 108 of the Employment Rights Act 1996, because in that he may find one or two words of comfort.

Patrick Nicholls (Conservative, Teignbridge)

Does my hon. and learned Friend agree that it is not a question of sympathising with high wage earners who have much to lose if they blow the whistle? As he says, unless the matter is dealt with, they will not make use of the legislation and of the good intentions and consensus in the House. The debate is not about sympathy but about the legislation having practical effect.

Edward Garnier (Conservative, Harborough)

I agree with my hon. Friend. Wages have increased tremendously over the past 25 to 30 years, and many traditional Labour supporters—this is not a party political point—such as head teachers and nurses, whose salary of £46,000 may not be reflected in the maximum under the order, stand to lose much more than that over time. It does not matter whether one is a coil winder earning £200 a week or the international chief executive of Megaton plc. What they have to consider is what they will lose if they tell the truth about what is going on. If they are going to be compensated only up to a maximum of £46,000, £47,000 or £48,000, whichever the exact figure is, it will not encourage a head of a big comprehensive, a senior or even junior nurse, a general practitioner, or a middle manager in a factory in the constituency of the hon. Member for Eccles (Mr. Stewart), still less one of his most ill-paid employees, so I ask him to bear it in mind that we are talking about just compensation for the total loss. We are not talking about comparing annual salaries, although, obviously, it is useful to bear them in mind. I shall sit down at this point, because I should like other hon. Members to address the House on this important matter.

Patrick Nicholls (Conservative, Teignbridge)

When I came to this, I thought that it was a slightly strange debate because, although my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) made the point that the Bill had been discussed exhaustively in Committee, it has not been exhaustively discussed on the Floor of the House. As I recollect, Second Reading went ahead on the nod.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

The point that I was trying to make was that the Bill had not been extensively discussed. It has had only one hour in Committee, and it went through on the nod on Second Reading. I am sad that we have not been able to debate the Bill at more length, because it is of great significance.

Patrick Nicholls (Conservative, Teignbridge)

I entirely agree with my hon. Friend. The fact that the debate seemed to take on a slightly Second Reading hue was in some ways inevitable, bearing it in mind that the broad principle of the Bill has not been discussed. That is slightly unusual. It must have happened before, but I cannot immediately recollect it. A detailed Committee discussion has taken place even though the broad merits of the Bill have not been debated on Second Reading. I always find that the Bills introduced by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) are usually well worth having a look at and supporting, but something troubled me about this Bill. I do not know whether I am alone in saying that I felt slightly queasy about it until I started to examine the detail and to think about it. I suppose old habits die. I said to myself, "Are we legislating for a sneak's charter?" Are we in the business of encouraging difficult troublemakers, the awkward squad, who exist in any organisation, by almost giving them financial incentives to behave in a way that many of us would find unattractive? To be fair, I do not think that that is correct, even if the Bill comes across that way to begin with. Reference has been made to some of the more famous cases where whistleblowers have been ruined. My hon. and learned Friend the Member for Harborough (Mr. Garnier) reminded us of the case in Switzerland in which an employee was literally ruined—by the sound of it, unto death—because he had had the courage to come out and talk about the corruption in his organisation. We have not yet heard anyone say—perhaps because we have not had many contributions from Labour Members; I look forward to hearing them—that it is wrong to compensate, and that, if something is right, one should come out and do it. That is marvellous stuff for us to say on the Floor of the House and sounds very noble, but, frankly, it does not matter whether someone is earning £200, £2,000 or £20,000 a week. During the course of a relatively long life, I have never met anyone who did not have any trouble living up to their income level. Whistleblowers have to contemplate taking a decision that could wreck not only their lives, but those of their wives and children. Therefore, if we are going to ask someone virtually to make the supreme gesture by coming out, taking their chance before a tribunal and perhaps making themselves unemployable—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. The hon. Gentleman has reminded the House that this is not a Second Reading debate. I should be grateful if he would try to confine his remarks to the new clause and the amendment.

Patrick Nicholls (Conservative, Teignbridge)

The point that I was going to make was simply this. If someone is going to do that, compensation must have some relevance. I look forward to hearing from the Minister when he replies. I do not see what the argument is for not removing the minimum and for not ensuring at least that the tribunal or whatever body is used has the discretion to make up its mind at what level it should compensate. The minimum payment may not be the most important aspect of the new clause, but it is important. I cannot see any reason for a minimum payment. Having been both an employer and employee, I can see every possible argument for not making it possible to win a big prize with a technical victory, and I am sure that that was not the intention. It is one of the matters that might have come out in a Second Reading debate. However, as things stand, we could be looking at that scenario. There will be marginal cases. A responsible, prudent person might go to his employer and say, "I am extremely unhappy about this situation. It may not be desperately important, but it is not right and something should be done about it." That would be a relatively low-key case. It is wrong to have as an alternative simply going down to the tribunal to win a quick prize of £16,545 minimum. In the past, I have criticised decisions taken by the judiciary and by lawyers. However, I have enough confidence in the tribunal system to want it to decide what the level of compensation should be. A minimum payment does not have a part in that. Let us examine the case—which the new clause reflects—for saying that there should not be a maximum payment of £45,000 or thereabouts. What will be the effect if the Bill passes into law but the new clause fails? The legislation will not be used. It actually reads better than the Road Traffic Reduction (National Targets) Bill, which we debated earlier. It is extraordinary that this Bill could turn out to be just as useless. I do not think that any of us wants that. There is a consensus that legislation is necessary, that we have learnt by events that it is necessary, and that we want to make it work. If a maximum payment is imposed, the Bill will not work. Implicit in all that—my hon. and learned Friend the Member for Harborough touched on this—pis that, when a tribunal comes to consider a major whistleblowing case, it must have the ability to consider all the consequences. Let us take the case of someone on a substantial financial package, with free health care and so on—a major amount of money being put at risk. If that person had detected, for example, fraud in a merchant bank, in an ideal world all the other merchant banks would say, "That's marvellous; that's a very honest chap—let's have him in our organisation." And pigs may fly. I suspect that, when someone goes in for a major whistleblowing exercise, whether aged 20, 40, 50 or 65, the reality is that he will probably never work again. We are expecting people to take the chance of litigation and put their reputations heavily under threat. Let us be fair—tribunals and courts can be quirky, so people have to face the fact that they might lose. Therefore, we must at least give the tribunal the opportunity to consider the possibility that the person may never work again. I do not make light of the fact that, when we hear some of the figures being bandied about, it is tempting to say, "It's all very well for those earning a lot, but if you're only on 200 quid a week it might look different." It is not a question of that—we want the Bill to succeed; we want people to use it. However, we do not want to give people an artificial incentive to use it. That is why having a minimum payment would be utterly wrong. We have to face the fact that the people who will use the legislation may lose everything. They will be putting their reputations on the line. They will have to face the fact that they may never be employed again. That is precisely the type of issue that might have arisen on Second Reading, and it has not been thought through properly. I have deliberately kept my remarks brief because I know that some of my hon. Friends want to speak, and I cannot imagine that some Labour Members would not wish to contribute. When the Minister replies, I hope he will say that, no matter how he feels about the drafting, if the Bill is to succeed, it has to be useable. Without the new clause, it might just as well stay on the lawyers' shelf because, for all the use that it will be put to, that is where it will belong.

Ian McCartney (Labour, Makerfield)

I congratulate the hon. Member for Aldridge-Brownhills (Mr. Shepherd) on the progress that he has made so far, supported by my hon. Friend the Member for Dudley, North (Mr. Cranston) and others. My Department is also grateful for the help provided by the charity Public Concern at Work. A good Bill has been improved in Committee, and I look forward to further progress being made today to ensure that, after many years of campaigning in and outside the House, with a great deal of support from the business community, from organisations that represent workers and from academia, we can at last put in place legislation to protect people who, until now, have suffered greatly for having the guts and integrity to put in the public domain things that would otherwise have remained secret. Because there has been no protection for such people, they have often suffered detriment to their health and their career. The Government strongly support the Bill, but I cannot accept the new clause. Like the hon. Member for Chesham and Amersham (Mrs. Gillan) I enjoyed a meal last night. We shared a taxi—I went to one very expensive hotel and she went to another. I enjoyed every morsel of my meal as I sat back, enjoying the celebration of the first year of the Labour Government—and what a year it has been for employment rights and the changing nature of British society.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

I thank the Minister for revealing our travelling arrangements to the rest of the world. I believe that my dinner was more enjoyable because I was learning about the pharmaceutical industry, not paying £500 towards Labour party funds.

Ian McCartney (Labour, Makerfield)

That probably means that the hon. Lady did not pay for her meal at all. Never mind, I am sure that she enjoyed not only the discussion but the speech made by my right hon. Friend the Secretary of State for Health, who, in the first year of the Labour Government, is proving to be the most successful Secretary of State for Health, since the creation of the national health service. I am pleased that, although the hon. Lady did not have the opportunity to celebrate new Labour, she was able to celebrate the new NHS under new Labour.

Nick St Aubyn (Conservative, Guildford)

rose—

Ian McCartney (Labour, Makerfield)

I have hardly started, but I shall give way.

Nick St Aubyn (Conservative, Guildford)

It is not strictly relevant, but perhaps the Minister could clarify his comment. Is he praising the Secretary of State for Health for the fact that waiting lists have increased by nearly 100,000 since Labour came to power?

Ian McCartney (Labour, Makerfield)

I am praising my right hon. Friend for getting rid of the Conservatives' plans to privatise the national health service and for putting millions of pounds into the service. We are reducing waiting lists—indeed, 18-month waiting lists have gone, ahead of schedule. By the next election, we shall have a health service of which the country will be proud. My right hon. Friend has had a role to play in tackling the problems facing whistleblowers. One of his first actions as Secretary of State for Health was to remove the previous Government's gagging clause on doctors and nurses, clauses that led to the sacking of Graham Pink and the destruction of his career. The previous Government wanted to silence his criticism of the NHS under the Tories, so we shall take no political lessons from them. I hope that our debate on the Bill will take the same approach as the Government. Along with the hon. Member for Aldridge-Brownhills, Members of all political persuasions want to see the Bill—

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

On the statute book.

Ian McCartney (Labour, Makerfield)

I am grateful to the hon. Lady. Obviously I got to bed later than she did. Compensation under the Bill will be determined by secondary legislation. However, it is our view that compensation should be based on remedies available under existing employment legislation. After all, the Bill is an employment measure. We believe that compensation limits generally should be increased in line with inflation. Indeed, we recently announced increases with effect from 1 April this year. In the longer term, we shall want to consider whether the limits and arrangements for reviewing compensation work in the best way to achieve fair minimum standards and a competitive business environment. I know that the hon. Member for Aldridge-Brownhills has had discussions with the banking sector in respect of third-party disclosure. It is certainly not the intention that, where a bank has acted diligently, it should be liable for a breach of confidence claim by a client when a bank employee has made a public interest disclosure. I understand that one of the reasons behind the new clause is that higher earners should be properly compensated if they blow the whistle. To limit compensation would prevent that. As hon. Members will be aware, the Government favour following the compensation model currently available for health and safety disclosure. Contrary to apparently popular belief, the sums available in such cases are by no means insignificant. Where someone is dismissed unfairly and does not get his job back despite a re-employment order having been made, the compensation is based on three times annual salary. So while someone on average earnings of £368 a week could receive more than £57,000, someone on £1,500 a week could receive £234,000 and those earning the equivalent of £ 1 million a year—such as the individuals that have been mentioned in the debate—could receive £3 million in compensation. In the case mentioned by the hon. and learned Member for Harborough (Mr. Garnier), who is no longer in his place, the compensation would be £1.5 million. Therefore, the proposal before the House is not insignificant, and potentially takes into account the earnings levels of all those—low, average and high earners—who could be covered by the Bill. There is no cause for concern or worry among hon. Members or those outside the House that the Government's intention is any different from that of the hon. Member for Aldridge-Brownhills and his supporters—to put in place a compensation regime that takes into account the losses that people may suffer if they lose their employment as a result of having acted within the context of the legislation. I hope that my assurances and the figures that I have provided in respect of the Government's intentions will make it possible for the hon. Member for Chesham and Amersham and her hon. Friends to withdraw the new clause so that we can proceed a little further towards ensuring that the Bill reaches the statute book. From that moment onwards, there will he legislation to ensure people in Britain who have the courage and commitment to enter the public domain to assist the public will not suffer the same disadvantages as they do now.

Nick St Aubyn (Conservative, Guildford)

I shall not detain the House long. I do not often agree with Labour Members, and I have some reservations about the full scope of the new clause. My hon. Friend the Member for Teignbridge (Mr. Nicholls) warned against creating a nark's charter. The unfortunate and no doubt unintended consequence of the new clause might be to create a super-nark's charter. Some months ago, we had a debate on industrial tribunals in which I made the point that it is important to set a limit on compensation in cases of dismissal because, without such a limit, the position of smaller businesses could be extremely vulnerable. In cases arising under the Bill where a small business has committed some misdemeanour, justice may not be served if that firm is exposed to the risk of a high level of damages being awarded to a former employee. The situation might not be black and white, or the former employee might have a private agenda in bringing the company's wrongdoing to the authorities' attention. If the court is obliged to consider the full financial consequences for the former employee in an extremely favourable light, the balance might swing in favour of the employee, at the expense both of the firm and of the other people whom that firm legitimately employees. The House should be cautious about agreeing to amendments that allow for unlimited compensation for former employees. We heard from my hon. and learned Friend the Member for Harborough (Mr. Garnier) of the plight of formerly well-paid ex-employees. One reason why those in the City are paid handsome compensation for the time and effort that they give to their employers is that they often do not expect to be in such lucrative employment for very long. One of the risks of their job is that, if they simply make a bad call on the market, demand for the services rapidly diminishes. The fact that such an employee may, as a result of exercising his or her conscience—something that many would do in any event—suffer some financial loss is part of the risks and rewards they accept when they go to work in such a high-risk environment. Many such employees will have planned to use the generous remuneration that they receive during their years working in that world to go and do something else quite different when they leave. I believe that, in one case, a trader at a large American bank who had been earning tens of millions of year decided to become a Catholic priest at the age of 35. We cannot predict what such employees will do, but we can state, based on that case, that they have a conscience and that they do not need money to be persuaded to exercise it.

Robert Walter (Conservative, North Dorset)

I shall be able to keep my remarks brief, as many of the points I wanted to cover have been raised by my hon. Friends. We are dealing with the integrity of our financial markets and financial institutions. The new clause would cover some of the highest-paid employees in financial institutions, and, if the Bill is to be effective in the City of London, we must accept it. BCCI and Barlow Clowes have already been mentioned; I would add Barings and, from the United States and Japan, Drexel Burnham Lambert and The Sumitomo Trust and Banking Company, whose activities extend to this country. A catastrophic disaster beset Barings, but it is possible that certain people within Barings knew what Nick Leeson was doing. If the Bill, with the new clause in it, had been in force at that time, they might have been prepared to blow the whistle earlier and, in so doing, save Barings from disaster.

Nick St Aubyn (Conservative, Guildford)

In the case of Barings, people did indeed know—but did not understand—what was going on in Singapore. The problem was one of comprehension. Many of those who knew what was going on would certainly have had an interest in bringing it to the attention of management if only they had understood it.

Robert Walter (Conservative, North Dorset)

I do not want to enter into a lengthy debate about what happened at Barings, but I suspect that some people preferred their bonuses to be looked after by Mr. Leeson than to blow the whistle. The financial markets, especially in the City of London, have the highest integrity and command the highest respect in the world. We continue to set high standards for them—through the Financial Services Authority, for example. If those institutions are not to be brought into disrepute—or brought down—by the occasional rogue, we must ensure that people can blow the whistle when they see wrongdoing, so I believe that we should incorporate the new clause and the amendment into the Bill.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

We have had a long debate on the new clause and the amendment, and I should say now that I do not intend to speak on Third Reading, as I am conscious that time is pressing and I want the Bill to be enacted. I hope that the Bill will act as a deterrent to employers who might be minded to rely on the inaction of their employees in the face of malpractice. I hope, too, that it will reassure employees that they will not be victimised if they speak out on good grounds. I believe that it will make a positive contribution to the means available to combat fraud—it should be welcomed. I am very disappointed with the Minister's response to the new clause. His wits have obviously been dulled by the events of last night, as he has not been persuaded by the powerful arguments of my hon. and learned Friend the Member for Harborough (Mr. Garnier), my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) and my hon. Friends the Members for Teignbridge (Mr. Nicholls), for Guildford (Mr. St. Aubyn) and for North Dorset (Mr. Walter). I am sad that, as time is pressing, my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) has not been able to contribute to the debate, but I hope that common sense will prevail when the Bill is considered further, especially in another place. It is not often that a Minister stands out against a measure that is recommended by the Institute of Directors, the Confederation of British Industry, the Trades Union Congress, all the other parties that were consulted and the majority of hon. Members—it is a brave Minister who stands like a little terrier guarding his hole. I know that I shall not persuade the Minister—he has dug his little heels in, which is a great shame—but in the greater interests of the Bill, I beg to ask leave to withdraw the motion.

NATIONAL SECURITY

David Maclean (Conservative, Penrith and The Border)

I beg to move amendment No. 2, in page 8, line 29, leave out from beginning to end of line 32 and insert— '"(4) Part IVA and sections 47B and 103A do not have effect in relation to categories of employment and certain employees employed in the security service, the Secret Intelligence Service or the Government Communications Headquarters, in respect of which there is in force a certificate issued by or on behalf of a Minister of the Crown certifying that employment of a description specified in the certificate, or the employment of a particular person so specified, is (or at a time specified in the certificate, was) required to be excepted from those provisions for the purpose of safeguarding national security.".'. I suspect that, in the time available, we shall not be able to do justice either to this important amendment or to amendment No. 3, which concerns the police service. The Government would be wise to accept the amendments when they are given more attention in another place—the Minister should not believe everything that his Department is told by other Whitehall Departments about the absolute need to give the security services everything for which they ask. The amendment would bring some security service employees in from the cold and in to the warmth and shelter of the Bill. It would cover the non-operational employees of the Security Service, the Secret Intelligence Service and Government communications headquarters. It would not cover operational members, but I want to ensure that office cleaners or messengers, for example, in the security services, who do not deal with sensitive matters of national security, can pop up and blow the whistle—without affecting national security—on appalling waste, maladministration or a member of the service who buys a desk as expensive as that of the Minister of Agriculture, Fisheries and Food. When blanket official secrets coverage is given to every person working in the security services, some non-operational failures are covered up—the price of the privilege is also that the security services cannot talk about their successes. There is no reason in the world why failures of office management and resource management in the secret services should not be aired. They have survived public revelations, decades ago, that they were thoroughly penetrated by Soviet agents, and I expect the services to survive some public and semi-public whistleblowing on day-to-day, routine blundering. It is not good enough for the secret services to argue, "It is national security; we do a terribly important job; we must have carte blanche coverage." That argument has not been accepted by the House in recent years, and I suggest to the Minister that the Department of Trade and Industry should not accept that argument now that it is being used by the Foreign Office and the Home Office to persuade the DTI that their secret service agencies and everyone in them—not just some categories of employee—should be exempt. 2.15 pm I could say much more, but I shall curtail my remarks. I simply point out to the Minister that the Official Secrets Act 1911 already ring-fences the vital topics that are properly within the scope of national security. In 1989, to produce the latest revision of the Official Secrets Act, the House did much work on and debated at length what is and what is not, in essence, a state secret. The purpose of that work was to determine who should, and who should not, be prosecuted under the Act. I believe that we can capitalise on that work and apply it to the Bill. The Official Secrets Act 1989 defines as secret any official information to do with security and intelligence, defence or international relations and information obtained in confidence from other states, or from international organisations. It also includes information likely to result in the commission of an offence or likely to impede the prevention or detection of offences and special investigations under statutory warrant such as interception of communications. Those categories are widely drawn—some would say so widely drawn that they almost restore the catch-all nature of previous versions of the Act. In any case, we can confidently say that everything important to national security is protected and that the Bill does not protect anyone who breaks the Official Secrets Act because it is part of the criminal law. I argue that any revelations that are not caught by the Official Secrets Act are fit and proper to come under legislation to shelter legitimate whistleblowers. I do not blame the Minister, because probably he was not anticipating this in Committee, but I am afraid that we did not hear an adequate explanation from the Government, in Committee, of why every person in the Security Service, the SIS and GCHQ, whether or not they were dealing with state secrets, should be protected. I understand perfectly why those services are protected. It is usual for them to say to the Home Office and the Foreign Office, "Get us exemption from the Bill: we are the Security Service; we should be exempt," and most Departments believe it. The Minister should tell the Cabinet Committee about today's debate and say that if there is to be any hope of the Bill passing through the other place, the Home Office and the Foreign Office must get back to the SIS, the Security Service and GCHQ and tell them, "Give us genuine reasons for exempting your whole service—or rely on the certification procedure suggested by the right hon. Member for Penrith and The Border (Mr. Maclean)."

Ian McCartney (Labour, Makerfield)

I hope that my response to the right hon. Member for Penrith and The Border (Mr. Maclean) will be positive and proactive. We must wait and see whether it is adequate to enable him to withdraw his amendment—or to withdraw it so that he may fight another day. The amendment is unnecessary and would have no practical effect. I am sure that hon. Members agree that national security cannot be compromised. The agencies to which clause 11 and amendment No. 2 relate deal with highly sensitive information, the disclosure of which would greatly damage national security. The Government have recognised the special position of those agencies in our proposals for a freedom of information Bill, from which they are to be excluded. Anyone who works in them could have access to sensitive information, even when that is not part of their main duties. The ethos of these agencies is secrecy, and blowing the whistle to an outsider is contrary to that ethos. I agree that it would be unacceptable if employees of the agencies enjoyed lesser protection than other employees where there was no good reason for it. That is why one of the first steps the Government took after coming to office was to restore the right of trade union membership to employees of GCHQ, which was withdrawn by the previous Government—of which the right hon. Member for Penrith and The Border was a prominent member for many years. The right hon. Gentleman was a Minister of State at the Home Office and other Departments with sensitive information. The previous Government prosecuted and tried to gaol civil servants who blew the whistle—remember Clive Ponting and Sarah Tisdall? The previous Government tried at every opportunity to gag members of the civil service and trade unionists to prevent their putting into the public domain on occasions legitimate information. I take with a large bag of salt the case put by the right hon. Gentleman this afternoon in respect of his conversion to openness in government and the protection of employment rights in the civil service, or for those who work for the Government at various levels outside the civil service. It is not the case that workers in the agencies will have no means of expressing legitimate concerns. They will be able to raise them under well-established internal procedures. If an intelligence agency employee believes that his or her concerns are not being adequately dealt with, they can raise the matter with the staff counsellor, who has a broad remit across the three security agencies—GCHQ, the Security Service and the Secret Intelligence Service—and can act quickly and effectively to resolve any concerns that may be raised. In addition, there are internal disciplinary, security and audit procedures that can be used to investigate possible illegalities and problems. Furthermore, all Crown servants are subject to the Crown Office guidance document "Giving Evidence or Information about Suspected Crimes". Taken together, these procedures provide the type of safeguard that will encourage people in the security services to raise matters of concern in a responsible manner, consistent with the aims of the Bill. I therefore ask the right hon. Gentleman if he will be kind enough to withdraw the amendment.

David Maclean (Conservative, Penrith and The Border)

I am disappointed that the Minister has not satisfied me on this. I recognise some of the arguments—I used them repeatedly over the years when I was arguing measures in the Home Office. His argument will be successful today as I shall not push the amendment to a vote and risk losing an important Bill, but the answer he has given today—that the security services must be exempt from everything—will not satisfy the other place. Nevertheless, I beg to ask leave to withdraw the amendment.

POLICE OFFICERS

David Maclean (Conservative, Penrith and The Border)

I beg to move amendment No. 3, in page 8, line 39, leave out from beginning to end of line 4 on page 9. I wish to speak for no more than two minutes on the amendment. We are led to believe that the Bill has not been extended to cover police officers because the Home Office is working on new procedures to obtain openness and accountability in police forces. That is all very well, but it is not a reason in itself to cold-shoulder the police from the benefits of the Bill. When the Home Office gets round to that review—I have not checked, but this must be the 20th or 30th Home Office review—it may come up with procedures, but that is no reason why the police cannot be included in the Bill. I want to impress on the House the value of police officers having the same rights and procedures available to them as civilians. If the Minister does not want to believe me, he may believe the chief constable of Sussex who, I believe, is head of the Association of Chief Police Officers committee in charge of public information. He said: I was surprised to see that it is proposed to exclude police officers. I find this puzzling, since police support staff who may well have access to the same information will not be excluded. The same argument applies to the secret services. The chief constable continued: If I take my own case as a police officer, I would be excluded from the provisions of the Bill, but my personal assistant, who has access to all the information that I do, will be protected by it. I believe that this is wrong. This association has taken a very firm stance in seeking to emphasise the need for integrity in police operations and honesty among all staff in the police service. Police forces have nothing to fear from malpractices being revealed. In fact, the contrary is the case—that chief officers of police need to know where corrupt and improper practice is going on so that they may tackle it as soon and as effectively as possible. In another place, the Minister should look favourably on including the police service, because it wants to be included in the scope of the Bill.

Ian McCartney (Labour, Makerfield)

The amendment is unnecessary. The Government gave an absolute commitment in Committee and outside the Committee to the hon. Member for Aldridge-Brownhills (Mr. Shepherd) and the sponsors of the Bill that the police regulations will provide protection equivalent to that in the Bill. That has been welcomed. There will be no disparity in the treatment of police officers, or in their capacity to whistleblow in the circumstances set out in the Bill. Police officers are office-holders and are subject to a separate regulatory regime. With the Under—Secretary of State for the Home Department, my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), we are working to bring the two regimes into an interlocking arrangement to ensure that police officers will be protected to the full if they put information into the public domain. I hope that the right hon. Gentleman will accept those assurances. As a former Minister of State in the Home Office, he will understand the steps that my hon. Friend is taking to ensure that the regulations are upgraded. Those regulations were introduced by the right hon. Gentleman. It seems that he did not quite get it right, but I give a commitment that this Government will get it right. In the relationship between the police force and the Home Office, police officers will have proper and adequate protection.

David Maclean (Conservative, Penrith and The Border)

I was confident that the regulations were right when they were introduced. They can always be added to, and no doubt improved. The Bill would give better protection than police regulations, but I was not convinced at all by the Minister's argument. I know that the other place will not be convinced either, but for reasons that I think the House will understand, I beg to ask leave to withdraw the amendment.

Richard Shepherd (Conservative, Aldridge-Brownhills)

I beg to move, That the Bill be now read the Third time. I wish to thank many people, honourable citizens in the House and without the House, and the Department of State.

Waste Minimisation Bill

POWER OF CERTAIN LOCAL AUTHORITIES TO TAKE STEPS TO MINIMISE GENERATION OF HOUSEHOLD, COMMERCIAL OR INDUSTRIAL WASTE

David Maclean (Conservative, Penrith and The Border)

I beg to move amendment No. 3, in page 1, line 18, at end insert `and shall also consult those whom the authority believes are the principal generators of controlled waste.'. The promoter of the Bill, the hon. Member for Basildon (Angela Smith), was kind enough to tell me that, although she was tempted to accept the amendment, she was unable to do so. Without embarrassing anybody, I assume that the Government had concluded that they could not accept my amendment. I regret that. The amendment merely invites the Government—although it would put an obligation on the Government—to consult those whom the local waste authority perceives to be the main causers of waste. I am at a loss to understand why anyone should object to such consultation. My amendment does not suggest that the waste authority must be bound by what the generators of the waste say, or that the legislation must be amended accordingly. It merely adds to the list of those consulted a requirement to consult those perceived to be the generators of the waste. I hope that the Minister will explain briefly why she could not accept that simple amendment.

Angela Eagle (Labour, Wallasey)

I shall try to reassure the right hon. Gentleman. We expect local authorities to consult, but we do not want a strong statutory provision for particular people to be consulted, when the parent legislation that the Bill would amend contains no such consultation measures. I hope that the right hon. Gentleman will accept my assurances that we envisage that there will be such consultation, but we do not want it included statutorily in the Bill. It would unbalance the legislation that the Bill would amend. This enabling Bill is welcome and has support throughout the House. We fully expect local authorities that take it up to consult, but we want that to come about through guidelines rather than legislation.

David Maclean (Conservative, Penrith and The Border)

Although I am not reassured by the hon. Lady and I may wish to return to the matter on another occasion, I shall not pursue the issue today. I beg to ask leave to withdraw the amendment.

David Maclean (Conservative, Penrith and The Border)

As I am not satisfied by the answer that I have received from the Minister, I wish to say a few words on Third Reading. While the Bill is reasonably innocuous, some of my concerns about it have not been addressed today. I shall not seek to talk about an amendment that, unfortunately, was not selected. It suggested that the word "anything" in line 11 of the Bill was rather wide and carte blanche.

WEIGHTS AND MEASURES (BEER AND CIDER) BILL

BREEDING AND SALE OF DOGS BILL

ENERGY CONSERVATION (HOUSING) BILL

ENERGY EFFICIENCY BILL

Colin Breed (Liberal Democrat, South East Cornwall)

On a point of order, Mr. Deputy Speaker. Is it in order for the right hon. Member for Bromley and Chislehurst (Mr. Forth) to object to the Bill and impose his will on the House, when the Bill has the support of those on his Front Bench and of the Government?

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

It is quite in order for the right hon. Gentleman to object in that way.

LOCAL AUTHORITY TENDERS BILL

CHAMBER OF COMMERCE (PROTECTION OF TITLE) BILL

PRIVATE HIRE VEHICLES (LONDON) BILL

Jenny Tonge (Liberal Democrat, Richmond Park)

On 3 July.

Jenny Tonge (Liberal Democrat, Richmond Park)

Yes, Mr. Deputy Speaker.

PREVENTION OF DELAY IN TRIALS BILL

LEAD IN PAINT (HEALTH AND SAFETY) BILL

WARM HOMES AND ENERGY CONSERVATION (FIFTEEN YEAR PROGRAMME) BILL

COLD WEATHER PAYMENTS (WIND CHILL FACTOR) BILL

RECYCLED CONTENT OF NEWSPRINT BILL

WATER INDUSTRY (AMENDMENT) BILL

HOME ZONES BILL

ENERGY EFFICIENCY (INFORMATION) BILL

LOCAL GOVERNMENT (EXPERIMENTAL ARRANGEMENTS) BILL [LORDS]

GENEVA CONVENTIONS (AMENDMENT) BILL [LORDS]

ELECTRO-CONVULSIVE THERAPY (RESTRICTIONS ON USE) BILL

PUBLIC RECORDS (AMENDMENT) BILL

LOCAL GOVERNMENT BOUNDARY CHANGES (REFERENDUM) BILL

FARMING OF ANIMALS FOR FUR (PROHIBITION) BILL

COMPANIES (MILLENNIUM COMPUTER COMPLIANCE) BILL

REFORM OF QUARANTINE REGULATIONS BILL

VOLUNTARY PERSONAL SECURITY CARDS BILL

MILLENNIUM CONFORMITY BILL

LICENSING (AMENDMENT) BILL

MENTAL HEALTH (AMENDMENT) (No. 2) BILL [LORDS]

REGISTERED ESTABLISHMENTS (SCOTLAND) BILL

ECONOMIC AND MONETARY UNION

BUSINESS OF THE HOUSE

ADJOURNMENT

TAX CREDITS (INITIAL EXPENDITURE) BILL

DATA PROTECTION

Prime Minister's Press Office

Norman Baker (Liberal Democrat, Lewes)

I am pleased to be able to raise this most important matter, which I know concerns many right hon. and hon. Members. I am sorry that the timing of the debate means that the Minister has not been able to return to his constituency to prepare for a good weekend. With no disrespect to him, however, it would have been more satisfactory to be able to hear from the Minister without Portfolio, who is mainly responsible for the presentation and co-ordination of Government policy. Perhaps the Government were keen to try to avoid a confrontation of that nature. I hope that that is not the case. The issues that I shall raise may be batted away today, and the next time, and the time after that, but the Government are on a sticky wicket, and eventually they will find themselves out if they do not take action. I say that as someone who is broadly sympathetic to what the Government are trying to do; who believes that they have made great strides in some areas, notably constitutional reform; and who does not want to see the return of a Tory Government. I hope, therefore, that what I say will be taken in the constructive spirit in which it is intended. My case is that, although the Government have done much to open the doors and let in fresh air, the method of operation of the press office runs counter to that. The very effectiveness of the Minister without Portfolio and of Mr. Alastair Campbell, the second Minister without Portfolio, and his colleagues is such that I believe that democratic accountability is being undermined. It is being undermined by the bypassing of Parliament by leaking stories to the media before Parliament is given the facts; by the use of the press office for party as opposed to Government purposes; by the incestuous relationship with Rupert Murdoch; and by the power apparently given by the Prime Minister to the unelected Mr. Campbell to order Cabinet Ministers about. I shall deal with each in turn. Madam Speaker recently raised a most important and serious point, which deserves the serious attention of the House. Many Members, including me, feel strongly about the matter. I refer to the increasing tendency of the Government to leak news in advance to friendly media contacts, most notably in the Murdoch press. How many times have we woken up to a story in the newspapers heralding a Government announcement that trailed on behind in a statement at 3.30 pm? How many Budget leaks were there, playing up the good news and getting people accustomed to the bad, so that there would be a clearly positive reception for the event on the day? As Madam Speaker has said, all Governments have done it. She added that it had been "rather blatant" in the preceding six months. In opposition, the Labour party was extremely good at news manipulation. I would take my hat off to it if I were wearing one—presumably it would be a top hat in this establishment. The Minister without Portfolio and Mr. Campbell are extremely effective. They played a major role in securing a Labour victory last year. To turn The Sun round from its Kinnock light bulb of 1992 to its support in 1997 was no mean feat. The trouble now comes from that very effectiveness. What are the constraints upon the Minister without Portfolio and Mr. Campbell? Is it healthy that they should now continue to maximise their returns, when so many extra levers, and so many powerful ones, are now there to pull? A driver progressing from a Mini to a Jaguar?—the Deputy Prime Minister, perhaps—does not put his or her foot flat on the floor. He or she will drive at well below maximum power. That is responsible and in the interests of others—and ultimately, also, in the interests of the driver. In a recent television interview, Madam Speaker rightly said: There are far too many of what I would term apparatchiks who have been accustomed, when a party was in opposition, to want to get the maximum publicity. Now in government, they have to be harnessed a little more. I entirely agree with Madam Speaker's sentiments. Let me be clear. I am not criticising Mr. Campbell, who is only doing his job, and is doing it rather well. 1 am criticising the Prime Minister for allowing him too much leeway. I strongly suggest that he should now put a limit on the power afforded to his communications team. I shall be grateful if the Minister will give the House his personal opinion when he responds to the debate. I hope that such leeway is allowed on the Government Front Bench. I should be interested to know whether the Minister has drafted his speech or whether it has been provided for him to some degree from behind the scenes. The Prime Minister recently made the revealing admission at Question Time that his chief press officer, a civil servant, did an effective job of attacking the Conservative party."—[Official Report, 1 April 1998; Vol. 309, c. 1252.] That was an amazing flash of honesty; clearly the Prime Minister was not on message at the time. Will the Minister say under what circumstances Mr. Campbell or any special adviser is given the authority to act party politically? I am grateful to the Minister for referring me this morning to a document from the Library, the "Model Contract for Special Advisers". Paragraph viii at page 12 states that special advisers must not take part in political controversy, must observe discretion, and must express comment with moderation. I humbly suggest that those descriptions do not fit Mr. Campbell and his press team. Will the Minister clarify whether the Prime Minister regrets making such an overt comment about Mr. Campbell's political activities, or does he stick by it? Party and Government interests appear to have become clouded and dangerously entangled. The Government must realise that the interests of the Labour party are not the same as those of the Government, let alone the country. Will the Minister confirm that the Government accept that? The attendance of the chief press officer at Cabinet meetings is also a cause for considerable concern. Is he now the unofficial 23rd Cabinet Minister—a surrogate who is a Minister in all but name? I cannot help wondering what purpose is being served. Does the Minister agree with the Chairman of the Public Administration Committee, who said: Alastair Campbell's attendance at Cabinet meetings is perhaps another step down the path towards a presidential system. Does he agree with the Cabinet Minister who on Sunday 5 April told The Sunday Times: It is all right if you are a fully paid-up Blairite. But if you are not, and you speak your mind in cabinet, there is a fear that No 10 will brief against you."? That can only cause suspicion about the way in which the Government are dealing with Ministers, let alone Labour Back Benchers. Hon. Members will recall that a stiff reprimand was recently delivered to the Secretary of State for Social Security in a letter from the press secretary which was published by the Sunday Express. According to the Sunday Express, Alastair Campbell wrote: I see from today's papers that no matter how much we urge silence, congenital briefing goes on about who was responsible for what… I do not want to see interpretation of either in tomorrow's press. It is time facts took over from personalities. Did the Prime Minister authorise the letter? Does he endorse unelected officials treating Ministers like naughty children who need their pocket money withdrawn? Is it not humiliating for a Minister to be treated in such a way? Ministers may be reluctant to say anything publicly in case an unflattering article about them appears in the Murdoch press the next day. Will the Minister clarify the chief press secretary's role in internal disputes between Ministers? The Prime Minister should publish as soon as possible a document about the press office that sets out the powers and responsibilities of those in it, how far they can go and the role of the strategic communications unit. There should be personalised job descriptions for such apparatchiks: we need to know their powers in relation to Cabinet Ministers, and what line management exists. The Minister will say that things were the same when Bernard Ingham was the voice of Margaret Thatcher. Perhaps they were in some ways, but I thought that the Government wanted no truck with the sleazy behaviour that characterised the previous Government. I know that things are different, but they are not different in this area. The Government should be new Labour, not old Tory. There is a deeper problem. The importance afforded to media image in recent years is at such a level that it distracts people from real issues. Instead of deciding what the Government want to do and marketing that accordingly, it seems that much time is taken up with how something will play in the media, with policy consequences following on behind. We must guard against that. Recently there has been publicity over the relationship between the Prime Minister and those in his circle with Rupert Murdoch. It seems that no offence must be given to Mr. Murdoch. His media ownership in this country, which, at 40 per cent., is excessive, must not be touched. The Lords amendment that would have limited his power is to be overturned. Does the Minister understand how uncomfortable his Labour colleagues are with that line? Perhaps he, too, is uncomfortable with it. Between 1985 and 1995, Mr. Murdoch's company, News International, paid only £11.74 million in tax on profits of almost £1 billion, at a rate of 1.2p in the pound. Such generosity to an American citizen who was born in Australia can hardly help the Treasury. The motivation is clear: it is to keep Mr. Murdoch on board and his newspapers on side. All Governments want maximum media support, but what if the price is to allow distortion of the media market and to play down, even tone down, the Government's European policy and credentials, so that he who is alleged to be virulently anti-European is not upset? Should a Government acting in the interests of the country pay that price? If that motivation seems far-fetched, let us consider the article in The Observer of 19 April, in which the Minister without Portfolio, the spin doctor in the House, spoke about the extraordinary importance that Downing street attaches to maintaining the support of Mr. Murdoch's newspapers. He suggested that the Prime Minister feels that he has to "convert Murdoch" before a referendum can be called on the European single currency. Incidentally, the Foreign Secretary revealed that the Cabinet was never consulted on that. Perhaps the Prime Minister's recent willingness to help Mr. Murdoch with his Italian business interests was an attempt to make him more sympathetic to Europe. Helping Mr. Murdoch by personally discussing his business on the telephone with the Italian Prime Minister was a generous gesture on his part. We are lucky to have such a considerate and caring Prime Minister. What a shame that the episode has been surrounded by what the Labour Chair of the Public Administration Committee described as the rather unedifying spectacle of half truths and non-denial denials". At the beginning, the Prime Minister's official spokesman said that there was "no such phone call." The suggestion that our Prime Minister had helped Mr. Murdoch in that way was described as "a complete joke" by the Prime Minister's press secretary. The Financial Times revealed that an Italian official had confirmed the phone call and had told the paper that the impression that the Prime Minister was acting on behalf of Mr. Murdoch would appear to make sense. It was left to Mr. Murdoch's own paper, The Times, to confirm that the Prime Minister had indeed spoken to his Italian counterpart on Mr. Murdoch's behalf. No such phone call? A complete joke? If it was all so above board and proper, why was there a cover-up? We must conclude that senior Government figures have been somewhat economical with the truth from beginning to end. It seems that the Prime Minister is very much in bed with Mr. Murdoch, and I do not envy the Prime Minister in that respect. This is all a pity, because the Government made such a good start with their freedom of information proposals. The episode is clearly at odds with the openness and progress elsewhere, although I note with interest a parliamentary answer that I received from the excellent and much leaked-against Chancellor of the Duchy of Lancaster to the effect that the No.10 press office and the strategic communications unit will be covered by that forthcoming legislation. Perhaps that sort of commitment explains why the Chancellor of the Duchy is so often leaked against. His assurance is in marked contrast to the Prime Minister's recent answers on the same subject. Inquiries about how much the strategic communications unit will cost the taxpayer have been answered in non-committal terms—"The budget has not been finalised," or, "The budget will be set in the usual way". I keenly await freedom of information legislation. There are other connections between the Prime Minister and Mr. Murdoch. We recently learned that another member of the Prime Minister's press office, deputy press secretary Tim Allen, had jumped camp to take up a senior job with BSkyB. It seems that News International has hired the lobbying firm Lawson, Lucas, Mendelsohn, which is well placed to whisper in Government ears. Neal Lawson once worked for the Chancellor of the Exchequer; Ben Lucas for the Home Secretary; and John Mendelsohn for the Prime Minister. It seems that among their roles is work on media ownership legislation. My right hon. Friend the Member for Yeovil (Mr. Ashdown) recently joined in the widespread expressions of concern over the matter when he drew attention to it at Prime Minister's Question Time. He spoke about the "seemingly unstoppable growth" in the media power and political influence of Mr. Rupert Murdoch, saying that the Prime Minister must do something about media ownership, and that the only way of doing so was to amend the Competition Bill. What is to be done to rectify these matters? The press function must be more accountable and less powerful, and that would be in the interests of democracy and of the Labour Government. As I said earlier, the Prime Minister should publish a paper setting out the exact remit of his press team. We need an annual report detailing the activities of the press office and an opportunity for Parliament to debate that. We need a commitment from the Prime Minister not to drive his press team with his foot to the floor, and a commitment that his press team will work in a Government rather than a party role. We need a commitment that important statements will be made first to the House and not leaked to the media in advance. Ministers must be allowed to do their jobs without being subjected to vilification by unelected officials and without having to worry about who is leaking against them. I hope that the Government will take these issues seriously and will act accordingly. Will the Minister add his weight to such proposals? If he does, it will go some way towards addressing the many issues that I have raised. I note that Mr. Campbell is due to appear before the Public Administration Committee in coming months to explain his actions in more detail because of the seriousness of the matter. I congratulate the Committee on its determination to hold the Government to account, and 1 look forward to reading its deliberations. I hope that both the Minister and Government take on board the criticisms that I have raised—constructively, I hope—and continue down the road to fully accountable and transparent government. if the Government are brave, they will find many people to support them.

Peter Kilfoyle (Labour, Liverpool, Walton)

I certainly put my weight behind all sorts of things. Whether I will put it behind the many contentions of the hon. Member for Lewes (Mr. Baker) is a moot point. I came here to answer him on the subject of Prime Minister's press office, but, as usual in his scatter-gun approach, he seems to have ranged across a series of targets and, true to form, to have missed most of them. The Government's overall political strategy, direction and style is set by the Prime Minister. As he has made clear, the Government intend to address serious problems with the consideration that they deserve. We shall co-ordinate the development of our policies within government, across departmental boundaries and in discussion with our private sector partners and the wider public and voluntary sectors. We shall communicate those policies clearly and coherently. The Prime Minister has appointed his chief press secretary as a special adviser to advise him on the effective presentation of policy and to lead the No. 10 press office to ensure that the essential messages and key themes that underpin the Government's strategy are sustained. The strategic communications unit, which was established at the beginning of this year, adds a strategic dimension to the communication of Government policy. The unit reports to the Prime Minister's chief press secretary. The No. 10 press office gives a clear sense of purpose and direction from the centre, liaising closely with departmental press offices, agreeing how departmental communications can best play into broader Government objectives, and ensuring that Government announcements are communicated in a structured and coherent manner—for example, through clearing major interview bids and the timing and form of announcements. Authority for the co-ordinating and leadership role of the chief press secretary and the No. 10 press office flows from paragraph 88 of the ministerial code, which states: In order to ensure the effective presentation of Government policy, all major interviews and media appearances, both print and broadcast, should be agreed with the No. 10 Press Office before any commitments are entered into. The policy content of all major speeches, press releases and new policy initiatives should be cleared in good time with the No. 10 Private Office, the timing and form of announcements should be cleared with the No. to Press Office". That is not a new requirement; it has been the practice—as the hon. Gentleman said I would remark—of successive Administrations. The only difference is that this Government are enforcing the rule. On the specific issue of the memo that was issued by the chief press secretary to the Secretary of State for Social Security and Minister for Women and to the Minister for Welfare Reform, that was issued on the authority of the Prime Minister. The chief press secretary was acting entirely within the rules. Incidentally, the No. 10 press office is staffed mainly by career civil servants, but this Government take the view that the post of chief press secretary—a post in the most politically exposed area of government—should be performed by someone who is not expected to have to perform a similar role for another Government. There are many precedents for political appointments to the chief press secretary job at No. 10; we have to think only of people such as Joe Haines, who fulfilled a similar role. As a Government, we wanted to be above board and open about our intentions for that role, which is why, immediately on our election to government, we amended the Civil Service Order in Council to allow a maximum of three special adviser posts in No. 10 to have executive powers, allowing the people occupying those posts to have civil servants working directly for them. We have heard from those on the Opposition Benches that those appointments are the first steps towards the politicisation of the civil service. That is most definitely not the case.

Norman Baker (Liberal Democrat, Lewes)

Just for the record, that comment was made by the Chairman of the Select Committee on Public Administration, who is a Labour Member, and not by me.

Peter Kilfoyle (Labour, Liverpool, Walton)

It may have been made by a variety of people, but, as I have said, it has been made from those on the Opposition Benches. The terms of the special adviser contract, of which the hon. Member for Lewes said that he was aware as a result of a debate on the radio this morning, allows the chief press secretary and other special advisers to discharge their role with a degree of party political commitment that would not be permissible for a permanent, politically impartial civil servant. Special advisers are free from the obligation placed on all other civil servants to be politically impartial. Unlike other civil servants, special advisers are not required to act in a way that would enable them to gain the confidence of future Ministers of another Administration. We believe that, by distinguishing clearly and openly the roles of special advisers, it avoids any creeping politicisation. The hon. Gentleman made certain charges, including the one that uncontrolled power was wielded by the chief press secretary. He said that we should exercise some constraint over the operation of the press office and that we needed some clarification in writing of the powers and role of the press office. That is rubbish, even by the hon. Gentleman's standards. The chief press secretary, like all other civil servants, is accountable to a Minister, who in turn is accountable to Parliament. The terms and conditions of employment are based on provisions set out in the model contract. What can and cannot be done by special advisers, including the chief press secretary, in such circumstances are circumscribed by the model contract for special advisers, which is published; by the ministerial code, which is published; by guidance on the work of the government information service, which is published; and by the Mountfield report, which sets out the relationship between special advisers and members of the government information and communications service, and which is also published. The hon. Gentleman also made the charge of statements being leaked to the press in advance of being made in Parliament, and suggested that that was somehow attributable to the chief press secretary. The ministerial code clearly states: Ministers will want to bear in mind that the most important announcements should be made in the first instance to Parliament"— and so they should. The hon. Gentleman referred to the letter from the chief press secretary to the Secretary of State for Social Security and Minister for Women and to the Minister for Welfare Reform. If he read the letter, he would recognise that the chief press secretary was exhorting people to stem the alleged leads from the Department. The hon. Gentleman again spoke of an incestuous relationship with Mr. Rupert Murdoch, and linked it directly with the chief press secretary. Mr. Murdoch is not treated any differently from anybody else. The hon. Gentleman referred to the telephone conversation between the Prime Minister and Mr. Prodi. Again, it has been made abundantly clear by the Prime Ministers and others that the reality is that the telephone call was initiated by Mr. Prodi, not the Prime Minister. My right hon. Friend has made it clear that he will go in to bat for any British company—indeed, he does so regularly. He did so for BSkyB. The hon. Gentleman inferred that the chief press secretary speaks for the Labour party and so confuses his office. I want to make it clear here and now that the chief press secretary is not a spokesman for the Labour party; he is a spokesman for the Government and responsible for the presentation of Government policy. He also questioned whether the chief press secretary attends Cabinet meetings. There is nothing strange about civil servants attending Cabinet meetings as observers. If the hon. Gentleman wants to attribute some sinister motive to that, that is down to him. I assure him that he is far removed from the truth. I wish that the hon. Gentleman would begin to understand the very different roles of the Minister without Portfolio and the chief press secretary. I do not know whether it is by design or through confusion, but he tends to mix up the two roles and the two personalities. The hon. Gentleman referred to The Observer report of an anonymous member of the Cabinet who apparently made allegations about the way matters were conducted at No. 10. He should not expect anyone here to respond to anonymous allegations of any sort—whether they come from those on the Opposition Benches or those on the Government Benches, or are some fabrication by a third party. The hon. Gentleman has also misunderstood line management in the context of the role of special advisers. It is abundantly clear exactly how the line management operates in terms of the chief press secretary's role in the press office at No. 10 and his relationship with the strategic communications unit. That unit was set up on the recommendation of the Mountfield report. As the hon. Gentleman knows, Robin Mountfield is a permanent secretary. The unit was set up with the full co-operation of the Government Information Service. If the hon. Gentleman thinks that the civil service and, within that, the Government Information Service, would willingly lie down either before the politicisation of the civil service or before particular individuals or politicians trying to ride roughshod over its interests and professionalism, he not only misunderstands the civil service, and in particular the Government Information Service, but demeans its professionalism. Civil servants are as interested as any politician in presenting for the Government of the day an effective case for Government policy. Clearly, politicians would be partial and political, but civil servants are not. They are professional people who accept that, with a change of Government, changing personalities and, indeed, changing times, the way in which the Government's message is communicated, across government, in the House and certainly to the wider public, is a matter to be reviewed. They have been extremely supportive.

Norman Baker (Liberal Democrat, Lewes)

For the record, I make it clear that I am in no way impugning the civil service; I was talking about the special advisers.

Peter Kilfoyle (Labour, Liverpool, Walton)

I accept that the hon. Gentleman made no direct imputation that the civil service was somehow weak or vacillating, but the thrust of his argument that there are certain special advisers and, indeed, elected politicians who ride roughshod over the service does not do sufficient credit to its professionalism and the fact that its members would respond dutifully according to their own code of conduct. I suggest that the hon. Gentleman seriously misunderstands that they appreciate that they have a very different role from that of the special advisers, which is especially so in the case of the job that the chief press secretary has. I found some of the hon. Gentleman's charges a bit rich—he said that, somehow, the Government's message was being distorted and that we were not being wholly truthful about the way in which the press machines operates, whether in No. 10 or elsewhere—given that he represents a party renowned for the use of, for example, the focus leaflet. That leaflet is famous for its mixture of half-truths, innuendo and downright lies—it is a Heinz 57 variety of politics. A different version of that leaflet is appearing for different councils in different parts of the country, so we shall take no lectures from the hon. Gentleman or his party. I submit that the No. 10 press office is performing a function that is key to success of the Government's communications strategy. It is working well—excellently, in fact. Nothing that we have heard today suggests otherwise. Indeed, the fact that some Opposition Members are reduced to attacking us on this matter rather than on any serious policy issue confirms just how well the No. 10 press office is performing that task.