Post Office: Horizon Compensation - Statement

– in the House of Lords at 2:21 pm on 30th June 2022.

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Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 2:21 pm, 30th June 2022

My Lords, with the leave of the House, I will now repeat a Statement made by my honourable friend Minister Scully in another place:

“With permission, I will make a Statement on the latest steps that the Government are taking to ensure that swift and fair compensation is made available to postmasters impacted by the Horizon IT scandal.

This House is well aware of the terrible impact felt by the many postmasters affected by issues with the Post Office’s Horizon IT system, which began over 20 years ago. These distressing consequences have been widely documented both in the courts, in the 2019 group litigation order judgments, and in the more recent Court of Appeal judgments, as well as in the media. I would like to pay tribute to colleagues on both sides of the House who have supported postmasters in their efforts to expose the truth and see justice done.

Today, I would like to take the opportunity to update the House on the latest steps that the Government are taking to ensure that fair compensation is paid to people impacted by the Horizon IT scandal. As you all know, the members of the GLO performed a great public service by bringing the case in 2019 which exposed the scandal. That is why I was pleased that the Chancellor announced in March this year that further funding is being made available to ensure that they receive similar levels of compensation to that which is available to their non-GLO peers.

Today, I can update the House that the Government intend to make an interim payment of compensation to eligible members of the GLO who are not already covered by other compensation support, totalling £19.5 million. Together with the share of the December 2019 settlement that we understand was distributed to the GLO postmasters, this brings the total of compensation to about £30 million. Postmasters will be contacted in the coming weeks to submit an application, after which we aim to distribute the funds within a few weeks of receiving their application. I hope this will go some way in helping many postmasters who have, and still are, facing hardships.

In parallel, we are continuing to work at pace on delivering the final compensation scheme for the GLO. I can confirm that we will be appointing Freeths to access the data and methodology it developed in relation to the distribution of the 2019 settlement. Freeths represented the GLO claimants and has vital knowledge and expertise based on its involvement in the case. This will allow us to work at pace on the design of a scheme with the JFSA and Freeths to give those in the GLO similar compensation to their non-GLO peers.

As promised in March, we will informally consult with members of the GLO about the proposed scheme’s operations. I am also pleased to announce that members of the GLO group will be able to claim reasonable legal fees as part of participating in the compensation scheme. I hope this will allay any concerns that they might have about meeting the costs of seeking legal advice and support when applying to the scheme.

Turning now to progress on compensation for overturned criminal convictions, I am pleased to report to the House that interim payments are progressing well. As of 27 June, there have been 75 overturned convictions, with the most recent convictions being overturned in recent weeks. The Post Office has received 73 applications for interim payments, including several new applications in recent weeks. Sixty-seven offers have been accepted by claimants, with 66 payments totalling nearly £7 million paid out in compensation so far. This marks significant progress, with nine additional interim payments made to postmasters since I updated the BEIS Select Committee on 11 January 2022.

I am pleased that these interim payments have helped to deliver an early down payment on the compensation due to affected postmasters in advance of full and final compensation packages being agreed. For those postmasters with an overturned conviction who have already submitted quantified claims, I can share that we are working with the Post Office to agree part-payments of agreed elements of claims, such as loss of earnings, wherever possible and will continue to do so with additional claims which are submitted.

Taking this step should enable us to avoid undue delays by awarding partial compensation while outstanding matters are resolved. I acknowledge that one area where it has been challenging to agree compensation is non-pecuniary damages, some of which reflect the wider impact on postmasters’ lives that these wrongful convictions have had. These include compensation for the loss of their liberty or impacts on their mental health. A number of the postmasters have agreed to refer this issue to the process of early neutral evaluation, to be conducted by former Supreme Court judge Lord Dyson. It is hoped that this evaluation will facilitate the resolution of these issues. Government stand ready to support the delivery of the early neutral evaluation process and are keen to ensure that the outcomes of this process enable swift compensation. I urge all postmasters with a Horizon-related conviction to continue to come forward to seek to have these overturned. They are being contacted individually by the CCRC and other relevant bodies to encourage them to do so.

In addition to the progress on compensation for those with overturned criminal convictions, good progress has been made on delivering compensation for those in the historical shortfall scheme. As of 23 June, 65% of eligible claimants have now received an offer, meaning £29 million has now been offered and that 444 further postmasters have been offered compensation since my last update to the House. I would like to thank the independent panels for their diligent work in progressing these cases. As I have said previously, I have set the Post Office the ambition to make 100% of HSS offers by the end of the calendar year, and the Government are working closely with the Post Office to achieve this.

As I have said before, it is important—in addition to providing compensation—that we learn lessons so that something similar can never happen again. That is why the Government have set up the Post Office Horizon IT inquiry and put it on a statutory footing to ensure that it has all the powers it needs to investigate what happened, establish the facts and make recommendations for the future. We are co-operating fully with the inquiry to ensure that the facts of what happened are established and lessons learned.”

Photo of Lord McNicol of West Kilbride Lord McNicol of West Kilbride Deputy Chairman of Committees 2:28 pm, 30th June 2022

My Lords, I thank the Minister for repeating the Statement and in anticipation of answering my questions. He has often been on the right side of this debate, and I thank him for that. The biggest and most frequent criticisms that your Lordships’ House has had are threefold—some have been answered—the time taken to deliver compensation, who gets it, and the levels and amounts. Many of those issues have now been resolved over previous months and with this Statement. March’s announcement that 555 sub-postmasters would receive the compensation that they were entitled to was welcome, as is today’s further announcement confirming a £19.5 million interim compensation package.

However, it is frustrating that it has taken so long to reach this point, when what was needed to be done has been clear and obvious for many years. I am sure that we all agree that the victims of this scandal have been made to endure this stressful uncertainty for far too long.

It is clear that the positive resolution we have now reached is thanks to the tireless work of campaigners both inside and outside this place. That includes, as ever from this place, the noble Lord, Lord Arbuthnot, and from the other place, Kevan Jones. Both have done a tremendous job in fighting this injustice. To be fair, the Minister here and Minister Scully have acted where their predecessors have failed to.

We all know the history of this case, so I will not rehearse the arguments. It is well-documented, both here in Parliament and across the media. We all hope that this sad episode will drive lasting change. The shame of this miscarriage will, rightly, be felt across government for many years to come.

I have a few questions for the Minister; he has touched on some already, and I am looking for more details on others. Can he provide a timescale for when all compensation payments will be made? Will the Minister confirm that the compensation will not affect the Post Office’s core funding, its day-to-day operations or its viability in any way, given the vital role that it performs in many, if not all, our communities? The Minister knows that, across this House, we have called for those involved to be held accountable. Can he update the House—he has a little already—on the ongoing investigations, specifically into Fujitsu and others involved in the technology that led to this failure? Has Fujitsu been sanctioned? Have any of its other contracts been re-evaluated, checked or looked at?

It is not just those external to government. The Minister has previously committed to hold those responsible to account—by that, I mean the Post Office board. Can the Government confirm that the inquiry will extend to the directors of the Post Office, including those placed there by the department—those who wrongly sanctioned legal action? While affected postmasters have lost thousands in legal costs, this is far from all they have lost. The Minister touched on the non-pecuniary damages, but I wonder if he could say a little more. The financials have been restored but, as he and the Statement said, many people were affected in many ways other than financial.

Last year’s historical shortfall scheme for non-GLO postmasters included interim payments, which are urgently needed both for those living in poverty and to start bringing closure to this ordeal. I think the Minister said he expects the payments to start within two weeks, but can he confirm that this will be the case, and will they cover all those affected?

To take a step back, in his High Court judgment in the Horizon IT systems case, Justice Fraser stated that the denial by the Post Office

“amounts to the 21st century equivalent of maintaining that the earth is flat.”

His judgment into this scheme went on to state that the Post Office showed

“the most dreadful complacency, and total lack of interest in investigating these serious issues”.

Will the Post Office now introduce an independent component when conducting prosecutions so that if there are any future prosecutions in other areas, there will be an independent component before taking them to the next stage?

This whole ordeal around the wrongful prosecution of sub-postmasters has caused a huge waste of public funds and time, as well as a huge deal of mental anguish to those wrongfully prosecuted. Can the Government ensure that such a huge level of carelessness and complacency is never repeated so that we can avoid a further waste of public funds, as well as the stress caused by this ordeal?

All sides of this House are rightly united and outraged at what the sub-postmasters and sub-postmistresses experienced and the injustices they suffered for almost 25 years. Lives have been unjustly destroyed, and jobs lost. Some have been imprisoned and others lost their business, and many had the prospect of having a conviction hanging over them. Saddest of all, some did not live to see justice finally restored.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

My Lords, I thank the Minister for his commitment on this issue and for his Statement today. As he knows, when I was first involved in this, as a Member of the Welsh Assembly in the early 2000s, even then it was obvious that there was something very seriously wrong. In a crowded room in a pub, with so many people, and their families, who had been regarded as pillars of the community—the sort of people who went to look for pensioners who had not come to collect their pension to check that they were all right—I was being asked by the Post Office to believe that those people had taken its money. That definitely jarred with me at the time.

The big questions are these. How has this been allowed to take so long? How was it covered up for so long? What will happen to those people within the Post Office and Fujitsu who knew that they were covering up problems? I realise that there will have been people who were doing so without realising that they were involved in a cover-up, but there were many who knew. We must also consider the impact on the Post Office as an institution, which had previously been one of the most trusted British institutions.

The Minister has already addressed some of my questions, but I have a few questions on today’s Statement. First, I welcome the interim payments that are announced, but the amount of money sounds relatively modest given the time it has taken to get to this place. They are interim payments, but can the Minister tell us how many people the £19.5 million will be going to, so that we can get some measure of how much they will receive in the interim? The Statement refers to postmasters being contacted in the coming weeks and so on. Can the Minister give us a target date by which he hopes the interim payments will be made? We have had so much delay here. Finally, because I realise that time is short, 75 convictions have been overturned. Are there more in the process at the moment? Does the Minister expect there to be other overturned convictions?

What will the Government do about payments for those who have already died? As this process has taken more than two decades, many of the people involved in this process are now very elderly, and some of those who have died did so as a result of suicide because of the situation in which they were placed. What plans do the Government have to compensate the families of those who died and the families that stumped up large amounts of money to avoid their relatives going bankrupt as a result of misplaced allegations?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I thank the noble Lord, Lord McNicol, and the noble Baroness, Lady Randerson, for their statements and questions. The noble Lord already knows that I totally share his frustration. His statement about stressful uncertainty for the postmasters sums up the issue very well, and I totally agree with him. I am also very happy to join him in paying tribute to my noble friend Lord Arbuthnot and Kevan Jones; I know that a number of other parliamentarians, on all sides of the House, have also been involved in this. They are truly a tribute to parliamentarians, who get criticised for a lot of things, but when there are scandals such as this, it shows the role that Members of both Houses can play in bringing the public’s attention, and indeed the Government’s attention, to them.

On the questions the noble Lord and the noble Baroness asked about the overall timescale, the ambition is that all offers will have been made by the end of the year. The GLO interim payments will be made within weeks. The noble Lord asked for an assurance that the core funding of the Post Office is unaffected, and I can give him that assurance. He also raised the issue of the directors of the Post Office: they can be held to account by the inquiry, as indeed can Ministers and officials involved in this. We are determined that there will be no hiding place for those who contributed to this scandal. He also asked about further private prosecutions. Right at the start of this scandal, when I spoke to the chief executive of the Post Office, he assured me that it had no plans to bring any more private prosecutions. I would be very surprised if it went back on that, given the trouble that this has got it into. The noble Lord also referred to Post Office complacency. That may have been the case in the past, but I think the new leadership under Nick Read is really producing a change in the culture and some real improvements in the service the Post Office is offering.

The noble Baroness, Lady Randerson, referred to cover-ups; there probably were, but that is of course a matter for the inquiry to establish. She asked how many people will receive compensation. The £19.5 million in interim payments goes to all members of the GLO scheme, of whom there are about 500. I can also confirm for the noble Baroness that in cases where some of those members have sadly died, we are engaging with their next of kin and their estates on seeking appropriate levels of compensation.

Photo of Lord Arbuthnot of Edrom Lord Arbuthnot of Edrom Conservative 2:42 pm, 30th June 2022

My Lords, again, my noble friend comes before this House with good news, and I am truly grateful for that. We look forward to the day when the compensation scheme can be completed, and we hope it happens early so that sub-postmasters can have truly substantial payments.

As the public inquiry considers the responsibility of Fujitsu, Post Office directors and others, can my noble friend the Minister assure your Lordships that the inevitable delay arising from the public inquiry will not cause to be legally time-barred any redress that might need to be taken in relation to those who are at fault?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I can give my noble friend a very quick answer to that: yes, I can give him that assurance. Once again, I pay tribute to the work he has done in exposing this scandal.

Photo of Viscount Stansgate Viscount Stansgate Labour

My Lords, I thank the Minister for repeating the Statement and apologise for briefly having left the Chamber while he was making it. I pay tribute to the noble Lord, Lord Arbuthnot, and others for the work they have done in bringing this scandal to public attention. My question arises in the light of the previous one, and it is about the public inquiry. Can the Minister tell the House how long it might take, for the obvious reason that the sooner it is completed, whatever its outcome, the sooner we can be reassured that a scandal of this kind can never happen again?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I cannot give the noble Lord a timescale. Obviously, we want it to conclude as quickly as possible, but it needs to be thorough and to go into all the facts. Of course, it is in the hands of the chairman of the inquiry to determine exactly how long it should take.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, we are all very grateful to my noble friend the Minister, and to my noble friend Lord Arbuthnot. He and Minister Scully have pursued this with vigour and deserve our thanks. These people, who have gone through hell, are being compensated but no compensation can be truly adequate. An idea has occurred to me which I commend to the Minister: could these people, who have been exonerated and compensated, be issued with a medal for meritorious service to the Post Office?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

That is an interesting idea that I will take back and discuss with officials.

Photo of Lord Macpherson of Earl's Court Lord Macpherson of Earl's Court Crossbench

My Lords, I very much welcome the Minister’s Statement, particularly the announcement of the public inquiry. But however speedy these are intended to be, they have an uncanny knack of going on for several years, so can the Minister confirm that both the Post Office and its sponsoring department have conducted internal inquiries, albeit on an interim basis, the better to learn the lessons now?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Officials and, I am sure, Ministers are keen to learn the lessons, but the inquiry is the best place to fully go into all these matters, which took place over decades, as I said. It will get to the bottom of this and the appropriate individuals will be held responsible.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, I congratulate my noble friend on the brilliant job he has done on this, but can he help me on the question of Fujitsu? We do not need a public inquiry to tell us that the software was deficient; we have reports of whistleblowers saying that they knew it was. So why is the taxpayer having to pick up the bill for this, and why is Fujitsu not being forced to pay up? If it is not prepared to do so, why on earth are we allowing it to do any work for any Government or anyone else with whom we have influence?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

As my noble friend knows, I have considerable sympathy with his points, which, on the face of it, seem obvious. But we need to wait for the inquiry to positively establish the facts and lay them out in stark detail before considering what further steps to take.

Photo of Lord Polak Lord Polak Conservative

My Lords, I had the honour of entering this House at the same time as my noble friend Lord Arbuthnot. We have been friends for many years, and I too congratulate him on his tenacity and effectiveness; it has been outstanding, and many people around the country are grateful to him. I was intrigued by what the noble Baroness, Lady Randerson, said about the Welsh pub. I have consistently tried to personalise this by mentioning my friend Rita Threlfall on every occasion, because this is about individuals and their families; it is not about the figure of 555, which almost means nothing. I entirely agree that no amount of money can restore their dignity. I also entirely agree that my noble friend and Minister Scully have done their best, but it is not enough. I was going to finish by saying what has just been said: I do not understand why Fujitsu is not paying for this. Can the Minister explain why it is not financially responsible for this and why the taxpayer is paying, as was said?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Again, I have considerable sympathy for the points that my noble friend makes, but, so far, Fujitsu has not been found guilty of any fraud or other crime related to this matter. It is co-operating in full with the inquiry, as we would expect of it. I realise that this is uncomfortable for the House, but we should wait for the results of the inquiry to set out in stark detail exactly where the failings were.

Photo of Baroness Altmann Baroness Altmann Conservative

My Lords, I associate myself with the tributes paid to my noble friend Lord Arbuthnot and Paul Scully in the other place, and with the congratulations offered to the Government on bringing forward payments at last, at least in many cases. The Statement talks about reimbursing “reasonable” costs of legal action. I understand that going forward, because we have to guard against egregious costs being imposed, but for those who have already had to take legal action, can my noble friend assure the House that there will be full recompense for all the legal expenses that they have had to go to, in addition to which there will be compensation for the suffering that they have clearly been through?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

If my noble friend is talking about the GLO legal action, of course the costs of that were funded and the lawyers were not paid by the litigants; a lot of the compensation went to pay the legal fees, which is part of the problem with the GLO scheme.

Photo of Viscount Stansgate Viscount Stansgate Labour

I hope the House will allow me the flexibility to take advantage of the fact that we have a few moments left in this exchange. Will the terms of reference of the inquiry—forgive me for not knowing the detail of them—encompass the role of the judiciary, which after all succeeded in sentencing an enormous number of postmasters to prison? Will it be a feature of the inquiry when it is held to investigate how that was possible?

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The inquiry can cover all relevant matters. Of course, the role of the judiciary is being examined in the cases proceeding through the courts at the moment and in the convictions being overturned. I am sure that all those members of the judiciary still in their posts will pay close attention to those cases. To be fair, they can adjudge a case only on the evidence that is presented to them, but I am sure that they will want to take careful account of any technical evidence that was given in the various cases and perhaps treat it with a bit more scepticism in future.

Photo of Lord Cormack Lord Cormack Conservative

I am grateful to my noble friend for his reception of my suggestion. It occurs to me that if we could have a public ceremony in, let us say, Westminster Hall, where these people were publicly recognised and given a medal, it really would do something for their morale.

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

As I said, it is an interesting proposition, and we will certainly have a look at it.