Moved by Lord Offord of Garvel That the Bill be now read a second
time. The Parliamentary Under-Secretary of State, Department for
Business and Trade and Scotland Office (Lord Offord of Garvel)
(Con): My Lords, we had positive debates last week in relation to
the Post Office Horizon scandal, in what proved to be a watershed
moment in this appalling scandal’s story. I was pleased to be able
to update the House in reply to the Oral Question from the noble
Baroness,...Request free trial
Moved by
That the Bill be now read a second time.
The Parliamentary Under-Secretary of State, Department for
Business and Trade and Scotland Office () (Con): My Lords, we
had positive debates last week in relation to the Post Office
Horizon scandal, in what proved to be a watershed moment in this
appalling scandal’s story. I was pleased to be able to update the
House in reply to the Oral Question from the noble Baroness, Lady
Chakrabarti, and through my Urgent Question repeat.
As noble Lords are aware, last Wednesday, the Prime Minister
announced that the Government will bring forward legislation to
overturn the convictions of all those convicted on the basis of
Post Office evidence during the Horizon scandal. We discussed
this in your Lordships’ House last week and I have since written
to noble Lords setting this out in more detail. The Government
will continue to keep noble Lords informed as progress is made on
the new legislation over the coming weeks.
The Post Office (Horizon System) Compensation Bill is a small
Bill of just two clauses, which will provide a continuing legal
basis for the payments of compensation to victims of this
appalling scandal, specifically in this case the trail-blazing
members of the group litigation order, or GLO, who took on the
Post Office all the way to the High Court and exposed the Horizon
scandal.
Compensation payments made under the GLO scheme are currently
paid under the sole authority of successive Appropriation Acts.
Parliament requires all such payments to be made within a
two-year period. The first payment of interim compensation was
made on 8 August 2022, meaning that with the law as it stands, no
GLO payments can be made beyond 7 August 2024. This Bill removes
that deadline.
Let me be clear on this point. This does not mean we are taking
our foot off the gas. We still want to pay compensation as
quickly as possible. My department is now committed to making an
initial offer of compensation in 90% of cases within 40 working
days of receiving a fully completed GLO claim, and many claims
can be dealt with much more quickly.
However, as Sir Wyn Williams, chair of the independent statutory
inquiry, noted, the resolution of compensation claims requires
action by postmasters, their advisers and third parties, as well
as the Government. In his interim report provided to Parliament
in July, Sir Wyn expressed concern that the August 2024 deadline
could leave some postmasters timed out of compensation or rushed
into making decisions. The Government have agreed that that must
not happen, and the Bill ensures that it will not happen. All GLO
postmasters will get full and fair compensation; they will get it
promptly, but without being unduly rushed.
Good progress has been made in paying compensation to GLO members
and those in the other two compensation schemes. As of 11 January
2024, approximately £153 million had been paid to over 2,700
claimants across the three schemes. Noble Lords and the public
can rightly continue to hold the Government to account on this
important issue of compensation. Figures relating to the number
of claims received and processed, and the compensation issued,
are updated each month on the dedicated GOV.UK page.
The Government are hopeful that the announcement of an upfront
offer of £75,000 that we made last week will save those affected
having to go through a full assessment. This will not only allow
the department to focus its resources on the larger cases but
will allow the claimants’ lawyers to do the same. The pace at
which we can get claims into the scheme is the key constraint on
how quickly we can settle them. The upfront offer is smaller for
the GLO scheme than for the overturned convictions because the
claims tend to be smaller. We estimate that perhaps a third of
GLO claimants may want to consider this route.
I turn now to the other pressing matter of truth and
accountability. The cases of Alan Bates, Jo Hamilton, Lee
Castleton, Lisa Castleton, Saman Kaur, Noel Thomas, Michael
Rudkin and Pam Stubbs—to name just a few of the more than 3,000
people who have suffered in some way as a result of his appalling
scandal—have been powerfully played out in the gripping ITV drama
“Mr Bates vs The Post Office”. Naturally, it has drawn much
greater public attention to the issue than before. I am pleased
to see a much wider awareness of the scandal among the public.
The Government previously set up the Post Office Horizon IT
inquiry in 2020 and have provided compensation funding since
2021, but there is no question that the TV drama has brought the
issue to the forefront of the nation’s attention.
For those portrayed in the drama and many others, it meant paying
the Post Office money that they did not owe. For others, it meant
the loss of their livelihood, home, mental or physical health, or
family relationships. Too many have died before getting justice.
Saddest of all, some of those deaths were suicides prompted by
the scandal. Each Horizon victim is a personal tragedy. It is
imperative that each and every person gets the justice and
compensation that they have waited far too long for.
This Government are committed to delivering justice for all
Horizon victims. Part of that justice will come from making sure
that everyone knows the truth about what happened. That is why
the Government set up the statutory inquiry into the scandal,
chaired by Sir Wyn Williams. The work of the inquiry to date is
commendable; it is doing great work in exposing that truth.
From that truth will follow corporate and individual
accountability; I know that there is a strong appetite for that
in this House and beyond. I sympathise with noble Lords’ desire
to see accountability right now, but finding people guilty
without looking at all the evidence is how we got into this mess.
It is how postmasters were prosecuted without proper disclosure.
We must not commit the same mistake when it comes to holding
people accountable for the scandal, however tempting that might
be.
In conclusion, until everyone has fair compensation, the truth is
known and the guilty are held accountable, noble Lords in this
House and others will rightly continue to raise issues about this
scandal. I assure your Lordships’ House that this Government are
on the side of the postmasters, and we will continue to give
these issues our full attention and do our best to resolve them.
The Bill is a further example of that, and I commend it to the
House.
8.04pm
(Lab)
I am grateful to the Minister; it is a pleasure to follow him. I
am particularly grateful for the way that he dealt with matters
last week, and the way that he has continued to deal with them
today. I will attempt to emulate not just his tone but his
succinctness; just because there is no advisory time does not
mean that one has to go one way as opposed to the other way.
The noble Lord, Lord Arbuthnot, is a modest man, but I am afraid
that I ask him and other noble Lords to forgive me for not
sparing his blushes—not just because of his work over so many
years, when these people must have felt so forgotten and ignored,
but because of his very succinct but powerful contribution last
week. He reminded noble Lords of the very important words of the
legendary jurist and Conservative politician William Blackstone,
who famously said:
“It is better that ten guilty persons escape than that one
innocent suffer”.
We all know that that is from his Commentaries on the Laws of
England. In those commentaries, he also said that criminal law
should always be
“conformable to the dictates of truth and justice, the feelings
of humanity, and the indelible rights of mankind”.
For anyone who believes that human rights were some confection
from 1945, or even later in the 1960s, I remind them that William
Blackstone said that not in the 1960s but the 1760s. So human
rights are not some foreign body floating in our soup; they ought
to be in our DNA.
In his remarks last week, the Minister very helpfully articulated
the reasonable demands of the wronged postmasters. I made a note
of them. The three aspects were compensation, exoneration and
accountability, and the Minister repeated that formulation, to
some extent, today. This Arbuthnot Bill is narrow to aid
compensation, because money must be authorised. As the Minister
said, it is a short and to-the-point Bill, but I say to the
Government, to all noble Lords and to anyone listening to this
debate or reading it subsequently, that exoneration—in my view,
for what it is worth—may be achieved by a Bill that is a little
longer, but not much. However, while I appreciate and agree with
the Minister’s remarks that on accountability it may take a
little longer to avoid the situation that he described, there
must be accountability in due course. There is an element of due
process, but there must be accountability none the less. That
includes corporate and, potentially, individual accountability in
the form of investigations—criminal investigations,
potentially—as well as restitution.
We heard just this week that the management and leadership of
Fujitsu are very humble, but this will not be a voluntary matter;
there will have to be some legislation, I believe, to ensure
corporate restitution in due course. Humility is all very well
but, however big this Bill, one needs to remember the even bigger
bill that the Government have met in enriching Fujitsu in
relation not only to the Post Office contract but to other
government contracts.
Finally, I come back to exoneration, which can be done
swiftly—almost as swiftly as compensation. It is incredibly
important that we do not repeat the mistakes of the Windrush
scheme. There needs to be a blanket element and an automatic
element to this exoneration.
I will not bore noble Lords in the short time I want to speak for
with my own formulation, but it is almost as simple as declaring
in primary legislation that a class of people’s convictions are
hereby quashed from the moment the Bill passes, and then any
application could be for a certificate of that quashing, but not
for the quashing itself. That is how automatic I believe this
ought to be after this length of time.
I know that some eminent lawyers, many of whom are friends of
mine and many of whom I usually agree with, are nervous about
this proposition. There has been much discussion, especially in
the media, to suggest that somehow a proposition of that kind
would interfere with judicial independence. I feel it incumbent
on me to explain why I disagree with those who have made that
argument, especially because some people have compared the
blanket, automatic nature of the legislation I propose to the
Rwanda Bill. I mention that not because I want to bang on about
Rwanda as a broken record and a one-trick pony, but because it is
important to make the distinction if I am to have credibility in
what I propose. It is obviously not the Government’s position,
but it is my position, which is important for these purposes,
that the Rwanda Bill is to change facts as have been found by the
highest court in the land. That is essentially what the Rwanda
proposition is, whereas here, I am proposing legislation that
will reflect the facts that have now been found, including by our
higher courts, and implement those facts on a swift and blanket
basis, to the benefit of individuals and not their detriment.
That distinction is incredibly important.
As I think noble Lords and perhaps the Minister agree, this was
at the very least a very gross error, involving maladministration
and blind trust in technology—we must take note of that in
relation to artificial intelligence, which my noble friend has been raising
concerns about in your Lordships’ House, and must learn, remember
and reflect on even after this particular circus has left
town—and, quite possibly, systematic corruption and cover-up
motivated by greed. Some noble Lords who have stopped me in the
Corridor in the days since our last discussion have asked me
whether I am troubled by even the remote possibility that a few
postmasters who perhaps could have been correctly convicted
should get off as a result of what I am proposing. I am very
clear with them, and the answer lies in what the noble Lord, Lord
Arbuthnot, said, and what William Blackstone said before him.
8.13pm
of Childs Hill (LD)
My Lords, I too thank the Minister and the noble Baroness, Lady
Chakrabarti, for their comments. I agree entirely with all that
they said. We on these Benches support the Bill in its limited
objectives. It simply provides financial power to the Secretary
of State for expenditure on the compensation scheme and, as the
Minister said, removes the deadline of 7 August to give people
more time to claim, as recommended by the statutory inquiry. It
also allows expenditure on other compensation schemes. The design
of those schemes is not, unfortunately, within the remit of the
Bill. We urgently need the Minister to confirm, as he suggested
when he spoke earlier, that these matters will happen speedily.
There is no reason to delay.
There needs to be a new rule and, following on from what the
noble Baroness, Lady Chakrabarti, said, postmasters and
postmistresses should be presumed innocent and all convictions,
past or present, should be overturned. She used the word
“exoneration” and mentioned other elements. If someone committed
an offence and gets through because these convictions are
quashed, that is a price that we hope will not be needed, but
should be paid.
There have been lots of accusations in the Tory-controlled press
seeking to make political capital out of personal disasters to
postmasters and postmistresses. Let it be clear that no Minister
of any party could have been expected to disbelieve the
appalling—the word used by the Minister—lies and misinformation
they received from senior civil servants and senior Post Office
executives. There have been multiple Ministers—a long list—over
this period. None of them deserves to be accused of anything
other than believing the lies told to them by people they should
have had the right to rely on.
The noble Baroness talked about Fujitsu. I understand that
Fujitsu had always said that the only people who had access to
these accounts were the postmasters and postmistresses, and
therefore, if there was any error, it was the postmasters and
postmistresses; it could not be Fujitsu. But we now find that at
its headquarters, Fujitsu had the ability to access those
accounts and to make alterations—maybe for the best of reasons
and to iron out bugs—and was doing so. That is what happens with
computer systems, but its interference may well have created a
lot of these problems.
I practise as an FCA and had a long career as a partner in firms
of chartered accountants. It would not be unusual for a client to
say to me, “Monroe, we have a wonderful new system we are going
to introduce for our accounting” or financials. I would look at
the system and say, “Well, it looks all right”. But I would
always say—and I imagine that all qualified accountants would
say—that you should run the old system in tandem, in parallel
with the new system for a period of six months or so, to see if
there are any glitches in the new system. You have not burned all
your bridges: they are still there.
The latest technology may be all singing and dancing, but you
should still be looking at, in this case, keeping the paper-based
system. Only when no sizeable discrepancies emerge could the old
system be jettisoned, and that did not happen. This is elementary
accountancy. This is not high-blown computer stuff. Can the
Minister say whether senior civil servants and Post Office
employees had any grounding in such mundane knowledge and
experience? I believe that they may have been highly qualified,
but I am of the opinion that their accountancy knowledge was
pretty limited. Can the Minister confirm that in future—because
we have got to look at the future now—the Government will not put
all its eggs in one computer basket?
Also, since we are talking not just about the compensation Bill
but the background to it, can he tell the House what auditing
took place? Surely there would have been internal audits at the
Post Office and at departmental level. There are audits all over
the place, but do we hear anything about them? What was the role,
or lack of role, of the National Audit Office? Surely we have a
right to look to them as well. It is no defence from these
auditors that certain bodies were outside their jurisdiction. I
have had the honour to be the chairman of the audit committee of
a Tory borough, the London Borough of Barnet, for eight years.
The audit committee dealt with all the activities of the various
departments. What we have is like a traffic-light signal—was it
red, was it orange, was it green? If it was red or orange, I
required the manager of each department to come to the committee
and explain why there was this error, why there was this poor
report, and to say what they are going to do in the future. That
worked pretty well, but then there was a glitch—a glitch that is
very relevant to the system which we are talking about now. The
officers said, “Oh, that wasn’t our officers; we outsourced it”.
In this case, in the London Borough of Barnet, it was to Capita,
the computer company. Therefore, “We can’t tell you about that
because Capita did it”. I said that the directors of Capita had
to come to the London Borough of Barnet audit committee and
explain why it was wrong and how they were going to justify it.
They objected, saying, “Well, we’re not part of your
organisation; we are outside”, as we are talking about in this
instance. However, I insisted that they came, justified, put
right and acknowledged the problems that were there.
Can we have less, please, of the party-political posturing and
more of a look at how IT, without a knowledge of accountancy, can
be a dangerous animal? The Minister and the noble Baroness, Lady
Chakrabarti, used the words, “an appalling scandal”. It is an
appalling scandal. We cannot stop it being an appalling scandal,
but we must make sure that the postmasters and postmistresses are
absolved, whether they might be guilty or not guilty. I am
assuming that they are not guilty but, assuming even that
somebody gets through who might have been guilty, I still feel
that they all should be absolved because they were part of the
system which was deficient at the maximum because it did not do
what any basic qualified accountant would have done.
From these Benches we support this Bill, but we hope that the
Minister will take aboard our comments about the future.
8.21pm
(Con)
My Lords, I am grateful to my noble friend the Minister for his
opening remarks, not least for their tone, which this House has
always got right. I am also grateful to the noble Baroness, Lady
Chakrabarti—except for her suggestion that this should be called
the Arbuthnot Act. She made the very important point about
blanket exoneration. We must not force these traumatised people
back before the courts that did them such injury. I am grateful
also to the noble Lord, , for his important remarks
about auditors, who have escaped much scrutiny. Maybe that will
change in the coming weeks and months.
I declare my interest as a member of the Horizon Compensation
Advisory Board. I put my name down for this debate intending to
use this speech to call on the Government to announce the
wholesale exoneration of all those convicted as a result of Post
Office evidence since the introduction of Horizon. I thank the
Prime Minister for making that unnecessary, which will shorten
this speech dramatically. He has been well supported and
motivated in this by the excellent Post Office Minister, , and his formidable team.
I shall not in this Second Reading debate succumb to the
temptation to travel widely beyond the contents of this Bill,
which is very short. I have spent the last week trespassing far
too much on people’s patience, on TV and radio and in the
newspapers. I apologise for that and feel—
Noble Lords
No!
(Con)
I feel a little talked out. That too, your Lordships will be
pleased to hear, will shorten this speech dramatically.
This Bill is with us at the request of the chairman of the public
inquiry to ensure that the Government do not run out of time to
pay compensation or, as Alan Bates has often said, to give
redress. He says that it is redress rather than compensation
because this is money that the Government owe the
sub-postmasters; some of it is money which has always, in law,
belonged to the sub-postmasters. Let us acknowledge that point
and move on.
The name of the Bill is the Post Office (Horizon System)
Compensation Bill, which suggests that it is about a faulty
computer system. But this dreadful story only started as a story
about a faulty computer system. It became something else, as we
have seen from the evidence at the public inquiry: it became a
matter of human behaviour; of oppressive contracts; of Post
Office investigators prioritising asset recovery over justice; of
useless helplines with Post Office and Fujitsu staff telling
sub-postmasters that they were the only people suffering these
problems and then telling them to do things which made matters
worse; of senior managers at the Post Office and possibly,
although I do not know, Fujitsu, lying about what their technical
staff could do by way of remote access; of Ministers of all
parties failing to exercise the responsibilities of ownership;
and of the courts ignoring the requirements of justice in order
to accommodate the most trusted brand in the country. The
background of this saga was a computer system, but compensation,
as we have heard from the public inquiry, is payable in respect
of so much more. So, frankly, I do not much like the name of this
Bill, but having questioned its name, I shall move on to its
substance.
Money is to be payable to compensate people affected by the
Horizon system, or to compensate persons in respect of other
matters identified in High Court judgments. The expectation at
the beginning of the group litigation was that it would be split
into five different cases. Because the Post Office—I assume with
the backing of the Government, although we shall find that out
soon—decided to spend the sub-postmasters into submission with
taxpayer-funded litigation, the sub-postmasters were forced, as
we saw in the drama, to settle after only two of those cases had
been decided. The consequence was that many issues were left
undecided. Does the Bill cover these issues?
What about issues arising out of the public inquiry, rather than
out of High Court judgments? We have been listening over the past
few days to some pretty dreadful stories of behaviour by the Post
Office investigators, who have been confronted with their
bullying behaviour. We have heard the evidence from Duncan
Atkinson KC about the shortcomings of the Post Office prosecutors
and their prosecutions. I hope that these issues will be covered
by the Bill as well as what has come out of the High Court
judgments.
I feel a bit churlish, frankly, attacking both the name and the
contents of a Bill that I welcome, but I do welcome the idea that
the Government should not run out of time to pay the redress that
we as taxpayers—with the help of Fujitsu, now that it has
recognised its moral obligation; I hope that soon it will
recognise its legal obligation to contribute to the cost—owe to
the sub-postmasters. The very fact that it should be necessary to
have the Bill in the first place suggests that the three
compensation schemes have been slow and bureaucratic —and they
have been. We must get a move on and do our utmost to make sure
that the Bill is not, in the event, needed, because full
compensation, or redress, is paid before August.
8.28pm
(Lab)
My Lords, it is a privilege and an honour to follow the noble
Lord, Lord Arbuthnot, particularly on the Second Reading of a
Bill which, whether he likes it or not, is already referred to as
the Arbuthnot Bill, and if I have anything to do with it, will
continue to be.
On 7 September last year, the noble and gallant Lord, , began his
contribution to an Armed Forces debate with the following
sentence:
“I suppose that one of the many benefits of being a Member of
this House is that you get a free copy of the New Statesman every
week”.—[Official Report, 7/9/23; col. 570.]
I never thought that I would use this phrase, but I opened my New
Statesman this week to discover that the editorial, headed “A
very British scandal”, is about the very subject that has led to
the necessity of this legislation. With your Lordships’
permission, I will read the peroration—for a very good
purpose:
“The malaise that the Post Office scandal has exposed in British
life is that of unaccountable power. Its executives obfuscated
and denied errors despite being confronted by innumerable
injustices. Institutions such as the Post Office and the Royal
Mail—diminished by its botched privatisation—should exemplify the
common good. All too often they become self-serving
bureaucracies, with customers and workers bamboozled should they
complain. Yet this affair is also a reminder of the best of
public life: crusading journalists and MPs (such as staff at
Computer Weekly and the Conservative peer ); gifted screenwriters and
actors; and, most of all, tenacious campaigners such as Mr Bates
who will not cease until justice is done”.
My noble friend Lord Arbuthnot is an example of the best of
public life.
The Post Office Horizon scandal exemplified many of the trends
that have led to anger and political apathy among the public.
Political indifference and delay, exacerbated by a defensive
posture among the legal profession and others, have resulted in
ruinous, life-altering outcomes for thousands of innocent people.
To add insult to considerable injury, Fujitsu—the company
responsible for this debacle—has won 150 government contracts
since the details of the Post Office scandal began to emerge.
Since December 2019, when the Appeal Court ruled that the Horizon
system contained bugs and errors that resulted in miscarriages of
justice, the Government have awarded contracts worth more than £4
billion either solely to Fujitsu or as part of joint public
sector contracts. For those affected, there could be no greater
evidence of a thumb on the scales of justice than this asymmetry
of consequences. Postmasters have faced financial hardship and
ongoing legal limbo, while those responsible have received
implicit government endorsement in the shape of new lucrative
contracts.
This is bad enough, but recent evidence has suggested that the
Post Office has also treated the limited compensation it
grudgingly offered to sub-postmasters as tax deductible. Dan
Neidle, the head of Tax Policy Associates, has outlined why these
claims are illegitimate, stating that you cannot
“claim a tax deduction for things which are unlawful, illegal or
outside the trade”,
such as wrongly prosecuting 4,000 postmasters. We must also ask
why, given that the £934 million they claim as deductible relates
to historic periods, it is only this year that the Post Office
has made a designedly oblique reference to this practice in the
small print of page 101 of its accounts. I am pleased that HMRC
last week confirmed that this matter—one of five where Tax Policy
Associates believes that the Post Office has materially underpaid
its tax—is under active investigation.
Mr Neidle is also campaigning openly for better compensation in
the present scheme, for the element of damage that reflects
destruction of reputation and stress. As I heard him explain only
the other day, in the context of employment tribunal awards that
component of the calculus of the total sum of compensation
attracts awards of between £1,000 and £11,000 for the lowest
levels of damage to reputation and emotional damage. For the more
severe, awards are between £11,000 and £34,000. For the worst
examples—I venture to suggest that the vast majority, if not all,
the wronged postmasters must have suffered reputational damage
and stress of the worst kind—employment tribunals are awarding
between £34,000 and £56,000, whereas most postmasters are getting
no more than £5,000 from the current compensation scheme.
Alongside today’s Bill, I am also pleased that a brief Act of
Parliament providing for exoneration of all those affected is now
being considered, which is something I first suggested in your
Lordships’ House in June 2020. Given that three and a half years
have elapsed between that date and this, such a glacial pace in
providing redress may be another useful exemplification of a
problem that saps confidence in the political process among the
public.
At the heart of this miscarriage of justice is the fundamental
unreliability of the Horizon software, upon which the original
prosecutions depended. It is equally clear that, without the
group litigation brought by the 555 sub-postmasters, the flaws
and glitches in the software would not have been uncovered. Here,
I return to a question which I raised in your Lordships’ House
last Wednesday: where does, and where should, the burden of proof
lie in respect of computer-derived evidence? The Police and
Criminal Evidence Act 1984 placed that burden upon those who rely
on such evidence. But, in response to lobbying from the Post
Office, among others, we saw that change, because of a Law
Commission recommendation. There is now a presumption in favour
of the reliability of such evidence unless a defendant can prove
why it may be compromised. How can we possibly expect an
individual unversed in the complexities of computer programming
or algorithmic, sequential decision-making to provide such proof?
This is a further asymmetry that needs urgent action. I would be
grateful if the Minister could give an undertaking, maybe not
today, that this will form part of the follow-up to the Williams
review.
Finally, I turn to the broader issue that my noble friend Lady
Chakrabarti alluded to, and which is an obsession of mine:
artificial intelligence and its integration into our public
services. If the Horizon system—far more rudimentary than any
AI-infused technology—can precipitate such confusion, misery and
frustration, there is a risk that a far more complex system could
produce more apparently coherent, though equally unjust,
outcomes. In such a case, the pursuit of justice in the case of
error would be more tortuous than that endured by the
sub-postmasters we are discussing today. Noble Lords may recall a
scandal that hit the Netherlands in 2019, whereby a self-learning
algorithm falsely labelled thousands of people in receipt of
child benefit as perpetrators of fraud. What was the result of
that? Poverty, a wave of suicides among those affected, and
children taken into foster care. Perhaps most worryingly, the
algorithm disproportionately—and, to reiterate, falsely—targeted
those from ethnic minorities.
I realise this is well outside the Minister’s purview, but, as we
learn lessons from the Horizon scandal, what plans do the
Government have to review the integration of AI into the work of
the DWP in this country? Perhaps more importantly—I have asked
this question and it has not yet been answered—what is the
statutory basis for the use of AI in public services at all?
Surely the use of AI in this way risks violating the Blackstone
principle, of which the noble Lord, Lord Arbuthnot, reminded your
Lordships last week. I will not repeat it, because my noble
friend has already dealt with this. In this respect, I return to
the Dutch case to which I referred. The victims had no way of
knowing why their cases had been identified as potentially
fraudulent, and officials claimed they had no way of accessing
the algorithmic inputs and could therefore not describe why they
were under suspicion. This echoes the Kafkaesque nightmare of the
sub-postmasters—accused by faulty technology, denied access to
the very information that could exonerate them and forced, in the
meantime, to endure penury and stigmatisation.
I will support this Bill, as my party will, as it passes your
Lordships’ House with, I trust, the utmost rapidity. I keenly
anticipate further measures, not merely to provide full
restitution to those affected by the Horizon scandal but to
strengthen scrutiny and ministerial oversight over arm’s-length
agencies. Nothing adequately can compensate the sub-postmasters
and sub-postmistresses who have lost years of their lives to this
injustice, but I believe that ensuring such a tragedy cannot
happen again may at least console them with the thought that
their suffering has not been entirely in vain.
8.39pm
(GP)
My Lords, this Bill is welcome because we needed to see some
action from the Government. It is very good, but of course there
are a lot of questions that remain to be answered. I am curious
about how many of these will get an answer over the next few
years.
Where did the sub-postmasters’ money go? Did it pay for the
bonuses of those who prosecuted them? Did Fujitsu ever get fined
or even suffer any consequences for the failures of the Horizon
system? Is it going to suffer in the future? At the moment, the
taxpayer is covering the cost of the government redress scheme,
but when do we get some of that money back from the people who
made a profit or claimed a bonus as a result of destroying the
lives of thousands of sub-postmasters?
What are the lessons we should learn, not just from this
horrendous injustice but from the common themes of numerous
modern scandals? We have had Hillsborough, which turned victims
into pariahs as the establishment closed ranks. There was the
“spy cops” scandal, with its denial of systematic abuse and
cover-up, and the institutional racism of the Windrush scandal,
which has its echoes in the racial profiling of sub-postmasters.
All these are examples of how the establishment closes ranks and
blocks progress. There is no recognition of how our democracy is
failing to deliver for ordinary people.
There are so many awful things about the scandal of how the Post
Office treated its sub-postmasters: the lies and threats used to
isolate people and make them feel alone; the vicious use of
courts to silence complaints about a flawed computer system; a
system of corporate bonuses designed to encourage malicious acts
against innocent people; and, of course, legal teams and
professionals who lost their moral compass. This is David versus
Goliath: a Goliath that was a private corporation, backed by the
state and able to destroy people’s lives one by one. At least 236
sub-postmasters were sent to prison for offences they did not
commit. Many have died poor and some committed suicide. Over
3,000 had their names dragged through the mud.
It is absolutely incredible that the sub-postmasters have had the
resilience to get together and win. I am in awe of their tenacity
and their patience—except, of course, they have not won yet. In
the last decade, they have been deceived and messed around with
previous compensation schemes. Fujitsu remains a favoured
government contractor. In fact, it has won nearly 200 public
sector contracts worth nearly £7 billion. When the
sub-postmasters are cleared and their names are removed from the
criminal records database, guess who has the contract to do that?
Fujitsu. Is it, perhaps, too big to fail? Is it considered
irreplaceable, or are there other reasons for continuing to use
it?
It was the Post Office that relentlessly persecuted the
sub-postmasters, but Fujitsu provided the expert witnesses in
court to declare that it was the “Fort Knox” of software. It
effectively pointed the blame at the sub-postmasters and away
from the company, yet it now acknowledges that there were bugs
and errors right from the start. Why, then, has Fujitsu been
involved in £4.9 billion of solo and joint public sector
contracts after the December 2019 ruling, including £3.6 billion
during Sunak’s time as Chancellor and now Prime Minister?
Is it the close ties with Conservative Party donors, such as
Simon Blagden, who stepped down as non-executive director at
Fujitsu UK in 2019? He was a man who, along with companies he is
associated with, has donated £376,000 to the Tories since 2005.
Or the 2019 donation by Fujitsu Services Ltd of £14,000—peanuts,
really—or the £21,000 to the Conservatives to run the Blue Room
at their conference in 2015?
I am now going to offer some solutions, because I do not like to
criticise without coming up with something positive to say
afterwards. I suggest that the Government now take three
immediate steps. They should hand back donations from those
linked with Fujitsu. That is a role for the Conservative Party.
They should have a moratorium on Fujitsu public sector contracts
until the public inquiry reports. There should be a pause in
using Fujitsu until we understand exactly what it did. They
should pay the redress money as soon as possible, but get back as
much from Fujitsu as possible. I see no reason why the taxpayer
should carry the burden of most of the redress money. I would
really like to point out that there are more questions raised now
than answered. It would look very good from the Government’s
point of view if they could, perhaps, answer some of those
questions before the public inquiry does.
8.45pm
(Con)
My Lords, I thought for a dreadful moment that I was going to
say, “I agree with everything the noble Baroness said”, but she
spoiled it with her party-political points at the end. She will
forgive me if I do not pick up on them, but what she had to say
about what has happened is something all of us feel very
deeply.
I have been around Parliament for close on 40 years, and I do not
think I have ever felt so ashamed of so many things that have
gone wrong, with devastating consequences. The Bill is about
compensation. I do not know how you compensate people for losing
some of the best years of their lives. I do not know how you
compensate people for the horror that they have faced of having
to live from hand to mouth. All I know is that something has gone
dreadfully wrong with our system when it took my noble friend,
who is a hero although he denies it, and in the other place for the
Labour Party, more than 20 years. This has gone on for more than
20 years, and even now we have a Bill to extend the time still
further. I am not against the Bill. I can see that in practical
terms it is necessary, and I am grateful to my noble friend the
Minister for saying that the Government are not going to take
their foot off the gas. I have to say that the foot has not
really been on the gas for quite some time.
My noble friend the Minister said that this is a small Bill; I
think we are going to have a very big bill at the end of this
process—I am referring not to legislation here, but to cash. I
was delighted to see Fujitsu today, speaking from Davos—the
irony—admitting moral responsibility. There is a legal
responsibility as well.
I want to say a few things to my noble friend about some of the
reasons that I say that this is much wider. What was the board of
the Post Office doing? Did nobody on the board of the Post Office
think, “Isn’t it a bit odd that we are suddenly getting all these
cases?” Where were they? What has the department done to hold the
board to account? Are there malice and clawback provisions—which
are common throughout business nowadays—that apply to the Post
Office? Are they being applied? I am sorry, but it is not good
enough for Ministers to say, “We are waiting on the results of
the public inquiry”. It is not the public inquiry’s
responsibility to hold the members of the board of the Post
Office responsible for discharging their fiduciary duties. That
is for Ministers to do. I am at a loss to understand this. Look
at what has happened to some of the people on the board of the
Post Office: one of them is now a Permanent Secretary in a
government department. I am not saying that she did anything
wrong, but I just find it completely remarkable, so can my noble
friend tell me what action has been taken by Ministers to look at
the conduct of the members of the board? Did they not read the
newspapers? Did no one think, “Isn’t it odd that we’re having all
these sudden cases of alleged fraud and dishonesty coming from
nowhere?”
Then we have Fujitsu. I read in the newspapers—to follow the
point made by the noble Baroness, Lady Jones —that when Ministers
wanted to take action to stop Fujitsu getting contracts, they
were told that poor performance in respect of one contract did
not enable you to not have some of the others. What is this world
that operates in Whitehall? Every household in the country, if it
gets a duff builder, does not feel that it has to give that
builder another opportunity, so there is something desperately
wrong with the procurement process and the way in which Ministers
are advised.
Now I would like to say something at risk to myself: I would like
to criticise the Lobby correspondents in this place. My noble
friend has raised this on numerous occasions, and we have all
tried to support him in one way or another. It gets nowhere. It
does not get reported. Then we have a television programme and
now my noble friend is full-time doing interviews and explaining
what has happened, but for years and years it was not of
interest, like so many reports produced by Select Committees of
this House which warn—I will not go through the whole litany of
them—and they do not get picked up because the Lobby
correspondents are too busy as a pack operating on how many
bottles of champagne have been sold in the House of Lords, for
example, which hit the headlines the other day, completely
wrongly attributing it to Members and not to people who come
here.
I am not a lawyer, but I always understood that lawyers had a
duty to the courts and to ensure that information was disclosed,
whether in court cases or tribunal cases. So what was going on
with the lawyers? What was happening there? Is the regulatory
body waiting for the inquiry as well? The inquiry will report and
then there will be another couple of years—by which time we will
all be dead—before we know what actually happened. Why are the
regulatory bodies not doing this?
On the subject of the Lobby, why is it that Computer Weekly has
been the hero here? Our paths crossed, my noble friend and I,
after , when he was Secretary of State
for Defence, set up an inquiry to look into the Chinook
helicopter crash on the Mull of Kintyre. I did this with a judge,
and with the noble Baroness, Lady Liddell. We exonerated the
pilots. Quite frankly, when we looked at the evidence, there was
a whole load of information that had not been made available to
Ministers. I see a pattern.
I concluded that a whole bunch of important people concerned with
security in Northern Ireland had all gone on one helicopter,
which they should not have done. The helicopter had not been
approved to fly safely; indeed, there was evidence that it had
been thought that it would be positively dangerous. The easy
thing to do was just to blame the pilots. The case took 11 years.
My noble friend, again, was one of the heroes pursuing that
issue. While the families battled to get clarity, some of them
died, as has happened with the postmasters. There is something
fundamentally wrong with the way we operate when these scandals
occur.
I congratulate my noble friend on his persistence. In the film,
someone says, “I never thought a Tory MP could be so nice”, or
something to that effect. Just for the record, whether they are
Tory or Labour MPs, or even Liberals, or Liberal Democrats—are
there any Green MPs?—whatever they are, the vast majority of
Members of Parliament, in my experience, do their duty by their
constituents and work very hard; there are some bad apples, of
course. But if we get answers from Ministers that do not answer
questions, if Parliament is not able to do its job because the
Executive has become overmighty and too powerful, they cannot
deliver. The result, of course, is a scandal of this type.
Having got that off my chest, I want to ask my noble friend the
Minister one question. This concerns one individual, Lee
Castleton; I know about this only because of the media coverage.
We know, because the Post Office has admitted it, that Lee
Castleton was used “pour encourager les autres”. He defended
himself in court, he got a bill for over £300,000 and he was
bankrupted. Will those legal costs be remitted to him? Will he be
compensated for all the legal costs?
When, greatly to their credit, the Prime Minister and other
Ministers say that people will be restored to the position they
would have been in had this not happened—wow—what does that mean,
and who will decide that? It does not mean just compensation in
terms of some approved scale or whatever. What about what
happened to their homes and house prices and everything else?
When we talk about compensation, what are we actually saying
here? How will this be delivered, and in a realistic timescale?
We are all getting older, and they have had to wait far too
long.
Finally, I want to ask my noble friend, although I know that he
does not have responsibility for it, what is going on in Scotland
in this respect? I read in the newspapers that, in Scotland, they
are talking about providing a pardon. I am sorry but, if I am a
postmaster who has been falsely accused, I do not want a pardon.
I want absolutely it on the record that I have been exonerated. A
pardon is not enough. I appreciate the legal difficulties but it
is not enough, and you cannot have a different system north and
south of the border when you are talking about restoring people’s
integrity and reputation.
I apologise to the House for going on for so long at this hour. I
had hoped to do it on Thursday when we talked about
accountability, but we were given three minutes, and now I can
talk for as long as I like. But I might lose the House if I did
so.
There are some serious issues here about accountability and about
the relationship between the Executive and Parliament. This needs
to change. There is going to be a general election. It will be
interesting to see what the parties say in their manifestos about
dealing with this. We all know on all sides of this House that
Parliament is broken and not working properly. We know that
because we get all the legislation that comes here from the other
place that is not being properly discussed. We know that because
we get Answers from Ministers to Written Questions and Oral
Questions which have been written by civil servants who do not
show sufficient respect to Parliament, and Ministers—perhaps
some—who do not respect Parliament to the degree they should.
When that happens, it means that people have to battle for 20
years. I pay tribute to my noble friend, who—he really needs to
shed his modesty—is a symbol of what is good about this place.
This whole episode has revealed a very rotten undercurrent, which
needs to be addressed.
8.56pm
(Non-Afl)
My Lords, it is a huge pleasure to follow the noble Lord, who has
probably spoken for those people watching and listening tonight.
What he is saying is that there needs to be a real, deep-rooted
look at how we work generally within Government and in
Parliament, and particularly with the civil servants. I agree so
much about the Post Office board.
I thank the Minister for his very sincere and clear outline of
the Bill. It is rare on a Second Reading to get so much agreement
between everyone. One or two things I would not necessarily agree
with, but most of what has been said tonight I absolutely agree
with. This is the first time for a little while that I have seen
a Bill that actually includes Northern Ireland. I thank the
Government for this because of course dozens of people went to
prison in Northern Ireland too. I am very pleased about that.
The Bill is about compensation, but the reality, as has been said
by other noble Lords, is that no amount of money will bring those
people who took their own lives back to their families, no amount
of money will replace the time that people spent in prison, and
no amount of money will help take away that terrible trauma we
know those men and women felt when they knew that their local
community—which they had loved, trusted and worked with—was
looking at them in a different way, because there was always this
idea that there was no smoke without fire. The point raised by
the noble Baroness, Lady Chakrabarti, and her explanation of
exoneration is so important. It is not just about compensation.
Money cannot replace all of those things. However, of course it
is important that we deal with that quickly, and that is why it
is good also that the time limit is being extended if
necessary.
I want to say a few words about Fujitsu. I find it shocking that
today we saw Fujitsu’s European boss, Paul Patterson, tell MPs,
as has already been mentioned:
“We were involved from the very start. We did have bugs and
errors in the system and we did help the Post Office in their
prosecutions of the sub-postmasters and for that we are truly
sorry”.
Fujitsu’s website says:
“For over 40 years, Fujitsu has been a trusted provider to the
public sector through the delivery of nationally critical
services”.
I say to the Government that it is inexplicable to me that they
could continue to give contracts at this stage to that company.
Paul Patterson also said today, “We all make mistakes”, but the
reality is that Fujitsu lied. That is not making a mistake.
On the moral obligation to contribute to the compensation scheme
that has been mentioned, we have to be clear that Fujitsu is
going to be made to pay huge amounts of money. As the noble
Baroness said, it should not be the taxpayer picking up the tab;
it should come from those who were at fault.
I am sorry if it seems as though I always come back to Northern
Ireland, but Fujitsu has the contract for the Trader Support
Service. I got an answer to my Question about how much it has
been paid. It is a Fujitsu-led consortium and it is very
expensive: so far, from August 2020 to August 2023, it has spent
£411.6 million on the scheme. Apparently, Fujitsu suggested when
it got the contract that it had the capacity to make the Irish
Sea border work smoothly, and that is why it got all this public
money.
However, hauliers are already saying that despite getting this
huge amount of government money, Fujitsu is not providing a
smooth service. The wonderful technology that it went on about is
still struggling to deal with things such as mixed loads going
across and the whole way that groupage works. We need to ask why
Fujitsu was given that contract, why it cannot now have that
contract removed, whether it can deliver and whether it has been
overpaid. If the Government were simply to restore Article 6,
that money could be given to many of the people who have suffered
under the Horizon scheme and under the overall control of
Fujitsu.
Tonight is important because we are moving on. I welcome that
things have moved so quickly in the last short while. I add my
tribute to all noble Lords who have been talking about this and
trying to do something about it for many years, particularly the
noble Lord, Lord Arbuthnot. I hope that we can now work out the
compensation, but accountability is the crucial bit. We cannot
let these people get away with this. We cannot let them continue
to think that they can simply go back to people who complain
about anything to do with the public sector and tell them that
they know best and technology knows best.
I welcome this measure. I am glad that we have been able,
finally, to move it forward as quickly as we can.
9.03pm
(Con)
I am glad to follow the noble Baroness, not least because I agree
so passionately with what she and others have said about my noble
friend Lord Arbuthnot. He has been exemplary in the way that he
has behaved. He has been persistent, tenacious and, in the end,
successful, but it has taken far too long.
Something that puzzles me is that those of us who have
represented constituencies in the other place, particularly if
they were rural ones—I had a significant number of post offices
in my constituency—know that in almost every village the
postmaster or postmistress was looked up to as one of the leaders
of the community. For the life of me, I do not know how the Post
Office or anyone else could have thought that these people who
had done so much for their communities—provided local leadership,
run the flower shows and all the rest of it—suddenly, all over
the country, had turned bad and become criminals. It is just
implausible. If it were in a novel by the noble Lord, Lord
Archer, no one would believe it. It is incredible that this has
happened.
I want to make one or two points. First, this Bill, which has my
wholehearted and complete support, is a misnomer: there is no
such thing as compensation—others have touched on this—for the
destruction of lives and livelihoods, for deaths; there is no way
that you could adequately compensate for those things. Of course,
they must have decent and proper payments, and they must have
them as quickly as possible. I believe the Government should
absolutely commit themselves to making these payments by August.
August is referred to in the Bill, and I ask that my noble friend
the Minister do everything he possibly can—I know he cannot give
a total commitment to your Lordships’ House tonight—to ensure
that the Secretary of State and the Government sign up to an
August deadline because this must not go on and on and on.
I also agree wholeheartedly with the need for doing more, and
what was proposed in the other place last week has my broad and
enthusiastic support. But we do have to recognise the
constitutional implications of Parliament passing an Act that, at
a stroke, overturns judgments in dozens, if not hundreds, of
court cases. It is very important that we recognise—I am very
glad to see the noble Lord, Lord Hunt, nodding at that point—the
constitutional implications of what we are doing, and in
recognising them, we need to commit ourselves to say that this
will never be necessary again. As to how we do it, it must be in
consultation with the judiciary, and various things spring to
mind: a decent budget for the Criminal Cases Review Commission
might be one of a number of ways we could contemplate doing it.
We must not put ourselves in the position again where Parliament
can undo, at a stroke, what the independent courts of this land
have determined. I beg noble Lords not to think that I am, in any
way, seeking to oppose what is proposed, but I think we need to
understand the implications of it very carefully; it is incumbent
on all of us to do that.
I thought that the noble Lord, , made a very
important point about artificial intelligence. I cannot pretend
to be an expert on these subjects—I think everybody in the House
knows that—but I am very worried about the manipulation of
artificial intelligence. I am very worried, with the general
election approaching, about the consequences for the future of
our democracy. It is possible to recreate the voice of the noble
Lord, , and my own voice,
and to put words into our mouths that advocate things we would
never in a million years advocate and, what is even worse, to
have people taking those things seriously—we do have to recognise
this. And that is why the noble Baroness, Lady Hoey, was right to
talk about the responsibility of Fujitsu. I cannot anticipate the
results of various inquiries, but it does seem that it has a lot
to answer for. I was horrified by the figure of £411 million that
the noble Baroness quoted in a more recent context; it has a lot
to answer for, and I believe it should have a lot to pay for as
well. I think that is absolutely fundamental.
I agree wholeheartedly with the Blackstone dictum, which I have
quoted in your Lordships’ House in other contexts: far better
that 10 or a dozen rogues go free than that an innocent man or
woman is punished. But we have to recognise that this is not the
only scandal. I suppose we really ought to urge ITV to do a
series on the contaminated blood scandal and on Windrush. This is
one of a number, although I believe it to be the worst, in both
numbers and content—but it is not the only one. We in this House,
and our colleagues in the other place, have an absolute duty to
do all we can to ensure that these scandals are not
replicated.
We will have a far better chance of doing that if we remember the
words of the late : if we have legislation that is
properly thought out, if we abandon the Henry VIII clauses and
the Christmas tree bills, and if we recognise above all else that
the Executive is answerable to Parliament, not the other way
round.9.11pm
(Lab)
My Lords, it is a rare occasion on which I agree with everything
that has been said. No amount of compensation can compensate
these people for the pain they have suffered—not only them but
also their families and friends. I have a number of questions for
the Minister, and I will take this opportunity to put on the
record some other matters that will hopefully be helpful for
later debates.
First, can the Minister confirm that there will be no upper limit
on the amount of compensation?
Secondly, paragraph 14 in the Explanatory Notes states that the
scheme will be
“administered by the Post Office”.
Why? Who on earth could have any confidence in it being fair?
Surely the entire board needs to be sacked and a new board needs
to handle this, or an independent body needs to be created. I do
not think many people will have any confidence in the current
board’s ability to handle this matter in a fair way.
Thirdly, there are press reports—the Minister may have seen
them—that one postmaster got compensation of £15.75. Could he
look into this please? I have looked at the 14-page form that
this sub-postmaster filled in, and I would not like to complete
it. It effectively asks them to give up their rights for any
future claim. That is utterly inappropriate, and it is another
reason why the Post Office is not a suitable body to handle the
compensation claims. I hope the Minister will attend to that as a
matter of urgency.
A number of comments have been made about accountability, and
directors and auditors have been mentioned. I will put some
matters on the record in relation to that. I checked the
Companies House filings today and, between 2002 and 2023, there
were 83 directors of the Post Office. Despite full inside
knowledge, not one of them went on the public record to say that
something was wrong. They were complicit, they lied and they
committed fraud—83 of them.
The Post Office also had several non-executive directors, who are
supposed to challenge what the executive board does. None ever
spoke up, despite some also being heads of the audit committee
and the risk management committee. There has been a conspiracy of
silence, injustice and fraud, and they all need to be held to
account.
Noble Lords asked what on earth happened to the money extracted
from sub-postmasters under fraudulent pretences. It may interest
them to note the Second Sight report from 2015, paragraphs 22.11
and 22.12 of which say that
“for most of the past five years, substantial credits have been
made to Post Office’s Profit and Loss Account as a result of
unreconciled balances held by Post Office in its Suspense Account
… It is, in our view, probable that some of those entries should
have been re-credited to branches to offset losses previously
charged”.
That was in 2015. The Post Office did not do so. Directors on
performance-related pay were very keen to boost the bottom line;
they directly benefited from this fraud. They all knew for years
that something was wrong but continued in exactly the same
way.
There were also violations of the Companies Act 2006 requirements
by directors of the Post Office. For example, Section 386
requires directors to keep “adequate accounting records”. In view
of the flaws of the Horizon system, it must be doubted that the
company did so. Failure to keep adequate accounting records is a
criminal offence, so what exactly have the Government been
waiting for? Why have they not charged anyone? Is it because we
do not have a central enforcer of company law in this country? We
are almost unique in the western world in that respect.
Section 172 requires directors to
“act … in good faith … promote the success of the company for the
benefit of its members as a whole, and in doing so have regard …
to … the interests of … employees … suppliers, customers … the
community”
and have
“high standards of business conduct”.
Anyone looking at the 300 pages of the High Court judgment would
conclude that the directors totally failed to do that.
Unfortunately, we do not have an enforcer of company law, so the
onus is on the Government to act. What action has been and will
be taken? I have no confidence in the Insolvency Service being
able to do anything—we would be waiting another 10 years.
I turn to auditors. Ernst & Young was the external auditor of
the Post Office from 1986 to 2018—the entire period of the
scandal. As part of their statutory duties, an auditor is
required to state whether in their opinion
“adequate accounting records have not been kept, or … returns
adequate for their audit have not been received from branches not
visited”.
The company did not keep proper accounting records, as I said
earlier. Despite the overwhelming evidence to the contrary, Ernst
& Young said that it was satisfied—how could it not be,
having picked up £1.8 million in fees in the previous two years?
Was it all to do with money? This is not the first time we have
talked about the role of auditors; there are numerous scandals,
and I have published a lot of academic and other research on
them.
Ernst & Young knew that the accounting system was deficient.
That much is clear from a publicly available, 36-page Post Office
report titled Horizon—Response to Challenges Regarding Systems
Integrity, dated 2 August 2010. It was written by a gentleman
called Rod Ismay, the head of product and branch accounting at
the Post Office. He joined the Post Office in 2006, after 11
years working for—guess who?—Ernst & Young, and was now
liaising with the auditor. The report is very concerned about the
court cases and adverse press reports. I first became aware of
this scandal in 2009 from an item in an accountancy magazine, and
I have followed it and noted with considerable dismay that nobody
actually honed in on auditors or corporate governance. It was all
about the systems and everything else.
On page 19 of the report, there is a paragraph that we need to
take note of:
“Ernst & Young and Deloitte”
—it has been involved in some capacity—
“are both aware of the issue from the media and we have discussed
the pros and cons of reports with them. Both would propose
significant caveats and would have limits on their ability to
stand in court, therefore we have not pursued this further. The
external audit that E&Y perform does include tests of”
Post Office Limited’s
“IT and finance control environment but the audit scope and
materiality mean that E&Y would not give a specific opinion
on the systems from this”.
Another paragraph is most damning:
“It is also important to be crystal clear about any review if one
were commissioned—any investigation would need to be disclosed in
court. Although we would be doing the review to comfort others,
any perception that POL doubts its own system would mean that all
criminal prosecutions would have to be stayed. It would also beg
a question for the Court of Appeal over past prosecutions and
imprisonments”.
That is an internal document—a report of the Post Office—which is
publicly available, and auditors have discussed all of this.
The point is that Ernst & Young had considerable awareness of
the issues, systems and internal failures. On 27 March 2011, it
wrote to the management of the Post Office. I will read two
paragraphs from that letter:
“The outsourcing of Post Office Limited’s … IT function to a
third party … provider (Fujitsu) creates a degree of complexity
and difficulty for POL in gaining assurance that”
these
“are adequate … We noted that POL are not usually involved in
testing fixes or maintenance changes to the in-scope
applications; we were unable to identify an internal control with
the third party service provider to authorise fixes and
maintenance changes prior to development for the in-scope
applications”.
It knows that Fujitsu is pulling the strings, having unauthorised
access to anything and everything. None of this ever gets
mentioned in the accounts and the audit report—none. That is the
state of audit that we have in this country.
Ernst & Young knew the failures of the system and the
cover-up. It knew that the company did not keep adequate
accounting records, and adequate returns were not received from
branches not visited by it. Post Office profits were inflated by
the amounts fraudulently taken from postmasters.
I have questions. I taught auditing for many years as an
accounting academic. The first thing you teach students is that
if management asserts something, you try to independently
corroborate it; the more that you are able to corroborate
something, the more confidence you can have in it. How on earth
did Ernst & Young corroborate what the management told it, or
did they simply rely upon it? How did it verify income and
profits, with millions, possibly—I do not know how much—in loss
of money given by innocent sub-postmasters and simply taken by
the Post Office?
E&Y knew the Post Office had suspense accounts. The existence
of prolonged suspense accounts is an indication of accounting
misstatements and possibly fraud—I am sure the noble Lord, , would agree with that. It
should have been put upon inquiry that something was wrong. That
went on for years and years. How did Ernst & Young test any
corporate reconciliation of those suspense accounts? How was it
persuaded to believe that no provisions needed to be made for any
contingent liabilities, given that it had access to all the press
clippings and everything?
There is an issue. Every year, Ernst & Young gave the company
its customary clean bill of health and, as I indicated, in the
final two years it collected £1.8 million in fees. As a sole
shareholder of the Post Office, the Government need to sue Ernst
& Young, because it owed a duty of care to the company at the
very least —if not to anybody else. It has been utterly negligent
and a party to a cover-up. The Government need to have the Ernst
& Young audit investigated from 1999 onwards—not just one
year, the whole period. What exactly was it doing? I hope that
the Minister will say, “Yes, that will begin tomorrow, next week
or next month”, because we need to be very firm on this.
Finally, I fully support the Bill and I await further Bills to
reform corporate governance and auditing.
9.25pm
(DUP)
My Lords, I enthusiastically support this legislation, which has
received support from every corner of this House—even from the
sober representation of the Democratic Unionists. I suspect that
we are not responsible for very many of the bottles of champagne
that the noble Lord, Lord Forsyth, made reference to earlier.
This issue has deep personal resonance for me. I come from a Post
Office family. My mother worked for many years for the Post
Office. My father worked his entire adult life for the Post
Office until his retirement in 1987. I shudder to think what
either of them would have made of this appalling scandal. In the
1970s, my father spent a good deal of his time working alongside
virtually every sub-postmaster and sub-postmistress in Northern
Ireland, helping them to fit what were referred to as “bandit
screens”—a euphemism for a form of protection used to try to
protect post offices from robbery. That should give us pause for
thought.
The noble Lord, , highlighted that the
sub-postmasters and sub-postmistresses are the backbone of our
communities and the glue that holds them together, but we should
also remember that the service and self-sacrifice they give to
the community have often come at deep personal risk. Post offices
were quite often targeted as the easiest and most vulnerable
target of organised crime, terrorism and local villainy whenever
robberies were being pursued. Those are the people at the heart
of the scandal before us.
It is right that this legislation is just one piece of the
jigsaw. It is important that the inquiry deals with
accountability at both an organisational and an individual level.
It is clear that there has been negligence, deceit and maybe even
criminal behaviour on the part of some of those individuals and
organisations, and it is right that we hold those people to
account through the due process of law. It is also the case that
the focus needs to go beyond accountability and that the inquiry
should deal with many of the systematic issues that have been
highlighted in this debate and beyond: the future role of AI, the
shift in the burden of proof when it comes to the reliability of
computer evidence, and the question of which organisations should
have the power to take criminal prosecutions. All those issues
need to be taken into account, and many more.
It is right that we focus today on what may be euphemistically
called compensation for sub-postmasters and sub-postmistresses
who have been affected. The contents of the Bill are of great
merit: it is right that the Minister is given the power to
compensate and, indeed, that the scope is wide enough to cover
all those who have been directly affected.
I welcome the removal of what I think is an artificial date: the
restriction of compensation ending, in effect, in August 2024. I
also welcome the Minister’s commitment that the foot will not be
taken off the pedal in relation to this.
It is also vital, as has been highlighted by the noble Baroness,
Lady Hoey, and others, that this covers sub-postmasters and
sub-postmistresses in England, Scotland, Wales and Northern
Ireland. The Post Office is a unitary body, effectively,
throughout the United Kingdom. Whether it is in the inner-city
branch or the most rural of settings, tasks, performance and
terrible things have happened throughout this kingdom, so it is
right that everybody is put on a level playing field.
To that extent, the Government need to look at the scope of
exoneration. It is clear that the Government are rightly
determined to ensure exoneration throughout the system, but, when
questioned on this last week, they highlighted initially that the
legislation was focused on England and Wales. But we know that in
Scotland and Northern Ireland, there have been 100 prosecutions,
I think: 76 in Scotland and 24 in Northern Ireland. I appreciate
that the Government have committed to consulting with the
relevant bodies in both those jurisdictions to take matters
forward. But I say to the Government that, if we are left with a
process that, at best, becomes unnecessary duplication of
legislation in other jurisdictions to achieve the same effect or
at worst, as highlighted by the noble Lord, Lord Forsyth, an
inadequate pardon, which becomes a form of second-class solution,
that is inadequate. It is worse still if we leave some of those
sub-postmasters and postmistresses in a situation in which
justice and exoneration for them comes with a level of
unnecessary delay because of that duplication. That would be
unacceptable.
I appreciate that there are legal barriers as to why this is
difficult to do, but I urge the Government to take every action
they can to think outside the box to ensure that we have
legislation which covers every sub-postmaster and
sub-postmistress who has been affected throughout the United
Kingdom. That is the fair solution, as we have with this
legislation.
Many years ago, there was a slogan used in Northern Ireland in an
election campaign. I cannot remember which particular election it
referred to, or even what it directly sought to overturn, but the
slogan was “To put right a great wrong”. We all know within this
House that whatever we do cannot completely put right what has
happened in terms of the wrong that has been done to the victims
of the scandal. For some, it is sadly too late. Some have taken
their own lives; others, through the passage of time, have passed
away; and for any sub-postmaster or sub-postmistress who has been
impacted by this, irrespective of the level of compensation, if
you gave them the choice of all the compensation in the world or
turning the clock back and making sure that this never happened
to them, they would choose the latter. We cannot completely put
things right. But today at least, and I think with a unanimous
voice, we can take a large step in the right direction by passing
this Bill.
9.33pm
(LD)
My Lords, we have had an extraordinary debate on compensation,
exoneration and accountability, but this very short, two-clause
paving legislation to grant the power to incur expenditure in
relation to compensation for the victims—the postmasters and
postmistresses—is absolutely vital. However, the detail that we
have been discussing is not in this Bill. For the short term, the
actual scheme for this particular compensation package is
something that I hope the Government will take notice of. But
there is time for politicians of all parties to review the entire
nature of compensation schemes and the way they work. This is
just one of many schemes that have gone wrong in the
administration, and we must look at that.
We were reminded by the noble Baroness, Lady Chakrabarti, of the
repeated abuse of the human rights of the postmasters in this
whole process over the years. They were let down by organisation
after organisation. We must have the postmasters at the heart of
any debate that we have about this. It is an appalling
miscarriage of justice. We were reminded of the personal
sacrifice of many postmasters by the noble Lord, Lord Weir, and
the risks that they face before they have to start looking at
their accounting packages—but worse is that they are still
waiting for justice and many, as we have heard, are waiting to
receive compensation or redress.
My noble friend talked about the presumption of
innocence, and that must be essential for getting to exoneration.
The postmasters, led by the absolutely admirable Alan Bates—who
is as modest as the noble Lord, Lord Arbuthnot—have fought for
decades to get to the truth of what happened and to clear their
names. The noble Lord, Lord Forsyth, referred to lobby
correspondents and other media, but there have been some
extraordinary journalists over the years. He referred to Rebecca
Thomson and Karl Flinders of Computer Weekly, but Private Eye has
covered this story for decades, as has Nick Wallis at the BBC,
and John Sweeney’s “Panorama” in 2015 was done at an absolutely
key time.
All of that happened before Paula Vennells was even the chief
executive of the Post Office. I am very grateful for the comments
that the noble Lord, Lord Forsyth, made about politicians. One of
the problems with how our press works at the moment is that there
tends to be one person that they talk about. There have been
other chief executives and other senior directors of Post Office
Ltd during the really difficult time when it was becoming
apparent behind the scenes that there were problems. Today is not
just about those who need to be held accountable in the future,
but that must happen in due course. The contribution of the noble
Lord, , about the role of auditors,
was very timely and very important. This would not be the first
audit scandal of the last few years.
The noble Baroness, Lady Hoey, quoted from today’s comments by
Fujitsu. The noble Lord, Lord Forsyth, said it had been 20 years,
but it is clear that the problems started just after MP signed off the pilot in
1994. Even then, the pilot postmasters were reporting problems—in
1995, 1996 and 1997. It goes right back. This is not
party-political. I am just making the point that Fujitsu and the
Post Office both knew that there were problems before the rollout
started in 1999.
The Father of the House, , said last week:
“The titanic error was the belief in technology”.—[Official
Report, Commons, 8/1/24; col. 86.]
However, every day, including today—the noble Baroness, Lady
Hoey, mentioned Fujitsu’s testimony to the Science, Innovation
and Technology Committee—more is revealed about what the company
knew, even from prior to the rollout, as I have just mentioned.
The noble Baroness, Lady Jones, talked about the chief executive
admitting today that funds that postmasters were forced to pay
may have gone into executive pay. If that is true, it is an
absolute disgrace.
The noble Lord, Lord Browne, and others, talked about computer
problems. I am married to an engineer. He is not a software
engineer, but he deals with software in the things that he
designs. One of my foster children is a software engineer. They
look at each other with raised eyebrows and talk about “garbage
in, garbage out”. “Garbage in” is done by people, not by
computers. The problem that the noble Lord, Lord Browne, raises,
is, “Will that happen in the future?” We have to hold Fujitsu to
account for those errors, which it then clearly did nothing
about. The noble Lord, Lord Forsyth, said that he felt ashamed. I
feel ashamed too. I want to quote from Professor Graham Zellick
KC, the former chairman of the Criminal Cases Review Commission.
He was angrier than we are. He said:
““I am enraged. I think this is deplorable. It is inexcusable. It
is a failure of public administration and government without
precedent. It makes one’s blood boil”.
I hope that we continue with that strength of feeling as we move
into the next stage and the drama moves out of the limelight,
because we must learn lessons from this. The Secret
Barrister—some noble Lords may follow him on Twitter/X—said:
“As the issue of compensation for miscarriages of justice is
rightly in the news, it’s timely to note that in 2014, the
government changed the law to make it all but impossible for
people wrongly convicted and imprisoned to claim
compensation”.
Much has already been said in this debate, but I want to go on to
talk briefly about the future. Various Members have talked about
the problems that people in the HSS—the Horizon shortfall scheme,
now known as the historic shortfall scheme—have had with the
application form. The noble Lord, , referred to a case where
someone claimed only £15.75 because he did not understand the
form; there was a reference in it to looking at Appendix 1, but
it was so impenetrable that he thought it did not apply to
him.
Another case cited by Dan Neidle, who runs Tax Policy Associates,
concerned someone who was made bankrupt, lost his post office in
a fire sale and has been offered £8,000. The numbers of people
receiving offers from Post Office Ltd for compensation are good,
but if compensation is at that level, it is not good and it is
inappropriate. We need a more transparent mechanism to streamline
the current complex arrangements, which Government after
Government have created with crisis after crisis, to have what
amounts to two and a half schemes running—the GLO and the HSS
scheme and then the new review scheme that was announced 10 days
ago.
Dan Neidle says we should probably follow the example of
employment tribunals. For example, why are sub-postmasters not
allowed a grant for legal advice before they put in their
applications? They should be. There should be a larger fixed
amount for damages; cases are different, but everyone who has
been involved, whether they have been convicted or not, has lost
income, often their job and their home, and been unable to work
at the level they were working at before because of the threats
they were under. Redress needs to reflect their loss of earnings.
They should also receive the very specific amounts of money that
they were forced to pay back—not compensation. They should be
paid back the money they had to pay in error. The idea of those
who were convicted and imprisoned having to pay charges for bed
and breakfast from their compensation is an absolute outrage that
should not be allowed. On occasion, there will be specific damage
above and beyond that outlined which might, for example, cover a
suicide in a family or those who have had strokes.
Finally, we should consider a complete change to the way in which
these compensation schemes operate. Next week in Committee on the
Victims and Prisoners Bill, we have an amendment on the infected
blood scheme. We are still waiting for the details of the interim
payments. The first young people were infected in the
mid-1970s—it cannot go on like this. Others have spoken about the
Windrush scheme; I would raise Hillsborough and Grenfell, where
there are similarly complex arrangements. Surely, now is the time
to consult on future arrangements for compensation schemes,
including whether they should remain with government or be
independent, so we can be sure that we have a reliable,
independent, swift and fair scheme that cannot be constantly
adjusted, ignored or delayed, particularly by politicians.
9.43pm
(Lab)
My Lords, I welcome this Bill and am glad that the Government
have accepted Sir Wyn Williams’s recommendations in his interim
report that the current deadline for compensation must be
extended. It is my hope, as has been said by many this evening,
that the extra time the Bill provides for is not needed, and that
compensation is delivered as quickly as possible.
Labour is committed to working with the Government to ensure the
best possible outcome for victims. As the shadow Leader of the
House of Commons said last week, justice delayed is justice
denied. It is deeply shameful that, 25 years after the rollout of
Horizon began and 15 years after this scandal was first revealed
by journalists and campaigners, victims are still seeking
justice. It is particularly saddening that justice did not come
quickly enough for the more than 60 sub-postmasters and
sub-postmistresses who died before being compensated and before
having their convictions overturned. It is incumbent upon us to
ensure that justice is delivered, and delivered urgently.
I am glad that the Government have committed to mass exoneration
to save victims having to relive their trauma and that the
Metropolitan Police has opened an investigation into those who
caused it. My noble friend Lady Chakrabarti is right: it will be
difficult to unpick and there will be legal issues, but it is
incumbent on all of us to overturn these convictions and allow
people to move on as quickly as possible.
The question still remains around why it took an ITV drama for
justice to finally be tabled for the victims. The noble Lord,
Lord Forsyth, touched on the board, and I remember standing here
four years ago after the Court of Appeal decision, when one of
the issues that we touched on was how much the lawyers had taken
out of the £58 million. I think £12 million was left. That point
was raised by a number of noble Lords, and I asked a question
then about the chief executive and the board. I had no idea that
there had been 80 members of the board—it would be interesting to
look through them now—but questions were asked four or five years
ago about their culpability. The Minister—not the noble Lord,
Lord Offord, but the previous Minister dealing with it—was again
very positive about what we needed to do, but we still have not
seen any action taken against the individuals who had oversight
at that time. That is something that we need to look at and make
sure we resolve for the future.
The public are rightly sick and tired of scandal after scandal,
which has again been a theme of this debate. From Hillsborough to
Grenfell, from Windrush to infected blood, we have had enough of
the destruction of innocent people’s lives, the cover-ups, the
vindictive way in which victims are treated once they come
forward and the lethargic speed at which the Government act.
The Post Office has used the opportunity of the last decade not
to hold up its hands and make amends to those it has wronged but
to do everything it can to protect the bottom line and its once
good name. Only last week, it was revealed that the Post Office
had claimed tax relief on the compensation payments it made. As
compensation is not a legitimate tax-deductible business expense,
HMRC will likely be investigating the matter, and it is reported
that the taxpayer may have to foot another bill, just short of
£100 million, to settle what the Post Office owes the Exchequer.
This was not before its creative accounting meant that bonuses
could be paid to senior executives in line with its false levels
of profitability. My question to the Minister is whether those
moneys will be reclaimed by either the Post Office or the
Government.
I will pick up the point made by the noble Baroness, Lady
Brinton, about only ever focusing on one of the CEOs and move to
another. In 2022, the then Post Office CEO Nick Read received a
bonus of £137,000. According to Tax Policy Associates, the
average payout under the Post Office Horizon shortfall scheme was
£32,000 before tax. As we have heard tonight, from my noble
friend and the noble Baroness, Lady
Brinton, one applicant was paid out £15.75, while also signing to
say that he relinquished any future claims. I hope that that will
be overturned and dealt with.
My noble friend Lord Browne and the noble Baroness, Lady Brinton,
touched on ways of moving forward with this. As has been said,
Dan Neidle has made the argument for looking at an employment
tribunal-style way of dealing with this that will set levels we
can move up from. I am interested to hear the Minister’s response
to that.
Alongside compensation, we must seek reforms, not just of systems
and structures at the corporate, judicial and governmental levels
but of culture. The culture of covering up instead of owning up
has cost so many sub-postmasters and sub-postmistresses their
livelihoods, their relationships—which we have not really touched
on—their dignity and in some cases their lives. The culture was
one of being rewarded for failure, and of the people responsible
for administering scandal not only not being held responsible for
their actions but in some cases receiving handsome bonuses,
honours and new jobs. It was a culture that, in this case, meant
that the scandal was compounded; that prosecutions continued long
after the Post Office became aware of the flaws of the Horizon
software; and that lawyers helped mislead Parliament and the
courts, and threatened journalists working to uncover the truth.
It was a culture in which, as we have heard, the Post Office made
compensation forms deliberately difficult for sub-postmasters to
complete in order to minimise payments; in which a former Post
Office Minister was paid a six-figure sum for advising the firm
legally representing the Post Office; and in which the Business
Department nominated Paula Vennells for a CBE two years after
group action lawsuits had been launched in the High Court.
Responsibility and accountability are vital. I am glad that the
leader of the Opposition made standards in public life a key part
of his campaign when we entered this new year. The public are
crying out for trust in their leaders. They need faith in a
system and government that works; faith that each week will not
bring about a new scandal; and faith that the worst instincts of
humans will not be indulged or rewarded but punished. Those
parliamentarians campaigning for the sub-postmasters and
sub-postmistresses have helped show that Parliament and
parliamentarians can stand in a good light. As my noble friend
Lord Browne and the noble Lord, , said in referring
to the noble Lord, Lord Arbuthnot, and MP, they represent the best of
public life. It is my hope that this scandal could be our last,
and that the collective jolting of the public consciousness that
has occurred over the last month will lead to a serious shift in
the way that those in power are permitted to act. With that, we
on these Benches support the Bill.
9.53pm
(Con)
My Lords, it is with great responsibility that I stand to
conclude what has been a respectful debate. We have heard many
insightful and personal contributions from noble Lords across
this House. I particularly echo the numerous and heartfelt
tributes paid to my noble friend Lord Arbuthnot, who has been a
long-time champion of those affected by the Horizon scandal. A
key part of this is that the noble Lord, plus MP in the other place, are
members of the Liaison Committee, where my colleague Minister
Hollinrake is dealing directly with them on a daily basis. That
is an important part of the architecture of this, and something
that the sub-postmasters and sub-postmistresses have expressed
confidence in. Again, that is a great tribute to my noble
friend.
I will start by picking up on the remarks of my noble friend Lord
Arbuthnot. Yes, this will be a simple piece of legislation, but
it will encompass the question raised by the noble Baroness, Lady
Chakrabarti, who asked whether this will be a blanket
exoneration. The answer is yes: this is a blanket exoneration to
be given to the sub-postmasters—those who have had convictions
—and speedy compensation will be given to all on the basis that,
as was mentioned by the noble Lord, , these folks are presumed
innocent rather than guilty. So I can start by saying that this
Bill exactly achieves what my noble friend Lord Arbuthnot was
going to be pitching for; that has been delivered with the
support of the Prime Minister and Minister Hollinrake.
In terms of speed of compensation, I reassure the House that our
plan is to keep going, not to go more slowly. The delay here is
not a delay of time: it is just allowing the due process to move
through. Alongside the Bill, we have made a commitment to make
offers on 90% of cases within 40 working days of receiving the
GLO application, and we will publish monthly updates about the
number of cases submitted and settled. In fact, to answer the
question raised by my noble friend Lord Arbuthnot, it is actually
the Government’s aim not to require a technical extension. The
aim of the Government is to actually have this compensation made
by 7 August, within the original timetable. Technically, that is
not entirely within the Government’s gift because, clearly,
claimants are underrepresented and need to give some evidence on
their claims. They want each of their claims to be assessed on an
individual basis, which is the right thing to do, and that is
often not a simple process. They are telling us that it takes
time, and they are saying that they want sufficient time to bring
in their claim.
There are a number of folks who are affected but do not want to
do that, which is why we are giving them the opportunity to go
straight to up-front compensation within the GLO scheme. If you
are just done with lawyers and completely scunnered by the
process, and you feel that you want to take the £75,000, those
who choose that route can take that straight up front and
therefore get away from the lengthy claims process. We want to
ensure that no one is timed out of compensation or rushed into
making decisions. That is what the statutory inquiry, chaired by
Sir Wyn Williams, has recommended, and we have taken action to
address that.
I will turn now to a number of the points raised in the House
this evening by noble Lords. The key objective of this Bill is
that we have redress—that is a very good word that we should be
using; compensation is compensation, but is it not the idea that
we have to provide restitution for people have been wronged, to
put them back in the position that they were in before?
The noble Lords, Lord Browne and , and a number of other noble
Lords, mentioned some of the paltry sums that have been quoted in
terms of individual claims. In fact, when one looks at the
overall Horizon shortfall scheme—the main HSS scheme, which is
for those 2,500 claims for people who were not convicted—the
average on that is £42,000 per sub-postmaster. That gives you an
indication that there is quite a wide range of claims. It is
quite right that there is not one single number for everybody,
because each claim needs to be assessed on its merits. That gives
some context to the £75,000 being offered to the GLO claimants
who consider that they have a further claim to process.
Then, in the hierarchy of compensation, for those 983 people who
have been wrongly convicted, of whom 95 have had their wrongful
convictions overturned, there is an immediate ability to claim
£600,000—again, without access to lawyers and without having to
go through any process. That is your right as a claimant to take
that. Again, however, if you feel that you deserve and should be
compensated for more than that figure, there is no limit. There
is no upper limit—to answer the noble Lord, Lord Sikka—to what
can be claimed.
We are dealing with a cohort of individuals who, as my noble
friend Lord Arbuthnot mentioned, are quite traumatised by this
process. They watched the first GLO court action being successful
and three-quarters of the money going to the lawyers, the claim
administrators or the investors in the litigation, so there is
deep scepticism within this cohort and community about the
process being run.
Again, to answer the question from the noble Lord, , the GLO scheme is being run by
DBT, not the Post Office. The Post Office is running the Horizon
scheme. Therefore, that is crucially where the advisory committee
comes into play to make sure that there is a clear, independent
voice for those who are feeling uncomfortable with that. In terms
of the overturned convictions, the retired High Court judge Sir
Gary Hickinbottom has been placed in to make sure that claimants
feel they have an independent person to refer to.
I think in terms of process and redress the Government are making
steps now to go fast, but it is up to each claimant to work out
the process they want to go through. It is not right for me to
comment on individual cases, but obviously the most egregious
example given in the drama was that of Lee Castleton. I think his
claim was about £26,000 but he ended up with a £320,000 bill.
Again, I am not commenting on that case, but it does inform the
£600,000 that can be claimed immediately against a case such as
that. Indeed, if he felt he wanted to take that further, he could
do that. That is a private matter for him.
(Con)
I know my noble friend the Minister does not want to comment on
the particular case of Lee Castleton, but the point I was making
about him was there were £325,000 of court costs. First, normally
when you win you do not pay costs. The effect of saying that he
is not guilty surely means that those costs should be returned.
That has nothing to do with the compensation that is paid to him.
So will costs be remitted? That is the key point. Secondly, in
respect of that case, what do the Government mean when they say
that things should be restored to where they would have been had
this not happened? What does that mean because £600,000 is an
arbitrary number? Some people lost their business, their house
and their position. How will that principle, which I think is
greatly to the Government’s credit, be delivered?
(Con)
I commend my colleague the Postal Minister Mr Hollinrake for
pushing through hard on the £600,000 because it is not for us to
judge what any individual has lost; it is up to that individual
claimant to make the decision about whether they want to go
through the due legal process. The word “compensation” has
perhaps been misapplied here. What we are actually talking about
is a monetary sum to be given back which gives redress to
individuals. In any particular case—for example, the case of Lee
Castleton—it may well be that one can actually identify separate
buckets, one of which might in fact be court costs be repaid, but
within the overall settlement there will be an amount which
should take account of all losses. If you have paid for someone
else’s legal fees, that is a loss which needs to be repaid, so
this will be tied up within each individual claim, the point
being that if you do not as a postmaster want to go through the
heartache and process of doing that, there is a route for you to
receive a substantial sum and you can close the matter and get on
with the rest of your life.
(Con)
I would not want anyone to be confused in an already confusing
situation. The £600,000 is not actually relevant to Lee Castleton
because it is a sum that applies only to those who have
overturned convictions. Lee Castleton was sued rather than
prosecuted. I am sure he will get a lot more than that, which
will include the legal costs that he had to pay and also all the
issues about the bankruptcy that he went through and the horrors
his family went through, and he will deserve a lot more than
that.
(Con)
I thank my noble friend for that clarification.
Moving onto another theme, there has obviously been a lot of
comment on Fujitsu and we have all been horrified by the extent
of what would appear to be its collusion in the matter. Again, we
have to be very careful here to allow this inquiry to run its
course. Sir Wyn Williams is very focused on this, and he will get
it done through the course of this year. We will get answers to
these questions.
Sir Wyn has been very clear, as indeed has Minister Hollinrake in
the other place, that the cost of this must not fall solely on
the taxpayer. We have now had the statement today from the
European chief executive, effectively putting his hand up to say
that he knows there is going to be a large bill to pay, and that
it goes beyond moral to legal and financial. Again, that will be
determined when we get through the inquiry.
The reality is that Fujitsu is embedded in all aspects of
government, in many departments. We all feel nervous about that
at this moment and I am sure that all departments will be
reviewing that; but, again, we have to discover the extent of
culpability. The company knows that it will have a large bill to
pay. We have to allow that process to run its course. I am sure
that there will be full accountability and from that—there is no
question my mind—will cascade many levels of scrutiny of that
company in every government department. I think we will be
hearing more about that as we go.
The other theme brought through was governance of the Post
Office. The noble Lord, Lord Forsyth, was very clear in asking
how this works in respect of being a limited company with a
board. The noble Lords, and , mentioned the whole accounting
scenario. With respect to the current governance of the Post
Office, it remains an arm’s-length statutory body; we are all now
asking different questions about how that works.
A noble Lord
With shorter arms.
(Con)
Shorter arms, yes. There has been quite a big overhaul in terms
of organisation, some of which is pretty obvious when you look at
it. There is now a huge amount more central support and training
given to postmasters. There are 100 new area managers, creating a
buffer zone between the manager and the board. Two postmasters
have now been appointed to the board as non-executive directors.
There is an appointment of a current postmaster in a director
role concerned with the day-to-day relationship with the
postmasters. All of it should have been done a long time ago.
As we look at public bodies, those of us who have been in the
private sector understand how boards work. We understand the role
of non-executive directors, which is to challenge management. It
is not to nod and pass, or to wave through. It is to be
intellectually curious and, if you find something that does not
stack up, to probe it and question it. That has not happened
here. We have had an organisation that looks and feels like a
plc. It has renumeration committees, audit committees, auditors,
a board of directors, non-executive directors and a non-exec
chair. All of these, when they are put into businesses, are put
in for checks and balances, as the noble Lord, , said. What we have had here is
a mirror image of this architecture without any checks and
balances. I think this requires us to look quite hard across
quite a wide range of arm’s-length bodies.
(Lab)
I am glad that the Minister has clarified that relationship, but
my concern is that, for as long as I can remember, the Government
have been preaching shareholder activism. What happened to that
when it came to the shareholder—the Government —in the Post
Office being active? Did nobody notice the pile of newspaper
clippings about the cases? I do not remember any Minister
standing up and saying “Right, we’re going to look at this” until
after the High Court judgment. Why did the Government fail on
their own so-called shareholder activism?
(Con)
I thank the noble Lord for that searching question. Of course,
this covers about three or four different Governments and more
than half a dozen Ministers; that is just a fact. The reality is
that the shareholder of the Post Office is the taxpayer. The
share is owned by the Secretary of State for the Department for
Business and Trade. Under the current structure, that is
effectively subcontracted to an independent board. If that
independent board had acted on an independent basis, this would
not have happened. In fact, if Ministers had slightly more
inquiring minds, this would not have happened.
I look at myself in my role as a Minister. I look at the advice
that I am given and at the decisions I have to make. There is a
lot coming through on a daily basis. I ask myself this question:
if I had been in this role and prior to Horizon there had been an
average of, say, 10 convictions per year in a bad year—maybe five
on average—and that went up to 80, even though I was very busy,
doing a lot of things, and even though I said I had an
independent board looking at this for me, would not that raise
some inquiry? This fundamentally is the shocking scale—we are all
embarrassed about this—of the abuse here. The accountability
piece of this will absolutely come through the Wyn Williams
inquiry. That will then move us to the next stage of the lessons
that we learn from it.
Next is the theme of legal process, brought up by the noble Lord,
, as well as the noble Lords,
Lord Forsyth and Lord Weir, and also in relation to the Scottish
angle. The noble Lord, , says that the lawyers have
some disquiet about the idea of Parliament overruling courts, but
we have had the counterbalancing argument from William
Blackstone. I think the House agrees that that overrides that
particular issue.
In Scotland and Northern Ireland we have different jurisdictions.
There were 77 prosecutions in Scotland and 24 in Northern
Ireland. To speak from a Scottish point of view, those
prosecutions were brought not by the Post Office but by the Crown
Office. That is a separate legal jurisdiction in Scotland. Yes,
we are one United Kingdom, but in the UK we respect the legal
jurisdictions of the devolved nations. The Lord Advocate has
reported today to Holyrood, the devolved Parliament in Edinburgh,
saying that she is not currently in favour of a blanket
rescinding of convictions because, she says, not every case
involving Horizon will be a miscarriage of justice. She wishes to
go through the appeal court—the Scottish Criminal Cases Review
Commission. From a legal point of view, she is saying that these
convictions were made by a court and therefore should be undone
by a court.
We are at an early stage of that dialogue. There are letters and
communication going between the MoJ in London and the Lord
Advocate and the Crown Office in Scotland, and there is
communication between the First Minister and the Prime Minister
on this. That just highlights that there are some legal
complexities here. The reserved matter remains reserved.
Compensation will be the same for all jurisdictions, but there
are some issues to be resolved regarding the actual legal
process—certainly north of the border.
(Lab)
How on earth does a court challenge the evidence that the
information coming from this computer is to be treated correctly
because of the presumption? How on earth does the court overcome
that? Only we can overcome that. We need to change the law.
Unless we do so, we will always have this problem. The fact of
the matter is that everywhere on this island the courts are not
fit to deal with these cases. There were miscarriages of justice
everywhere. The courts were not fit to test the evidence.
(Con)
That is exactly the position that has been taken here by the Lord
Chancellor for England and Wales, and that is now the
conversation that has to be had in Scotland and Northern Ireland.
We are dealing with a legal complexity that was confronted
earlier this week by the Lord Chancellor, who now needs to run
through the process with the Lord Advocate.
We come to the accountability issue. There have been comments
from the noble Lords, and , about the role of the
auditors. Again, you will get technical answers back that this is
a separate statutory body that does not account to the National
Audit Office because it has its own auditors, but then we find
that that the auditor, EY, has signed off on the accounts. This
is what we need to get to the bottom of. There needs to be a full
inquiry to bring this to light. We will get the answers to these
questions. Out of this, as I said, there will be a cascade of
inquiry taking us into the fundamental territory of how the
Government operate alongside quangos, arm’s-length bodies and so
on. We have not heard the last of this. Its repercussions will
come down through Whitehall.
Lessons will be learned, but right now our responsibility is to
get the blanket exoneration that the noble Baroness, Lady
Chakrabati, was asking for, and which my noble friend Lord
Arbuthnot is now satisfied will be given, and getting the
compensation—whatever that means; let us say financial
restitution—to the claimants as quickly as possible.
This is a sorry saga and, as my noble friend Lord Forsyth said,
we are all deeply embarrassed by it. It has taken so long; it has
been going on for 20 years. How people did not ask more basic
questions is something that we all need to reflect on. All of us
Ministers are looking at that. From my own personal point of
view, I am certainly looking at things quite differently through
the lens of, “Where’s my sniff test on what I’m hearing, as
opposed to just what I’m told by officials?”
I commend the noble Lord, Lord Weir, on his personal reflections
on this and his story about his father being a postmaster. Is
that not the essence of what we got from the series, and from our
personal experience in the towns and villages where we live, that
these folks are the salt of the earth? How could they as a group
suddenly become criminal? How could we go from half a dozen
convictions a year to 80? It just does not make any sense. So I
thank the noble Lord for that contribution. That is what is
turbocharging our response to this matter.
I say in conclusion to noble Lords that, as far as my department
is concerned—and my colleague Mr Hollinrake is working very hard
to ensure this—those who are affected by this awful scandal will
receive the full and fair compensation that they are owed, and we
will do that as quickly as possible. Postmasters have suffered
for too long. That said, with their having waited so long for
justice, the Bill ensures that the Government will not need to
force victims into unduly rushed decisions on the complex and
emotive issues of compensation.
I repeat my thanks to all noble Lords for their contributions
today. I know the House takes a strong interest in this scandal
and wider Post Office matters. I hear what the noble Baroness,
Lady Brinton, said about where this takes us on previous
scandals, and I am sure there is more to be said about that. This
Bill is just one part of the extensive action that the Government
are taking to defend the interests of postmasters, and I commend
it to the House.
Bill read a second time. Committee negatived. Standing Order 44
having been dispensed with, the Bill was read a third time and
passed.
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