Lord Fox (LD)
My Lords, I thank the Minister for bringing this Statement to your Lordships’ House, and for his two letters to all Peers over the last five weeks. I should say that I have been a member of the Post Offices APPG for some time.
Looking back, the Government have said that they will determine what went wrong. Of course, we absolutely support that. To this end, their route has been to ask Sir Wyn Williams to lead the Post Office Horizon IT inquiry. The inquiry, they say, will work
“to fully understand these events, gather available evidence and ensure lessons have been learnt so that this cannot occur again.”
I am sure that this will be a thorough investigation, which will shine a bright light on systems and programmes, and their implementation. But can the Minister reassure us that it will also illuminate the overriding issue of how this business behaved? As the noble Baroness, Lady Hayter, has just eloquently set out, the moral shortcomings of the management are central to why this happened. To fully understand this issue, as the Government want to, they need a thorough appraisal of the management culture of the Post Office. It is changing the culture that makes sure that something never happens again, not updating an operating system or rewriting a computer programme.
Can the Minister please make available the full terms of reference according to which Sir Wyn will conduct his inquiry? Government communications include the phrase:
“The Government look forward to receiving Sir Wyn’s report in the summer”.
Does the Minister expect the report to be completed by this summer, or have I misunderstood? If so, what support will the investigation have to run to such a tight timetable? I am concerned because this is not a statutory inquiry. What will happen if individuals retain lawyers to represent their interests? How will Sir Wyn proceed in those circumstances?
I echo the praise given by the noble Baroness, Lady Hayter, to the noble Lord, Lord Arbuthnot of Edrom. He has tenaciously pursued this issue, and in February last year he asked a question of the then Under-Secretary of State at BEIS, the noble Lord, Lord Duncan of Springbank:
“To ask Her Majesty’s Government what recent assessment they have made of the Post Office’s powers to conduct prosecutions.”-
The response was that
“the Post Office’s powers to bring a private prosecution, which fall under section 6(1) of the Prosecution of Offences Act 1985, are not specific to that company.”—[Official Report, 4/2/20; col. 1709.]
I forewarned the Minister that I would bring this up, because my understanding is that while it has not been granted investigative powers, the Post Office has regularly undertaken joint investigations with the police and other investigative bodies that do have statutory investigating powers. It was granted access to the national police computer system for intelligence and prosecution purposes; it had financial investigators appointed by the National Crime Agency for the purpose of undertaking financial investigations for restraint and confiscation proceedings; and Royal Mail was included in the list of relevant public authorities, under the Regulation of Investigatory Powers Act 2000, designated to grant authorisations for the carrying out of directed surveillance to investigate crime. The Minister’s views on that would be welcome. Is it really still appropriate that this organisation should enjoy those powers?
This is by no means the end of the road, as the Statement makes clear. In yesterday’s debate in the House of Commons, my honourable friend Christine Jardine MP asked the Parliamentary Under-Secretary, Paul Scully, to give an assurance that the Government will commit to treating each of the former sub-postmasters as individuals. The Minister acknowledged that, as well as those prosecuted, there were those whose lives had been blighted by incorrect accusations. I am pleased to report that he acknowledged the human cost. However, it is not clear to me what this acknowledgment means in practice. How will the Government embark on treating everybody individually? As part of the settlement, we have the historical shortfall scheme and it has been explained that this had received over 2,400 applications when it closed last August. First, although this is more than the Post Office anticipated, is the Minister satisfied that everybody who could have applied for this was aware of it and did? Secondly, the Minister was clear that Her Majesty’s Government will support the Post Office with resources. We of course endorse that. We do not yet know what form compensation will take and how it will be calculated. However, in a Written Answer, the noble Lord, Lord Callanan, said:
“we will not spend more of taxpayer’s money than is necessary to ensure that the Scheme meets its objectives.”
That sounds like a management expectation exercise and is a bit ominous. This is not an area, or a time, for penny pinching.
However financially generous the scheme turns out to be, the Government have to be clear that they can never fully compensate for the emotional and social damage that has been visited on many thousands of innocent people in this country.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Fox, for their comments. I completely share many of their sentiments of shock and outrage. The tragic failings of the Post Office have occurred over many years, over many different Governments. On behalf of the current Government I can only say that we are truly sorry.
We welcome the decision of the Court of Appeal on 23 April to quash the 39 convictions. This is in addition to the six convictions that were quashed in the Crown Court in December. The impact that this ordeal has had on affected postmasters, their lives and livelihoods cannot be overstated. Nobody who saw the television coverage and the news reports the other day can fail to have been affected by the individuals featured. We certainly hope that, with this decision, these postmasters can at least start the process of moving forward to a new chapter in their lives.
I move on to the specific issues raised by the noble Lords. On compensation, the Government hope that the court’s decision is another important step towards bringing resolution to these postmasters. The Court of Appeal’s judgment will require careful consideration by all involved, and the Post Office itself will need to consider the next steps and the best process for fairly compensating these postmasters. We are keen to see that all those whose convictions are overturned are fairly compensated as quickly as possible and we will certainly work with the Post Office towards this goal. I understand the strength of feeling felt by those postmasters in the GLO who I understand only received a portion of the original £57.75 million settlement by the Post Office. However, that was a full and final settlement reached between the claimants in the GLO and the Post Office.
Both noble Lords mentioned the inquiry. Many postmasters and their families have suffered issues and distress since the faults in the Horizon system. We all agree on that. Some had their livelihoods and businesses taken away and were convicted of crimes that we now know they did not commit. Anybody can only imagine the distress that that must have caused to loyal, upstanding and honest members of the community. We are clear that a situation such as this must never, ever be allowed to happen again.
To ensure that the right lessons are learned, and to establish what must change, we launched an independent inquiry, led by Sir Wyn Williams, in September last year. He is a retired High Court judge with a wealth of experience and is fully independent of both the Government and the Post Office. I can tell the noble Lord, Lord Fox, that the inquiry has made swift progress. It has already heard from a wide group of affected postmasters. The call for evidence has recently closed and I understand that Sir Wyn is planning to have some public hearings on these matters in June. I can confirm that we expect to get his report by the end of the summer.
Given that all parties so far are committed to co-operating, we remain of the view that a non-statutory inquiry is the right approach. However, if Sir Wyn does not get the co-operation he requires, then all options are on the table and we will not hesitate to act. We do expect his report in the summer.
On who is to blame, decisions regarding the litigation strategy at the time were taken by the Post Office based on the legal advice that it had received. The Government at the time relied on the Post Office’s management to investigate issues with the Horizon system. As we have seen from both Mr Justice Fraser’s judgment and now the Court of Appeal judgment, the Post Office consistently maintained that the Horizon system was robust. That obviously turned out to be incorrect. What is also clear, from the Court of Appeal judgment last week and the judgments in the 2019 group litigation, is just how misguided the Post Office was in its approach to the management of issues arising from the operation of the IT system. All of these matters will be investigated in the inquiry, so that we can ensure this never happens again. I commit to keeping the House fully informed.
The noble Lord, Lord Fox, raised the issue of private prosecutions. The Post Office no longer undertakes any private prosecutions, and I have been personally assured by the new chief executive that it has no plans to undertake any further prosecutions in these matters. However, the Government understand the wider challenge that the Post Office case poses regarding the responsibilities that companies have in undertaking private prosecutions. The Justice Select Committee considered this last year and concluded that prosecutions brought by victims of crime themselves, whether corporate or individual, still have a valuable part to play. The Select Committee concluded that existing safeguards in place to regulate private prosecutions are effective at filtering out weak claims. As the noble Lord, Lord Fox, himself acknowledged, the Post Office’s powers to bring private prosecution fall under Section 6(1) of the Prosecution of Offences Act 1985, and they are not specific to that company. It has the same right as any other, whether an individual or a company, to bring a private prosecution but, as I said, I have been assured that it has no plans to bring any further prosecutions.
The noble Lord, Lord Fox, was kind enough earlier today to mention the issue of the Post Office and its investigatory powers. Since he did, I have asked my officials to investigate this matter. There are, apparently, over 600 public authorities that can use investigatory powers, and these are overseen by the Investigatory Powers Commissioner’s Office. There have been no changes to the authorities that the IPCO oversees since the introduction of the Investigatory Powers Act. According to the IPCO 2019 annual report, Post Office Ltd is not on that list.
The Deputy Speaker (Lord Alderdice) (LD)
We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.
Lord Mackay of Clashfern (Con) [V]
My Lords, this is a situation in which the Post Office used our system of justice to produce a massive injustice. I would like to know who represented the Post Office in these proceedings, whether they had any reason to doubt the validity of the evidence that the Post Office produced and, if so, whether that was passed to the defence.
Lord Callanan (Con)
My noble and learned friend makes some very good points. Given that some of these initial prosecutions happened, in some instances, 20 years ago, the fact is that the Post Office representation changed a number of times. It is difficult to provide a complete answer to my noble and learned friend’s questions. Postmasters were prosecuted by the in-house legal teams of the Post Office and, before that, by the Royal Mail, and they were supported by external counsel as needed. It is important to emphasise that none of these prosecutions involved any current Post Office lawyers, nor that of Peters & Peters, which is the criminal lawyers firm now supporting the Post Office to address these issues. I am unable to say what prosecutors thought at the time. However, as my noble and learned friend is of course well aware, prosecutors have a duty to disclose to the accused material that could reasonably be considered capable of undermining the prosecution case or assisting the defence case.
Lord Pannick (CB)
The Minister spoke of fair compensation. Is he aware that the statutory test for compensation for miscarriages of justice is much stricter than simply showing that the Court of Appeal has quashed a conviction as unsafe? The statutory test would impose a burden on postmasters to prove beyond reasonable doubt that they did not commit the alleged offence. Can the Minister assure the House either that this onerous statutory test will not be applied to restrict compensation or that the statutory test will be treated as satisfied in all these cases? Any other approach would compound the wrong done to these postmasters.
Lord Callanan (Con)
The noble Lord makes a powerful point. Of course, the judgment is relatively recent and no decisions have been taken regarding compensation, so I cannot give him any specific commitments today. However, I repeat that we are keen to see that all postmasters whose convictions are overturned are fairly compensated as quickly as possible. I know that the issue of compensation will be of great interest to the House, and I commit to update the House on this matter whenever it is appropriate.
Lord Mendelsohn (Lab) [V]
My Lords, as a businessman, I am embarrassed that our culture of corporate governance and a failure of corporate leadership has directly ruined the lives of the innocent. As Mr Justice Fraser’s judgment lays bare, this includes the fact that they defended an untenable case, and how they did it shows how hollow and disingenuous even the current statements by the Post Office should be seen. The positions of the chairman and CEO are difficult to justify. Can the Minister provide assurance that the serious questions this raises about the position of every member of the current board, and indeed the responsibility of all members since the board was first presented with problems in the system nearly a decade ago, can be fully examined without a statutory inquiry? Can he also assure us that the Government are now willing to provide a full statement relating to what they were told and their actions and role as shareholder? Their apparent failure to provide vigorous challenge to the board meant that this scandal has carried on for as long as it has and illustrates a likely flaw in the Government’s role as a shareholder in this and potentially other circumstances.
Lord Callanan (Con)
I can give the noble Lord the assurance he asked for in the first part of his question: Sir Wyn, as part of his evidence gathering, is looking at the issue of corporate governance, where it is clear that there are some serious questions that need to be answered. On his question about the role of the shareholder, as I have said before on a number of occasions in this place, the Government pressed the management at the time on issues regarding complaints brought by sub-postmasters about Horizon, and we received repeated assurances that the system was reliable. Of course, the Court of Appeal opined that the Post Office had consistently asserted that Horizon was robust and reliable at the time.
Baroness Neville-Rolfe (Con)
Having been a Minister in the business department whose responsibilities included the Post Office for a period, I join others in congratulating the postmasters and the courts on restoring justice. I have always been much troubled by these cases and the tenacity of the Post Office in defending the integrity of its IT systems—now shown to be wholly unjustified—and by the fact that the Post Office was both investigator and prosecutor, which has already been touched on. Does my noble friend the Minister agree that, while being extremely important and useful, the criminal cases review process is far too slow? As part of lessons learned, will he follow up with the Ministry of Justice and explore the case for statutory deadlines or other incentives for speed? People’s lives have been wrecked for literally decades.
Lord Callanan (Con)
I will certainly pass on the noble Baroness’s comments on the speed of the justice system to the Ministry of Justice. I am sure there are many other areas where we would all like to see speedier justice.
The Deputy Speaker (Lord Alderdice) (LD)
The noble and right reverend Lord, Lord Harries of Pentregarth, has withdrawn, so I call the noble Lord, Lord Stevenson of Balmacara.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, the Minister has confirmed that the inquiry—although, technically, I think it was originally called a review—is looking at corporate governance issues, and that is welcome. Could he answer two specific questions? Have the Government submitted any evidence already in the response to the call for evidence? If not, why not? Secondly, does Sir Wyn have the powers to subpoena information from the Government if it turns out that he requires that?
Lord Callanan (Con)
The Government are committed to fully cooperating with Sir Wyn’s inquiry; whatever information or access he needs will of course be provided. I am not sure whether we have submitted evidence, but I will certainly get back to the noble Lord on that. As I said, the inquiry is making swift progress and we look forward to receiving Sir Wyn’s report. However, as I said in my earlier remarks, if there are instances of any stakeholder in this area not co-operating, we will certainly not hesitate to take further action.
Baroness Stuart of Edgbaston (Non-Afl)
My Lords, the tragedy of this case is not just the length of time it took to put this wrong right but the number of players who individually felt they had nothing to answer for other than just to say that they were sorry, which is not sufficient. We need to find out why this happened.
I return to the issue of the Criminal Cases Review Commission. It was set up as a royal commission to speed up the process in the wake of the Guildford Four, the Birmingham Six and a number of serious miscarriages of justice. When you look up the funding structure of that body over the years, we see a combination of increased workload and reduction of funding. The very least that we can do is to fund it so that it can perform its function as it was set up to do, and not allow this sub-postmasters miscarriage of justice to be added to that list of grave injustices which have not been righted in the proper way.
Lord Callanan (Con)
As I said in my answer to the noble Baroness, Lady Neville-Rolfe, we support the work of the Criminal Cases Review Commission, which does some powerfully valuable work in its independent investigating of possible miscarriages of justice. I know that it has worked hard to complete the review into the Post Office Horizon cases with the necessary speed and thoroughness. However, as I said to the noble Baroness, Lady Neville-Rolfe, we will pass on the remarks of a number of noble Lords to the Ministry of Justice to see what more can be done to support its work.
Lord Arbuthnot of Edrom (Con) [V]
My Lords, the Post Office and the Government have expressly excluded the 555 group litigants from the compensation scheme. Nick Read, the chief executive of the Post Office, has called on the Government to compensate the 555 fairly. Are the Government considering compensating all the 555 litigants—as they should, because they have taken their money and should not be keeping it—or are they limiting compensation to those whose appeals have succeeded? Should not Sir Wyn Williams have considered this in his inquiry?
Lord Callanan (Con)
I start by paying tribute—as have a number of other noble Lords—to the tireless work that my noble friend has undertaken on behalf of the sub-postmasters in this case. His is a splendid example of some of the fine work that is done by many Members of this House in tenaciously seeking to draw attention to tremendous miscarriages of justice, and he has done a good job. I know we have spoken a number of times about it when he has drawn attention to these issues. I understand the strength of feeling felt by the postmasters in the GLO who, we have all come to understand, received only a portion of the £57.75 million settlement paid by the Post Office. However, that was a full and final settlement that was reached between the claimants. For postmasters who have convictions overturned, we are keen to see that they are fairly compensated as quickly as possible, and we will certainly work with the Post Office towards that goal. Given that the Court of Appeal judgment is an important development since the launch of the inquiry, I am sure that Sir Wyn Williams will want to note this in the final report on his inquiry.
Lord Berkeley of Knighton (CB) [V]
My Lords, it is a great shame that the Post Office did not approach this with the same sense of admirable humility as does the Minister, who is able, for example, to say, “We got it wrong.” I endorse what my noble friend Lord Pannick said. Would the Minister agree that it would be adding insult to injury—in fact, injury to injury—if these victims had to prove what had gone on? In addition, does the Minister feel that he and the Government have learned enough already that, if they were to discover something similar going on elsewhere, they would now be able to intervene much faster?
Lord Callanan (Con)
I cannot really add anything to the answer I gave the noble Lord, Lord Pannick. On the noble Lord’s second question, I would certainly hope that, if the situation arose in any of the arm’s-length bodies for which I am responsible as a Minister, I would ensure that attention was brought to it and the appropriate lessons drawn as quickly as possible. I hope that those in wider government have also learned the lesson of this sad and tragic case.
Baroness Stowell of Beeston (Non-Afl)
My Lords, my point picks up on that just made by the noble Lord, Lord Berkeley. As horrified as we all are at this miscarriage of justice, what is also shocking to everybody is just what it tells us and shows us about the arrogance of those of us in positions of authority when we are faced with something that is so obviously wrong and has been brought to us by the general public. I understand what the Minister is saying about a statutory inquiry and the inquiry that Sir Wyn is doing at the moment. However, will he consider and express to us his understanding of the reasons why there is that lack of confidence from the sub-postmasters and many others in the robustness and validity of the review that is under way and the need for more reassurance that other steps can be taken if accountability and responsibility is not shown through that process?
Lord Callanan (Con)
The noble Baroness makes an important point: it is vital to get the buy-in and support of the postmasters for the operation of the inquiry. I hope that we will get that. If there are any shortcomings in the process of the inquiry, we will not hesitate to go further, if necessary. My understanding is that the inquiry is proceeding well. Sir Wyn is getting on with his work; he is a well-respected judge in this field, and will hold some public hearings in June, which will, we hope, draw more attention to these matters. We will keep it under review, and I hope he will get the support of the postmasters, because that is vital to ensure that the inquiry is robust.
Lord Harris of Haringey (Lab) [V]
The Minister said that the Horizon IT system had “real problems”. That is a huge understatement, given the misery caused to hundreds of sub-postmasters who had been serving their communities for many years. The Statement says nothing about Horizon’s manufacturer, Fujitsu, a company that continues as a trusted partner of HMRC, the Department for Education, the Cabinet Office, the Home Office, the Ministry of Defence and no doubt many other government departments. The NHS had to sack Fujitsu for a huge IT programme which, like Horizon, did not work. The company’s response was to demand £700 million in compensation. The Minister did not answer my noble friend Lady Hayter’s question: how much compensation will Fujitsu be paying those whose lives it knowingly wrecked with its Horizon software? What assessment have the Government made of what this scandal says about other Fujitsu software embedded in so many government departments?
Lord Callanan (Con)
Fujitsu has been rightly and severely criticised in much of the judgment, but the noble Lord will understand that compensation from Fujitsu is a contractual matter between the Post Office and Fujitsu. I am pleased by and welcome the fact that Fujitsu continues to co-operate fully with Sir Wyn’s inquiry. The noble Lord is right to say that Fujitsu provides a range of services across government and, of course, many parts of the private sector. We are not at the moment aware of any other problems in its systems.
Lord Mackenzie of Framwellgate (Non-Afl) [V]
My Lords, I thank the Minister for his update today, which is helpful. One of my passions throughout a long police career was the fight for justice and to put right miscarriages. This case has caused personal tragedy to hundreds of people through family breakup, bankruptcy and loss of liberty on an industrial scale. Some, of course, have since died. For example, why did nobody join the dots when deficits were occurring throughout the Post Office estate following the installation of the new Horizon IT system, and why was it kept secret? Does the Minister think it is now time for those who took the decisions at the top of the Post Office all those years ago to be called to account, so the matter can now be closed? Has Sir Wyn Williams got powers to summon witnesses and seize written evidence? If not, surely it requires nothing less than a full statutory inquiry, with powers to determine who knew what and when, so that fair compensation can be awarded to allow all the victims of this massive miscarriage of justice to get on with their lives.
Lord Callanan (Con)
As I said in previous answers, we are keen to see that all postmasters whose convictions are overturned are fairly compensated as quickly as possible, and we will work with the Post Office towards this goal. On the noble Lord’s comments about the inquiry, the problem with a full statutory inquiry is that it could take many years to report. The current inquiry is going well; everyone is co-operating and we should be able to get a report in the summer. I think it is better for all concerned that we have the report, so that we learn the lessons that have to be learned as quickly as possible, rather than waiting years—but, as I say, we are not ruling anything out. If there is any lack of co-operation that we need to address, we will not hesitate to go further.
Lord Forsyth of Drumlean (Con) [V]
My Lords, given that people have lost their livelihoods, liberty and even lives as a result of the incompetence and bureaucratic bullying, does my noble friend really think it is enough, after 20 years of injustice, for the Post Office to apologise for historical failings and recruit two NEDs, and for the Government to compliment the victims on their tenacity and offer the cliché that lessons will be learned? Why has no one been held to account and why, as the noble Lord, Lord Harris, just asked, is Fujitsu, the producer of the dodgy Horizon software, not paying for the damage it caused and repeatedly denied? Will my noble friend return to the question asked by my noble friend Lord Arbuthnot, who has done so much in this area, about why the 550 people are not to be included? As for the argument that there was an agreement signed—it was an agreement signed before people knew of the scandal of the way the Post Office was behaving.
Lord Callanan (Con)
I totally agree with the noble Lord that, of course, words are never enough, and we are keen to see that those whose convictions were overturned are fairly compensated. I cannot make any commitments on funding at this stage; it is for the Post Office to engage with the appellants in the first instance as to how compensation can be paid as quickly as possible. The inquiry is doing its work, we will see the report in the summer when it is produced and we will learn all the appropriate lessons.
Lord Browne of Ladyton (Lab) [V]
My Lords, the Metropolitan Police are conducting an ongoing investigation into Fujitsu workers after Mr Justice Fraser wrote to the DPP expressing grave concern about the evidence provided in earlier court hearings. Does what we already know about this appalling miscarriage of justice not justify a wider police investigation? Will the Government not call for one?
Lord Callanan (Con)
The noble Lord will notice that I have avoided commenting on any potential police investigation, for very good reasons that he will understand. However, I hope the investigation will reach speedy conclusions and the police will take the appropriate action.
The Deputy Speaker (Lord Alderdice) (LD)
We have come to the end of the 20 minutes and I regret that two noble Lords who were actually in the Chamber were unable to ask their questions.