Post Office: Compensation for Horizon Scandal
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
With permission, I will make a statement on the latest steps that the Government are taking to ensure that swift and fair compensation is made available to postmasters impacted by the Horizon IT scandal.
The House is well aware of the terrible impact felt by the many postmasters affected by the issues with the Post Office’s Horizon IT system that began over 20 years ago. Those distressing consequences have been widely documented in the courts—in the 2019 group litigation order judgments and in the more recent Court of Appeal judgments—as well as in the media. I have met postmasters personally to hear how their lives and the lives of their families have been affected by these events, and every time I am moved by the impact that these events have had on individual postmasters’ lives and their fight for justice over a number of years. I pay tribute to colleagues on both sides of the House for the way they have supported postmasters in their efforts to expose the truth and see justice done.
Today, I will update the House on the latest steps that the Government are taking to ensure that fair compensation is paid to people impacted by the scandal. As Members will know, members of the GLO group performed a great public service by bringing the case in 2019 that exposed the scandal. That is why I was pleased when the Chancellor announced in March this year that further funding is being made available, to ensure that those people receive similar levels of compensation to that available to their non-GLO peers. The Government intend to make an interim payment of compensation to eligible members of the GLO who are not already covered by other compensation support, totalling £19.5 million. Together with the share of the December 2019 settlement, which we understand was distributed to the GLO postmasters, that brings the total level of compensation to around £30 million. Postmasters will be contacted in the coming weeks to submit an application, and we aim to distribute funds within a few weeks of receiving that application. I hope that will go some way towards helping many postmasters who have faced and still are facing hardships.
In parallel, we are continuing to work at pace on delivering the final compensation scheme for the GLO. I confirm that we will be appointing Freeths to access the data and methodology that it developed in relation to the distribution of the 2019 settlement. Freeths represented the GLO claimants, and it has vital knowledge and expertise based on its involvement in the case. That will allow us to work at pace on the design of a scheme with the Justice for Subpostmasters Alliance, and Freeths, to give those in the GLO similar compensation to their non-GLO peers. As promised in March, we will informally consult with members of the GLO about the proposed scheme’s operation. I am also pleased to announce that members of the GLO group will be able to claim reasonable legal fees as part of participating in the compensation scheme. I hope that will allay any concerns they might have about meeting the costs of seeking legal advice and support when applying to the scheme.
Turning to progress on compensation for overturned criminal convictions, I am pleased to report that interim payments are progressing well. As of 29 June, there have been 75 overturned convictions, with the most recent being overturned in recent weeks. The Post Office has received 74 applications for interim payments, including several new applications recently. Sixty-seven offers have been accepted by and paid out to claimants, totalling nearly £7 million. That marks significant progress, with 10 additional interim payments made to postmasters since I updated the Business, Energy and Industrial Strategy Committee on 11 January 2022. I am pleased that those interim payments have helped to deliver an early down payment on the compensation due to affected postmasters, in advance of full and final compensation packages being agreed.
For those postmasters with an overturned conviction who have already submitted quantified claims, we are working with the Post Office to agree, wherever possible, part payments of agreed elements of claims, such as loss of earnings, and we will continue to do so with additional claims when they are submitted. That step should enable us to avoid undue delays, by awarding partial compensation while outstanding matters are resolved.
One area where it has been challenging to agree compensation is non-pecuniary damages, some of which reflect the wider impact on postmasters’ lives that the wrongful convictions have had. That includes compensation for their loss of liberty, or impacts on their mental health. A number of postmasters have agreed to refer this issue to the process of early neutral evaluation, to be conducted by former Supreme Court judge Lord Dyson. It is hoped that that evaluation will facilitate the resolution of those issues. The Government stand ready to support the delivery of the early neutral evaluation process, and are keen to ensure that the outcomes of the process enable swift compensation.
I urge all postmasters with a Horizon-related conviction to continue to come forward to seek to have them overturned. Indeed, postmasters are being contacted individually by the Criminal Cases Review Commission, and other relevant bodies, to encourage them to do so.
In addition to progress on compensation for those with overturned criminal convictions, good progress has been made on delivering compensation for those in the historical shortfall scheme. As of 23 June, 65% of eligible claimants have now received an offer, meaning that £29 million has now been offered, and 444 further postmasters have been offered compensation since my last update to the House. I thank the independent panels for their diligent work in progressing those cases.
As I have said previously, I have set the Post Office the ambition to make 100% of HSS offers by the end of the calendar year, and the Government are working closely with the Post Office to achieve that. It is important, however, that in addition to providing compensation, we learn lessons so that something similar can never happen again. That is why the Government set up the Post Office Horizon IT inquiry and put it on a statutory footing, to ensure that it has all the powers it needs to investigate what happened, establish the facts, and make recommendations for the future. We are co-operating fully with the inquiry to ensure that the facts of what happened are established and lessons are learned, and I commend this statement to the House.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I thank the Minister for advance sight of his statement and for keeping the House informed of progress. The Horizon scandal is perhaps the greatest miscarriage of justice in our country’s history. Its victims have waited for justice for far too long. I pay tribute to the Justice for Subpostmasters Alliance for its tireless work and acknowledge the work of colleagues on both sides of the House who have gone to considerable lengths to highlight the plight of their constituents. In particular, I pay tribute to my right hon. Friend the Member for North Durham (Mr Jones), whose commitment to the cause has been unwavering, and to Lord Arbuthnot in the other place.
I also pay tribute to the Minister—and I do not say that lightly. Successive Conservative Governments have sat on the scandal, but he has made real progress in moving us to a place where we can see that justice is in sight. I acknowledge that. I also welcome the update on the March announcement that, as Labour has repeatedly called for, the 505 litigants will receive the compensation payments that they are entitled to. However, I emphasise that, as I am sure the Minister will acknowledge, it is unacceptable that it has taken so long when the right course of action was always clear. There really was no need for victims to have spent so long in limbo.
At the core of this unforgivable scandal is the belief that workers were dishonest and technology was infallible. Perhaps that is not surprising, given the Government’s track record on defending the rights of working people. Decent, honest people have had their lives torn apart, been put in prison and been made to wait years for justice. For some, that wait has been too long. We must not forget those who are not with us and will not see the justice to which they were so entitled.
As I have previously done in the Chamber, I implore the Minister to act quickly and decisively to draw a line under this horrific miscarriage of justice. There can be no further delays in providing the compensation that will go at least some way in helping to right this wrong. As such, will he provide a timescale for when all compensation payments will have been made? Will he confirm that the compensation will not affect the Post Office’s core funding, day-to-day operations or viability in—I stress this—any way? Given the vital role that post offices perform in our communities—we all acknowledge that—it is essential that today’s communities are not made to pay for the unacceptable mistakes of the past. Labour has called for all those involved to be held accountable. Will he therefore update the House on what investigations are ongoing into the role of Fujitsu and others involved in the technology that led to the failure?
The Minister spoke about learning the lessons from this horrific scandal. The Government were, and remain, the only shareholder in the Post Office. They have a financial responsibility and a moral responsibility to ensure that nothing like this ever happens again.
Paul Scully
I thank the hon. Lady for her kind words, and I totally echo her thanks and congratulations to the right hon. Member for North Durham (Mr Jones) and Lord Arbuthnot. My hon. Friend the Member for Telford (Lucy Allan) and others sitting behind me have also worked tirelessly on this for so long, as has the hon. Member for Motherwell and Wishaw (Marion Fellows), who chairs the all-party parliamentary group on post offices.
It is not possible to listen to the stories and fail to be moved. There is always something else that comes out and brings a tear to the eye and, frankly, anger that this was ever allowed to happen. The Government have moved to do something about it, but we are all doing something, because this is about a human cost. We are humans first and politicians second.
The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) talked about the timing. There is an application form for the 555 to fill in. It is comparatively simple and Freeths will work with each of them and walk them through the process, because the last thing we want to do is put hurdles in their way. We want to make sure that within a few weeks the money goes out of the door to them. They need the money now. In parallel with that, the compensation scheme has started. We want informal consultation with the 555, to make sure that they are happy with the scheme and have faith and confidence that the funding will be delivered. As I have said, we want the historical shortfall scheme to be wrapped up and to at least make offers to each person by the end of the year.
I think we will be able to start moving quickly on overturning criminal convictions as soon as Lord Dyson has responded through his early neutral evaluation, but that also depends on the flow of cases via the solicitors. I have been working closely with Hudgells and other solicitors who represent the groups, to make sure that it is as speedy as possible.
I can confirm that this will not affect the Post Office’s core funding. We want to make sure that the Post Office has a future, but we cannot have that future until we have rectified the mistakes of the past.
The hon. Lady also talked about Fujitsu, learning the lessons and holding people to account. The next stage of the statutory inquiry starts next week, when the Government, the Post Office, Fujitsu and others will go in front of Wyn Williams. That will start the process of making sure that we know exactly who knew what, who did what and when.
Lucy Allan (Telford) (Con)
I thank the Minister for all his good work. Obviously, today is a great day because he has been able to make this statement to the House.
I remain deeply concerned about the role of Fujitsu, UK Government Investments and all those who sent Ministers to this House, even after the Justice Fraser judgment, to say, “Nothing to see here.” That was wrong. I know that Sir Wyn Williams is investigating, as the Minister has rightly said, but will my hon. Friend personally commit to ensuring that those individuals are held to account?
Paul Scully
I thank my hon. Friend for all the work that she has done. Having set up the statutory inquiry, what I cannot do at this Dispatch Box, at this moment in time, is direct Sir Wyn towards any particular area of findings. That is for him to do and I want him to remain an independent chair. But we absolutely want to make sure that lessons are learned and that people are genuinely held accountable.
Marion Fellows (Motherwell and Wishaw) (SNP)
Thank you, Mr Speaker. I thank the Minister both for his statement and for prior sight of it. I also thank all members of the APPG, both former and current, because they have been the power behind this. I merely chair it. I came along quite a way into all of this, and I am grateful for the help I have had.
The Minister has been diligent in his work leading to today’s announcement on interim compensation. Though that is very welcome, it has taken a long time to get here. I thank him for the thought that has gone into the administration of the scheme, and welcome the proactive action to be taken in contacting those GLO members who are yet to receive compensation.
Will the Minister—I know this is a big ask—reopen the historical shortfall scheme without a cut-off date, as the NFSP called for? Lots of sub-postmasters have still not applied for the compensation to which they are entitled. Post Office failures go a long way back under Conservative, Labour and Lib Dem Ministers, and sub-postmasters still struggle to make a decent living. Will the Minister confirm that the Government will continue to support post offices and sub-postmasters so that they thrive and do not suffer for grievous past mistakes that are now rightly being dealt with?
Paul Scully
I thank the hon. Lady for all her work and for her remarks. It is not practical to reopen the historical shortfall scheme in full, but cases are still coming forward and the Post Office is looking at them on an individual basis, because we want to make sure that we catch as many people as possible who have been wronged.
As for remuneration for postmasters, I talked about the fact that we have to give post offices a future. That has to be done on the back of the people—the postmasters up and down the country—who make the Post Office what it is. Remuneration remains a key topic of discussion with the Post Office, the NFSP and postmasters in general.
Mr David Davis (Haltemprice and Howden) (Con)
I have watched many Ministers do a good job at the Dispatch Box, but it takes a very special Minister to take an issue such as this to heart and really make it move, as this Minister has. The compensation that he talks about is long overdue, particularly for litigants—he knows that I represent one of them—and it will go a good way to correcting some of the historical injustices in this sorry case. I congratulate him on that and I know that this is not the end of the tale.
There is another way in which this cannot be the end. We have heard about learning lessons and all that, but this is about more than learning lessons; there is a massive question of justice. People have covered up—let us make no bones about it—a massive injustice to their advantage and for their own profit, pay and honours. I know that the Minister cannot say certain things and that sub judice issues apply to him, but I hope that he will keep a very close eye on this issue and make sure that the people who need to be punished are punished and that justice is done.
Paul Scully
I thank my right hon. Friend for all his work and the conversations that we have had. I should not have to be here making these statements and the taxpayer should not be covering compensation for the Post Office. This is being done because people have been wronged by those in authority and they have been let down time and again over 20 years. That is why we need compensation, justice and answers and to be able to draw a line under this, so that people who have been wronged can move on with their lives.
Clive Efford (Eltham) (Lab)
The Minister knows that I have two such cases. One person is in front of the independent panel giving advice on the historical shortfall scheme. The other person has a conviction that was overturned by the Criminal Cases Review Commission. However, the Post Office does not accept that that was a Horizon-related conviction and is therefore refusing to provide any form of compensation. Given the comprehensive nature of the failure of Horizon, how can the Post Office say that with any confidence? Will the Minister confirm that we will consider compensation for former postmasters who are in my constituent’s position?
Paul Scully
The hon. Gentleman and I have discussed this matter and I think the interim payments are his constituent’s concern. If Horizon is deemed not to have been the main driver of what happened—the Post Office contested that—his constituent would not be entitled to the interim payments, but that does not stop them applying for compensation.
Mr David Jones (Clwyd West) (Con)
Like my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), I commend the Minister for his personal dedication to this cause. It is outstanding and I am sure that a lot of postmasters around the country appreciate it. The cost of the settlement that he has announced will fall on the public purse. In due course, it should be possible to seek indemnity in whole or in part from the companies—I suggest Fujitsu, most notably—that are responsible in whole or in part for this issue. What steps is he taking to ensure that they are made aware that, in due course, such indemnity will be sought?
Paul Scully
I think that all parties who will be in front of the inquiry will know exactly that. I do not want to pre-empt anything that we may do, but as my right hon. Friend says, the taxpayer clearly should not have to foot the bill. However, we want to make sure that we get all the answers before we take further steps.
Mr Kevan Jones (North Durham) (Lab)
I thank the Minister for his statement. I put my thanks to him on the record, because of the numerous Ministers I have dealt with on the issue in the past 10 years or more, he is the only one who has challenged the system and compassionately realised that this wrong needs to be righted. He should be congratulated and take full credit.
The interim payments will make a difference because a lot of these individuals, such as my constituent Tom Brown, have been living in abject poverty for the past few years through no fault of their own. Proud individuals who served their community were ruined by the state. Like the hon. Member for Telford (Lucy Allan) and the right hon. Member for Haltemprice and Howden (Mr Davis), I would like to know what the next process will be.
I accept that the compensation scheme will be put in place, and I am pleased that Freeths is involved, but what about holding people to account? My layman’s view is that criminal activity was involved in some of the decisions that were made. When will the individuals involved face a day of reckoning? I accept that the Minister cannot speak about what will come out of the public inquiry, but it is very important that the Government have a strategy to ensure not only that those individuals are identified, but that there is a process for dealing with them in the criminal courts.
Paul Scully
I thank the right hon. Gentleman for all his work and for his kind words, which mean a lot from someone who has done so much in this area. I do not want to pre-empt the inquiry, but I know from looking back at the records that the Director of Public Prosecutions was interested in the findings of the Fraser judgment. That is the process for further criminal action, should it be deemed appropriate.
Duncan Baker (North Norfolk) (Con)
I echo everything that has been said to the Minister; I will not go over it all again, but he really deserves the credit that has been given. As a former postmaster—I think I am the only one in the House—I absolutely believe that those responsible, including Fujitsu and senior people in the Post Office, must be held to account.
I also want to say something different to the Minister: will he please, please look at the remuneration structure for postmasters? We are losing post offices up and down our high streets and in our communities, because it is sometimes unviable to run a post office as a stand-alone unit. When communities lose post offices, we struggle to get them back. Once this horrendous scandal is dealt with, will the Minister please look at remunerating postmasters properly so that we can get these great institutions back on our high streets? My goodness, we need them.
Paul Scully
I thank my hon. Friend, whose comments come from experience. We are not waiting until this is over. The Post Office has conversations all the time with sub-postmasters and their representatives about remuneration. It relates partly to the future of post offices. Some postmasters rely on extra services to bring in footfall so that they can then sell other products in their retail outlets; some find that too binding, including in some smaller units in Scotland—the hon. Member for Motherwell and Wishaw (Marion Fellows) is nodding— because they are full of parcels, which is preventing them from doing other trading. That is why we need to work together to make sure we have a viable approach for post offices, not just for economic value but for social value.
Chris Elmore (Ogmore) (Lab)
I pay tribute to the Minister for righting this wrong and for working to get more justice for postmasters. He is aware that I have a constituent who has faced hardship for many years, having been a sub-postmaster for about 10 years. May I press him slightly on his statement, in relation to the 33 postmasters who are no longer with us, four of whom took their own lives during the wait for justice? Will he ensure that their families, including husbands, wives and children, get support to receive compensation? There can never be enough compensation for those families, but that would go some way towards righting this wrong and ensuring that they get the justice that they deserve.
Paul Scully
I thank the hon. Gentleman for his comments. I ask him please to pass my condolences to the family of the postmaster to whom I know he is referring, and to others with whom he has been in contact who have a family member who has taken their life as a result of this. The compensation schemes all include the estates of the postmasters who have died, whether they died of natural causes or unfortunately took their own lives.
Sir Robert Buckland (South Swindon) (Con)
I want to add my tribute to my hon. Friend, who is working tenaciously on behalf of—as he has just said—not just the living, but those who have sadly died. I think he will agree that we can have the fullest confidence in the experience of the High Court judge Sir Wyn Williams and his independent statutory inquiry, but does he agree that the inquiry should examine in particular the way in which, before evidence that is the product of information technology—which is only going to grow as a phenomenon in the years ahead—is presented to any court, it is the subject of its own verification? That seems to me to be at the heart of the problem that was the root of what has been, in terms of its scale, the greatest miscarriage of justice in our English and Welsh legal history.
Paul Scully
I thank my right hon. and learned Friend for what he has said and for the experience that he brings to the House. Sir Wyn Williams has had to learn very quickly and import considerable resources because of the technology that has been involved. It is easy to baffle people with high tech, and to say that there is nothing to see here and absolutely nothing is wrong. It is extremely complex, and I hope that Sir Wyn does get to the bottom of exactly the issue that my right hon. and learned Friend has raised.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
May I add my voice to those who have said that the Minister deserves full credit for getting us to this point?
The inquiry is of course about ensuring that those who have done wrong in the past are accountable. However, we already know that at the heart of this problem was the culture at the top and the centre of the Post Office, which essentially did not trust the people at the coalface. If we are to ensure that this never happens again, we have to know that that culture has changed. Quite apart from the inquiry into the past, is the Minister satisfied that those who are currently at the top and the centre of the Post Office have genuinely received that message about a change in the culture?
Paul Scully
Yes, I definitely am. We have already talked about remuneration, but Nick Read brings with him a different type of culture—a different approach—because he does not see post offices as merely branches of a central location. He was used to dealing, in his previous occupation, with supermarkets which were part of a bigger organisation, and I believe that the culture is shifting under his leadership.
Bob Blackman (Harrow East) (Con)
I, too, congratulate my hon. Friend—not just on the work that he has done in respect of this matter, but on keeping the House updated, and listening to what Back Benchers have had to say and then dealing with it. He has, for example, announced the interim payments that were requested by Members during the last statement.
Sub-postmasters are essentially running small businesses, for the benefit of the community and to provide services. The accounting systems prior to Horizon were chaotic, to put it mildly. May I urge my hon. Friend to ensure that evidence is presented relating not just to what happened during the scandal of people being charged with offences which they clearly had not committed, but to what happened previously and led to this chaos in the first place?
Paul Scully
I thank my hon. Friend for his kind words. Sir Wyn will be looking at the Horizon scandal in the round to see how it progressed over those 20 years, and at the history that is documented in Nick Wallace’s book “The Great Post Office Scandal”, which is a very comprehensive read. As for the interim payments, they will clearly never be enough for people to settle their debts, but they are a first step. This is not the end of the process, but it is a really important step.
Gareth Thomas (Harrow West) (Lab/Co-op)
Further to the question from the chair of the all-party parliamentary group on post offices, the hon. Member for Motherwell and Wishaw (Marion Fellows), about the scope for flexibility on the closing date for the historical shortfall scheme, I have constituents who ran a sub-post office in a nearby borough but had it shut down and the franchise taken away by the Post Office. At first glance, it looks as though Horizon issues were very much involved. They submitted an application to the historical shortfall scheme, but for a series of reasons it seems that their application was not received by the Post Office. If the Post Office is unwilling to consider their case, would the Minister be willing to meet me to see if together we might persuade it to rethink?
Paul Scully
I will gladly meet the hon. Gentleman to look at that case. It is difficult for me to make a judgment here, but I have talked about the fact that the Post Office is looking at things on an individual basis and I will gladly meet him to talk about his constituents’ case.
Aaron Bell (Newcastle-under-Lyme) (Con)
Can I add my name to the chorus of praise for the Minister? I also thank the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), for her generous words to him. The reality is that it has taken far too long to get to this point, and not just in miscarriages of justice like this. We have also seen scandals in the NHS where people have to wait too long for Governments finally to admit fault and then to compensate people. That is often because they have been badly advised along the way. Given what we have heard from so many people around the Chamber today about the people involved in these cases being old, retired and often still in poverty—and, as the hon. Member for Ogmore (Chris Elmore) said, some of them have died—can I impress on the Minister the urgency of his continuing his good work so that we can get this fully resolved as speedily as possible and everyone can get the justice and compensation they deserve?
Paul Scully
I thank my hon. Friend for his kind words. Receiving this praise is great for me, but this is not about me. As he rightly says—please do carry on, by the way—it is about the people who have suffered terribly at the hands of people in authority. Some of them have taken their own lives and many of them have been stigmatised and left in debt and abject poverty, so we have to keep the pace going, not just to get that compensation for them but to get those lessons learned and hold people to account.
Peter Grant (Glenrothes) (SNP)
Among the other catastrophic and inexcusable failures, this House failed. This House was made to fail in its duty to get to the bottom of this quicker, because somewhere in the machinery of government there was a deliberate and sustained conspiracy to send Minister after Minister unwittingly to the Dispatch Box to say things that we now know are not true. This House has to look at that very seriously indeed. It cannot be acceptable in any circumstances for this House to be prevented from doing its job by conspirators, whether in Government or in outside agencies, and I hope the appropriate authorities of the House will look into that urgently.
Can the Minister tell me what further action he proposes to take in forthcoming legislation to widen the circumstances in which directors of companies can be held personally liable as well as corporately liable for serious misconduct in office? In particular, one of the things my constituents find frustrating is that directors of these companies, who at the very least should have known what was going on and did nothing to stop it, were able to walk away and become directors of other companies. They have had 20 years of a good lifestyle that was denied to the victims and, if they are called to account, they will get a fair trial, which was denied to the victims. Will the Minister look for ways to speed up the process of preventing directors from taking up other highly paid directorships if there are serious questions to be answered about their conduct in office?
Paul Scully
I am not sure if it is the House authorities, but it is certainly the case that Wyn Williams’s inquiry will see exactly where the failings were—including, if there are any, failings by Ministers or others who have stood here—without fear or favour. In terms of directors, we have already brought in a number of measures since I have been a Minister, including the disqualified directors legislation, which allows the Insolvency Service to bring companies back on the books and then to take action against their directors, but we will always look to make sure we have the most robust system to tackle rogue directors.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I would like to thank the Minister for his determination to get this issue sorted for sub-postmasters where other Ministers have failed. With post offices getting harder and harder to come by in recent years, how do the Government intend to restore confidence so that potential sub-postmasters are not put off opening these businesses that are so essential to our communities?
Paul Scully
We want to ensure that, by drawing a line under this historic miscarriage of justice and scandal, we can work on the future of the Post Office. To do that, we need to make sure we are engaging everybody—rural, coastal and city-wide post offices—on how we get the right balance between the Post Office’s economic value and its social value. I will continue to work with the APPG and with Members on both sides of the House to get this right.
Jim Shannon (Strangford) (DUP)
I thank the Minister for grasping the core of the issue and getting the job done. The Chamber is unanimous in thanking him, and I add my thanks, too. I welcome that those who initially missed out on the scheme now have the opportunity to apply. It is good to see fairness and equity set as the standard for those who have passed away. Will their sponsors or next of kin be eligible to apply?
Paul Scully
I thank the hon. Gentleman for his kind words. The solicitors will work with the estates of postmasters who were subject to overturned convictions or historical shortfalls, or indeed the original 555. It is important that we get the equity he seeks.