Post Office (Horizon System) Compensation Bill

(Limited Text - Ministerial Extracts only)

2nd reading
Tuesday 19th December 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

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

The Post Office Horizon scandal, which began over 20 years ago, and the impacts of which are still felt today, is rightly described as one of the biggest miscarriages of justice in our history. The House will be aware that during the late 1990s the Post Office began installing Horizon accounting software, but faults in the software led to shortfalls in branches’ accounts. The Post Office demanded that postmasters cover the shortfalls and, in many cases, wrongfully prosecuted them for false accounting or theft. Attempts to protest their innocence fell on deaf ears, and decent, honest and hard-working postmasters who served at the heart of our communities were subject to a range of abject harms.

Take the case of Alan Bates, who is one of a number of heroes in this tale. As many Members will know, Mr Bates is due to be immortalised on our screens on 1 January in the ITV series “Mr Bates vs The Post Office”, which will make compelling viewing for many of us. He is an innocent man who, alongside his partner Suzanne, invested £100,000 of life savings to start a new life and run the post office branch in Craig-y-Don, on the north Wales coast. When shortfalls began to emerge, Mr Bates was accused by the Post Office of mismanagement and ordered to repay the difference immediately. He protested his innocence and identified some of the supposed shortfall as the result of an overnight software update. The Post Office continued to pursue payment, meanwhile refusing Mr Bates the IT access necessary to interrogate his own branch accounts. His postmaster’s contract was subsequently terminated, with Mr Bates losing his likelihood, savings and reputation in his community in the process.

Suspecting that other postmasters may have suffered because of Horizon issues, Mr Bates launched his campaign website. Ultimately—15 years later—he gathered enough evidence to successfully take the Post Office to court and expose the scandal.

[Alan Mak (Havant) (Con)]

Like Mr Bates, my constituents Mr and Mrs Simpson ran a village shop and post office that suffered from the faulty software. They have campaigned for compensation through the Justice For Subpostmasters Alliance, and Mr Simpson himself gave evidence at the public inquiry. Will the Minister join me in paying tribute to my constituents and their colleagues? Without their determination and courage, we would not be where we are today, delivering this Bill to support those victims.

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[Kevin Hollinrake]

I thank my hon. Friend for his intervention, and I particularly thank Mr and Mrs Simpson for their work—of course, a number of people campaigned so strongly on this tragedy. I pay tribute to his constituents and to many others like them who made sure we are here today, delivering justice and, indeed, compensation for those postmasters.

Alan Bates’s case is one individual tragedy, but he is only one among many: over 3,000 people have suffered in some way as a result of this scandal. For some, that meant paying the Post Office money they did not owe. For others, it meant the loss of their livelihood, their home, their mental or physical health, or their family relationships. Too many have died before getting justice; saddest of all, some of those deaths were suicides. Each Horizon victim is a personal tragedy, and it is imperative that each and every one gets the justice and compensation for which they have waited too long.

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, which is why the Government set up the statutory inquiry into the scandal chaired by Sir Wyn Williams. The work of that inquiry to date is commendable—it is doing important work in exposing the truth. From that truth will follow corporate and individual accountability, for which there is a strong appetite in this House and beyond. I sympathise with hon. Members’ desire to see accountability right now, but we must let justice take its course.

[Mr David Davis (Haltemprice and Howden) (Con)]

On the Minister’s point about corporate responsibility, I had the chief executive of the Post Office come and apologise to one of the people I have represented in this exercise. The point I made to him, which I hope the Minister will also take on board, is that the corporate behaviour of the Post Office has not been above criticism: it has employed very expensive lawyers to make this process much more difficult for the victims than it needs to be. I hope the Government will continue to encourage the Post Office not to do that.

[Kevin Hollinrake]

Absolutely—we want to make it as easy as possible. I thank my right hon. Friend for his campaigning on this matter, too: he is one of a number of parliamentarians who has done fantastic work to make sure we are here today. I have referred to both corporate and individual responsibility. Corporate accountability is not enough: where we find that individuals are to blame, they should be held to account too.

Any compensation must be fair and just, and we have created a Horizon compensation advisory board to help us make sure that happens. I am very grateful to the right hon. Member for North Durham (Mr Jones), both for his campaigning on this matter and his work on the advisory board. He sits on the board alongside Lord Arbuthnot, who is another great campaigner on this matter, and two academics. Its reports, which are published on gov.uk, have been invaluable in helping us ensure that the schemes are working properly and delivering fairness. As part of the Post Office’s process for compensation for overturned convictions, it is —by agreement with claimants’ lawyers—appointing an independent assessor for the process, whose role will be to ensure that fair compensation is paid.

[Duncan Baker (North Norfolk) (Con)]

The Minister is right when he says that this is a miscarriage of justice. As I have often said in this place, I was formerly a postmaster, and I can remember when the tills did not balance. Unlike the Post Office, I believed my staff that it was not their fault—that there was an error. Luckily, those errors were not significant, and we just wrote them off. I thank the Minister for all he has done, as well as my hon. Friend the Member for Sutton and Cheam (Paul Scully), who has equally done an enormous amount.

The Post Office did not believe those innocent postmasters who were simply doing their job, but equally, Fujitsu supplied the software that did not work properly, yet I never hear about whether that company is culpable. Can the Minister tell me what Fujitsu has ever had to suffer from what has happened to everybody else?

[Kevin Hollinrake]

I thank my hon. Friend for his work on this issue, as well as his direct experience—he is one of the few people in this House who has that experience. I also pay tribute to my hon. Friend the Member for Sutton and Cheam (Paul Scully) for all the work he did as my predecessor; his comments about Fujitsu, and about making sure that it is not the taxpayer alone who picks up the tab, are clearly on the record. Again, where responsibility can be assigned, there should be accountability, perhaps in the form of compensation paid by those companies. It is right, though, that the Sir Wyn Williams inquiry is allowed to take the time it needs to report and to identify blame where it exists. Those matters can then be dealt with at that time.

Alongside introducing this Bill, my Department published a revised version of the documents for the group litigation order scheme, which make clearer than ever that the scheme exists to pay full, fair and timely compensation. If compensation cannot be agreed with my Department, a decision will be made by a panel of independent experts. Any GLO postmaster who believes that the panel’s award fails that fairness test can ask the scheme’s independent reviewer, Sir Ross Cranston, to look at their case. Between them, those arrangements provide powerful and independent assurance that compensation is fair.

Turning to compensation amounts, to date, around £138 million has been paid out to over 2,700 claimants across the three compensation schemes established by the Post Office and the Government. Those figures are regularly updated on the dedicated gov.uk page. So far, 93 convictions have been overturned. We have seen positive progress since my previous statement to the House on 18 September, which announced that postmasters who have had convictions on the basis of Horizon evidence overturned are entitled to up-front offers of £600,000 as a fixed sum in full and final settlement of their claim. I can confirm that following that announcement, the first 22 claimants have now settled their claims with the Post Office, taking the total to 27 full and final settlements—I hope this will encourage other postmasters to submit claims. I should add that a significant proportion of those claimants followed the fixed sum award route.

The GLO scheme, administered by my Department for the 500 trailblazing postmasters who took the Post Office to court and exposed the Horizon scandal, has already paid out roughly £27 million across 475 claimants. Postmasters who were neither convicted nor members of the GLO can apply to the Post Office-run Horizon shortfall scheme. I am pleased to say that every last one of the 2,417 people who applied before the scheme’s original deadline have now received initial offers of compensation, and some £87 million has been paid out. The Post Office is now dealing with late applications and with those cases where the initial offer was not accepted.

I turn now to the provisions of the Bill before us. The Post Office (Horizon System) Compensation Bill, a small Bill of just two clauses, provides a continuing legal basis for the payments of compensation to victims of this appalling scandal. Principally, it will enable the Government to continue to pay compensation under the GLO scheme that my Department is currently administering. Compensation payments made under the scheme are currently paid under the sole authority of the successive Appropriation Acts, and 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.

This certainly does not mean we are taking our foot off the gas. We will still want to be able 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 will be dealt with much more quickly. However, as Sir Wyn Williams has noted, the resolution of compensation claims requires actions by postmasters, their advisers and third parties, as well as by the Government.

In his interim report, which he provided to Parliament in July, Sir Wyn expressed concern that the August deadline could leave some postmasters timed out of compensation or rushed into making decisions. The Government agree that this must not happen, and the Bill ensures that it will not happen. All GLO postmasters will get full and fair compensation, and they will get it promptly without being unduly rushed.

In conclusion, until everyone has fair compensation, the truth is known and the guilty are held accountable, Members of this House and others will rightly continue to raise issues about this scandal. In the meantime, the House should know 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. This Bill is a further example of that, and I commend it to the House.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

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[Kevin Hollinrake]

With the leave of the House, it is a pleasure to conclude this debate. We have heard insightful contributions from right hon. and hon. Members across the House, many of whom have championed this cause and campaigned for justice on behalf of postmasters for many years. I pay particular tribute to the right hon. Member for North Durham (Mr Jones), my hon. Friend the Member for Telford (Lucy Allan), the hon. Members for Jarrow (Kate Osborne), for Kingston upon Hull East (Karl Turner), for North West Leicestershire (Andrew Bridgen) and for Motherwell and Wishaw (Marion Fellows) and others, who have demonstrated the best of cross-party campaigning in the interests of those affected by this scandal.

I have addressed the House many times on the subject of the Post Office Horizon scandal, both as a Back Bencher and now as the responsible Minister, and I want to respond to the specific points raised in the debate. The shadow Minister who opened the debate, the hon. Member for Bethnal Green and Bow (Rushanara Ali), rightly talked about further delays. I want to stress that this is not about further delays, but about preventing an arbitrary date being set, so that people whose claim has not been submitted or is not at the stage where it has been completed or settled can still get compensation.

I say to the other shadow Minister, the hon. Member for Croydon Central (Sarah Jones), as I said in my earlier remarks, that the commitment is that we will get 90% of offers out in 40 working days. We are doing a number of things to expedite settlements and accepted claims, not least the fixed-sum award for overturned convictions. She asked about the number of people who have taken that route. For confidentiality reasons, we do not think it is right to state the actual number, but it is a significant proportion, so certainly it is a route that many people think is the right one for them to take. Obviously that is a matter for the individual, and claimants can pursue the standard full assessment process if they feel that is their best option.

Not everything is within our gift, and that is one of the frustrations that we have, because these claims can be complex and require legal input from the claimant’s side. It can take time for the claims to be compiled before they are submitted. That is one of the reasons why we think it is right to delay the long-stop date of 7 August next year.

The hon. Member for Croydon Central asked about the resources and about how we will expedite the settlements. She may be aware that we have recently committed to additional resources for the Post Office. Part of that is to increase the resources committed towards the inquiry, but another part is committed to compensation. We think all the resources are there to get this money paid out within the timeframes we have set out.

I pay tribute again to my hon. Friend the Member for Sutton and Cheam (Paul Scully) for all of the work he did on this scheme. It is perhaps a little bit ironic that I used to push him from the Back Benches and now he is pushing me from the Back Benches on a similar issue. He is a very sad loss to the Front Benches in this House; he did a fantastic job and he speaks with great authority on this subject. As he says, the best work he did in the Department he attributes to this particular area, so I thank him for all he has done.

My hon. Friend asks whether we need to extend this the long-stop date and why. It is very much a long-stop position. We want to get the payments out before 7 August but, as Sir Wyn Williams advised, this is the right thing to do. My hon. Friend also asked whether, if we were to start again, which I do not think is the right thing to do, we would do things in this way, with three different compensation schemes. I think Sir Wyn Williams said something very similar: we would not do it like that, but all together in one single scheme. However, we are not there and it is right to push ahead now with the work we are doing in this form.

The hon. Member for Strangford (Jim Shannon), who is not in his place, said that we need to go faster, not slower. We are not going slower; we are going faster, and that is what we are keen to do. The same issue was raised by the right hon. Member for East Antrim (Sammy Wilson), who rightly pushed us to make sure we are delivering this at pace. My hon. Friend the Member for Sutton and Cheam also talked about doing things at pace; “pace” is a word I use a lot in my Department—my officials will probably support that remark—so I totally agree with him. If I may say so, I think the pace in a Department should be dictated by Ministers, so it is my responsibility to make sure that the schemes are delivered at pace.

My hon. Friend wished the House a merry Christmas; I am pleased, and I think we should all be pleased, that 27 families have had convictions overturned and may be able to enjoy their Christmas a little bit more than previous Christmases. Their ability not only to receive compensation, but to move on and move away from some of the trials and tribulations that they have faced in getting compensation and getting justice, is welcomed by everyone in the House.

As always, I thank the hon. Member for Motherwell and Wishaw for the work she does on the all-party parliamentary group on post offices. She pointed out the very significant value that post offices have in communities. I could not agree with her more that the disclosure areas were unacceptable. That should not have happened and we made that very clear to Post Office management. I agree with her entirely on Fujitsu. Anybody who is shown to be responsible for the scandal should be held accountable, and that may also include compensation. We have stated that on the Floor of the House on a number of occasions. She refers to senior executives in terms of the inquiry sub-metric, having repaid bonuses voluntarily. Those are not something we would want to see in future. I also agree with her and others, including the right hon. Member for North Durham, about some of the people who have been instrumental in this matter outside this House. She referred to Dan Neidle. Nick Wallis, Karl Flinders and Tom Witherow have also been important contributors in ensuring that sub-postmasters get the justice they deserve.

I thank the right hon. Member for North Durham again for all his work and for his work on the advisory board. He talks about a sword of Damocles and is right to say that we are removing it. He speaks very movingly about Tom Brown and what happened to him: the indignity of having his home searched, hardship, bankruptcy, the impact on his family, and his reputation in the community. All were intolerable situations. He sadly passed away prior to receiving compensation. In my constituency, Sam Harrison, a sub-postmaster in Nawton, near Helmsley, went through a similar set of circumstances, certainly in relation to financial difficulty. She sadly passed away earlier this year without receiving compensation. There is a huge human cost, as well as a financial cost. I talked to the advisory board about potential counselling that might be made available to sub-postmasters. We also talked about restorative justice. Sir Wyn Williams has referred to that and it is something we are keen to look at.

The right hon. Gentleman mentioned a predecessor to the Horizon scheme in the north-east. If we are on the same page, I understand that was a pilot scheme for Horizon, so we are confident that our current compensation schemes can deliver outcomes and compensation for the individuals he refers to, but if he does not agree with that I am very happy to have a conversation with him.

[Mr Kevan Jones]

That is welcome, but I think the Minister knows my views on the advisory board. We need to try to find out exactly how many people were prosecuted and in what circumstances. It shocked me, and I think the Minister too, that even with all the publicity about Horizon, no one actually said, “By the way, we had this scheme.” If it had not come out in the inquiry, or I had not intervened to see that individual in the north-east, would it just have been forgotten about?

[Kevin Hollinrake]

Those people will not be forgotten about. I am very happy to work with the right hon. Gentleman and the advisory board on any matter he raises with me. I think we are very like-minded on all the issues he has brought to us so far and we are keen to deliver solutions where we think they are required. I agree with him about Sir Ross Cranston. I worked with Sir Ross from the Back Benches. He came in with the review of the Lloyds-HBOS scheme and did a fantastic job. I also agree with him on holding individuals to account. Whether it be Lloyds, HBOS or Post Office Ltd, I do not think we will ever stop these things happening until we hold individuals to account. He talked about Paula Vennells’ CBE. I think Sir Tom Scholar, the head of the relevant body on the forfeiture of honours, has said that we need to wait until the end of the inquiry to consider that, but it should certainly be looked at. I completely associate myself with the comments of the right hon. Gentleman’s former constituent Tom Brown in relation to holding people to account.

In response to the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), yes we are allowing ourselves extra timescales but we do not want to use them. On the Christmas deadline, I think we are on the same page on this. It was Christmas this year for the Horizon shortfall scheme. We have now delivered offers to 100% of those people who have applied through that scheme, which meets our objective. Nevertheless, many of those cases are complex and not everything is in our gift to ensure that claims are put in promptly so that they can be dealt with quickly.

I thank the right hon. Member for East Antrim for his kind words. I commit absolutely to giving regular updates to the House. I am very happy to come to speak to hon. Members about this, both on the Floor of the House and by other means. There are regular updates about compensation payments on the gov.uk website. I agree entirely with him about accountability and the need to ensure that the guilty are held responsible. He is right to say we will be rigorous with anybody who is shown to be guilty, including at Fujitsu. He is also right to say that there are some things associated with a tremendous scandal that we can never compensate people for. That is why we are here, keen to deliver a final resolution to these problems.

My Department and I continue to work hard to ensure that those affected by the Horizon scandal receive the full and fair compensation that they are owed. The Bill is just part of the action that the Government are taking to defend the interests of postmasters. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill stood postponed (Order, this day).