Post Office Horizon Compensation Scheme

Thursday 27th February 2025 Lords Chamber

Motion to Take Note

12:37

Moved by

[Lord Beamish]

That this House takes note of the progress of the Post Office Horizon compensation scheme and of the contribution of Fujitsu to the compensation of victims.

[Lord Beamish (Lab)]

I begin by declaring an interest as a member of the Horizon Compensation Advisory Board. I am looking forward to the maiden speeches of the noble Baroness, Lady Elliott, and the noble Lord, Lord Barber, both good trade unionists who I have worked with and known for many years.

Along with my good friend—and I call him a good friend—the noble Lord, Lord Arbuthnot, I have been involved in the campaign for sub-postmasters for over 15 years. I hope that our efforts have made a little contribution to exposing this scandal. The main efforts that need to be recognised in this scandal are those of Alan Bates and the sub-postmasters. They have ensured that we have got to where we are today, when the truth is finally coming out about what went on around the Horizon scandal.

I first became involved with this cause in 2009, when I was Member of Parliament for North Durham. A constituent of mine, Tom Brown, came to see me. He was an upstanding, hard-working postmaster who had received awards from the Post Office for fighting off an armed robber at his post office. He was accused of stealing £84,000.

Tom had raised with the Post Office the issues around the Horizon system, but he was completely ignored until auditors arrived to close his post office down and was subsequently taken to court for stealing £84,000. In that two-year process, Tom was made bankrupt. ironically, on the morning of the case at Newcastle Crown Court, the Post Office said it had no evidence to put forward. It was too late for Tom by then: his life had been ruined. Tom gave evidence to the public inquiry but, sadly, passed away last year before its conclusion. He was one of too many who passed away, never to see the justice that they deserved.

The Post Office Horizon issue has been described as a scandal, but I argue that it is worse than that. It is the worst example of when the state, with all its powers, not only goes unchecked but leads to collusion. Moreover, the state was in a position where it can bury the truth, even at the expense of individuals who are hard-working, upright citizens going to prison.

Over the years, the noble Lord, Lord Arbuthnot, and I, along with other parliamentarians from both Houses who have been involved in this campaign, have been lied to. Has it been a lonely furrow to plough over those years? Yes, it has. Certainly, when you talk to the campaigners and the sub-postmasters, you find that they have felt frustrated over the years that they have been not only ignored but lied to as well.

Without Alan Bates and the campaigners—the 555—who took the case to court, I am not sure that the truth would have emerged. Even when the case took place in 2017, the Post Office and the state were still prepared to spend £100 million of taxpayers’ money to try to bury the truth to ensure that it did not come out. To the credit of the campaign, its financial backers and Lord Justice Fraser, they did get to the bottom of the case, but again, they had to settle because the Post Office and the state used a tsunami of cash to try to stop the process. The dam did burst in that case to make sure that evidence that had been hidden for many years but known to many of us who had been involved in the campaign saw the light of day. Remarkably, the ITV drama on the Post Office brought it to a wider audience. The subsequent public inquiry has shone an even deeper spotlight to reveal the truth, and I look forward to its findings. I pay tribute to Sir Wyn Williams and the staff of the inquiry for the work that they have done.

The Government have paid out £633 million to victims through the Horizon compensation scheme. We have four schemes: the Horizon shortfall scheme, the group litigation order scheme, the overturned convictions scheme, and the Horizon convictions redress scheme. If you were starting afresh, would you start with four schemes? No, you clearly would not, because the claimants have quite clearly found the way all four schemes have operated to be frustrating and bureaucratic.

The advisory board has sought to try to ensure that there is fairness across the four schemes, and that we have a system whereby individuals can get some independent legal advice and, at the end of the process, can have the process and their claims looked at independently from the Post Office. The victims quite rightly do not trust the Post Office. The scheme with which I have the most difficulty is the Horizon shortfall scheme, because it was run by the Post Office. There is quite clear evidence that there was an attempt to try to settle many claims as quickly as possible to ensure that the Post Office did not have to come to the Government for more money. The advisory board has recommended that there should be independent processes at the end for claimants to be able to have their cases reviewed, because there is clear evidence that there are individuals who have accepted settlements without legal advice that, I would argue, were under settled.

If noble Lords want to know why victims distrust the Post Office, I can tell them that there is potentially a fifth scheme that surrounds the Capture system, which pre-dated Horizon. It only came about because I found out about it by accident. I went to see a postmaster in Northumberland a couple of years ago, who said she had been a victim of the Horizon scheme, but when I looked at the dates I discovered that they pre-dated Horizon, which surprised me. When I went to the Post Office and the Government to say that this was surely a Horizon case, they said that it could not be because the dates were too early.

We then found out that there was a pre-runner of Horizon called Capture, which again has thrown up other issues, including more than 200 individuals who were either prosecuted or had their lives ruined. Because of that, the Government instituted an independent report—the Kroll report—and have agreed to compensate those individuals. That shows the culture there has been at the Post Office of not coming forward. You would have thought that, with all the publicity around Horizon, someone might have come forward and said, “Well, we might need to look at the earlier system”. Again, however, we had to drag out of the Post Office, kicking and screaming, any information that was needed.

This comes to broader point. As I said, would you start with four schemes in the complex system that we have? No, we would not. There is a need in government—and it might possibly come out of the inquiry—to set up a body to look at how we pay compensation to victims of misjustice: certainly, for example, those affected by the infected blood scandal. But this scandal was not the result of mistake or failure: this was conspiracy—a cover-up—involving government, Ministers, the Post Office and Fujitsu.

Fujitsu was the main contractor. In terms of that company, sub-postmasters were always told that this system was infallible, that it could not be accessed remotely, and that whatever was put in by the sub-postmaster was somehow their mistake and their fault. It was quite clear, however, that there could be remote access to it, and this was known. It is clear that that could happen from Lord Justice Fraser’s judgment in the sub-postmasters’ case. Again, we were given the impression that it was the perfect system but that judgment found that there were 29 bugs, some of which went unchecked for many years.

Was this known at the corporate level? Yes it was. For example, in 2001 Fujitsu paid the Post Office £150,000 for a data breach. However, it is worse than that, because Fujitsu not only covered up the fact that the system was full of bugs and could be remotely accessed but took an active part in the prosecution of sub-postmasters. It had, as part of its contract, a litigation and fraud support unit, which provided the Post Office with data to support prosecutions. This was known as ARQ data. Lo and behold, this ARQ data was never checked, so in the case that went forward not only did Fujitsu employees gave testimony against the sub-postmasters but the data they were given was not accurate or even checked. We know this because Anne Chambers, who was a Fujitsu employee, raised this at corporate level in 2006 and asked why this data was being given without any checks whatever. That, again, was raised and completely ignored by Fujitsu.

That begs the question: what was Fujitsu actually doing? We know now that all this was known. In his testimony to the public inquiry, Paul Patterson, the director of Fujitsu in the UK, admitted to all of this. Likewise, Rob Putland, who was the senior vice-president, admitted to it when he wrote to the BIS Select Committee of the House of Commons in 2020. All the information was there, so it raises the question: why were these red flags not raised within Fujitsu itself?

At the public inquiry and the Commons Select Committee, Mr Patterson said that he apologised to the sub-postmasters and that Fujitsu would make a contribution to compensate victims. As of today, no money has been paid by Fujitsu to victims—and this is a company that is still making multimillion-pound profits from government contracts. That information is available in Computer Weekly, where, last week, Karl Flinders had a very good article showing that Fujitsu will potentially make, over the next few years, over half a billion pounds in new contracts. It said that it was not going to bid for new contracts, but what it is doing is extending existing contracts. That is happening at the same time as the taxpayer is paying out nearly £600 million in compensation to victims, and many victims are still waiting for compensation.

Fujitsu is hiding behind the public inquiry. It knows the evidence that it has given to the public inquiry is there. Nothing will be revealed from a public inquiry’s findings that we do not already know. So I suggest that it should make an interim payment of at least £300 million now to cover the cost for victims. Some major changes are also needed within Fujitsu. When the process for bidding for new contracts starts, the Government should bar Fujitsu from taking part in any future contracts if major change has not taken place. That would be a tragedy for the 7,000 people in the UK who work for Fujitsu, nor would it be good for UK-Japanese relations, a point that the noble Lord, Lord Arbuthnot, and I raised a few weeks ago with Mr Suzuki, the Japanese ambassador to London. I understand that, in a few weeks’ time, the Secretary of State for Business and Trade will go to Japan, and I suggest that he should meet senior Fujitsu representatives to press the case for them to make proper compensation, even if only on an interim basis.

In conclusion, yes, this a scandal, but it is also something that we cannot allow to happen again. We need to put in place things that not only prevent it happening again but change the culture, both within the organisations and in how we address these issues. We need a new system independent of government—an ombudsman system—which does not then mean that we need to have a public inquiry every time. Clearly, we need to strengthen whistleblowing, and the Government need to look at the way in which non-executives and others are appointed to outside bodies which, clearly, do not raise any questions. Finally, Fujitsu needs to pay up. It needs to make sure that it will not keep taking money from the UK taxpayer while it makes no financial contribution to this scandal.

I finish with this point. Tom Brown, who gave evidence to the public inquiry, was asked what he wanted from the inquiry. He said that he wanted the truth. That is what we owe Tom and all the other victims of this scandal. I beg to move.

12:53

[Lord Arbuthnot of Edrom (Con)]

My Lords, I too declare my interests as a member of the Horizon Compensation Advisory Board and as chair of the advisory panel of Thales UK.

I congratulate my good friend, the noble Lord, Lord Beamish, on securing this debate. He has been with me every step of the way in his vigorous campaigning on behalf of the sub-postmasters. It is at least partly thanks to him that we are where we are now, and that we are getting somewhere. Discovering the Capture issue is thanks to him. We are getting somewhere, but we are not far enough along, and I will come to that.

I very much look forward to the maiden speeches of the noble Baroness, Lady Elliott, and the noble Lord, Lord Barber. What an excellent choice they have made in their topic for their maiden speeches. It is a hugely important topic, and your Lordships will all want to welcome them to this battle. There is no party politics in this, because all the political parties comprehensively failed the sub-postmasters—we are all to blame. We all need to work hard together to achieve an improvement in the position of the sub-postmasters and their redress, holding to account those who were responsible for this mess and establishing a better set of institutions to try to ensure that it does not happen again.

The debate is about compensation, specifically drawing attention to the role of Fujitsu. Before I come to that, there is one important matter that I ask the Government to consider. In doing so, I welcome the Minister back to her place—without a stick—and I hope that she is well on the way to recovery. The important matter is that the politicians failed in our initial attempts to get this matter sorted out through politics; I failed and even the noble Lord, Lord Beamish, failed. As he said, the only thing that got us to where we are today was Sir Alan Bates’s courageous group litigation, funded by litigation funders. Following the PACCAR judgment in the Supreme Court, it would probably be impossible today for Sir Alan to raise such litigation funding. A cross-party group of your Lordships’ House will meet the Attorney-General next week to discuss this, but I raise it now to flag up its importance and relevance.

Returning to Fujitsu, I am grateful to Mr Stuart Goodwillie and Mr James Christie for their fascinating and helpful briefings online. Let us not forget what Fujitsu did. ICL, the company that produced Horizon and that was bought by Fujitsu, provided a computer program to the Post Office which it knew was seriously flawed. As Richard Christou of ICL told the public inquiry, Pathway, the ICL front company in the contract negotiation,

“was determined to win the tender, and decided to undertake as little negotiation as possible in order to better its chances of obtaining the award”.

Fujitsu had a duty under its contract to provide evidence for prosecutions that was admissible and accurate. It did help the Post Office prosecute the sub-postmasters, but with evidence that was false. Knowing of the flaws in the Horizon system, it told the courts that there were no such flaws.

Moreover, Fujitsu had a large operation altering the accounts of the sub-postmasters without the knowledge of the sub-postmasters. It told everyone that it could not alter those accounts, despite carrying out an extensive operation doing exactly that. So Fujitsu did much more than stand idly by while the sub-postmasters were maliciously prosecuted; it was an active, knowing and essential participant in the whole ghastly fraud. If it were not a company but an individual, it would be facing years, or possibly decades, in prison. Yet it is a company, and one on which the Government have become unacceptably dependent. Each year in which the Government extend some contract or other, saying that there is no alternative, they should ask themselves, “If this were Prisoner Smith in cell block J4, would we really be giving him a contract worth tens of millions of pounds?”

What is Fujitsu doing about this? What money has it offered? As we heard from the noble Lord, Lord Beamish: nothing. It has accepted its “moral obligation”, but the taxpayer is paying out hundreds of millions now. There needs to be an interim payment from Fujitsu now. The noble Lord, Lord Beamish, suggested £300 million; £700 million would be less than half the cost that the taxpayer is currently estimated to bear. If it does not do that, why should the Government offer it further extensions of its existing contracts, still less grant it new contracts? That is Fujitsu.

But what about the auditors, Ernst & Young? A couple of weeks ago, I told your Lordships that I asked the inquiry to include the auditors in its scope, but the inquiry chair decided that that would extend the length of the inquiry disproportionately. But here we have Ernst & Young certifying that the audited accounts represent a true and fair view of the Post Office’s financial state—missing a liability of £1.87 billion. What on earth were they doing? I will tell you what they were doing. In 2003-04, they decided to audit, out of a total of 12,000 Horizon branches, not 10% of them—1,200—which would have been respectable; not 1% of them—120—which would not have been respectable; but one. One branch. When the Post Office’s chief operating officer, David Miller, was asked in the public inquiry,

“do you consider it was a satisfactory way for the Board to satisfy itself of the accuracy of the company accounts?”,

he answered: “It was very limited”. One, out of 12,000 branches.

On 5 June last year, Alice Perkins told the public inquiry of a meeting she had with Mr Grant, the partner at Ernst & Young, when she became chair of the Post Office. He told her: “With Fujitsu”, the Post Office

“drove a very hard bargain on price but they took back on quality/assurance”.

So, he knew that the quality of what Fujitsu was providing was suspect. Where does that appear in the Post Office audited accounts? As the noble Lord, Lord Harris, would say: spoiler alert—it does not.

Mr Grant also told her:

“Horizon – is a real risk for us … Does it capture data accurately ... Cases of fraud—suspects suggest it’s a systems problem”.


In her evidence, Alice Perkins said:

“Horizon is a real risk for us”,


meaning that Horizon was a real risk not to the Post Office, but to Ernst & Young. That too does not appear in the audited accounts. As James Christie says on his website:

“The Horizon system has never featured as a risk in any annual report. It surfaced only indirectly in the 2019 report, but as a litigation risk, which was incorrectly thought to be mitigated by contesting the litigation that took place”.


Well, we know how that ended up.

“Even this risk had vanished in the 2020 report”.

In a management letter to the Post Office—I am grateful to the noble Lord, Lord Sikka, for drawing my attention to it—Ernst & Young wrote:

“We were unable to identify an internal control with the third-party service provider”—


that is, Fujitsu—

“to authorise fixes and maintenance changes prior to development for the in-scope applications”,

that is, Horizon. If there was no internal control, what were the external auditors doing about it? Nothing. How were the owners—the taxpayers—meant to know this was going on if the auditors were not telling them? How were the sub-postmasters, those who were being sent to prison, made bankrupt, having their lives ripped apart, meant to defend themselves?

If the public inquiry will not hold the auditors to account, it is a task that must fall, first, to the Financial Reporting Council and, ultimately, to the Government. The Government need to drive this. It should not be down to the advisory board—this part-time group—to be driving this forward. We need action now.

13:04

[Baroness Ludford (LD)]

My Lords, I look forward to the two maiden speeches.

I am a relative Johnny-come-lately to the story of this scandal. There are a number of people who deserve our thanks and regards: first, the sub-postmasters and their families, who have suffered terribly from the incompetence, arrogance and bullying of the Post Office. Sir Alan Bates, of course, stands out. The noble Lords, Lord Beamish and Lord Arbuthnot, have also been on the case for a long time and I thoroughly applaud their work. I thank the noble Lord, Lord Beamish, for instigating this debate. They both made excellent speeches.

ITV played a big role in reaching a wide and outraged audience with its admirable hit series “Mr Bates vs The Post Office”. There are lawyers, such as Neil Hudgell, battling for the postmasters. Among journalists, I must single out Nick Wallis. It was his BBC Radio 4 series five years ago that first alerted me, although he had been working on the issue for a decade previously, when he was a presenter on BBC Radio Surrey. An article on him three years ago described what happened:

“It was a tweet that any journalist might have ignored. It came … from a taxi owner asking if he could pitch for the local radio station’s taxi account … Davinder turned out to be the husband of Seema Misra who had been thrown into prison on her son’s 10th birthday while pregnant, for supposedly stealing £74,000 from the Post Office … Davinder insisted not only that his wife was innocent but that it was the Post Office computer in her sub-Post Office that was at fault”.


It was November 2010. The rest, as they say, is history; a very painful one.

Sir Alan Bates, brilliantly played by Toby Jones on TV, is of course the most famous of the wronged sub-postmasters. Lee Castleton is another well-known name. He recently tweeted:

“Why is it so difficult to be open, fair and quick. It is disgusting that Betty Brown at 92, is still waiting for the return of Her money. JUST PAY HER what she is owed”.


Someone replied:

“Still can’t help but feel they’re still putting 2 fingers up to us”.


The Financial Times reports that

“many victims are still locked in a glacial, bureaucratic process of offers and appeals that could end up back with the courts”.

Some 72% of the budget for redress has still not been paid. One recalls the adage, justice delayed is justice denied.

The worst problems are in the Horizon Shortfall Scheme—the HSS—which I will mainly speak about. Tony Downey is a former sub-postmaster caught up in this terrible injustice, together with his wife and business partner. He has been granted only 20% of his claim. Tony has written to Sir Wyn Williams, chairman of the Post Office Horizon inquiry, and is allowing me to quote from his letter:

“The Post Office agree we paid the shortfalls, they agree they made us both bankrupted with their action and they agree this made me sick and unable to work since, they agreed at the meeting that the forced sale of the property was related to the Horizon. However they will not pay me the lost income as in other schemes, they will not pay the bankruptcy or costs of my wife and business partner, they will not pay me the full amount of the head of claim for sickness, they will not pay for the loss of the property”,


which was, I think, the family home.

Tony Downey, Christopher Head OBE—another wronged postmaster—and journalist Nick Wallis have drawn attention to a curious feature of way the Horizon Shortfall Scheme is being administered by the Post Office that might help explain why claimant sub-postmasters with complex cases are receiving offers way below their claims. The HSS assessors seem to be—indeed are, and have said that they are—working to a set of guidelines different from the published principles and are refusing to share them with the claimants’ lawyers. One claimant has commented:

“We guess they include every get out clause possible”.


One of the claimant lawyers replied to Post Office lawyers as follows, and it bears quoting fully, which I have permission to do:

“The Post Office approach to HSS claims is on the basis of breach of contract and assessing damages had the contract been ‘validly terminated’. We fundamentally oppose that basis of calculation which is at odds with the Principles that are widely published in relation to the HSS, and therefore the narrow contractual approach taken by Post Office does not satisfy the tests presented in the Principles document. The document to which you”—


that is, a Post Office lawyer—

“refer appears to be fundamentally different to the widely published one and seems to be separate guidance used by the Panel and has never seen the light of day publicly, so how can we or a Postmaster be on an equal footing in this claims process, when you refuse to disclose guidelines used by the panel? This would not be an acceptable situation in any other claims or legal process in this country”.

As far as I can see, he is absolutely right that a narrow contractual approach, which effectively gives a sub-postmaster only redundancy money, is not at all the same as the Post Office’s published Horizon Shortfall Scheme Consequential Loss Principles and Guidance document, whereby:

“The object of the assessment will be … to put the postmaster into the position that the postmaster would have been in but for the Horizon Shortfall”.


For former sub-postmaster Tony Downey, this is the difference between getting redundancy money amounting to two years’ or so income and being fully compensated for inability to work since a nervous breakdown in 2007 after being suspended, audited twice, bullied to pay shortfalls in order to get reinstated, having to sell the business at a loss, both he and his wife having to declare bankruptcy, and losing their home. He says:

“We had gone from owning a mortgage free property now worth £900,000 with a successful business and savings to having nothing and the scheme is unable to put us anywhere near the position we should have been”.


Inquiry chairman Sir Wyn Williams wrote in his July 2023 first interim report on compensation:

“It would be tempting for some to be sceptical about whether”


full and fair compensation,

“can be achieved … a commitment to provide compensation which is full and fair is not the traditional stance taken by a defendant in our adversarial system of civil litigation”.

That was very prescient. What will the Government do to oblige the Post Office to follow the published principles on consequential loss, not revert to being a traditional adversarial defendant? Can the Minister ensure not only that the Post Office’s secret guidelines, which are not in accord with the published principles, are made available to all claimants and indeed to parliamentarians and everyone else, but that it stops using them?

The Business and Trade Select Committee reported on 1 January on redress for the Horizon scandal. The government response was not available yesterday or first thing this morning. I imagine the Minister can assure us that it is imminent; by my calculation, the deadline for the response is tomorrow at the latest. Your Lordships will probably all have read the committee’s recommendations, one of which was that the Post Office should be removed from administering any of the schemes. It says, and I strongly agree, that the Post Office acted as “judge, jury and executioner” when pursuing sub-postmasters and that now it

“should not be deciding on what financial redress is owed to victims of its own scandal”.

I do not have time to discuss the other recommendations from the committee, but I just point out that the present reality is that claimants not only have to fill out a complex form with no legal support but face a scenario of snakes and ladders. This is well-described in a letter that a former sub-postmaster, Christopher Head, wrote yesterday to inquiry chairman Sir Wyn Williams—he has made it public, so I can quote from it. He describes how a claimant faces

“the risk that should she pursue a claim above the Fixed Sum, she could be offered less and then have to enter the long drawn out dispute processes that could continue for years … There is also no guarantee she would get close to the fixed sum award let alone the sum claimed. All this must be done without any legal advice, unless the individual is willing to pay for their own representation, which is out of reach of most people”.

Mr Head rightly says:

“Claimants should be able to receive these awards”—


the fixed awards—

“in any of the schemes and then be invited to raise a further claim for the remainder of their claim should there be sufficient evidence to do so and a likely chance of success … without any risk”.

How does the Minister react to that suggestion, and can she tell us whether the department will take over the Post Office scheme?

I will conclude by quoting briefly from an interesting and heartfelt book by the former Prime Minister, the noble Baroness, Lady May, entitled The Abuse of Power. In her words, she,

“describes many examples of injustice against ordinary people perpetrated by the powerful and mighty”,

with

“often a sense that protection of the institution is more important than fairness, justice or seeking the truth”.

That is what we have seen with the Post Office. She concludes that

“we need to reconsider who we are as a country and the urgent need for those in authority to ensure that in all they do, they are putting the country and the people first”.

13:14

[Baroness Elliott of Whitburn Bay (Lab) (Maiden Speech)]

My Lords, it is an enormous privilege to rise to make my maiden speech today in this place. I want to start by thanking Black Rod, her staff, the doorkeepers, police, and all the staff of this House for their warm welcome and support in my first few weeks here, and particularly for their help towards my family and friends on the day of my introduction—there was rather a large number of them.

I would also like to thank my supporters, my noble friend Lady Armstrong of Hill Top, one of my closest friends in politics and life, whose advice and guidance over many decades has been and continues to be invaluable to me, and my noble friend Lady Smith of Basildon, who has given me time, advice and guidance over the last few weeks.

Today, I want to give some background as to who I am, where I come from, and what motivates me and the areas where I feel I have most to contribute in this place.

I was born in my parents’ home, a council house in the village of Whitburn, the place I live today—I have never lived more than two miles from it in my entire life. My roots are very strong. I am a very much a northern woman who will stand up for the north at every opportunity I can.

My dad Harold worked as a blacksmith’s striker at the local colliery, and my mother Laura looked after the family and did little cleaning jobs to make ends meet. In my experience, that is the hardest work anyone can do. She was a very strong northern woman and was an enormous influence on me.

My brother Dennis, almost 15 years older than me, was an electrician at the colliery, and my sister Joan, who is 10 years older than me, was still at school when I was born. It is no underestimation to say that I was a little bit of a surprise to my family when I arrived. I was delighted that Joan was able to attend my introduction with her husband Derek, as sadly, only Joan and I are left from that family group.

Growing up, the community in my village was a very tight one, and still is. Neighbours were like family, and everyone looked out for each other. Most people did not have a lot of money—most men worked either at the local pits or the shipyards—but everyone believed in hard work, taking care of your family and your neighbours and wanting the best for everyone, and they had enormous aspiration for their children, although they would not have described it as that.

My family were not political, although they were very interested in current affairs. We watched the news, read lots of newspapers and discussed the issues of the day. I got involved in politics during the year-long miners’ strike of 1984, when, whatever the merits or otherwise of that strike, as a young woman coming from generations of miners on both sides of my family I felt that the Government of the day was attacking my way of life and the community I came from. I could not stand back and let that happen; I had to take a stand and make my voice heard in trying to defend my community, so I joined the Labour Party. I did not know it at the time, but that decision was to influence the path my life took in a way I would never have imagined or even thought possible all those years ago.

I have had the privilege of working for my party as a regional organiser, for my trade union—the GMB—for a charity, and then I had the honour of being the Member of Parliament for the constituency of Sunderland Central for 14 years.

My family is at the centre of my life. I have four grown-up children: Rebecca, Miles, Georgia and Helena, all of whom attended my introduction, along with five of my eight grandchildren, as well as my wonderful husband Andrew. They are at the centre of everything I do, and it is fair to say that I could not do what I do without their love and support.

My community, my strong sense of working-class values, my family and my passion for the north are the things that drive me and make me want to make a difference and contribute to public life. Over the years, I have developed an interest and expertise in all things connected to digital, culture, media and sport, having had the privilege of serving on the Select Committee in the other place for nine years; and the Middle East, with my involvement for several years as the co-chair of the Britain-Palestine All-Party Parliamentary Group. I also have a passion for promoting the north of England, its potential and its continuing regeneration.

I was pleased that my noble friend Lord Beamish, someone I have worked with in different roles for more than 30 years—there is a theme here from the north of England, where we all know each other—moved this debate on the progress, or perhaps lack of progress, on the Post Office Horizon compensation scheme today. More than a decade ago, two constituents came to see me at a surgery about the Horizon scandal. It was one of those moments in my time as a Member of Parliament when I was absolutely flabbergasted at the horror of what I learned had happened to my constituents. The female constituent had an exemplary work life in banking before she decided to take on a sub-post office. The couple had lived in a comfortable detached house in a very nice part of Sunderland that they had worked hard all of their lives to buy. When the Horizon system showed they owed hundreds of thousands of pounds that was missing, they had to sell their home and use the proceeds of that sale and all of their savings to pay the money back to the Post Office, to avoid prosecution and most likely prison.

This was wrong. It should not have happened, but, sadly, their story, as some of the stories that have already been talked about today, is just one of hundreds of cases. The victims of the Horizon scandal have waited far too long to get meaningful compensation. As has been described, even for those who have had some compensation, it has not been full or adequate. The Horizon system was introduced in 1999; the problems were actually known about before that. It is now time for Fujitsu to play its part and step up to the plate to pay some compensation. I urge all of those involved in this to move as quickly as is practically possible and pay all the victims of this scandal the moneys they so deserve.

I look forward to participating and making informed contributions in the future in your Lordships’ House.

13:22

[Lord Hastings of Scarisbrick (CB)]

My Lords, it is a great privilege to be able to pay tribute to the noble Baroness, Lady Elliott, for her wonderfully warm and family-loving speech, and for naming her children and family in such an affectionate and supportive way.

She will not know it, but we are both Sunderland lovers. Maybe that is the reason I was selected to pay tribute to her wonderful and seriously, gratifyingly positive maiden speech. I am wearing the tie of Sunderland Football Club. She will not know, but I have attended the Stadium of Light on six occasions and the Academy of Light of four occasions, taken there by the owners of Sunderland in order to see the great playing craft of so many of the players, in particular Jermain Defoe, from whom I have a shirt with the number 14—my number—and the signatures of all of the players of Sunderland Football Club. I was delighted and honoured to attend so many times in the noble Baroness’s home town and constituency.

Many of the tributes that are owed to the noble Baroness include for her deep love as a governor of schools and her passionate campaigning on the issue of asthma, which affects so many, both ourselves and those we know. I know she will bring enormous expertise to this House and the punch that an elected Member who is now here in the upper House can bring from having heard the painful rhetoric of constituents, especially on the issue that we are discussing today.

One other thing unites us. In my research—which was very slim, because so much is wonderfully written about the noble Baroness, Lady Elliott—I discovered that we also share the fact that she voted against all Brexit measures in the House of Commons, and I voted against them all here in the House of Lords. We both realised what another tragedy of injustice was being imposed on us by the miscreant Government of the time. On that, her great policy wisdom is well noted and I am sure the whole House will look forward to her ongoing strength of position and commitment and welcome her to the House of Lords.

This debate is essentially about compensation matters. We tend to interpret compensation as meaning money. I pay tribute to the noble Lords, Lord Arbuthnot and Lord Beamish, for their arduous, persistent fight on behalf of those whom many of us only became intimately aware of because of Alan Bates and the ITV drama. It really hit us in the eyes when we watched it, let alone when we listened to the BBC’s own documentary. Through the drama and the documentary, we became aware of something that was happening below our noses, so close we should have smelled it earlier but we just did not. There was such clever scheming by the Post Office and Fujitsu.

I have been looking at this through a slightly different lens—a lens which many in this House will know matters to me enormously. The offences Act, passed last year, which essentially annulled the prosecutions of the postmasters, uses these words, already quoted:

“Some were convicted and imprisoned. Some were made bankrupt”.

Malicious allegations were made against them.

“Some lost their homes. some suffered mental or physical health problems … Some were harried as thieves by their local communities. Some suffered breakdowns in relationships with their partners, children or other families and friends. Several died by suicide”.


There is another actor in this horror, besides the Post Office and Fujitsu: the courts. I realise by flagging this that I am treading on very delicate territory, but there were 700 convictions in cases provided by the Post Office and a further 283 sub-postmasters were prosecuted by others, including the CPS, totalling just short of 1,000 prosecutions. I am not sure of the exact number who went to prison. Could the Minister tell the House in her reply how many went to prison as a result of this crass injustice?

It raises the very ugly case that potentially 1,000 courts heard 1,000 cases and thought it was okay. At what point did the justice system, the Ministry of Justice or the Law Society ask, “What the hell is going on?” Why is every court so disconnected from every other one? If judges did not ask, “What, another one? I’ve read about this, I saw this, there was a note about this”, or if clerks did not bring this to their attention, what is the role of judges? Judges are meant to be highly intelligent, impartial adjudicators of the law and its principles. Those principles include intelligent, evidence-based prosecutions, not just taking by swallowing what has been brought by an institute of the state—notably the Post Office—backed up by its deceitful accompanying company, Fujitsu, which simply wanted to bury the detail.

I will ask a difficult question of the Minister: was the wool pulled over the eyes of the judges? What assessment have the committee, the Government or the Ministry of Justice made of the wrongs done by the courts? I believe that it is a matter not just of what needs to be paid out in compensation—that is clearly the real cause of this debate, although it is somewhat flagging—but of from whom the apologies should come. I would like to see handwritten apologies from every judge to every prosecuted individual, especially those who went to prison, and face-to-face meetings that accept that there was deceit at multiple levels of this procedure. We will not have honest justice if there is no honest apology, recognition and accountability. That lies with the courts, as well as with the Criminal Cases Review Commission—which has failed in multiple cases—and the Crown Prosecution Service.

I realise that this is a sensitive thing to ask, because we have a tradition in Britain that we do not question judges. Following a question raised in the other place recently by the Prime Minister and the Leader of the Opposition about a deportation issue—and therefore an allocation of refugee status based on falsified information—immediately somebody representing the court stood up, because there was a criticism of a decision of the court, and said, “Don’t question our decisions”. But is that not exactly what this is about? How can there be a thousand cases with not a single judge saying, “Excuse me? Throw it out”? I am sufficiently aware of so many people’s cases that I know of some where the courts—the Old Bailey or the High Court—and the judge have decided on day 1 or day 2, or week 1, of a case that there is no substantial evidence from the prosecution. They concluded the case and released the individual. Why did that not happen here?

I am asking a sensitive and important question. I am asking the Minister—I realise this is not her area—to communicate to her colleagues in the Ministry of Justice that they ought to wake up to our so-called supremely effective independent judicial system and ask the hard questions about the intelligence and agility of the courts and judges to deal with cases of such manipulation.

As many noble Lords know, I spend a lot of time in prisons, and I was in a prison yesterday morning speaking with a man on a 32-year sentence. He has attempted on five occasions to have the Criminal Cases Review Commission assess his case based on falsified forensic data. It refuses to do so. The CCRC has just lost its chair; it has been a flappingly useless institution and needs to be completely renewed from top to bottom. It is another part of the system of injustice, emboldened by the state because we will not ask the hard questions.

Two years ago, we all heard the case of Andrew Malkinson. He was released finally, after 17 years, after a falsified rape case, in which he was innocent. He is still awaiting the compensation agreed by the High Court. As we think about how to improve the financial compensation due, which in my mind is Fujitsu’s bill and not the taxpayers’, we need to recognise that honour, dignity and respect for those falsely prosecuted—and especially those imprisoned and those who lost homes, property, savings and work—requires those who did that injustice to them to look them in the eyes and admit they were wrong. Only then can we restore transparency and honour to our justice system and bring dignity to the postmasters.

13:34

[Lord Polak (Con)]

My Lords, I pay tribute to the noble Lord, Lord Beamish, not only for securing this debate but for all that he has done. I pay tribute to my noble friend Lord Arbuthnot. I guess that, in modern parlance, they are both superheroes.

This is not a matter of financial redress; it is, as we have heard, about the lives of real people who have suffered through the failures of a system that has wronged them for far too long. I wish to highlight one such person, whom I have mentioned many times in this House, albeit from the other side: Rita Threlfall, a 70 year-old woman who, alongside her family, has endured an unimaginable amount of stress, uncertainty and financial strain as a result of this scandal. Rita’s story is one of far too many, but I share it with noble Lords today because of the specific personal emotional toll it has had on her life.

Rita and her husband, Kevin, ran their business together in my hometown of Liverpool. I am northern too, but from the north-west, not the north-east. For many years, their post office was more than just a livelihood; it was their life, their future and their pension. This future was cruelly taken away from them. Rita’s claim for compensation was submitted two months ago, in January 2025. She was expecting an offer within the 40 working days stipulated, but that deadline is fast approaching—in fact, tomorrow marks the expiration of this deadline. To date, she has received no offer and has heard nothing further, aside from a request for additional information about her husband Kevin’s earnings—a query that has only added further stress to an already harrowing situation. Rita’s claim includes loss of earnings for her husband, as he worked in the post office alongside her, and she remains perplexed by the request. She paid her husband a salary for his work in the business, but the authorities continue to ask for further documentation—a process that Rita and Kevin have found incredibly painful.

Rita has been waiting for 15 years since she was first wrongly convicted in 2010. Despite the repeated assurances that the claims process would be expedited, she remains in the dark about the timeline for resolution. For her, and countless others in a similar position, this has been a crippling experience. Her emotional and financial struggles have only deepened over the years. Rita became a pensioner four years ago, yet she is now living off a state pension which is simply not enough to cover her living expenses, let alone the debts she incurred in the loss of her business. Rita and her family are struggling to make ends meet. As a businesswoman, she had always planned that her business would provide financial security in her retirement. Since the scandal took it all away, she has been unable to invest in her pension or secure a proper future for herself and her husband. Although her two children are doing their best to support their parents, they are finding it increasingly difficult to keep up with the pressure of daily living costs.

Rita’s anxiety and stress levels have soared, while her weight has plummeted, as a result of this prolonged ordeal. Her health, physical and mental, has suffered immensely. During our conversation this week, she shared with me that she feels overwhelmed by the uncertainty of it all, constantly wondering how much longer she must wait and what the outcome will be when it finally arrives. The emotional toll is staggering. For years, she has lived in fear of her future, unable to plan for anything and uncertain about whether she will ever receive the compensation she so desperately needs and deserves.

When I talked to Rita earlier this week, her distress was palpable. She spoke about her 70th birthday celebration in January, an event that, for a moment, allowed her to reflect on happier times. Rita and Kevin had to leave their home in Liverpool due to their financial struggles, and they now live in Stoke-on-Trent. For the occasion of her 70th birthday, all her family, including the youngest member, a six month-old, gathered at the local cricket club to celebrate with her. It was a rare moment of joy amid long years of pain. Yet even in that moment of happiness, Rita could not escape the overwhelming sadness of what had been lost, including her proximity to her family, her post office, her livelihood, her future and her dignity—they have all been taken from her, and the compensation she so desperately needs is still pending.

As of now, Rita has received nothing since the interim payment in December 2022, which, as we know, did not begin to cover the damages caused by the closure of her business. Rita remains in limbo, waiting.

This is why I urge the Government to act swiftly and decisively. This is not about statistics or balance sheets; it is about real people, whose lives have been shattered. Behind every claim is a person like Rita, who has endured unimaginable hardship, financial ruin and emotional turmoil. Rita, like so many others, has suffered more than enough. She deserves justice. She deserves compensation and she deserves it now. Every day that passes without resolution prolongs the suffering for those who have already lost so much. We cannot and should not allow bureaucracy and delays to stand in the way of what is right.

Given Fujitsu’s acknowledged role and its stated moral obligation to contribute to compensation, can the Minister explain why the substantial contracts that have been talked of today remain in place? Why were many of them awarded after 2019? What assurances can the Government provide that no further public money will be awarded to Fujitsu unless it has fully met its financial obligations to the victims of this devastating miscarriage of justice? Can the Minister also confirm that employees and suppliers are paid monthly and regularly by Fujitsu, in stark contrast to Rita and her colleagues who, rather than being paid, are being humiliated?

The Government must provide clear and transparent communication to claimants about process, ensuring that they know what to expect and how long they will have to wait. I agree with the noble Lord, Lord Beamish, when he suggested £300 million from Fujitsu—I think that was upped by my noble friend Lord Arbuthnot. I argue that it should pay exactly as much as the taxpayer has. It is a lot of money, but it should be paid.

I would also like the Government to do more to support those who are struggling with the emotional and financial strain of this scandal and provide them with the tools and resources that they need to move their lives forward. As I said at the beginning, this is not just about money; it is about rebuilding lives that have been torn apart. At 70 years old, Rita should be enjoying retirement with her family, yet instead she finds herself battling anxiety, financial hardship and the lingering effects of a fight that she should never have had to endure. Her family is doing all it can, but why should it have to? Why should any victim of this scandal have to rely on loved ones to survive, when it was the failures of others that put them in this position?

The Government must step up with not just words and sympathy but concrete measures that provide real, immediate relief for the victims. Rita and countless others like her have been waiting far too long for justice. I stand here today not as a Member of this House but as a human being imploring the Government to take immediate action to right this wrong. We cannot continue to allow these victims to suffer. We must act and we must act now.

13:43

[Lord Barber of Ainsdale (Lab) (Maiden Speech)]

I want to express my thanks to my noble friend Lord Beamish for initiating today’s debate and give my warm congratulations to my noble friend Lady Elliott on her excellent maiden speech.

I feel very privileged to join this House and acutely conscious of how much I have to learn of its conventions and procedures. I am fortunate to have the guidance and wisdom of my noble friends Lord Monks and Lady O’Grady, who both supported my introduction to the House. John has been a mentor and close friend of mine ever since I first walked through the doors of the TUC headquarters, Congress House, in 1975—quite a long time ago. Frances, who succeeded me in the position of TUC general secretary, has demonstrated ever since that her talent and integrity wholly justified my confidence that the TUC’s leadership would be in great hands on my departure. I am also delighted that another very close colleague, now my noble friend Lady Carberry, has also joined us in this House. She will give great service.

Ainsdale, now in my formal title, is an area in the town of Southport, which has suffered greatly in the wake of those terrible events some months ago. I applaud the spirit of the Southport people in their response to that outrage.

Throughout my childhood in Ainsdale, my dad worked as a bricklaying instructor in a local approved school. The term “approved school” was the language of the time; now I guess it would be called a young offender institution. We had a house in the grounds of the school; perhaps I am the first noble Lord to have been brought up in such an institution—or looking around all the Benches, perhaps not.

I sometimes saw my dad defuse a difficult situation, with angry young men about to kick off, by using patience, calmness and reason, and sometimes humour too. As I have discovered, both in the TUC and during my time as chair of ACAS, these can be important factors in the resolution of any difficult conflict.

I have tried to learn from all my experiences as I have made my way through life. After leaving school, I served for a year as a volunteer teacher in Ghana through the VSO—Voluntary Service Overseas—programme. This began to open my eyes to the vast diversity of life experience across the planet we share. At the end of my degree course at City University, I spent a year as president of the student union, able to observe and play a part in the university’s most senior governance structures. A year followed working for an industrial training board before I saw an advert for a job at the TUC. The advert told very little about the vacancy to be filled. It was only after I reached the interview that I discovered they were looking particularly for someone to do research and briefing on industrial training policy. My experience at the ITB, I think, got me the job and I was there for the next 37 years—serendipity.

Today’s debate is an opportunity to highlight again a terrible injustice suffered by a blameless group of workers, inflicted by an irresponsible and overmighty employer which appeared to feel that it could act with impunity. Fair compensation is long overdue and this scandal, to my mind, reinforces the message that trade unions are as vitally needed today as ever to provide effective representation for people at work and to hold employers to account.

The half a century since my entry to the TUC has seen remarkable changes in the world of work and of trade unionism. The mid-1970s saw the agreement between the Labour Government of the day and the TUC of what was termed the “social contract”. That saw the level of inflation in the economy reduced from around 24% in 1975 to 8% by 1978. That was a staggering achievement that appears largely forgotten now as the “winter of discontent” followed the breakdown of that agreement. History, of course, is written by the victors. That was followed by a long period of the demonisation of trade unionism, even termed at one point as “the enemy within”, with workers at GCHQ—Government Communications Headquarters—even being told that being a union member was not consistent with loyalty to the nation.

The Labour Government of 1997 righted that wrong at GCHQ and made other progressive changes. Trade union recognition rights were underpinned by law. The minimum wage lifted living standards for the lowest paid. The UK rejoined the European mainstream on rights and protections for people at work by signing up to the European Social Chapter, from which the previous Government had opted the UK out. But despite those achievements, there are long-term trends that have still left working people relatively poorer. In simple terms, inequality has grown as the coverage of collective bargaining and effective workplace representation has been weakened. A rebalancing is long, long overdue.

Good employers have nothing to fear from this. The story of trade unionism is often told by reflecting on major disputes. I understand why the drama of such events appeals to news editors but for most trade unionists the real story is of agreements being made, with good employment relations being a crucial part of the mix in building competitive and successful organisations. Change is so much better managed with understanding and consent.

One letter I received as TUC general secretary reflected that reality in a graphic way. It came from 12 individuals who had together come through an educational programme established by their trade union under the TUC’s Unionlearn initiative, in a partnership between their employer and a local college, to deliver basic literacy and numeracy skills. They told me that the experience and skills gained had completely transformed their lives—to their benefit, of course, but also to the benefit of their employer; a win-win if ever there was one. Crucially, those individuals would never have had the confidence to get involved if the invitation had come just from their employer or the local college. It was only the support of the union that persuaded them to risk re-entering a classroom, in which they had always previously felt a failure. The letter to me, thanking trade unionism for making that difference, finished by saying that it was the first letter any of them had ever sent in their life. That was truly humbling. At its peak, Unionlearn was helping over a quarter of a million people a year back into learning, and I hope our new Government will restore the support that made that possible.

During my time at the TUC, I also served on the Court of Directors of the Bank of England under the dedicated leadership of the noble Lord, Lord King of Lothbury. That brought me up close to the global financial crisis of 2008-09, with all the terrifying risks to the fabric of our financial system.

Since leaving the TUC, I have been fortunate to serve on the boards of Transport for London and Openreach, and the Financial Services Culture Board, each with hugely important public interest missions, and from each of which I have learned a great deal. I was proud to chair ACAS for six years; it does such important work, often behind the scenes, in resolving so many difficult disputes. My time as a trustee of the Mountview Academy of Theatre Arts has also been a delight, dedicated as it is to opening up the hugely successful education and professional training it provides to young people from all backgrounds, so delivering opportunities to make the careers that their talent deserves.

Now, as I embark on this new chapter, I am sure that I will again have an opportunity to learn many new lessons from noble Lords and noble Baronesses in all parts of the House and from the dedicated staff, who have all given me such a warm and kind welcome, for which I thank them most sincerely. I look forward to this next phase of my lifelong learning journey.

13:55

[Lord Monks (Lab)]

My Lords, it is a real pleasure for me to follow that excellent and inspiring speech by my noble friend and fellow Lancastrian—we are doing the northern bit at the moment, so I will join in with that. As my noble friend Lord Barber said, he comes from Ainsdale, an area with famous golf courses, where I think it can be said he had a misspent youth on many occasions—he is a very good golfer when his new knee permits it, by the way.

My noble friend’s appointment to this House, as he said, represents a reunion for both of us, because we have been friends and colleagues for about 50 years, with 30 of those spent together at the TUC. We rarely fell out, except perhaps about football from time to time, with his love of Everton, which I never understood. I was extremely pleased to see him succeed me all those years ago as TUC general secretary and for him then to flourish in that role and win this wide regard and respect, which is reflected in the different things he has done in his career. His determination, calmness and courtesy have long been hallmarks of his style, and I am sure they will be widely perceived within this House when noble Lords get to know him a little better. The range of tough jobs that he has done, and the people who have turned to him for help in tricky situations, is very impressive. We are looking at a stellar career that spans the private, public and voluntary sectors. That first speech was excellent, and the House can look forward to many more from my noble friend, as we can from my noble friend Lady Elliott, who gave a very warm speech, which would have gone down well with even the non-Sunderland supporters.

I turn to the subject of the day. The Horizon scandal is perhaps the worst British scandal in my lifetime. Here we had a respected and prestigious public body persecuting many innocent victims in what, ultimately, was a futile attempt at a cover-up. It went on for years, and it still goes on. People have lost their livelihoods, their savings and, in some cases, their freedom and their lives with the pressure that they had been put under—and it was all down to a dodgy, faulty computer system and an unwillingness to admit that a big mistake was made.

As I said, it is not over yet. Compensation schemes are in place but are being criticised for being too slow and, depressingly, Fujitsu is still dragging its feet on paying up—honeyed words are not enough. The point being pursued by the noble Lord, Lord Arbuthnot, and others about the role of the auditors, Ernst & Young, in whitewashing the accounts of the Post Office reminded me of what happened in the wake of the Enron scandal—a scandal of a similar scale, in some respects—where it was the auditors who paid a very heavy price. Do noble Lords remember a firm called Arthur Andersen? Well, that was the end of it at that time. I am not saying that Ernst & Young is in that position, but it needs to come clean and make some contribution because, in my opinion, it shares the guilt for what has been going on.

Generally, I think we need to finish this saga and put it behind us. I want to ask the Minister a couple of things. Have the Government yet drawn any conclusions from the initial reaction to the Green Paper on the future of the Post Office and how this can be used to ensure that none of these terrible things that have been happening can happen again?

I recognise the Government’s contribution to delivering compensation. We all pay due tribute today to the doughty campaigners—Sir Alan Bates and his colleagues—as well as to our colleagues, such as the noble Lords Lord Beamish and Lord Arbuthnot, who brought all this to light. I add my tribute to them, as this House has done many times, for the steadfast and determined role they played in seeing those enormous wrongs righted.

Those wrongs were a product of the damaged culture in the Post Office, with its emphasis on being defensive, its opposition to anybody who looked like a whistleblower, and its feeling of being beleaguered—that it was the victim rather the one causing victims. That culture was deep-rooted. I am interested in what can be done to make sure that is completely eradicated, because many of the people are still there. I guess that they will remain there because, individually, they have not done any criminal wrong. It is the corporate story that is so bad. What can be done to make sure that the culture is repaired and changed? The Post Office used to be loved and respected for its competence and openness but, at the moment, it is reviled by a significant section of our community.

Finally, can the Minister tell us how many convictions have been quashed and how many have received their due compensation, including in relation to Capture, the preliminary scheme which was around earlier than the Horizon system? Let us see a determined effort to close this shameful chapter in the history of the Post Office. It is long overdue. As a nation, we must put it behind us.

14:01

[The Earl of Erroll (CB)]

My Lords, I thank the noble Lord, Lord Beamish, for bringing forward this debate. This issue has worried me for a very long time. I remember the great campaign in particular by the noble Lord, Lord Arbuthnot, as well as by others in the Commons. Some of us here mentioned it, but we knew we were getting nowhere and were labelled as nutters. After a while, because we wanted to get on with other important things, we just had to give up. I am delighted the noble Lord never did and that we are finally getting there.

As the noble Lord, Lord Beamish, said, the problems started years ago with the ICL Capture system and the PFI contract Pathway project to computerise the Post Office. It started going wrong very early on. I remember a parliamentary visit to ICL. Among other things, they showed us Horizon, though it was not called that then; it was either Capture or it may have been called Pathway. They said, “Sadly, it doesn’t work and we’re going to knock it on the head”. Very soon after that, Fujitsu took over and, suddenly, a bit later, this new Horizon system appeared in the Post Office. I was very surprised because, only a couple of years earlier, they had known perfectly well that it was not working.

A lot of people were taken off or left the Pathway project to work on the millennium bug to make sure that it did not take the country down—which it did not. It infuriates me when people say that so much money was wasted on the millennium bug. It was not. People pre-emptively sorted out the software so that things did not go wrong at midnight. In a way, the lesson is that lots of failures are needed and people must be paid to sort them out, but this is not the sort of lesson we want to learn.

I was told that part of the problem was that the Capture system was based on spreadsheets. The other trouble was the system for transferring the data centrally, which took place in a short, one-hour window in the evening, over telephone lines which, back in those days, were very dodgy—in some places, they are a little better today. That system often did not work, particularly with the software they were using, which was designed for very small datasets. The datasets they were transmitting were much bigger. There were lots of errors and lots of time was spent trying to sort them out. Very often, they did not work.

There is another problem in the system which you get in large organisations and everywhere else—confirmation bias. For a long time, those on the security side of the Post Office were sure that with the amount of cash sloshing around in the system, some postmasters out there must have been pocketing some of it. Therefore, when the Horizon system said, “Yes they are”, they said, “There, we’re proven right”. They were willing to believe that Horizon was right and not the others. That is the trouble with large organisations: you get these attitudes and they do not shift forward very easily.

Fujitsu knew the software problems and told the Post Office. It is on a PFI contract and therefore has a duty of client confidentiality and is not allowed to talk outside, so none of this was meant to leak. We were told by the Post Office and others that maybe they were crooks, but they obviously did not think about this very hard or investigate it properly. Auditors are all very well, but if they are investigating stuff that they do not know and understand, it is quite tricky, as they do not know what they are looking at.

Also, having dealt with accounting software in the past, I have noticed that large auditing companies do not understand cash-based accounting. They work on P&L accounting. You have lots of little accounts and you can push things away. You have control accounts between your sales or ledger accounts and your main nominal account, for pushing things into. You can tamper with them, which you cannot with cash-based accounts. In a cash system, the other side of your central bank thing, which tells you where the money is, is the individual postmasters’ accounts. If you tamper with one, it tampers with the other. The people doing the tampering probably realised that but were not listened to, so you have this big problem of not understanding things. Certainly, I have discovered that big auditors do not understand cash accounts. I have had this trouble in other small businesses.

It is just a ring of failures—of understanding, listening and looking at the problem properly. It is sad. However, the problem really is that there must have been people telling lies somewhere down the line. Those lies must have surfaced in some of the evidence given to the courts. There must have been people giving evidence to the courts or briefing the lawyers who were not telling the truth, in which case they are guilty of perjury. The only way of stopping this from happening in the future is to prosecute some people for perjury. There must be somebody in the Post Office, though not necessarily at the top; I do not know where it happened. I do not see why we cannot investigate who briefed whom with what to conceal the truth.

We should look also at how good the expert witnesses are. I do not know who the courts were relying on, particularly in the early days when they were being told that the systems worked. You must be very careful. We have had problems with expert witnesses in other areas as well. The courts need to start thinking about it.

Also, I seem to remember that barristers and expert witnesses owe their first duty to the courts, not to their clients. Sometimes our legal profession should think about that quite seriously, because that is how you can get these huge miscarriages of justice. We also need to remember that large bureaucratic organisations often like to conceal things that do not go right. I remember years ago trying to get a large part of an organisation—I had better not say which one—to adopt some software which would have been very good at tracking all the stuff around contracts so that you could tell exactly who had done what, what had gone wrong and everything like that. They said, “Oh. no, we can’t have that. The first rule is that if at first you don’t succeed, bury all trace that you tried”, because it would not be career-enhancing. Anyway, that is enough of the cynicism.

The sad thing about it is what happened to the postmasters and postmistresses. It was dreadful. It was known about for a long time and a lot of people colluded to hide it. I would like to see some heads roll. Who pays for it? Fujitsu made a lot of money out of those contracts, so I do not see why it should not ante up towards it. The Post Office must too, as it is hugely responsible for the whole thing. It owed a duty of care to its postmasters and postmistresses. We need to dig deep, but I would like to see some heads roll for lying to the courts. It really worries me when our court system is not working properly.

14:09

[Lord Sikka (Lab)]

My Lords, I thank the noble Lord, Lord Beamish, for securing this debate, and I congratulate the noble Lord, Lord Barber of Ainsdale, and the noble Baroness, Lady Elliott of Whitburn Bay, on their wonderful speeches. I look forward to working with them.

The survivors of the Post Office scandal have already suffered enough, and the slowness and adversarial nature of the compensation schemes are simply adding another layer to the cruelty they have already suffered. I have a number of questions for the Minister. Can she explain why some claims are being minimised to as little as 5% when they have been fully prepared by financial assessors? Why are the claimants being asked repeatedly for more expert medical assessments? Why should Horizon shortfall scheme applicants have to wait for their first offer before qualifying for any legal help? Why is 92 year-old Betty Brown still waiting for compensation after the Minister, Gareth Thomas, pledged that he would find a solution six weeks ago?

We are seeing scandals within scandals. There is the tragic case of Mrs Gowri Jayakanthan, who I met last December here at a seminar organised in the House. In 2005, under pressure from the Post Office, her husband committed suicide. No wrongdoing was subsequently established. In summer 2020, Mrs Jayakanthan applied for compensation under the Horizon shortfall scheme. In November 2023, her application was refused because the company through which her husband contracted for his post office had gone into liquidation, and in the Post Office’s view her losses did not fall within the terms of that scheme. I urge the Minister to meet Mrs Jayakanthan and examine that case in detail, because justice must be seen to be done.

As has been mentioned, the cost of compensation must not fall solely on the public purse. What claims have been made against the directors’ and officers’ insurance taken out by the Post Office?

Then there are questions about Fujitsu. It played an active part in the prosecution of innocent postmasters and perverted the course of justice, but it has not returned even a penny of the fees that it collected over the years from the Post Office. Even worse, the company is currently bidding for a new £370 million government contract and is confident that it will be able to renew its contract with HMRC, which was worth £240 million when last signed in 2020. Why does Fujitsu continue to be indulged and why, despite massive evidence, has it not been prosecuted for perverting the course of justice? Why has it not been forced to make any contribution? As has been said, it should really bear at least 50% of all the compensation that is to be paid. Have the Government had any conversations with Fujitsu about funding Lost Chances? That is a charity set up to assist children whose parents were impacted by the Post Office scandal.

From a September 2024 report prepared by Kroll Associates, we know that Horizon’s predecessor, the Capture system, which operated from 1992 to 1999, was also flawed, and the Government are committed to redressing affected postmasters. The point here is that Ernst & Young was the external auditor of the Post Office from 1986 to 2018—the entire period of the Capture and Horizon scandals. Publicly available evidence shows that the firm knew the flaws. It could not have carried out effective evaluation of internal controls and satisfied itself that the Post Office kept proper accounting records, or that its directors were able to prepare true and fair statutory financial statements. Auditors did not qualify the Post Office accounts, which did not contain any provisions for contingent liabilities arising from wrongful prosecutions, which are now falling on the public purse.

On 11 February 2025, in reply to a call from the noble Lord, Lord Arbuthnot, for an inquiry into the conduct of Ernst & Young, the noble Baroness, Lady Gustafsson, told the House

“I look forward to ultimately hearing the outcome from the FRC”,—[Official Report, 11/2/25; col. 1105.]

implying that the regulator is looking at it. Can the Minister tell the House whether the Government have formally asked the Financial Reporting Council to investigate accountants involved with the Post Office? When was that request made? What is the scope of that request? Ernst & Young was the auditor for the duration of the Capture and Horizon scandals; therefore, all those audits need to be re-examined by an inquiry. Have the Government asked the FRC to look at the conduct of Deloitte and PricewaterhouseCoopers as well? PwC succeeded Ernst & Young.

I will now ask some questions about the 61 or more prosecutions of postmasters by the DWP for alleged frauds, none of which have been quashed. These prosecutions took place mostly between 2000 and 2006. The Government’s position is that these were not connected with the failings of the Horizon system. Well, they certainly took place when there was a conspiracy of silence and cover-up by the Post Office, the state, and government officials.

To accuse someone of fraud there is a presupposition that the underlying accounting records are 100% correct. We know that Horizon, Capture and the manual accounting systems used before them were flawed. We know that sub-postmasters were given minimal accounting training. So, what did the DWP use as a benchmark to say that somebody committed fraud? How did it know that that benchmark was reliable? I have not seen any evidence to support that.

The cases were handled by DWP solicitors, who would then instruct counsel to represent the DWP at court. Too many sub-postmasters, facing the full might of the state without any legal aid, were advised to plead guilty to a fraud they insist they never committed. Sadly, many have since passed away and their families have long sought to clear their name. Since the date of those DWP convictions, court transcripts and bundles of evidence relating to those convictions have been destroyed. The DWP has been unable to provide any court transcript to back up its insistence that its position was correct, so how sound could these convictions have been?

We have to remember that before the 2019 High Court case of Alan Bates and Others v Post Office Ltd, the authorities insisted that the convictions were sound. The rest, as they say, is history. We need an independent inquiry. I pursued this with the Minister on 24 July. She replied:

“On the individuals and the question of whether there should be an independent inquiry, we believe that the best way to deal with this issue now is through the current arrangements being set up, rather than by having another third party involved. I am sure that all these matters will be taken into account in the eventual recommendations”.—[Official Report, 24/7/25; col. 505.]


The problem here is that Sir Wyn Williams did not consider the DWP prosecution of postmasters part of his remit. I am sure the Minister is committed to securing justice for all, and I encourage her to revisit this issue and commission an inquiry. We can only win justice, and that is highly desirable.

14:19

[Baroness Brinton (LD)]

My Lords, I congratulate the noble Lord, Lord Beamish, on securing this important and timely debate. I echo his credit to the postmasters for their decades-long search for justice. My noble friend Lady Ludford highlighted the role of Nick Willis, whose reporting over decades exposed what was happening to many members of the public. I want to pay tribute to the many solicitors and barristers who worked with the victims over the years as well, long before they were listened to. It is a pleasure to follow the noble Lord, Lord Sikka, who highlighted the delays and attempts to minimise compensation despite agreed routes to compensation. This is a key issue, and he is right that these are further scandals within scandals.

I congratulate the two new Peers on their maiden speeches. The noble Baroness, Lady Elliott of Whitburn Bay, spoke about the lack of progress of the compensation scheme. She is right and even though there has been some progress, as we have heard in this excellent debate, there are certainly problems and particularly snail-like reviews of complex cases. The noble Lord, Lord Barber of Ainsdale, brings his wealth of experience in the trade union movement to this appalling miscarriage of justice. He highlighted how employers could mistreat staff with absolute impunity. He has been, and I am sure will continue to be, an exceptional advocate for workers and the trade union movement. I also agree with him about skills. As a former director of UFI, I worked closely with Unionlearn. I believe it was transformational, and I hope that work can be resurrected. From these Benches, we welcome both new Peers and look forward to their contributions to your Lordships’ House.

Just over a year ago, the country was reeling from the exceptional ITV drama “Mr Bates vs The Post Office”, which brought to the country’s attention the appalling miscarriages of justices faced by many postmasters. Early on, we focused on the Post Office. This debate rightly takes us to some of the other issues, specifically Fujitsu. The noble Lords, Lord Arbuthnot and Lord Beamish, whose constituents were affected, have led the campaign for many years in Parliament on these issues and continue to lead the debate. The speeches were once again clear on progress and the remaining issues facing postmasters.

In February 2024, the Treasury supplementary estimates outlined the money set aside for the GLO scheme and, separately, the value of provisions relating to the Post Office for some of the other schemes and some of the Post Office’s legal costs. I looked at the Treasury supplementary estimates for the Budget last year, and the numbers had slightly changed. Without wanting to question the Minister about exact sums, it would be useful to know six months on whether those estimates still hold or if, in light of compensation agreements, we are going to have to expect further rightful compensation.

The noble Lords, Lord Arbuthnot and Lord Sikka, raised the essential issue of Ernst & Young’s audit practices. I hope the inquiry report will lay bare these failures and its practices in giving clean bills of health, because it just did not query items. The noble Lord, Lord Monks, spoke of the Enron scandal and the role of auditors, and about the cultures of organisations when things go so badly wrong. The noble Earl, Lord Erroll, spoke about the auditors’ shortcomings and of cash accounting. What are the Government doing to ensure that organisations, whether private or publicly funded, understand the role of auditors, make sure they have people able to assist them and, in particular, that the audit profession reviews what it does?

We had a very helpful briefing from Protect, the whistleblowing charity, which raised an interesting point in relation to the Post Office contractors—the sub-postmasters, who blew the whistle on the Horizon scandal. They would not have enjoyed legal whistleblower protections because they are self-employed. Will the Government use their powers to extend legal whistleblower protections to self-employed contractors?

The small number of postmasters who were not cleared under the Post Office (Horizon System) Offences Act was brought up by a number of speakers. In May last year, the Law Society gave parliamentarians a briefing when we were considering that Bill, setting out the reasons why some were not included—judicial reasoning that they would have been convicted of something else. I remain particularly concerned about this. If the evidence for the other items was also coming from the Post Office and Fujitsu, why is their evidence in those cases suddenly valid? I hope that this will be reviewed, particularly by the criminal justice system and the judiciary. As the Law Society commented, it is difficult for Parliament to insist on things with the justice system.

Can the Minister say how the appeal cases of those few who were excluded from the general cancellation of the wrongful convictions is proceeding and whether there is any doubt about the substantial evidence provided by the Post Office and Fujitsu on those convictions?

There has been some mention, as there has been elsewhere in Parliament over the last year, of the Capture scheme. The noble Lord, Lord Beamish, said it is now clear that there are certain problems. I am grateful that he highlighted the issues in the first place. The noble Earl, Lord Erroll, outlined some of the technical problems with Capture. Who among us does not remember dodgy phone lines when attempting to transmit data in the 1980s and 1990s? I certainly do.

It is really important to see whether there are miscarriages of justice in this scheme. Since this time last year, when we have discussed the Post Office Horizon scheme I have kept raising what will happen when it is realised that the Capture scheme victims also deserve to have their convictions overturned. I asked then whether it would be possible to amend by regulation the Post Office (Horizon System) Offences Act rather than having to start with new legislation, because it would be dreadful to have to start all over again. Can the Minister update the House on that and on what the Government plan to do about the Capture scheme? We saw the report published last autumn; it is really important that we get speedy responses on this issue.

Sitting behind all of this is Fujitsu. The noble Lord, Lord Beamish, is right to highlight its consistent lying for so many years that it was not possible to adjust Horizon remotely, which supported the prosecution of postmasters. Only through seeing Fujitsu staff on the witness stand at the inquiry having to admit that they regularly changed data did we realise the scale of what had been happening. I echo his concerns about Fujitsu’s silence. It is appalling that it has not yet announced how much it will contribute to the compensation. Above all, after they realised what was happening, why did the last Government—and the new one—give it and continue to consider it for new contracts?

My noble friend Lady Ludford highlighted the omissions from the Horizon shortfall scheme and how different standards are now being used by some of the assessors, which is very concerning. I have heard about this too, so can the Minister say whether these are being addressed? The example from the noble Lord, Lord Polak, of the struggles that Rita is facing demonstrated that this is not a technical issue; it is not done and dusted, and it is still affecting postmasters’ lives today.

My noble friend also made the point that the Post Office should not be responsible for negotiating with the victims. This also applies to other inquiries, where government department staff often operate the compensation scheme. The Infected Blood Compensation Authority is at least at arm’s length from government and therefore separate from the institutions responsible. Will the Government have a review to consider whether this might be a model for the future? The one thing we do not want to see is a repeat of the long years of mistrust and problems with the compensation—the speed at which it is being awarded, and the detail of what is being awarded.

14:28

[The Earl of Effingham (Con)]

My Lords, I thank all noble Lords who have contributed to this debate and the noble Lord, Lord Beamish, for securing it. I greatly enjoyed hearing the maiden speech of the noble Baroness, Lady Elliott, and very much look forward to hearing her contributions on standing up for the north. We have an opportunity to create a genuine northern powerhouse, and it would be brilliant to achieve that. It was also extremely interesting to hear the maiden speech of the noble Lord, Lord Barber—from Ghana, ACAS, TfL, Everton Football Club and Mountview Academy to the TUC, bringing together more than 5.5 million working people. He said that he is looking forward to learning from his noble friends, but I think your Lordships’ House is equally looking forward to hearing from him.

It would be remiss of me not pay a special tribute to the noble Lord, Lord Arbuthnot, and, rather than my words, please let me quote from some of the many articles that highlight his amazing contribution which resulted in justice for postmasters.

“One of the figures who comes out of the Post Office scandal with universal and unequivocal praise is Lord Arbuthnot”.


“His actions, with purpose and forethought, that he stuck with through the process, show the instinct and intelligence to approach this carefully and allow all sides the opportunity to show their character before committing to the cause with fire and brimstone”.


We should all be incredibly grateful that both he and the noble Lord, Lord Beamish, did commit to the cause with fire and brimstone, because this was, unfortunately, one of the gravest miscarriages of justice in recent times. A scandal that saw honest, hard-working individuals—our local postmasters—wrongly accused, prosecuted and, in some cases, driven to financial ruin. Depression, prison time, moving country and attempted suicide: these are just some of the tales told by the victims of the scandal.

The Post Office is a pillar of our communities and has long been a trusted institution, but, between 1999 and 2015, hundreds of postmasters faced devastating consequences due to the faults in the Horizon IT system, supplied by International Computers Ltd, which was later fully incorporated into Fujitsu. These errors falsely suggested financial shortfalls, leading to suspensions, wrongful prosecutions and untold suffering. So my first question to the Minister is: what measures will His Majesty’s Government implement to prevent such a miscarriage of justice from occurring again?

The Government have indeed acknowledged this injustice and have worked to provide compensation, with the Post Office (Horizon System) Compensation Bill being introduced to ensure that victims receive full and fair redress. As of 31 January 2025, approximately £663 million has been paid across multiple schemes, which is part of a total £1.8 billion set aside for compensation costs. But, despite these efforts, we must ask: is justice being delivered swiftly enough?

The noble Baroness, Lady Ludford, and my noble friend Lord Polak mentioned legal complexity and speed of claims. The Business and Trade Select Committee recently raised serious concerns about the pace and complexity of the compensation process. While payments have increased, delays persist. The committee’s report describes the process as akin to a “second trial” for victims. Postmasters should not have to navigate an overly bureaucratic system to receive what is rightfully theirs after what they have already been put through. The committee has stated that while redress schemes are moving faster, they are still “not fast enough”. So we have to ask the Minister: what specific measures can be taken to accelerate these compensation payments?

The recommendations put forth by the committee must also be seriously considered. We must remove the Post Office from administering any redress schemes, we must offer upfront legal advice to claimants and we must introduce strict timelines to expedite claims. Furthermore, His Majesty’s Official Opposition believe that an independent adjudicator should oversee the process to ensure fairness, with legal costs being scrutinised to prevent further exploitation of the victims.

As mentioned by the noble Lords, Lord Beamish, Lord Arbuthnot, Lord Hastings, and Lord Polak, and the noble Baronesses, Lady Elliott and Lady Brinton, Fujitsu cannot evade accountability. The company must take financial responsibility for its role in this disaster. As the inquiry nears its conclusion, it is imperative that Fujitsu contributes meaningfully to the compensation efforts. Justice demands nothing less. The National Federation of SubPostmasters has raised concerns that progress on addressing the scandal has only been expedited due to public scrutiny and the ongoing inquiry. The NFSP has questioned what will happen once the inquiry concludes, particularly regarding Fujitsu’s contribution to compensation. It has suggested that Fujitsu may be delaying action in the hope of minimizing its culpability and avoiding public scrutiny over its financial responsibility. As the inquiry nears its conclusion, it is imperative that the company contributes meaningfully to the compensation efforts, so we need to ask: what conversations are His Majesty’s Government having with the board of directors at Fujitsu?

It is not just financial compensation that must be addressed, as was mentioned by my noble friend Lord Polak. The emotional wrecking of lives caused by this travesty must also be looked at, so we would like to know how His Majesty’s Government will support affected postmasters beyond financial compensation to help them rebuild their lives. Achieving justice for the victims of this scandal and ensuring that such a tragedy can never happen again must be the Government’s priority. When we talk about compensation, we have to remember that the lives of the postmasters and their families caught up in this scandal have been changed for ever. They have faced financial ruin, untold personal distress and a loss of reputation that no amount of financial compensation can ever fully restore. It is of paramount importance that we recognise our clear moral duty to right those wrongs to the best of our ability. His Majesty’s Government must set out a plan for how they will notify eligible postmasters of compensation. What steps will they take to ensure that all affected individuals are reached?

Finally, please allow me to quote my noble friend Lady Fookes, a hugely respected veteran of both the other place and your Lordships’ House, who spoke with such great authority when she challenged His Majesty’s Government on a similar topic. The same applies here for all of the postmasters who deserve compensation:

“The government machine needs to get more of a move on than it usually does in these matters. Will my noble friend take as his motto a cry often heard in the streets: ‘When do we want it? We want it now’”.—[Official Report, 18/5/23; col. 368.]

14:37

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, first, I welcome my noble friends Lord Barber of Ainsdale and Lady Elliott of Whitburn Bay and congratulate them on their maiden speeches. I am sure this House would agree with me that they both bring a wealth of experience, particularly in speaking up for working people, and I look forward to working closely with them as they navigate their way through our shared UK growth missions. My noble friend Lady Elliott—I am sure the House agrees—will be an important northern voice in this Chamber. I am sure that the House will also agree that we will all benefit from my noble friend Lord Barber’s experience in arbitration and conciliation. We have a lot to learn from him in that regard.

I am pleased to respond for the Government and . I thank the noble Lord for bringing forward this Motion and allowing us to debate this very important issue. I pay tribute to the work of my noble friend Lord Beamish, alongside that of the noble Lord, Lord Arbuthnot, as members of the Horizon Compensation Advisory Board. They have helped guide and shape the Government’s work in this area.

Like my noble friend Lord Beamish, I pay tribute to Alan Bates and the 550 who took the case to court and finally shone a light on the role of the Post Office in deliberately hiding the truth. I also agree with the noble Baroness, Lady Ludford, that certain members of the press—ITV has obviously been mentioned—and in particular Nick Wallis, played an important role in shining a light on this in a very dogged and determined way, and brought it certainly to my attention for the first time.

I welcome this opportunity to provide an update on the progress of the Horizon redress schemes and to discuss the contribution of Fujitsu to the costs of the scandal. This scandal was one of the worst miscarriages of justice in this country’s history. Redress for the postmasters whose lives were scarred by it is of great importance for the new Government. A number of noble Lords, including the noble Lord, Lord Polak, and my noble friends Lord Beamish and Lady Elliott, gave very moving examples of the individuals impacted by the scandal and their lives being torn apart as a result. We recognise the devasting impact that the Post Office’s actions had on many postmasters’ lives, their families and their communities.

The Government remain focussed in our efforts to ensure that all postmasters receive full, fair and swift redress for the terrible ordeals to which they have been unjustly subject. That is why the Government have set aside around £1.8 billion for redress for the 2024-25 financial year onwards for those postmasters affected by this grievous miscarriage of justice. This is in addition to the around £200 million already paid to victims in previous years; this is not a ceiling but an estimate.

I turn now to the progress of the redress schemes. My department and Post Office Ltd publish monthly updates on progress. Since the end of June last year, the total amount of redress paid to victims of the Horizon scandal has more than doubled. Across this period, 1,409 more victims have settled their claims. Approximately £663 million has now been paid to over 4,300 claimants.

As we have identified, there are four separate redress schemes. This is by no means ideal, but, as noble Lords know, the reasons for it are historical. I will describe separately the progress of each scheme. I will start with the Horizon shortfall scheme, which covers postmasters who were not part of the group litigation and do not have a criminal conviction. It is run by Post Office Ltd, with funding, oversight and governance provided by the Department for Business and Trade. Approximately £315 million has been paid under this scheme. However, it has delivered redress too slowly, for two reasons. First, the scheme received many more applications than were originally anticipated: 7,000 and counting rather than a few hundred. Secondly, amounts are decided by a panel independent of the Post Office. This is intended to ensure fairness, but it makes the process slower. Combined with the huge volume of cases, this has caused real problems.

In March 2024, the Minister for Postal Affairs announced an optional fixed sum offer of £75,000 to those applicants who did not wish to complete a full claim. This has greatly accelerated progress. As well as providing speedy redress for those who accepted the offer, it has substantially shortened the queue for everyone else.

The Government have also acted to give postmasters assurance of fair redress. Many postmasters have had understandable concerns about any scheme run by the Post Office, even though redress offers are recommended by an independent panel, which the Post Office has never undercut. The noble Baroness, Lady Ludford, asked whether there was secret guidance to the Post Office lawyers on this issue. In response, I say that the principles of the Horizon shortfall scheme are public; offers are set by an independent panel, with a KC, an accountant and a retail expert. There is also a process to dispute the offer.

[Baroness Ludford (LD)]

I apologise for interrupting the Minister when we are time-pressed. Can she undertake to explore whether the Post Office really is operating to those published principles? The material that I have seen seems to give credible backing to the suggestion that it is not. Indeed, there is an exchange featuring Post Office lawyers saying that they are working on a contractual basis and not a consequences-of-loss basis, which is entirely different.

[Baroness Jones of Whitchurch (Lab)]

I hear what the noble Baroness is saying. Perhaps if she has some of that evidence, she could share it with us. I am not dismissing what the noble Baroness said. If she has that evidence, we will of course look into it. It is important that justice is done in this case, and is seen to be done.

In light of these concerns, in September the Minister announced that the Government are setting up an appeal process for postmasters who are unhappy with the full assessments of their claims, as recommended by the Horizon Compensation Advisory Board. We expect to receive the first appeals in the spring. The Government have committed to covering the reasonable costs of postmasters obtaining legal advice at each stage of the appeals process. The Government are also actively looking at other ways in which the pace of redress can be sped up and have been supported by the recommendations from the advisory board and claimants’ lawyers in this area.

Post Office prosecutions of innocent postmasters were perhaps the most reprehensible part of this scandal. Some 111 of these unfortunate individuals had their convictions overturned by the courts. The Post Office set up the overturned convictions scheme to ensure that such people get fair redress for malicious prosecution and other losses. Approximately £65 million has been paid under this scheme. So far, 82 of the 111 exonerated people have submitted full and final claims for redress. In response, 73 redress offers have been made and 66 accepted and paid. This scheme provides the option of an upfront offer of £600,000 to claimants, ensuring swift redress is provided to those victims who do not wish to submit a full claim. This is larger than the fixed offer in the HSS, reflecting the greater harm done to those who were convicted. As of 3 January, 58 people have chosen to accept that offer.

The House will recall the widespread concern that people convicted as a result of the scandal were not being exonerated by the courts, often because the evidence had gone or because they could not face a further legal fight. These people were therefore exonerated en masse by Parliament in May of last year. As of 7 February, 557 individuals in England and Wales have been sent a letter, informing them that they have at least one conviction quashed by the Act. The devolved Administrations in Scotland and Northern Ireland are running parallel exercises.

In July last year, the Government launched the Horizon convictions redress scheme to address the suffering of these people, wherever they are in the UK. I am pleased to report that it has made excellent progress. Under this scheme, eligible applicants are entitled to an interim payment of £200,000. They can then opt to have their claims individually assessed or take the fixed offer of £600,000. The noble Baroness, Lady Ludford, said that 72% of people in this redress scheme have not yet been paid. Most of the costs of redress relates to convictions which were rightly overturned by Parliament. No full claims have yet been received from those individuals and the Government are not going to slow down the redress. When people claim and we get the full claims, we aim to make to make an offer within 40 working days in 90% of the cases.

As of 31 January, 383 initial interim claims had been received, of which 364 have been paid; 232 full claims have been received, with 208 of those paid and 24 offers accepted and awaiting payment. The department’s target is for the first offers to be provided in response to 90% of full claims within 40 working days of receipt. A total of £156 million, including interim payments, has been paid to eligible claimants under this scheme. BBC News recently ran a story of two more claimants having received their £600,000 claims. It is very good to hear those individual cases of justice being done, even if it has taken far too long.

This brings us to the GLO scheme—the group litigation scheme. The group litigation court order case celebrated in last year’s ITV drama provided redress which proved to be unequal and unfair when compared with that provided by the HSS. The GLO scheme is intended to put that right.

The scheme is delivered by the Department for Business and Trade rather than the Post Office. Last year, Sir Alan Bates expressed concern that the scheme was not delivering fast enough. The Government agreed, but the problem was that we were not receiving the full claims. However, those concerns have now been eased. Out of the 492 postmasters eligible for the scheme, the department has received 408 completed claims. When it receives claims, the department acts quickly. It aims to make offers in 90% of cases within 40 working days of receiving a completed claim. As of 31 January, 89% of offers were made within that target period.

If any postmaster cannot resolve their redress through such bilateral discussions, they can go to the scheme’s independent panel. So far, only five cases have required help from the panel. By contrast, 257 cases have been by agreement between the department and the postmaster, either in response to the first offer or a subsequent challenge. This demonstrates that the department is making fair offers.

A total of £128 million, including interim payments, has been paid to postmasters under the GLO scheme. The Government expect to have paid redress to the great majority of the GLO claimants by 31 March 2025.

My noble friend Lord Sikka raised a question about the DWP convictions. I can assure him that the Minister for Transformation is looking into this, a review is being established, and I hope to provide more information about that. My noble friend also raised questions about the Lost Chances charity. A meeting has been arranged between it and my colleague, Minister Thomas.

We have been talking about the Horizon redress schemes but, as noble Lords have pointed out, a predecessor system known as Capture also involved errors and bugs which affected some postmasters. I pay tribute to the tireless advocacy of my noble friend Lord Beamish on behalf of this group.

In response, the Minister announced on 17 December last year that the Government will be providing full and fair redress to postmasters who were victims of errors and bugs in the Capture programme. The Government will continue to discuss this work with my noble friend Lord Beamish, and we will return to the House in the spring with an update.

Fujitsu supplied the Horizon software at the heart of this scandal. The sorry tale of its introduction has been fully explored by Sir Wyn Williams’ public inquiry. The Government of course welcome Fujitsu’s acknowledgement of a moral obligation to contribute to the cost of the scandal and continue to talk regularly to Fujitsu about this. The Post Office Minister will be meeting Fujitsu’s Europe CEO shortly.

The noble Lord, Lord Arbuthnot, asked: if Fujitsu were in jail, would we be giving it the millions that we are currently giving it? It is of course true that Fujitsu has admitted wrongdoing, but at the moment we do not know whether it is criminal. Deciding on that before reviewing the evidence is part of what has caused the scandal, and we should not repeat it. In its apology, Fujitsu recognised that it has a civil liability, and this will be dealt with through the financial contributions which it has promised.

The noble Lord, Lord Arbuthnot, my noble friend Lord Monks, the noble Earl, Lord Erroll, the noble Baroness, Lady Brinton, and others raised the issue of errors made by the Post Office auditors. The noble Lords have referred the performance of Post Office auditors to the Financial Reporting Council, and my department officials have also spoken to it. It is the right body to consider this, and the Government should not second-guess it. But, going back to the issue of Fujitsu’s contribution, the full amount cannot be determined until we have Sir Wyn Williams’ report, which will set out the full facts of what happened.

The noble Lord, Lord Arbuthnot, and my noble friends Lord Beamish and Lord Sikka raised the potential for an interim contribution from Fujitsu. I would say that it is too soon to decide on Fujitsu’s final contribution to the costs of the scandal, but I agree with noble Lords that an interim contribution would be very welcome and appropriate in these circumstances. Given the nature of the discussions that will need to take place on Fujitsu’s contribution, the Government will not be giving a running commentary on them. But I can promise that we will keep the House informed of progress at appropriate moments.

The Horizon system is still in place, unfortunately. A new version was introduced in the late 2010s, which the High Court accepted was “relatively robust”, but it is none the less very much in need of replacement. There can be no overnight fix for this lack of investment.

We are working with the Post Office to secure a new system which is fit for purpose, and which will not involve Fujitsu. In the meantime, the Post Office is, unfortunately, still dependent on the Horizon system to run its branches. I understand the widespread desire to see Fujitsu out of the Post Office picture immediately, but the only way to achieve this would be to shut down all local post offices and deny citizens the vital services which they provide. We do not think that we can do that, and so Fujitsu must remain for the time being. The Post Office has extended its contract until March 2026 but is looking to reduce its input as soon as possible.

Recognising its responsibility for the scandal, Fujitsu has voluntarily paused bidding for new government contracts. However, the Post Office is not the only area where government needs help which is only practicable to get from Fujitsu. So, while we agree with Fujitsu’s decision not to bid for government contracts in general, there will be situations where existing contracts need to be extended, or new ones begun, although generally in connection with existing services. Of course, we understand why that is undesirable, but it is being done only because currently there are no viable alternatives.

There have been allegations in the media that Fujitsu is seeking and receiving contracts beyond those limits. I assure the House that this is not the case. The Crown Representative and his team in the Cabinet Office, who oversee all the Government’s dealings with Fujitsu, are keeping a close watch on the situation.

I agree with noble Lords that individuals and companies responsible for the Horizon scandal must be held to account. The Metropolitan Police is keeping a close eye on the Williams inquiry and has a number of staff working on this. The noble Lord, Lord Hastings, asked about the involvement of law processes. The Solicitors Regulation Authority has said that it has more than 20 live investigations into solicitors and law firms relating to the scandal. There are other channels of accountability, too, and all of these need to be investigated in due course. My noble friend Lord Monks rightly raised the question of the wholesale culture change needed at the Post Office, and my noble friend Lord Sikka raised specific questions about the culpability of the directors. This will all be covered in Sir Wyn Williams’ report, which will establish what happened, what went wrong and why.

The noble Lord, Lord Beamish, raised the question of an independent body—

[Lord Sikka (Lab)]

I apologise to the Minister for interrupting. I know she has had a lot of questions to answer; I very much hope she will send detailed replies to a lot of the questions I asked. One matter was the case of 92 year-old Mrs Betty Brown, who, despite promises from the Minister six weeks ago, is still waiting for her compensation. Secondly, I asked whether the Minister could meet me and Mrs Gowri Jayakanthan, who had been refused any compensation and whose husband committed suicide, unfortunately, under pressure from Post Office allegations. Would the Minister be good enough to meet us, please?

[Baroness Jones of Whitchurch (Lab)]

My Lords, I was going to go on to say that a number of noble Lords have asked very specific questions, and I will of course write. I will just deal quickly with the idea that there should be an independent body for redress in the future. That is certainly something that we are looking into, and it is a very helpful suggestion coming forward from the Horizon Compensation Advisory Board, among others.

Horizon was a terrible scandal, and it is right that we should continue to keep it in our minds through debates such as this. The Government are determined to learn the lessons from it, which is why Sir Williams’s report will be so important, to deliver full and fair compensation, as quickly as possible, to those postmasters who were so unjustly used. I thank noble Lords for this very helpful debate.

15:00

[Lord Beamish (Lab)]

I am grateful to noble Lords for their contributions. We have had an informed debate. The important thing about this scandal that I have recognised over the years is that you have to keep bringing it to the surface so that people do not forget the gravity of what we face.

I will pick up one point that the noble Lord, Lord Hastings, made about the judiciary. In reply, the Minister talked about solicitors, but the noble Lord—and I agree with him—was talking about the judiciary as an institution. When the last Government overturned the convictions, there was a huge hue and cry from the judicial establishment, saying how terrible it was that this was taking place. I suggest that people read some of the transcripts of the court cases and look at the role of judges.

The one that sticks in my mind is the Capture case of June Tooby. Her protestations that Capture was the problem were completely ignored and thrown out by the judge, who was not prepared even to hear the consideration. Although cases are being taken against solicitors, the judiciary needs to look at its role in this. There is no way this could have happened if a few inquiring minds had asked questions. I ask the justice department to look at that.

On the role of auditors, that is unfinished business. I am sorry, but I do not accept that it is good enough for the Government just to say that it is down to the regulators to look at that. Over the years, sub-postmasters kept asking what had happened to their money. The accountants did not know where the money was in the system, even though it was signed off—and no doubt Ernst & Young and others were paid millions of pounds for their advice.

I understand the position of the Government and others in wanting to wait for Sir Wyn Williams’s report to be published, but I think that is being used as an excuse. Most of the information is out there now, and certainly in Fujitsu’s case it is—it has admitted to its role in this.

I welcome the Minister’s support for my suggestion that Fujitsu should support and pay an interim payment. I just hope that, when Minister Thomas meets Fujitsu, he makes that point strongly. I also urge that, when the Secretary of State visits Japan next month, he raises that directly with the main board in Tokyo.

At the end of the day, the contribution that got to the heart of it was that of the noble Lord, Lord Polak—it was a human story. We all have those, and if you have met any of the victims, you can replicate those human stories. At the end of the day, this is about individuals who were hard-working, solid citizens. They were pillars of their local communities and were absolutely devastated and ruined by these acts against them.

In closing, all I would say is that compensation and changing the systems are important, but we should all remember that, at the end of the day, when the state gets things wrong, it is the individual citizens—people such as Rita, referred to by the noble Lord, Lord Polak, who has gone through hell for the last few decades—we should think about.

Motion agreed.