The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
With your permission, Madam Deputy Speaker, I wish to make a statement on the Post Office, Horizon redress and Post Office finances. We inherited a Post Office in crisis. It had a grim past, a poor commercial track record, unstable leadership and its record on compensation was widely perceived as legalistic, slow and adversarial. Since this Government came into office, the total amount of redress paid to victims of the Horizon scandal has increased by more than three and a half times. Between July last year and 31 March this year, more than 3,300 victims have received compensation for the first time. Approximately £892 million has now been paid to more than 6,200 claimants. We have also established a new compensation scheme, so that those postmasters who finally had their convictions overturned by Parliament last year get redress. We are working on our approach to redress for postmasters who fell victim to the flaws in the Capture system.
Unlike the previous Government, we set out a clear forecast for compensation within the autumn Budget of £1.8 billion from 2024-25. As the House will know, the Government previously committed to provide the majority of group litigation order claimants with substantial redress by the end of March. I can confirm that, as promised, 76% of those who submitted claims for compensation have received substantial redress. All those who submitted a claim before Christmas have received an offer or, in one case, a substantial interim payment instead. We will also take further steps to increase the pace at which claimants’ challenges can be resolved fairly. Facilitated discussions will be reintroduced to the GLO scheme for this purpose.
Most recently, we announced that from 3 June my Department will take over responsibility for the overturned convictions scheme from the Post Office. We have also welcomed Fujitsu’s commitment to contribute to the Government’s compensation for the victims of the scandal. During a meeting between the Secretary of State and Fujitsu’s chief executive officer in March, an agreement was reached on beginning talks ahead of the conclusion of Sir Wyn Williams’ inquiry.
The House will be aware that the Secretary of State announced the Government’s intention to establish an appeals mechanism for claimants who were unhappy with offers that they had received under the Post Office’s Horizon shortfall scheme. Today we are publishing the guidance and principles for the HSS appeals, and by the end of this month we will begin to accept applications from eligible postmasters who are currently involved in the Post Office’s dispute resolution process. The document sets out the underlying rules that will govern the assessment of appeals, and also provides information on, for instance, the eligibility criteria to help postmasters and their legal representatives make their claims. We developed this in consultation with the Horizon compensation advisory board, claimants’ lawyers, and representatives of postmasters’ organisations.
Later this month we will begin writing to the legal representatives of potentially eligible postmasters who are currently involved in the dispute resolution process, inviting them to transfer their claims to the new HSS appeals scheme. If postmasters do not have legal representatives, we will write to them directly. Shortly after that, we will open the scheme to all other eligible postmasters. As with the GLO scheme, my Department will aim to respond within 40 working days of the submission of a substantially complete appeal in at least 90% of cases. We will encourage postmasters entering the process to engage legal advisers, and we will meet their reasonable legal costs through a tariff that we have agreed with claimants’ lawyers. Postmasters will not have to pay a penny of income tax, capital gains tax, national insurance contributions, corporation tax or inheritance tax on any compensation that they receive through the new process.
As we look to the future, we will also continue to address any concerns about the Post Office’s past behaviour. I am therefore pleased to be able to provide an update on the Government-funded Post Office process review scheme, which will provide redress for postmasters who lost out financially owing to issues connected with Post Office products, policies or processes. Those issues are unrelated to Horizon but are part of the company’s efforts to rebuild trust with its postmasters and ensure that past failings are fully addressed. The scheme is due to be launched in the next month, and the Post Office will write to all of those potentially affected with further details, including information on how postmasters can apply.
We will consider carefully the conditions and recommendations of Sir Wyn Williams’ inquiry when it is published. While tackling the awful legacy of the Horizon scandal, the Government are also determined to make the Post Office more sustainable for the future, and we remain committed to publishing a Green Paper to consider its long-term future. In particular, I look forward to hearing the visions and ideas of stakeholders, including key trade unions, sub-postmasters and others.
It has been apparent for some time that the Post Office is heavily reliant on Government funding. Its chair’s transformation plan was announced in November, with the aim of putting the company on a path towards financial stability and delivering a “new deal for postmasters”. The plan requires the company to make difficult decisions about, for example, the need to look seriously at efficiencies in its headquarters and the branch network to ensure that it is fit for purpose.
Today the Post Office has announced that it would be moving to a fully franchised network as part of those plans. That will realise significant savings, potentially amounting to £100 million over the duration of the current Parliament. Before this announcement, many Members wrote to me expressing concerns about their local directly managed branches, and we have heard those concerns. The Post Office will therefore ensure that each directly managed branch will be franchised, either on site or in a location nearby, so that service provision will remain in place in communities. Making those changes will ensure that the company is more sustainable.
To support Post Office provision in every community across the UK, the Government plan to provide up to £83 million of subsidy next year. That is up from the £50 million provided under the last Government, and is in addition to the uplift that we provided in the last financial year. The Post Office needs to transform the outdated technology on which it depends, and we therefore plan to provide up to £136 million of funding for its new future technology portfolio in the 2025-26 financial year. Over the next five years this work will address technology needs across the business, which will include replacing Horizon, reducing central costs and ensuring that postmasters have the tools they need to serve their customers. To enable the Post Office to continue to administer redress payments to postmasters and respond to the Post Office Horizon IT inquiry, the Government will provide up to £57.9 million of funding. These funding streams are subject to the Subsidy Control Act 2022 and referral to the Competition and Markets Authority.
An announcement on banking framework 4 has not yet been made, but I am hopeful that there will be a positive announcement soon, as post offices continue to provide vital banking services in every community up and down the country. Together, these steps will help to pave the way towards a more sustainable future for the Post Office.
During my engagement with the National Federation of SubPostmasters, concerns have been raised that the Post Office may have acted improperly in the course of the network transformation programme during the 2010s. There are claims that the Post Office and its representatives put undue pressure on postmasters, and may have given unregulated financial advice to encourage them to move on to contracts that were ultimately not in their best interests. Those allegations must be taken seriously. I am therefore commissioning an independent review of the conduct of the programme to establish whether there was any improper or coercive behaviour, and I will update the House on the scope and timing of the review in due course.
It remains our priority to speed up the delivery of fair compensation to all the victims of the Horizon scandal, and to secure and strengthen the Post Office for the future. There is more to do, but I commend this statement to the House.
Kevin Hollinrake (Thirsk and Malton) (Con)
I thank the Minister for his statement, and for advance sight of it. I also thank the campaigners on this issue, with whom I worked for more than five years—both as a Back Bencher and as a Front Bencher—and, indeed, I thank Lord Beamish and Lord Arbuthnot for their work on the Horizon compensation advisory board, which we established on a cross-party basis during our tenure.
I agree with the Minister that, although good progress has been made, there is much more to do. It is good that £892 million has been paid to 6,200 sub-postmasters, a tenfold increase on what we saw only a couple of years ago. It is clear that most of that has gone out of the door because of what this Parliament did last June, when it overturned the convictions by statute, and because of the introduction of fixed-sum awards, which have revolutionised the ability to pay compensation quickly.
I am proud to say that we did all that in the House on a cross-party basis, and it was the right thing to do. I worked with the then shadow Secretary of State for Business and Trade and with this Minister and others in their former roles, and our work was strongly supported by the then Prime Minister, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), the then Business Secretary, who is now Leader of the Opposition, and the then Chancellor and his Ministers. I am therefore a little disappointed that the Minister has sought to suggest that he took over a crisis.
We have made much progress on this matter on a cross-party basis, and my remarks today will continue to be made on that basis, but for all the progress the Minister talked about in his statement, I did not hear about a single aspect of the Horizon programme that was not already in train under the last Government, in conjunction with the then Opposition. The Minister mentioned a three and a half-fold increase in July, which I welcome, but as he will no doubt concede, it happened as a result of the overturning of the convictions by Parliament and the introduction of the compensation schemes. The redress scheme, for example, was set in train by the last Government with the co-operation of the then Opposition, as was the investigation of Capture.
The Minister says that the compensation was not budgeted for, but that is not right. Last year’s Budget simply said that the money had been reallocated from departmental expenditure to annual managed expenditure. He implies that the money was not there to pay out to postmasters, when the work had been done on a cross-party basis. It is absolutely wrong to give that impression to people out there who are still waiting for redress. The HSS appeals system was something that we advocated for and put in place, as were the fixed-sum awards for overturned convictions and the Horizon shortfall scheme.
The Minister talks about the unstable leadership of the Post Office. We thought it was right to put a new chair in place, and we have every confidence that Nigel Railton, whom we put in place, will do a fantastic job. We support his transformation plan and the move to a fully franchised network, which we think is the right thing to do.
I will ask the Minister some questions, if I may. It is not clear what he will do about victims of the Capture programme, even though it has been acknowledged that the Post Office was at fault in some of those cases. Will he bring forward legislation to overturn their convictions by statute? I know the advisory board believes that that is the right way forward.
On compensation, when I was in the Minister’s role, I said that a named individual should oversee the compensation schemes, and the Business and Trade Committee has advocated for that. There should be one individual to oversee all the schemes, who will put their reputation on the line for delivering compensation. Although the fixed-sum awards are working, the full assessment route still has problems. Something that the Minister did not mention in his statement, but which we looked at, was a pilot of a more tariff-based scheme, whereby people who have suffered from mental health difficulties could be paid more rapidly, rather than going down a full assessment route.
The Minister mentions the timescales. Currently, there is a time parameter of 40 days for a response from the Department to a new claim, but the clock is reset when the claimant says that the claim is at the wrong level. Will he look at that?
What progress has the Minister made on an interim payment from Fujitsu? What progress has been made on establishing what Ernst and Young should have done in 2011-12, when it was aware of the huge liabilities that the Post Office had on its books due to this particular problem? Will he be ambitious on the banking framework to make sure that postmasters get a good deal, and what progress has the chair made on his commitment to reduce the highest-paid roles in the Post Office’s central management tier to make sure that more of the revenue that flows into the Post Office flows out to postmasters?
Gareth Thomas
I thank the hon. Gentleman for his comments, and I join him in commending the work of all those who have campaigned, and who continue to campaign, for the victims of this horrendous scandal. I pay tribute to the noble Lords Arbuthnot and Beamish. In a spirit of cross-partisanship, I pay tribute to the hon. Gentleman for his work in the past. I know that he worked extremely hard to try to move things forward, and I very much respect the job that he did.
Let me attempt to do justice to the detailed questions that the hon. Gentleman asked. On Capture, we are actively working on a redress scheme. We have had a series of meetings with some of the sub-postmasters who were affected by the problems in the Capture software and their legal representatives. He will be aware that a number of cases with the Criminal Cases Review Commission relate to Capture, and we think it is appropriate that the CCRC is allowed to continue to review those cases.
As I outlined in my opening remarks, the Secretary of State recently met the global chief executive of Fujitsu during his visit to Japan. I have met the chief executive of Fujitsu in the UK, and I said to him that an interim payment would be a significant step in the right direction.
The hon. Gentleman asked me about the Post Office’s accountants. He may be aware that the Financial Reporting Council is looking at this issue and has been talking to the Horizon compensation advisory board. It is an independent body, and I am sure that he and the House will recognise that it is right that we respect the right of that independent body to do its work.
The hon. Gentleman said, quite rightly, that the full assessment of claims occasionally has problems. That is one of the reasons why I referred to the fact that we are bringing back facilitated discussions, particularly on the GLO scheme. Although there has been significant progress in settling two thirds of the GLO claims that have been put in, we think that those facilitated discussions will help to make it easier for fair compensation to be allocated in a timely way to those victims of the scandal.
Where a case for interim payments is made to us, we always encourage our team to make such payments in order to try to ease the financial pressures, and therefore the trauma, that victims still experience. The hon. Gentleman will know that there were concerns in the past about the letters requesting further information. I have seen some previous examples of those requests, and I can well understand the frustration of sub-postmasters, their lawyers and campaigners. When we request further information, it is to make sure that we can offer an increased payment to sub-postmasters going forward. However, I recognise that there will be some scepticism because of the history around requests for information.
We will continue to do everything we can to get payments out to people as quickly as possible, and we have taken further steps to work with the Post Office to identify victims who had not previously come forward. Some 6,000 new claimants have now come forward, and we are trying to process their cases as quickly as we can.
Clive Efford (Eltham and Chislehurst) (Lab)
I welcome my hon. Friend’s statement, particularly the reference to the discussions with Fujitsu. The Horizon software is still being used by the post office network, and I understand that the contract with Fujitsu is worth about £2.4 billion over its lifetime. We should not lose sight of the fact that Fujitsu was heavily involved in supporting the Post Office’s prosecution of innocent sub-postmasters. Can my hon. Friend say exactly how he will ensure that Fujitsu pays the appropriate amount of money to compensate for its role in this affair?
Gareth Thomas
I recognise the concern across the House. My hon. Friend has followed this issue for a long time, and I recognise his continuing interest. He will forgive me if I do not give a running commentary to the House on the negotiations that we will have with Fujitsu. We are obviously waiting for the conclusions of Sir Wyn Williams’ inquiry and his judgment about the level of responsibility that Fujitsu must accept. As I alluded to in my answer to the Opposition spokesman, an interim payment by Fujitsu would be a significant step forward.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
We Liberal Democrats welcome the progress that the Government have made, but the redress payment processes are still too slow. First, victims claiming under the Horizon shortfall scheme continue to face significant up-front complexity without legal advice. I welcome the Minister’s announcement that the Government will be writing to that group, but could he please outline a time by which they will receive those letters?
Secondly, the Minister announced that any compensation will not be subject to a penny of income tax, capital gains tax, inheritance tax or other taxes. Could he confirm whether that will require primary legislation? If so, will it be limited to this scandal or apply to other scandals as well? I am thinking in particular of the cross-party campaign on Philomena’s law because some victims of that scandal are struggling to access their compensation.
Thirdly, this scandal has involved many individuals working at the Post Office, Fujitsu and others. The Government have committed to bringing forward a statutory duty of candour; they initially said they would do so by 15 April, which is the 36th anniversary of the Hillsborough disaster. At business questions last week, the Leader of the House cast doubt on whether that deadline would be met, because the Government say they will take whatever time is necessary to get the issue right. We Liberal Democrats want the drafting to be done correctly, but is there any update on when we can expect the statutory duty to be brought forward?
Fourthly, the evidence of whistleblowers at Fujitsu was crucial in exposing the lies about Horizon. We Liberal Democrats have repeatedly called for an office of the whistleblower, and we have put down amendments to the Employment Rights Bill to strengthen protections for whistleblowers. Would the Government work with us on that issue?
Finally, I was surprised to see the announcement about directly managed post offices. The Minister will be aware that a cross-party group of Members has been infuriated by the poor communication from Post Office bosses on this process. I recognise that today’s announcement states that the Post Office will move to a fully franchised network, but that still provides no guarantee about the range or quality of services that will be available, no guarantee on the definition of “nearby”, no guarantee that there will not be a break in service and no guarantee that those post offices will not eventually be closed if the franchises do not work. Will the Minister please set out the next stages? Those will affect my constituents in St Albans and many constituents represented by Members here.
Gareth Thomas
I am grateful to the hon. Lady. She is absolutely right to reflect the view of the whole House that there is still much more to do on compensation. We as the Government are very clear about that ourselves, and we are working at pace to try to step up even further the rate at which compensation payments are made. We think that, in just the first nine months of this Government, we have made significant progress, increasing by three and a half times the amount of compensation that has been paid out. But I completely accept that there is more to do.
We think that the launch of the Horizon shortfall scheme appeals process will help to address a number of cases in the HSS where sub-postmasters are concerned about the offers they have had. The hon. Lady asked me when letters would be going out. I set out the broad timescale in my statement, and I simply say to her again—shortly. We want to get this up and running as quickly as we can.
The hon. Lady asked me whether new legislation would be required to implement the commitments on tax that I set out. No, it will not be required. On the issue of the duty of candour, I do not have anything to add to what my right hon. Friend the Leader of the House said. However, the hon. Lady’s question is an opportunity to underline that we expect a number of significant issues to arise from Sir Wyn Williams’s inquiry, and we as the Government—and, I am sure, the whole House—will want to reflect on the conclusions and recommendations that he comes up with.
The hon. Lady mentioned the issues about the decision to franchise the remaining directly managed branches. As I set out in my statement, I have heard the concerns from across the House—they were particularly significant on the Labour Benches, but I recognise those from the Opposition side as well—about the impact of losing post office services in the communities where those directly managed parties are. That is why we have made it clear to the Post Office that franchised post office services have to remain in those communities.
We expect the Post Office to work from the starting point of those services being what is called a mains franchise—a franchise that, as well as providing the more traditional post office services such as stamps and parcels, will also provide Government services such as passports and driving licences: the equivalent of what is available in those branches at the moment. I expect that, in the first instance, those franchised services will continue to operate in exactly the same place where they do at the moment, before decisions are taken about where they should be located in the slightly longer term.
The hon. Lady asked me what guarantee there is that services will continue to be provided in that space. She will know that access criteria have already been published that commit the Government to provide 11,500 post offices. The decision on directly managed branches does not change those criteria, and the Post Office is committed to continuing to provide a service in those communities. I would also expect the Post Office to talk to local stakeholders, including Members of this House, about the continued operation of post office services in their communities.
Rebecca Long Bailey (Salford) (Lab)
Salford precinct’s busy Crown post office is a vital lifeline for residents and businesses alike, especially for those who collect their pensions and benefits in person. Put simply, closing it in favour of a franchise would cause local economic and social devastation, especially if services are reduced and staff are let go. It would also put that service at the whim of the franchisee, which, as we know from the recent case of WH Smith, causes great uncertainty and insecurity. What is the Minister doing to guarantee that Salford retains all its existing post office services and staff in this geographical location, and what alternatives has he considered or will he consider in favour of shelving franchising?
Gareth Thomas
I know that my hon. Friend has always been a great champion of Salford. Like other Members, she has made it very clear to me how significant the post office is in her community. The vast majority of post office branches across the country are already franchised. Both main and local franchises are often open longer than directly managed branches.
My hon. Friend asked what guarantees there are. As I have set out, we have made it clear to the Post Office that we want every directly managed branch to ensure that there is a main franchised operation in those communities. I recognise that there will be concern while that change takes place, but if she or any other Members have concerns about aspects of that transition as it moves forward in their constituencies, I will obviously be very happy to meet them to discuss those.
John Cooper (Dumfries and Galloway) (Con)
As a member of the Business and Trade Committee, I should remind the House that in March we recommended that the Government should listen harder to our recommendations. I am glad that that seems to have been taken on board, but I am slightly concerned that a lot of back patting seems to be going on, particularly about Fujitsu. Does the Minister not agree with me that he should be telling Fujitsu what to do, not asking it? This Government seem overly deferential to lawyers. He is in charge of this. Can he not get the pace moving, because lawyers are getting their money—their fees—but postmasters are not getting their money at the rate they should?
Gareth Thomas
The hon. Gentleman is absolutely right to want progress on Fujitsu, which is one of the reasons why I have made it clear to Fujitsu that an interim payment would be a very welcome and significant step forward. We have said that we think it is important that we hear the view of Sir Wyn Williams, who has been looking in detail at the responsibility of both Fujitsu and senior leaders in the Post Office during this scandal. We need to recognise that there is a process, but we are absolutely clear about our responsibility to move the negotiations forward.
Dawn Butler (Brent East) (Lab)
I thank the Minister for his statement and for all the work he is doing to redress the injustice of the Horizon scandal. Can he confirm that the Communication Workers Union, as well as the National Federation of SubPostmasters, has been involved in decision making? I have lobbied him very hard about my post office in Cricklewood, so he will know that we want to and must maintain those services going forward. I think a lot of the problems stem from the separation of the Royal Mail and the Post Office following privatisation, so would he consider discussing the possibility of a joint venture again?
Gareth Thomas
I know from the conversations I have had with my hon. Friend just how much she and her constituents value the post office in Cricklewood. As I have set out, our starting point is that a mains franchise offering the same services as currently enjoyed by the residents of Cricklewood will be provided. I hope her constituents will not see any significant disruption going forward, but I am very happy to have a conversation with her about that.
I have had many conversations since coming into this role with the leadership of the Communication Workers Union, who have been very direct in their views about directly managed branches. On the question of their having a view and a say in the future of the Post Office, as I have made clear we are determined to publish a Green Paper, which will allow all those who are interested, including the CWU, to give us their vision of the future of the Post Office and view about the various questions about its future.
Tim Farron (Westmorland and Lonsdale) (LD)
Does the Minister acknowledge that among the horrific impacts of the Horizon scandal is the massive brand damage to Post Office Ltd and its management among not only the sub-postmasters who are currently employed, but the potential workforce of the future?
Our communities in the lakes in Hawkshead, Staveley and Grasmere are currently without an operating post office and have lost those services. Will the Minister give attention to and push Post Office Ltd to provide a package that not just encourages people to remain within the Post Office, but attracts new people, acknowledging that it will take more effort than normal to attract people into the sector? On the issue of franchise services, our post office in Kendal shares space with the Royal Mail, and any change of site for our post office could threaten both. Is he cognisant of that, and will he do something about it?
Gareth Thomas
The hon. Gentleman rightly underlines the significance of the Post Office, in particular in rural communities, and the challenge on occasion of finding sub-postmasters to run franchise post offices in those areas. I hope the uplift in postmaster remuneration that came just before Christmas will help to address that particular challenge.
We have made clear to the Post Office leadership that a fundamental change in its culture is needed to place sub-postmasters at the heart of the operation going forward, which they accept. They have therefore set up a consultative council to ensure that sub-postmasters have direct input into the future direction of the Post Office. They are also doing more, through a postmaster panel, to bring in postmasters to understand the different processes used and to rebuild confidence in how Post Office management handles some of the bigger challenges that the company faces.
I will happily consider any request or point of concern that the hon. Gentleman raises about Kendal. If he is not satisfied with progress in addressing those points, he is very welcome to get in contact with me further down the line.
Luke Akehurst (North Durham) (Lab)
I am very proud of the local campaign I have been involved in alongside councillors and residents to save Chester-le-Street post office. Although it is disappointing that we are losing the post office in its current form, I am relieved that the services have been saved. I recognise that the market for traditional post office services has been in decline for some years. Does the Minister share my disappointment that Post Office management did not have the commercial imagination to find new business streams utilising their brand and network of prominent high street locations?
Gareth Thomas
I commend my hon. Friend for his campaign. I recognise just how much the Chester-le-Street post office is valued by his constituents, as he has made clear to me a number of times in his representations.
On the commercial future of the Post Office, it is absolutely true that postal services in this country—as indeed in a number of other countries—are facing significant pressures, and it is therefore imperative that Post Office management here in the UK look at what they can do to capitalise on new opportunities, particularly in terms of banking. The Post Office chairman and chief executive, Nigel Railton and Neil Brocklehurst, completely get this point, and we are actively talking to them about what more we can do. I very much hope we will hear positive news on banking framework 4, which I hope will be a significant step forward in this regard. However, there is more that can be done in this space.
Sir Julian Smith (Skipton and Ripon) (Con)
Third-party litigation funding played a key and controversial role at the start of this crisis. Following recent Supreme Court judgments, that access to justice that postmasters had at the start is under threat. What discussions is the Minister having with his colleagues about how third-party litigation funding worked in this situation and what needs to improve as it moves forward?
Gareth Thomas
The right hon. Gentleman will have to forgive me; I have been very focused on the efforts to increase compensation for the victims of the Horizon scandal, which has been the immediate challenge facing the Government in this policy area. It was something we heard loud and clear in opposition and we wanted to see progress on it. As I alluded to earlier, I suspect that the recommendations in Sir Wyn Williams’ inquiry will range quite widely, and if it touches on the particular issue that the right hon. Gentleman has raised, we will look at that extremely carefully. More generally, I suspect that my right hon. Friend the Secretary of State for Justice will be interested in his question.
Alex McIntyre (Gloucester) (Lab)
I thank the Minister for his statement and for the update on the redress scheme for victims of the Horizon scandal. I also thank him for listening to my campaign to save the Kings Square post office in Gloucester and for maintaining so many vital services for Gloucester residents with today’s announcement that they will be franchised and continued. Will he meet me to discuss the merits of the new franchise staying in its current location? Kings Square has a fantastic future, with the opening of the university’s new City campus later this year and the Forum, a new office, hotel and leisure facility, which will be fantastic. It would be great for the new franchise to be an important part of that future.
Gareth Thomas
I am grateful to my hon. Friend for his continued representation of his constituents’ interests. He has made a number of very clear representations to me on the importance of the Gloucester post office, and I would be very happy to meet him to discuss its future as it transitions to a franchise-run operation. I should make it clear that the Post Office very much wants these franchises to be in key locations that are important for our communities, because that is obviously where the commercial income will come from, so it will be keen to meet with stakeholders such as Members of this House and other local stakeholders. If my hon. Friend would like to meet me to discuss this issue further, I would be very happy to do so.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Where a post office branch that is currently directly managed is not staying in its current premises, will there be a proper formal scheme of community engagement to give the community some control over ensuring that what is provided in its place will be at least as good? Communities simply do not trust the Post Office at the moment to make that judgment for itself.
Gareth Thomas
The right hon. Gentleman makes a completely fair point that the Post Office suffers from a significant lack of trust, for all the reasons we know. I completely understand why he would want to press the particular point that his community should be involved in discussions about their post office services going forward. As I alluded to earlier, I would expect the Post Office to engage with local stakeholders, including the right hon. Gentleman as the local Member of Parliament. If at any point he is concerned about those discussions, he is very welcome to get in contact with me, and I will happily meet him.
Helen Hayes (Dulwich and West Norwood) (Lab)
My constituents are served by Crown post offices in Brixton and East Dulwich, both just outside my constituency boundary and both in areas that have seen the near complete withdrawal of high street bank branches, leaving residents and businesses dependent on the post offices for banking services, as well as for the wide range of other services that they provide. The Minister knows that the big difference between Crown and franchised post offices is that no one in the public sector has any say in the public interest over whether a franchised post office remains open, or indeed whether a franchisee can be secured. What assurance can my hon. Friend give that post office franchises opened in place of Crown post offices will remain open for the long term?
Gareth Thomas
I recognise the significance that the two post offices have to my hon. Friend’s constituents, and I recognise, too, that there will be concern in her constituency about the long-term future of those post offices. Although she is not the constituency Member of Parliament for the area, I will ensure that she is consulted about the future of those post offices. I recognise that, particularly in urban areas such as the ones that she and I represent, people outside the immediate constituency are reliant on those post offices. As I have said, a post office will want to ensure that, in the long term, it is located at the heart of the commercial activity in a community, because its future income depends on that. However, given what has been said about the lack of trust in the Post Office, it is important that there are conversations with local stakeholders, including Members of this House. Moreover, given the points that she has made, I will make sure she is included in conversations about those two particular post offices.
Dr Kieran Mullan (Bexhill and Battle) (Con)
More than 4,000 residents have signed my cross-party petition opposing the closure of the Bexhill Crown branch. It is fair to say that this whole situation has been made worse, because the Minister has allowed the Post Office to put the cart before the horse, with the decision taken on closures ahead of a clear guarantee on what will come next for all of our constituents. I notice that in his answers, the Minister has talked about “should”, “expectations” and “starting points”, but those are not cast-iron guarantees. Can he give a cast-iron guarantee that he will veto any replacement of the Crown service in Bexhill if it does not provide exactly the same services as the current branch is providing?
Gareth Thomas
I recognise from the meetings that I had with the hon. Member and also with a Bexhill Labour councillor how strong the feeling is about the threat to the post office in Bexhill. I have made it clear that the Post Office should replace the directly managed branch with a mains franchise. That is what I expect it to do. I also expect there to be a consultation with local stakeholders in Bexhill, including with him as the Member of Parliament. If he has concerns about that process, he is welcome to get in contact with me.
Joe Powell (Kensington and Bayswater) (Lab)
I thank the Minister for meeting me to discuss the directly managed branch on Kensington high street in my constituency of Kensington and Bayswater. More than 1,000 residents joined my campaign to save the services at the branch. Today’s news is welcome for them, but can the Minister give us some reassurance on when the transition will take place from the current system to a franchise model, and what guarantees he has on continuing service levels?
Gareth Thomas
I welcome my hon. Friend’s question. I recognise that he has campaigned and made representations to me on this issue, as he has set out. As I have said to other Members today, he and other local stakeholders should expect to be involved in discussions about the future of post office services in Kensington and the transition to a franchise. We have the expectation—the Post Office has accepted this expectation—that it will be a mains service, as opposed to a local franchise, which provides Government services such as passports, driving licences and so on. I cannot give him an exact timeframe for when those discussions will begin, but the Post Office has already begun to have conversations with staff and potential franchisees. I would expect them to start getting in contact with Members of Parliament over the next few months.
Richard Foord (Honiton and Sidmouth) (LD)
Tony Hibberd, a former sub-postmaster from Colyton in east Devon, is 84 years old. Four years since he submitted his claim, and 14 years after his wrongful dismissal, there has still been no meaningful progress towards a fair and final settlement that reflects the loss to Tony’s reputation. Following the statement from the Dispatch Box on 18 December, I wrote to the Minister about Tony’s case and the reply that I received referred to an offer made to Tony in December, but no such offer had been received. The Minister refers to a new Horizon shortfall appeal scheme with a turnaround time of two months; but again, I say that Tony is 84 years old. Will the Minister urgently review Tony’s case to ensure that he finally receives the compensation that he deserves?
Gareth Thomas
The hon. Member will understand that I do not have the details about Tony’s case to hand, but he has asked me to review the way that the case has been handled. I am happy to do that. I am keen that complex cases are resolved fairly and as quickly as possible. I recognise that many sub-postmasters have been waiting a long time for compensation. We have made progress, but I recognise that there is more to do. I will happily look at Tony’s case after this and write to the hon. Member.
Amanda Hack (North West Leicestershire) (Lab)
I thank the Minister for his update on the progress to redress the victims of the Horizon scandal as well as the commitment to invest in new technology. In light of the sudden closure of a post office in Coalville in my constituency, what reassurance can the Minister give to current and prospective new postmasters that the Horizon system, which is still being used in post offices, is now fit for purpose?
Gareth Thomas
We are clear that we need to replace the Horizon system. As the whole House would expect, the Post Office is not taking any criminal action when there are shortfalls. There are processes for resolving issues around shortfalls in the Horizon system. Indeed, I referenced the postmaster panel and the way in which the Post Office management is working with sub-postmasters to help them to understand how shortfalls in the system are being dealt with going forward, so I hope that, slowly, we are taking the first steps to rebuild that trust.
Vikki Slade (Mid Dorset and North Poole) (LD)
I am sure the Minister remembers that, on 18 December, I raised the case of Donna from Mid Dorset and North Poole, who was bankrupted for a quarter of a million pounds due to the Horizon scandal. The bankruptcy was cancelled, but not before most of the interim settlement was deducted by the Post Office receiver. I was therefore shocked to receive a reply from the Minister in which he confirmed that the GLO approach is to deduct interim payments regardless “of what the claimant did with the money”. Apparently, the only option is for legal representatives to undergo a protracted appeal, incurring more costs and delays, ensuring that the lawyers get their pay day before the postmasters. Will the Minister reflect on this policy, which is punishing victims again and again, so that Donna gets the redress that she deserves?
Gareth Thomas
I ask the hon. Lady to forgive me for not having the details of that particular case in front of me. As she has asked me to look again at that case, I will happily do so and write back to her.
Mark Sewards (Leeds South West and Morley) (Lab)
I thank the Minister for his statement, and for giving me his time over these past few months to discuss the Morley directly managed branch with him. Over 3,300 people signed my petition to keep Morley post office open, so it is definitely welcome that the post office will be retained. That is caveated by the fact that it will be a franchise, and there are questions about its location. I was also delighted to help secure a banking hub for our community, but the services provided by a banking hub do not overlap with those provided by a post office. What guarantees can the Minister give my constituents that the new Morley post office will offer all the services that they enjoy from the current one?
Gareth Thomas
I recognise that my hon. Friend has been campaigning hard to save Morley post office; he has certainly made clear representations to me about it. The starting point for discussions about the future of postal services, in Morley as elsewhere, is that post offices will be replaced by a main post office offering Government services as well as traditional post office services. If he has particular concerns about the way the transition is happening, he is welcome to get back in contact with me.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers and commitment to addressing these issues. The Post Office Horizon scheme was deeply flawed from the outset, and we cannot trust Horizon to provide evidence for postmasters or postmistresses when the entire scandal is based on Horizon’s unreliability. Does the Minister not agree that we have no option other than to trust the people, not the computer, and that we must do the right thing by the people who have been vilified?
Gareth Thomas
I absolutely pay tribute to the journalists and campaigners who exposed the Post Office scandal, and who continue to campaign for those who have not yet received redress. I had the privilege of meeting a number of sub-postmasters who were very badly affected by the scandal, and those conversations will stay with me for a very long time, and I suspect that the same is true for other Members who have had similar conversations. They are powerful, motivating conversations that will help this to get sorted out.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
I put on record my complete sympathy and solidarity with the victims of the Horizon scandal, which is one of the biggest injustices in modern British history. I was extremely concerned in November to hear that Edinburgh City Crown post office, based in the Waverley station complex—the centre of Scotland’s capital—was to close. I have been campaigning hard to ensure that residents, commuters and businesses see no diminution in services, and for fair treatment for post office staff. Can the Minister confirm that, thanks to this Government, a franchise post office will be established in the area, meaning continuation of service for local residents? When does he expect that transition to take place, and will he ensure that both MPs and Members of the Scottish Parliament are consulted on where the post office will be?
Gareth Thomas
I recognise the point that my hon. Friend makes about Edinburgh. He will remember conversations we have had about the future of the post office, in which he made very clear to me the significance of a continued post office service for that community. As I say, we will make sure that conversations take place between local stakeholders, including him as the constituency representative in this House and his Scottish Parliament colleagues representing his community. Colleagues in Wales such as my hon. Friend the Member for Merthyr Tydfil and Aberdare (Gerald Jones) have made similar representations to me, and are also very concerned to make sure that they have conversations about the location of their post offices.
Amanda Martin (Portsmouth North) (Lab)
For some, the post office is a lifeline. I understand the changing role of the post office in this difficult and changing market, but given the closure of several banks on the high street of Cosham in my constituency, the recently proposed closure of the post office has caused huge concern. First, I thank the Minister for constantly meeting me and listening to me. I also thank my constituents who shared and signed the petition, and who got in touch about the need to save our post office, for showing its value. I am pleased to see that the Government and the Post Office have been listening to them. Today’s announcement of a franchise model will allow Cosham post office to remain open. What will the Minister and the Post Office do to ensure that local voices continue to be heard in the franchising process? Can they ensure that Cosham post office retains all existing services and stays on the high street? Will he also continue to meet me to discuss this issue?
Gareth Thomas
My hon. Friend makes a very good point about the number of bank branch closures. Over 9,500 bank branches closed under the Conservatives, who did next to nothing to ensure that they were replaced by any sort of alternative service. The post office is often the last opportunity for people to access banking services on many high streets. That is one of the reasons why we remain committed to having 11,500 post offices, and to the access criteria, which will help ensure that every community in the UK, including the people served by the Cosham post office, has access to post office services. I will of course continue to meet my hon. Friend, if that is what she requires.
Alex Mayer (Dunstable and Leighton Buzzard) (Lab)
I thank the Minister for his positive engagement on this; I have discussed with him on a number of occasions the situation at Leighton Buzzard post office. Can he confirm that a Leighton Buzzard post office will remain in the high street area, and what can he tell residents about the opening hours that the branch will have?
Gareth Thomas
My hon. Friend has pushed me repeatedly on the future of the Leighton Buzzard post office. We are very clear that we want post offices to be located on or very close to high streets, so that they can best serve local people. I can give the commitment that my hon. Friend will be consulted by the Post Office and other stakeholders in the Leighton Buzzard community about how it will operate going forward.
Ben Coleman (Chelsea and Fulham) (Lab)
It is just Ben Coleman, Madam Deputy Speaker, but thank you for the honorific. I am very grateful to the Minister for his statement, and for the further measures he is taking to support the shamefully treated victims of the Horizon scandal. I also thank him for saving our beloved post office on the King’s Road in Chelsea, after meeting me to discuss it. The news will be warmly welcomed by residents in Chelsea, 1,000 of whom signed the petition to save that post office. Can I ask him to ensure that the King’s Road branch, when it is franchised, provides no less a service than it does now? Ideally, it would provide an even fuller service, if possible. That is what happened to the franchise branch on the North End Road in Fulham, which I campaigned with residents to save, and which is now open seven days a week, from 7 in the morning till 9 in the evening.
Gareth Thomas
My hon. Friend made clear to me the significance of the King’s Road post office to his constituents, and I am pleased that there will continue to be a post office service there. I have experience of a directly managed post office closing and a franchise opening up—in this case, in a WHSmith—and afterwards the service was open for longer. I hope his constituents enjoy the same experience. If he has particular concerns about the way services are to be delivered, I will happily meet him again.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Minister for his statement. I know that none of these issues are of his making, so I am grateful to him. Edinburgh South West and Edinburgh South share 18 victims of the Horizon scandal, and I am sure that they very much welcome what the Minister has said. I want to talk about the directly managed branch in my constituency, in Wester Hailes. That is one of the most deprived parts of Scotland, so any loss in service there will be acutely felt. I know from campaign work I have done, along with Councillor Stephen Jenkinson, that the post office is used by people well beyond Wester Hailes, so it is important that we take any threat to it really seriously. The situation is made all the worse by the fact that the Bank of Scotland branch right across from it is closing next month. I am slightly concerned that what is described as a “new deal” for the Post Office might be a bad deal for Wester Hailes. For it to be a good deal, the consultation has to be right. It has to be meaningful and tailored to the people of Wester Hailes. Can the Minister reassure us that this will be a meaningful consultation that will reach into Wester Hailes and understand the needs of the community?
Gareth Thomas
I know from conversations I have had with my hon. Friend the significance of the post office to his community. I very much hope that his experience, the experience of his community, and that of local stakeholders such as the councillor he has been working with, will be positive when the Post Office sits down with him and talks through the transition. If he has concerns about how those conversations are going, I remain happy to meet him to discuss them.