Post Office Horizon Scandal: Compensation Payments

Baroness Gustafsson Excerpts

Tuesday 11th February 2025 Lords Chamber

[Lord Sahota]

To ask His Majesty’s Government what progress has been made in paying compensation to victims of the Post Office Horizon scandal.

[The Minister of State, Department for Business and Trade and Treasury (Baroness Gustafsson) (Lab)]

My Lords, the Government have made significant progress in delivering redress to victims of the Horizon scandal. As of 31 January, approximately £663 million was paid to over 4,300 claimants, an increase of £69 million on the previous month. Delivering swift redress remains a priority and we are grateful to the noble Lords, Lord Arbuthnot and Lord Beamish, for their support as part of the Horizon Compensation Advisory Board.

[Lord Sahota (Lab)]

I thank the Minister for the Answer and the Government for allocating £1.8 billion to settle the Post Office claims. As we all know, the police are investigating the conduct of Post Office managers in this whole sordid affair. Some of them could be charged with corporate manslaughter and perjury, so why are they still involved in administrating the Post Office compensation scheme? Also, why do the claimants not have free legal advice paid for by the scheme administrator? I am sure some find navigating through the whole legal system extremely difficult, especially some Asian sub-postmasters.

[Baroness Gustafsson (Lab)]

I thank my noble friend for the question. He is right: of the four schemes that are available, two of them are administered directly by the Post Office, while the other two are administered by the Department for Business and Trade. This is a matter that is currently being reviewed by the Department for Business and Trade, and there is consideration being given to whether that administration should be brought within the department. However, as part of that consideration, we cannot inadvertently create some environmental factors that may accidentally slow down the process of those claims. We are looking into this and trying to make sure that we deal with these expeditiously, while ensuring we do not inadvertently create unintended consequences by bringing those within the department.

With regard to the legal claims that are in process and whether those legal fees are addressable, there is significant legal support available for each of the claimants, and those legal fees are being reimbursed. But I understand that the process is a complex one, that people have suffered a great deal already and that the process can be quite cumbersome. Whilst this cannot always be avoided in all cases, the Government have worked hard to try to alleviate some of this by making some fixed-sum offers available, which go some way to making the process a lot simpler for claimants.

[Lord Arbuthnot of Edrom (Con)]

My Lords, the Minister has declared my interest as a member of the Horizon Compensation Advisory Board. Attention has rightly focused on the contribution to be made by Fujitsu to the compensation payable, and I hope it is very substantial, but the auditors of the Post Office, Ernst & Young, should also bear their share of the blame. I asked the chair of the inquiry to include in his inquiry what the auditors knew and did not know, and he decided that that would lengthen the inquiry disproportionately. That means that the auditors who certified that the Post Office accounts presented a true and fair view of the Post Office finances, and yet somehow missed a liability of £1.87 billion, will not be held to account. What can we do about that?

[Baroness Gustafsson (Lab)]

I thank the noble Lord not only for his question but for his significant contribution to the role, and I pay tribute to him for his long-standing commitment to resolving the Horizon scandal and his work within the advisory board. He is right that Sir Wyn Williams’ inquiry chose not to look at the issues concerning the audit of the Post Office. I know colleagues on the advisory board have aired these matters with the Financial Reporting Council, which is the right thing to do, and I look forward to ultimately hearing the outcome from the FRC.

[Lord Wigley (PC)]

My Lords, the Minister referred to 4,500 cases having been settled, if I heard her correctly. Can she tell the House how many more cases are awaiting, and by what stage would she expect to reach, say, 90% payment? These people have been waiting for so long, and justice delayed is justice denied.

[Baroness Gustafsson (Lab)]

I thank the noble Lord. The volumes coming through each of the schemes are very differing. If I take the HSS, for example, which is the scheme with the most volume, a significant volume is going through that: 3,400 offers have been accepted and 3,350 claims have been paid in full. However, there are 7,082 claims out there that are still being looked at, and making sure we address them quickly is a priority of the Government. A lot of activity has been taken in that regard—for example, giving fixed-claim sums to claimants—with the goal of speeding up the process.

The noble Lord referred to the 90% target that the department applies to the schemes that are operated by the Department for Business and Trade. I note that, in particular, the GLO scheme is operating at 89%, against the target of 90%. That 90% is about claims being reviewed within 40 days of receipt. There are some ideas that we could perhaps up that target—why would it not be 100%?—but there is a balance to be struck there, because the claimants need to make sure that they are getting appropriate time to review and understand the offer being made to them. We do not want to inadvertently apply some pressure or duress for them to review those claims in a process that suits our timelines but perhaps not theirs, so, at this point, that 90% target is appropriate.

[Baroness Brinton (LD)]

My Lords, last week the National Audit Office reported that, under the last Government, inadequate data from government had held back the 2023-24 audit of the Post Office Horizon compensation schemes, and there was also a breach in spending limits, which undermines rules of control over public spending. What are the Government doing to ensure that this never happens again?

[Baroness Gustafsson (Lab)]

If I may refer specifically to the Horizon scandal and how we are making sure that a scandal of this level never happens again, there is a significant undertaking with the Sir Wyn Williams review looking at exactly this matter of understanding how a scandal of this scale was allowed to come about, the accountability that operates there and that the right people are held accountable, and of ultimately making sure that something to this extent can never happen again.

[Lord Sharpe of Epsom (Con)]

My Lords, in December we had a very similar Question. I asked then whether the Minister could

“tell us what safeguards are being put in place to ensure that no authority, public or private, can act with unchecked power similar to that exercised by the Post Office during the Horizon case”.—[Official Report, 12/12/24; col. 1874.]

The Minister said she would have more information on this in the future. I was wondering if she could therefore provide an update to the House on progress.

[Baroness Gustafsson (Lab)]

The purpose of the Sir Wyn Williams review is specifically to look at how this was able to occur within the Post Office, and make sure that those lessons have been learned. We are expecting the outcome of that review to be within some months, but I would anticipate before the end of this calendar year.

[Lord Stirrup (CB)]

My Lords, the noble Lord, Lord Arbuthnot, referred to Fujitsu. Can the Minister update the House on what financial contribution Fujitsu is expected to make to the cost of the compensation package for the victims of this appalling scandal? In how many government contracts does Fujitsu continue to be involved today?

[Baroness Gustafsson (Lab)]

Fujitsu has acknowledged a moral obligation to support the Government in respect of the financial redress that should rightly be made to the victims of this scandal. We are awaiting the outcome of the Sir Win Williams review, which will go a long way to understanding the scale to which this financial contribution should be made. Ultimately, this will be made in the light of that evidence.

Regarding the ongoing relationship with Fujitsu, Fujitsu has agreed not to make new bids for business within government. That being said, there are existing relationships within departments with Fujitsu, where perhaps they feel that the necessary skills or capability is something that is uniquely held by Fujitsu. In those cases, the contracts may continue to exist, but ultimately that is a decision within the department.

[Lord Beamish (Lab)]

My Lords, I declare an interest as a member of the Government’s Horizon Compensation Advisory Board. The Government put in £1.8 billion to compensate victims—money that was not put in by the previous Government—to compensate victims of the Horizon scandal. Picking up on the question from the noble and gallant Lord, Lord Stirrup, on Fujitsu’s responsibility, I have been campaigning on this for many years, and we all knew nearly 15 years ago that company’s role in it. The inquiry clearly highlighted that as well. The Minister said that it had accepted that it had a moral obligation to pay compensation, but what discussions have the Government had with Fujitsu to start paying money forward? She says that it is not bidding for new contracts, but it is making multi-billion-pound profits from extensions of contracts, so may I urge the Minister to get it to the table as quickly as possible?

[Baroness Gustafsson (Lab)]

I think that urging is heard and encouraged. Having said that £1.8 billion has been set aside, I remind the House that this is not a limit or target; it is just the best estimate. Ultimately, the Government will do what they can to fully compensate the victims of this scandal. Fujitsu has an important role of being financially responsible for some of this, and there are ongoing conversations within the department and with Fujitsu. Ultimately, the outcome and report of the inquiry by Sir Wyn Williams will be an important determinant of this.