Post Office Legislation

Lord Arbuthnot of Edrom Excerpts

Thursday 14th March 2024 Lords Chamber

[Lord Arbuthnot of Edrom (Con)]

My Lords, I declare my interest as a member of the Horizon Compensation Advisory Board. I pay tribute to my noble friend the Minister; to Kevin Hollinrake, the Minister in another place; to his impressive team of civil servants; to the Government in general; to Alan Bates; to ITV; and especially to Alex Jennings, of course. But, before this turns into an Oscars speech, we must acknowledge that there is much to be done.

I just want to raise one matter: those excluded from this legislation. I understand that the Government do not want to go head to head with the Court of Appeal, but some people have been excluded through the accident of fate—they have been refused permission to appeal or have had their convictions not turned down by the Court of Appeal. Will the Government encourage and, if necessary, resource and facilitate, those people who are expressly excluded for those reasons from this legislation? Will the Government encourage them to go back to the Court of Appeal for their convictions to be reconsidered? It would be quite wrong if these sub-postmasters were, through that accident of fate, the only sub-postmasters in the country to continue to have convictions against their name.

[Lord Young of Norwood Green (Lab)]

My Lords—

Horizon Scandal: Psychological Support Services

Lord Arbuthnot of Edrom Excerpts

Monday 4th March 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. As far as parliamentary business is concerned, it is planned to have the legislation go through both Houses and have it all done by the Summer Recess. That is in process, and there are more announcements to follow shortly. In relation to the claims, as I have said before, 78% of claims are now settled, and compensation has been paid to 93% of postmasters, some on an interim basis. As I said in the Chamber last week, we can go only as quickly as we receive the claims. We are at the most difficult end of the claims now. For example, with the GLO 477, we have had 58 claims, of which we have settled 41. We can go only as quickly as the claims come in, and we have guaranteed that we will work to get 90% cleared within 40 working days.

[Lord Arbuthnot of Edrom (Con)]

My Lords, I declare my interest as a member of the Horizon Compensation Advisory Board. I am troubled by the Answer my noble friend has given, because how can a family member, as opposed to the sub-postmaster themselves, claim for compensation or psychological help? Many of these families have broken up. Does my noble friend agree that the mere fact that there may be a lot of family members entitled to help or compensation should not of itself be a reason for denying them that help or compensation?

[Lord Offord of Garvel (Con)]

I thank my noble friend. I once again pay tribute to his continual scrutiny of this matter, and his vital role on the advisory committee. Currently, the compensation is directed to each claimant—a postmaster or postmistress—but the whole point of having the advisory committee is to have live discussions on this. I encourage him, in that capacity, to keep those discussions going.

Post Office: Executive Remuneration

Lord Arbuthnot of Edrom Excerpts

Tuesday 27th February 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

Again, I am very grateful for this challenge; it is a very important discussion to have. The Government are responsible for setting remuneration for the board, while the bonuses that I think the noble Lord, Lord Sikka, was referring to relate to the Post Office executives, so we should separate the two. Both still need to be investigated—absolutely. I do not have the specific answer to the question relating to the Chief Secretary to the Treasury, but I will be delighted to write to the noble Baroness.

[Lord Arbuthnot of Edrom (Con)]

My Lords, either the Post Office is an independent arm’s-length organisation, or it is one for which the Government are fully responsible. Does my noble friend agree that the Post Office Horizon scandal shows that never again should Ministers refuse to answer questions relating to a body in which they own all the shares?

[Lord Johnson of Lainston (Con)]

I pay tribute to my noble friend for the astonishing work he has done on this great travesty. I am very grateful to him personally for driving this agenda, and I agree in principle with some of the comments he has just made. There seem to be an air gap between arm’s-length bodies, the Government and Ministers. It is very important that this situation allows us to review exactly how the principle of arm’s-length bodies functions, in the sense that it does not mean they are entirely out of Ministers’ or the Government’s remit and our lines of inquiry. Noble Lords would expect that of us. They remain within reach, and the inquiry will allow us to have a significant investigation into how culture and practices can be improved in the governance of such institutions.

Post Office Horizon: Compensation and Legislation

Lord Arbuthnot of Edrom Excerpts

Tuesday 27th February 2024 Lords Chamber

[Lord Arbuthnot of Edrom (Con)]

My Lords, I declare my interest as a member of the advisory board, which is now meeting not exactly in continuous session but every few days.

The Post Office itself is under investigation by the police. Is it not quite inappropriate for the Post Office to express any view as to the correctness of overturning convictions and is it not quite wrong, coming back to the point made by the noble Lord, Lord Fox, for it to have any position or play any part in the compensation process?

[Lord Johnson of Lainston (Con)]

I am grateful to my noble friend and pay tribute to his work. The Post Office will not play a role in deciding the correctness of the overturned convictions in the Bill; that will be a matter for the Government. The statement about the Post Office paying compensation is well heard. I am grateful for that and I hope I have made the point that the Government continue to look into it. Having said that, the Post Office has paid a very large quantum of compensation payments—several thousand, I think. It would be extraordinary if the team there were not completely aware of the need to ensure that they get this right, I hope including significant cultural change. There has been a wholesale change of individuals on the board of directors since 2021 and 2022. Currently, the important thing is to get the compensation payments paid and, in parallel, review how the process is working.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I thank the noble Lord, Lord Fox, for those comments. I should say that the Government have full confidence in the CEO and in the board whom we have appointed over the last two to three years. I am told they are extremely grateful for the services of the government representative and the UKGI representative. There are two postmasters, who I think are elected to the board, so it is a diverse board that represents the interests of the Post Office. Its members are not tarnished, as it were, by previous activities, and they have been doing a good job in responding to what can be described only as a crisis.

I echo the noble Lord’s points. The Post Office personnel are the absolute core of the business, of many communities and of this country, and it is agonising to see them put through so much distress. I agree with the comment made, I think by a colleague of mine, that in some respects the sheer greatness of our Post Office staff around the country has been magnified by this event, and I am sure that more of us will use our local services when we get the opportunity. This has also drawn a lot of attention to the needs of the postal service around the country, the conditions that its employees work in and the opportunity to improve them, with more recruitment and more people entering the Post Office service. I totally support the noble Lord’s aim; it is a magnificent organisation in its principal core ambitions of delivering great service to communities. The people who work there should be celebrated, and we certainly do that.

[Lord Arbuthnot of Edrom (Con)]

May I come back on a point that was raised by the noble Lord, Lord Browne, about the declaration that is to be signed by those whose convictions are overturned? I am not sure that I understand this declaration. If you have signed accounts which you know to be wrong and yet you have had your conviction for false accounting overturned by the Court of Appeal on the basis that it is an affront to justice, do you sign something saying you have not committed false accounting when maybe you have? I do not understand this declaration.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for raising that point. The signing of the form saying that you are innocent is not to do with the conviction being quashed but is in order to receive compensation. The Government do not think that it is unreasonable, and I hope noble Lords would not think it is unreasonable, that there is an element of a threshold for people to say that they were not guilty of a crime and that they deserve their compensation. The nature of the application alone should probably cover that. It is a very sensible move to make, and I do not think it distorts the process. However, clearly, these are live conversations and we will have them in more detail.

Post Office Governance and Horizon Compensation Schemes

Lord Arbuthnot of Edrom Excerpts

Wednesday 21st February 2024 Lords Chamber

[Lord Arbuthnot of Edrom (Con)]

My Lords, I declare my interest as a member of the Horizon compensation advisory board. Of course, if you are a sub-postmaster, you do not really care who said what to who. There are two questions that a sub-postmaster would be interested in: when will the compensation be paid and when will the convictions be overturned? As for when the compensation will be paid, I would like to pick up a question raised by the noble Lord, Lord McNicol; namely, the accounts. In which department’s accounts is the £1 billion that it is expected will be paid out in compensation to the sub-postmasters? I hope it can be found in some department’s accounts. As to the convictions, this is an interesting Statement, but when can we expect a Statement on precisely how those convictions are going to be overturned and when can we expect a Statement on the legislation to come before both Houses?

[Lord Offord of Garvel (Con)]

I thank my noble friend Lord Arbuthnot. I will take the second one first: there are live conversations going on right now, at great speed, to finalise the legal process with the Ministry of Justice, which will result in the overturning of all the convictions in England and Wales by an Act of Parliament, excepting that there may be some small number of people who, in fact, have had legal or safe convictions, but they will be overturned—as we discussed before—because the greater good is to wipe the slate clean as quickly as possible. That will be coming to this House in short order, and I imagine there will be unanimous support for that.

As for the timing and the finance, the finance for this will come ultimately from the Treasury. The Treasury has been funding DBT, in order for it to fund the Post Office, and, in the course of last year, under the chairmanship of Henry Staunton, £253 million was paid by the Treasury, via DBT, to Post Office Ltd, of which £150 million was for the compensation schemes—and £160 million has now been paid—and the £103 million was for the replacement of the Horizon system. There are regular funding lines going to the Post Office via DBT.

This money has been ring-fenced and identified by the Government—it sits within the Treasury—but we have also had conversations in this House about the fact that there may be some other sources of compensation to be had from other places, and why it should not necessarily be just the taxpayer who picks up the bill for this when there are perhaps other stakeholders involved in this sorry saga who should pay their part. It may well be that that the taxpayer can be relieved of some of the £1 billion ring-fencing because it may be that we can get other sources, not least Fujitsu, to pay for that.

The commitment given by my department—we are working flat out on this—is to get 90% of the claims processed and settled within 40 working days. There is no going back from that; as we have said before, 78% of postmasters and postmistresses—a figure of 2,270—have been fully paid and settled. We are now at the sharp end of this process for those who were treated the most egregiously. Therefore, those cases are more complex, and perhaps need more time—not demanded by the Government—for the process of how they put their claim together. We have a situation where it is openly known that Mr Bates has submitted his claim and is not happy with the response: that is part of the process that we are in, and it will go on. We will move as quickly as we can to make sure that everyone is restored to the position that they should be in.

Post Office Appointments: Ministerial Responsibility

Lord Arbuthnot of Edrom Excerpts

Wednesday 7th February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. The whole House shares the noble Lord’s sentiments that this is a deeply shameful episode, which went on for over 20 years. It is quite incredible to think back on the scale of the failure here, both of governance and of corporate life. Since the Horizon scandal came to light, the Government have taken quite a lot of steps to strengthen the governance of the Post Office. However, there are a number of ongoing reviews, including one by Simmons & Simmons, to look at exactly how the appraisal system works. Once the Wyn Williams review—a statutory inquiry—has concluded, we will be able to take steps around corporate governance going forward.

[Lord Arbuthnot of Edrom (Con)]

My Lords, in an arm’s-length organisation, to whom in practice is the chief executive accountable? Is it the department’s Permanent Secretary?

[Lord Offord of Garvel (Con)]

I thank my noble friend for his question and for all his efforts on behalf of the postmasters. We have to realise that this is a limited company owned entirely by the Government, with one share owned by the Secretary of State. It separated from Royal Mail Group when that went private, but the Post Office is actually classified as a public non-financial corporation. Public corporations include, for example, Ordnance Survey, Royal Mint and British International Investment. They are typically owned by the appropriate Secretary of State in that department, the reason being that they are hybrid: the Post Office has commercial activity, it makes revenue through the post offices, but it also receives public money to support the network. As a result, the governance is such that the chief executive reports to the chair, the chair reports to the Secretary of State, and the chief executive also reports to the Permanent Secretary when it comes to public money.

Post Office (Horizon System) Compensation Bill

Lord Arbuthnot of Edrom Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 16th January 2024 Lords Chamber

[Lord Arbuthnot of Edrom (Con)]

My Lords, I am grateful to my noble friend the Minister for his opening remarks, not least for their tone, which this House has always got right. I am also grateful to the noble Baroness, Lady Chakrabarti—except for her suggestion that this should be called the Arbuthnot Act. She made the very important point about blanket exoneration. We must not force these traumatised people back before the courts that did them such injury. I am grateful also to the noble Lord, Lord Palmer, for his important remarks about auditors, who have escaped much scrutiny. Maybe that will change in the coming weeks and months.

I declare my interest as a member of the Horizon Compensation Advisory Board. I put my name down for this debate intending to use this speech to call on the Government to announce the wholesale exoneration of all those convicted as a result of Post Office evidence since the introduction of Horizon. I thank the Prime Minister for making that unnecessary, which will shorten this speech dramatically. He has been well supported and motivated in this by the excellent Post Office Minister, Kevin Hollinrake, and his formidable team. I shall not in this Second Reading debate succumb to the temptation to travel widely beyond the contents of this Bill, which is very short. I have spent the last week trespassing far too much on people’s patience, on TV and radio and in the newspapers. I apologise for that and feel—

[Noble Lords]

No!

[Lord Arbuthnot of Edrom (Con)]

I feel a little talked out. That too, your Lordships will be pleased to hear, will shorten this speech dramatically.

This Bill is with us at the request of the chairman of the public inquiry to ensure that the Government do not run out of time to pay compensation or, as Alan Bates has often said, to give redress. He says that it is redress rather than compensation because this is money that the Government owe the sub-postmasters; some of it is money which has always, in law, belonged to the sub-postmasters. Let us acknowledge that point and move on.

The name of the Bill is the Post Office (Horizon System) Compensation Bill, which suggests that it is about a faulty computer system. But this dreadful story only started as a story about a faulty computer system. It became something else, as we have seen from the evidence at the public inquiry: it became a matter of human behaviour; of oppressive contracts; of Post Office investigators prioritising asset recovery over justice; of useless helplines with Post Office and Fujitsu staff telling sub-postmasters that they were the only people suffering these problems and then telling them to do things which made matters worse; of senior managers at the Post Office and possibly, although I do not know, Fujitsu, lying about what their technical staff could do by way of remote access; of Ministers of all parties failing to exercise the responsibilities of ownership; and of the courts ignoring the requirements of justice in order to accommodate the most trusted brand in the country. The background of this saga was a computer system, but compensation, as we have heard from the public inquiry, is payable in respect of so much more. So, frankly, I do not much like the name of this Bill, but having questioned its name, I shall move on to its substance.

Money is to be payable to compensate people affected by the Horizon system, or to compensate persons in respect of other matters identified in High Court judgments. The expectation at the beginning of the group litigation was that it would be split into five different cases. Because the Post Office—I assume with the backing of the Government, although we shall find that out soon—decided to spend the sub-postmasters into submission with taxpayer-funded litigation, the sub-postmasters were forced, as we saw in the drama, to settle after only two of those cases had been decided. The consequence was that many issues were left undecided. Does the Bill cover these issues?

What about issues arising out of the public inquiry, rather than out of High Court judgments? We have been listening over the past few days to some pretty dreadful stories of behaviour by the Post Office investigators, who have been confronted with their bullying behaviour. We have heard the evidence from Duncan Atkinson KC about the shortcomings of the Post Office prosecutors and their prosecutions. I hope that these issues will be covered by the Bill as well as what has come out of the High Court judgments.

I feel a bit churlish, frankly, attacking both the name and the contents of a Bill that I welcome, but I do welcome the idea that the Government should not run out of time to pay the redress that we as taxpayers—with the help of Fujitsu, now that it has recognised its moral obligation; I hope that soon it will recognise its legal obligation to contribute to the cost—owe to the sub-postmasters. The very fact that it should be necessary to have the Bill in the first place suggests that the three compensation schemes have been slow and bureaucratic —and they have been. We must get a move on and do our utmost to make sure that the Bill is not, in the event, needed, because full compensation, or redress, is paid before August.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I commend my colleague the Postal Minister Mr Hollinrake for pushing through hard on the £600,000 because it is not for us to judge what any individual has lost; it is up to that individual claimant to make the decision about whether they want to go through the due legal process. The word “compensation” has perhaps been misapplied here. What we are actually talking about is a monetary sum to be given back which gives redress to individuals. In any particular case—for example, the case of Lee Castleton—it may well be that one can actually identify separate buckets, one of which might in fact be court costs be repaid, but within the overall settlement there will be an amount which should take account of all losses. If you have paid for someone else’s legal fees, that is a loss which needs to be repaid, so this will be tied up within each individual claim, the point being that if you do not as a postmaster want to go through the heartache and process of doing that, there is a route for you to receive a substantial sum and you can close the matter and get on with the rest of your life.

[Lord Arbuthnot of Edrom (Con)]

I would not want anyone to be confused in an already confusing situation. The £600,000 is not actually relevant to Lee Castleton because it is a sum that applies only to those who have overturned convictions. Lee Castleton was sued rather than prosecuted. I am sure he will get a lot more than that, which will include the legal costs that he had to pay and also all the issues about the bankruptcy that he went through and the horrors his family went through, and he will deserve a lot more than that.

[Lord Offord of Garvel (Con)]

I thank my noble friend for that clarification.

Moving onto another theme, there has obviously been a lot of comment on Fujitsu and we have all been horrified by the extent of what would appear to be its collusion in the matter. Again, we have to be very careful here to allow this inquiry to run its course. Sir Wyn Williams is very focused on this, and he will get it done through the course of this year. We will get answers to these questions.

Sir Wyn has been very clear, as indeed has Minister Hollinrake in the other place, that the cost of this must not fall solely on the taxpayer. We have now had the statement today from the European chief executive, effectively putting his hand up to say that he knows there is going to be a large bill to pay, and that it goes beyond moral to legal and financial. Again, that will be determined when we get through the inquiry.

The reality is that Fujitsu is embedded in all aspects of government, in many departments. We all feel nervous about that at this moment and I am sure that all departments will be reviewing that; but, again, we have to discover the extent of culpability. The company knows that it will have a large bill to pay. We have to allow that process to run its course. I am sure that there will be full accountability and from that—there is no question my mind—will cascade many levels of scrutiny of that company in every government department. I think we will be hearing more about that as we go.

The other theme brought through was governance of the Post Office. The noble Lord, Lord Forsyth, was very clear in asking how this works in respect of being a limited company with a board. The noble Lords, Lord Palmer and Lord Sikka, mentioned the whole accounting scenario. With respect to the current governance of the Post Office, it remains an arm’s-length statutory body; we are all now asking different questions about how that works.

Horizon: Compensation and Convictions

Lord Arbuthnot of Edrom Excerpts

Wednesday 10th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank my noble friend for his point. There have been 983 wrongful convictions, of which 24 are in Northern Ireland and 76 in Scotland. We in this House know well that we have separate legal systems in Northern Ireland and Scotland. Conversations have begun with the devolved Administrations; formal discussions are going on now between the justice department in Scotland and the Lord Chancellor. The compensation remains a reserved matter, and will be paid by the UK Treasury, but due process must take place in Northern Ireland and Scotland. Those discussions are under way, to make sure that all are treated equally in all parts of the United Kingdom.

[Lord Arbuthnot of Edrom (Con)]

My Lords, I will say two things. First, I give my thanks to my noble friend the Minister, to the Minister in another place, Kevin Hollinrake, and to noble Peers across this House for helping to produce a solution which, while difficult and inevitably a compromise, resolves the vast majority of the issues in this dreadful case. Secondly, does my noble friend the Minister agree with Sir William Blackstone, of a little time ago, when he said:

“It is better that ten guilty persons escape than that one innocent suffer”?

[Lord Offord of Garvel (Con)]

I thank my noble friend again for being so dogged in his pursuit of these matters. We are absolutely indebted to him for continuing his role on the advisory committee; my colleague in the other place, Minister Hollinrake, is meeting actively with that committee. The William Blackstone principle has been around for 250 years, and it could not be said better than in this House.