Post Office Legislation
Lord McNicol of West Kilbride Excerpts(8 months, 2 weeks ago)
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Lord McNicol of West Kilbride (Lab)
My Lords, as we have said many times before, the Fujitsu/Horizon scandal is truly shocking and one of the most egregious miscarriages of justice in British history. The scandal has brought blight and devastation to the lives of thousands of falsely convicted sub-postmasters and sub-postmistresses. Over 20 years on, they and their families still suffer from the consequences and trauma of all they have been through. I pay tribute to them for their determination in pursuing justice, especially those who took the very courageous and difficult step of challenging the Post Office. Without their bravery and perseverance, the campaign would not be where it is today.
We of course welcome the legislation that has been laid before Parliament. Before giving a full verdict on it, we will need to properly scrutinise the detail and analyse its potential impacts. In the first instance, the legislation still leaves a series of outstanding issues, including the question of when justice and compensation will be delivered and to whom.
I ask the Minister: what steps have he and Ministers in the other place taken to prevent this rightly exceptional piece of legislation being used by government in a nefarious way in future? How are we protecting against the abuse of this legislation further down the track? The flip side of that is that there are many other scandals that courts, reviews and government are working through. Could the principle of this legislation be used by them?
As I have said before, I seek assurances on the territorial scope of the legislation, which currently applies only to England and Wales even though the Post Office is not devolved and the Fujitsu Horizon system and the impacts of the scandal are UK-wide. Approximately 30 cases need overturning in Scotland and Northern Ireland but a series of outstanding questions remain as to when sub-postmasters and sub-postmistresses in Scotland and Northern Ireland in particular will receive their justice. I welcome the Minister’s assurances that there will be regular dialogue with the devolved Administrations, given the different legal processes, but I will be a bit more specific: can the Minister update your Lordships’ House on what conversations his department has had with colleagues in Northern Ireland, who have expressly requested that the cases there be included in the scope of this legislation?
This is probably harder to deal with but can the Minister also update your Lordships’ House on what conversations the department has had with colleagues in Scotland about the progress on exonerating sub-postmasters there? As we know, 80% of the redress budget is yet to be paid out and considerable uncertainty remains about when sub-postmasters will receive their full compensation. We all agree, I am sure, that they have waited long enough and that the delays are causing only further financial distress and suffering.
The Commons Business and Trade Committee recommends that there be a “legally binding timeframe” for the period between an offer first being tabled and a settlement being reached. Would the Minister care to comment on that recommendation? If those legally binding targets are not adopted, what assurances can the Minister give that Minister Hollinrake will meet his target of ensuring that all compensation is out of the door by the end of the year? I know that the Minister here and the Minister in the other place are committed to ensuring that there are no further delays but sub-postmasters and sub-postmistresses will want to know when this will actually happen.
Given the recent chaos in the Post Office’s leadership, we welcome the decision to take it out of the redress process. In fact, last week, the noble Lord, Lord Arbuthnot, and I called for this. Redress must have independent oversight; I thank the Government Ministers and their teams for implementing this. Financial redress alone cannot come close to repaying sub-postmasters and sub-postmistresses for their suffering, although it is important that we get it right. As we have previously discussed, some of those impacted by the scandal have sadly passed away; they did not live to see this legislation and their innocence proven, nor to receive the compensation that they rightly deserved. Can the Minister clarify the process for those who have passed away so that their families can receive closure?
On the families, especially children and partners, we see today in the news that a number of children of sub-postmasters and sub-postmistresses are looking to take legal claims against the Post Office. Can the Minister inform your Lordships’ House of the Government’s attitude towards this? It is vital that the Government act with the urgency and speed that are needed to correct this injustice. We on these Benches stand ready to work with the Government to ensure the speedy implementation of this Bill.
I have just one question regarding the Explanatory Notes. On page 7, paragraph 41, the sentence just trails off. It starts:
“Clause 2 gives the meaning of ‘relevant offence’ with reference to several conditions set out in the subclauses”.
That is fine, but it continues:
“All of the conditions must be satisfied for an alleged offence to”.
It just stops. Can the Explanatory Notes be updated? I understand that this was rushed through, and that is absolutely fine, but it would be helpful if we could have just a bit of clarity of what the end of the sentence is meant to be.
Baroness Brinton (LD)
My Lords, the Liberal Democrat Benches echo the comments of the noble Lord, Lord McNicol, about the consistent and determined efforts of the wronged postmasters who still are fighting for the redress that they deserve. I thank the Minister for the Statement. We on these Benches are pleased to see that legislation will start to correct the fundamental wrongs done to most of the postmasters convicted as a result of the Horizon scandal.
However, the Statement says that
“this legislation will quash all convictions that meet a clear set of conditions”.
These are defined in paragraph 11, on pages 3 and 4 of the Explanatory Notes for the Bill, which was introduced yesterday in another place; the noble Lord, Lord McNicol, referred to those Explanatory Notes just now. Can the Minister explain how these criteria were decided upon? How many of the convicted postmasters are excluded from this redress scheme as a result, and why? I appreciate that all this has been done in a hurry, but even if my questions cannot be answered now, please can the answers be clearly articulated to those who will speak on this Statement so that we can understand why? At the moment, it is not clear who is and is not included as a result of Clause 2 of the Bill.
As I mentioned in a number of previous interventions on this issue, we know that software issues were reported in the predecessor systems to Horizon. Indeed, in 1997, when the noble Lord, Lord Lilley, was Paymaster-General, there was a steady stream of complaints during the pilot rollout. The i newspaper has also revealed the problems with the Capture scheme, under which a number of postmasters were also convicted. It said yesterday:
“Steve Marston … was using Capture, an IT system rolled out by the Post Office in the early 90s when he suffered unexplained shortfalls of around £79,000. He insists he never stole ‘a penny’ from his branch at Heap Bridge, Greater Manchester, but felt pressured into pleading guilty in 1998 in order to avoid a prison sentence, a tactic the Post Office has admitted was widely used by investigators to secure convictions”.
Can the Minister explain why this group of postmasters, who were using Capture when there were complaints, are also excluded from this Bill?
The Minister says in the Statement that the Bill only covers England and Wales; the noble Lord, Lord McNicol, has already covered this. It specifically excludes Scotland and Northern Ireland. The Statement says:
“However, we are fully committed to working with the Scottish Government and the Northern Ireland Executive through regular, weekly official-level engagement to progress their own approaches”.
If that is the case, why has the Justice Minister in the Scottish Parliament, Angela Constance, expressed her real concern that Scotland is not included? She said:
“We, along with the Northern Ireland Executive, urged the UK Government to introduce UK-wide legislation as the best way to ensure there is a quick, fair and equal solution for all the affected sub-postmasters, particularly as the Post Office is reserved to Westminster, so this announcement is extremely disappointing”.
Given that, in that same paragraph, the Statement goes on to say
“The financial redress scheme will be open to applicants throughout the UK, once convictions have been overturned”,
why on earth has the decision been made by the Westminster Government to exclude Scotland and Northern Ireland, when neither of those devolved Governments want that?
The Statement made it clear, at last, that the Post Office will no longer have responsibility for redress and should be subject to independent oversight. My noble friend Lord Fox and I, and others from these Benches, have also raised this as a fundamental problem of trust for many postmasters, so its removal is welcome. However, I ask whether the Department for Business and Trade is truly independent of the process, not least because of the debate about the speed of processing of claims that happened in January following the differing statements from the Prime Minister, Kevin Hollinrake MP and the Secretary of State, Kemi Badenoch. The Government are responsible for the payments—I shall come on to that later—but this gives them some skin in the game and one thing has to happen now, which is to give postmasters confidence that oversight is truly independent. Can the Minister therefore describe how independent the independent panels or independent individuals will be? Who will appoint them? Will there be a departmental official on the panel? Will departmental staff clerk the panels? Will the independent panels include a postmaster?
The Statement says that there will be legislation to make sure that the payments are exempt from taxation. A regulation on taxation exemption under the compensation arrangements for both the Horizon and infected blood schemes was presented to Parliament in December 2023. Is this a further simple amendment to that regulation, or is it further, separate secondary legislation, or is it a new Bill? How will it differ? Can the Minister explain?
The final section of the Statement refers to the Select Committee’s recommendation of a legally binding timeframe for redress—here, I echo the questions from the noble Lord, Lord McNicol—but I think there is some sympathy for ensuring speed wherever possible. However, the Statement said that it would be impossible without imposing penalties on forensic accounts. That seems to be an extremely narrow focus. There is a balance to be struck between ensuring as swift as possible processing of payment and debate between postmasters and forensic accountants about what is due to postmasters. The critical reason for independence is to ensure that postmasters are afforded a truly fair debate, which many say has been denied them in the initial offers received from the scheme when it was run by the Post Office.
Finally, I have been going through the central government supply estimates for 2023-24 and obviously looked at the Budget papers. I am still struggling to find the compensation payments—in total, approaching about £1 billion—in either the department or Treasury tables. Can the Minister help? I have raised this matter now with, I think, three Ministers and would be grateful if the Minister could write to me and point me in the right direction for the figures. I know that Liam Byrne has also raised these points in the Select Committee he chairs.
Horizon Scandal: Psychological Support Services
Lord McNicol of West Kilbride Excerpts(8 months, 3 weeks ago)
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Lord Offord of Garvel (Con)
I thank the noble Baroness for her question, which we have discussed in this House. It may not be in the Green Book specifically, but it is clearly in the Treasury’s books. The money is there to be paid in compensation. The Government have given assurances on that; there will be no wriggling back. I am very happy to write with any further details required, but I say from the Dispatch Box that, as far as the Government are concerned, all commitments will be made to the postmistresses and postmasters.
Lord McNicol of West Kilbride (Lab)
My Lords, these are the words of the department in 2022:
“While seeking evidence from relevant witnesses, the inquiry is keen that such participation should not intensify or create psychological distress”.
Does the Minister not agree that the whole sorry fiasco has done nothing but intensify or create psychological distress, due to the complexity of the different compensation schemes; the continued obsession of Post Office Ltd with defending many of its practices; the time taken to get us here, near to quashing convictions; and the fact that no Post Office board member or senior manager has been held to account? I encourage the Minister to do everything necessary to speed up, first, the remaining compensation payments and, secondly, the legislation to quash all convictions. We stand ready to support and work with the Minister on that.
Post Office Horizon: Compensation and Legislation
Lord McNicol of West Kilbride Excerpts(9 months ago)
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Lord McNicol of West Kilbride (Lab)
My Lords, victims of the Fujitsu Horizon scandal have lacked justice for more than 20 years now. Lives and livelihoods were taken away, victims were told that it was only them and were not believed, and little progress has been seen until recently. Better late than never is little consolation, especially when, in numerous cases, the victims are no longer with us. Nonetheless, the Government’s progression of the legislation to rightly exonerate those wrongly convicted is welcome and I commend the work that has been done to get us here. I also appreciate the regularity with which the House has been updated, and the Minister has come here to answer our questions. The legal work needed to make this legislation happen will require cross-party work and support, so I urge the Government to continue in the manner that has brought us here.
I turn to the Statement. What further details can we expect on the legislation being tabled, and when? Do the Government have a timeline for the exoneration to be fulfilled and for full compensation to be delivered to all those who deserve it?
Our legal system played a huge part in this scandal. Time and again, the courts believed the Fujitsu computer rather than the individual sub-postmasters and sub-postmistresses. As my noble friend Lord Browne of Ladyton has asked on many occasions—and I am sure he will again today—when will His Majesty’s Government look at overturning the premise that it is for the individual to prove that the computer was wrong rather than the opposite?
Many postmasters and postmistresses have waited far too long for redress. As we all know, justice delayed is justice denied. Dealing with that point, will the Minister tell us whether there will be an opportunity within the legislation for the 66 postmasters who have died, and the four who have committed suicide, to have their convictions overturned and quashed? Surely it is only fair for their families to also have justice and closure.
Looking at the reach of the legislation, is there a specific reason why it does not cover Northern Ireland? As we know, the Northern Ireland Justice Minister has said that she supports the Government’s line of approach, calling it the fastest and most equitable legislative solution. Would it not make sense to apply it directly across Northern Ireland? On a similar note, would the Minister update your Lordships’ House on conversations that the Government have had with their Scottish counterparts regarding overturning convictions that took place under the Scottish jurisdiction?
I would also be keen to hear whether any prosecutions were made using data from the precursor to Horizon, Capture? Did any sub-postmasters or sub-postmistresses lose money due to Capture failings? If so, surely these should also be included in the scope of the legislation.
I turn to the legal ramifications. The Statement makes it clear that a precedent will not be set for the future regarding the relationship between the judiciary and the legislature, but that is easier said than done. In future, what is to stop this case being treated as a precedent where Parliament can pass law to overturn judicial decisions?
In the case of other similar scandals, would not the Government consider taking a similar approach, especially as some people are asking whether we consider that this example could be relevant in other historic or other worthy causes? I would be particularly keen to hear what specific safeguards the Government are putting in place to protect this stance, and what advice they have received to provide them with the appropriate assurances regarding their approach.
On a slightly separate note, the Government have now confirmed with the Post Office that no investigators involved in this horrendous scandal remain working for the Post Office. This is progress, but can the Minister provide us with an update on progress not on the Wyn Williams statutory inquiry but on the Government’s own investigations?
Finally, last Monday the Business Secretary told the other place that
“while Mr Staunton was in post, a formal investigation was launched into allegations made regarding his conduct, including serious matters such as bullying”.—[Official Report, Commons, 19/2/24; col. 474.]
Today, Mr Staunton told the Commons Business and Trade Select Committee that it was Nick Read, not him, who was the subject of the misconduct inquiry. Can the Minister confirm that that is correct and, if so, where it leaves the Secretary of State?
Lord Fox (LD)
My Lords, I thank the Minister for allowing this Statement to be debated in your Lordships’ House. We welcome its direction of travel.
Everything that could be said about the horror and unfairness of this scandal has been said, but we need to remind ourselves, as the noble Lord did, of the crushed human lives that sit beneath this issue. The move to quash these wrongful convictions at the point of the forthcoming Act’s commencement without the need for people to apply to have their convictions overturned is welcome, and the fact that it is being designed to reduce or eliminate the bureaucratic application process is promising. But clearly we need to understand it.
To qualify for this, as I understand it, there is an understandable list of criteria that have to be met, including the offence, the contract that people had, the timings, their exposure to Horizon, technology and other things. Here I have concerns. Can the Minister confirm that it will not be Post Office Ltd that will be sifting through who qualifies to have their conviction overturned? Experience has shown that it cannot be trusted; it has neither the good faith nor the processes to do this effectively and efficiently. But even if it is removed from this part of the process, it is Post Office Ltd that owns and controls most of the documentation and information that is needed to decide who qualifies for exoneration. As such, the upcoming legislation must include a duty on POL to provide documentation within a timeframe, with sanctions if they do not.
There is an overall communications issue that needs to be engaged with around those victims—what is happening to them, and how is the process going forward? If people who believe that they should be on the exoneration list are not on it, we need to know what the appeals process for them will be.
Of course, once their convictions are quashed, then we move into the compensation zone. Minister Hollinrake agreed yesterday that compensation has been delivered too slowly—I think we can all agree with that. We welcome the Minister’s comments about attempts to speed up payments, but it is clear that having three separate schemes and five different classes of victims has been a nightmare for those victims when it comes to getting through the system, and they have not been helped by Post Office Ltd—quite the opposite.
The chair of the Horizon Compensation Advisory Board, Professor Chris Hodges, speaking on the radio today made it clear that in his view POL should be completely removed from the role of processing and setting compensation payments. We agree, so can the Minister confirm that that is the Government’s intention? Of course, as the noble Lord said, this announcement covers only England and Wales, so we need to know intentions in respect of the two remaining countries. As the noble Lord asked, what is happening in Scotland and Northern Ireland? We understand the issues around devolved authorities, but what is the timing going to be and when could we see it?
There is also the issue of those who have been convicted in relation to the Capture system. Kevan Jones MP has been very clear on this, and we would like to know where that is going to go and how fast it is going to move, as with people who paid back sums to avoid the scandal that the Post Office was hanging over their heads. How will they move into the compensation zone? It is still not clear.
When will the legislation happen? The Minister talks about a July Royal Assent, which was my understanding. Given the sell-by date of this Parliament, that is running things a little fine. If possible, we need to move much faster.
As the noble Lord said, this legislation is unprecedented, and we will need time to get into the detail of what the Government are proposing. Your Lordships’ House needs time properly to assess both the effectiveness of the legislation and its constitutional implications. That is not to hold it up, but it is to do our job properly. Can the Minister tell your Lordships’ House when it will be tabled in the Commons and when we are likely to see it here? We need time for proper scrutiny, but let us get on with it. Victims are dying, victims are in financial need and victims need closure.
Lord McNicol of West Kilbride (Lab)
Just to be clear on that as we go into the last few seconds, with regard to the quashing of the convictions, is it the case that the individual postmasters or postmistresses who received judicial sanction will not need to do anything for their convictions to be quashed, as the signing is purely to do with compensation?
Lord Johnson of Lainston (Con)
Absolutely. In conclusion, the Bill will immediately exonerate everyone whose conviction is being quashed. It is not a requirement to apply to have your conviction quashed; the Government will draw up their list. Detail has been raised about how people could appeal if they feel they should be on the list and are not, and there are clearly some details that need to be worked out about how that process will work. It will happen the moment the Bill becomes an Act of Parliament. It is absolutely the right thing to do, it is our intention that it will happen before the end of the Summer Recess, and I very much look forward to all sides of the House supporting us in that move.
Post Office: Executive Remuneration
Lord McNicol of West Kilbride Excerpts(9 months ago)
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Lord Johnson of Lainston (Con)
My noble friend raises a very good point. I am aware of people’s frustration over the longevity of the processes, but Sir Wyn Williams’s review will be extremely important in informing us about what has happened. I agree with my noble friend’s point: long-term incentive plans should be as common in public sector bodies as they are in the private sector. I encourage that when looking at how we review governance in these sorts of organisations.
Lord McNicol of West Kilbride (Lab)
My Lords, a recent Post Office board meeting refers to a “toxic culture of disbelief” persisting at the top, including a continuing view that some postmasters and postmistresses were guilty as charged. Until the Post Office is taken out of the compensation process altogether, nothing will change. The Minister knows that one of the advisory board’s recommendations is to do exactly that. Have the Government made any recent assessment of the impact of the Post Office’s involvement on the delivery of the compensation scheme? Also, regarding the last question put by the noble Lord, Lord Forsyth, the answer is yes—the Government do have a clawback mechanism.
Lord Johnson of Lainston (Con)
I am grateful to the noble Lord for that point. On the reference point at the end, I assume that we are awaiting the outcome of the inquiry, which is only right, so that we can ensure that the right things are done at the right time in the right way. I am also grateful for the prompt regarding the Government taking over the entire management of the compensation system. There is a great deal of demand for that—half the compensation processes are managed by the Government, and they have been effectively delivered. It is not for me to make such commitments, but it is clear that these discussions are going on within government to give people confidence that we are trying to do the right thing for those who have suffered so much.
Paternity Leave (Amendment) Regulations 2024
Lord McNicol of West Kilbride Excerpts(9 months ago)
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Lord Fox (LD)
My Lords, I thank the Minister for his presentation, which was very clear, and I welcome the movements that this statutory instrument represents. It is important to add more flexibility, to do things such as reducing notice, and to extend the period by which this leave can be used. The Minister is correct: the ability for fathers to spend time with their babies at this early stage is an extremely vital part of improving the level of parenting going forward.
However, we have to be a bit realistic, in that we have an economy that is gradually moving towards an informal employment model, whether it is gig economy or zero hours, which means that an increasing number of people are missed out by this sort of measure. Then, of course, we have straightforward self-employed people, who are not part of this, and people who have not been working for long enough for their business. That starts to leave out a large number of people. I cannot give the exact number, but at least a quarter of fathers are not eligible because of those issues; it is probably more because the gig economy is increasing. I urge the Minister and the Government to consult with all of us about ways those fathers can be brought into the system, because at the moment there is a danger that they will slip through the net.
We will be going into the election with a manifesto commitment to an increase in the amount of paternity leave that is available and in the level of flexibility. I am sure that His Majesty’s loyal Opposition will say something similar in a minute, perhaps with more specificity. However, I will make a special mention of those businesses that go beyond the law. Many businesses go way past the legal minimum, and one way of moving this forward is for the Government to recognise, praise and celebrate businesses that do far more than the current legal limit. They recognise that the fathers in their business benefit, not just as fathers but as employees. I think the Government and all of us can spend time celebrating that.
Lord McNicol of West Kilbride (Lab)
My Lords, like the noble Lord, Lord Fox, I welcome this SI, as far as it goes. As he said, it is welcome, but this is not groundbreaking; we are talking about small moves in timescale, the length of leave, when it can be taken and the number of opportunities to take it. On the previous SI, we were all declaring our interests. My interest in paternity leave finished 21 years ago, when my youngest child passed his first birthday, but I declare my interest in a number of businesses that I advise, all of which treat their employees at a better and higher level than the legal minimum that this sets—and I shall come back to that.
The SI, Explanatory Memorandum, impact assessment and the Minister’s introduction are all very clear. As I said at the start, this is welcome, but I have a few questions to raise. If the Minister cannot answer them, I am more than happy for him to write to me and place a record of that letter in the Library with answers to some of the specifics—but we support this SI going through.
To work through the regulations, one thing that I was not clear about is the territorial application, which is England and Wales and Scotland. Why does it not also cover Northern Ireland? I was interested in that.
Let us look at flexibility. When I did take paternity leave—Jeez, 23 or 24 years ago—my employer at the time, GMB trade union, offered two weeks, which could be taken within the first year, but there was no period that you had to take. These regs will cover two one-week blocks. Twenty-four years ago, I was able to take the first week, then my wife and I decided that I would take every Friday for the next five weeks, because she had help and support earlier in the week, and Fridays were the time that I could take to spend time with our child and allow her some respite. That flexibility of having one day a week for the next five weeks was a different way of taking it, but that is not covered by the regulations. So, just to take the point from the noble Lord, Lord Fox, a bit further, did the department look at widening that flexibility so that it could be taken as individual days?
I fully welcome it being within the first year, and the notice period is also more than welcome. The Minister noted that the first consultation was post the general election following a manifesto commitment in 2019. We are now in 2024, so I am wondering why it took so long to get here, because this is a positive move. The impact assessment, again, is spot on and covers all the right issues.
I am looking at flexibility for a reason. If we look at page 9 of the impact assessment, it looks at the take-up assumptions. Right now, we are on 74% for week one and 66% for week two. A large number of partners and fathers are not taking the second week, so this is about redressing that. However, the assumption is that the second week will move up to a central figure of 70%, which is an increase of only 4%. Even if we get to the high-end assumption of 74%, it is an increase of only 8%. Any increase is welcome, but is there more that the department can do to help general uptake on the first week? With these changes, there is no expectation that week one uptake would increase. Is there more that we could do on advertising and marketing to show and share the benefits of this? Looking at the finances of it, they are relatively small.
The Minister touched on the neonatal issue as well. I have a genuine question for information. Obviously, when there is a notice period, it is for four weeks. If you have a premature birth, or it is an adoption and things move quicker, that four-week period may be too much. The Minister touched on this but I did not quite get the detail of it. If there is a premature birth, what are the rules in terms of the partner or father being able to move quickly in order to take time off? I presume that many premature births end up in hospital but I am sure that support from the partner or father would be very willing. Can the Minister say anything on that?
The noble Lord, Lord Fox, touched on the gig economy so there is no need for me to repeat what he said.
With that, as the noble Lord, Lord Fox, said, we will come back to the manifesto in due course, but now is not the time to set out what our policy would be for the next election. We on these Benches support these regulations.
Lord Johnson of Lainston (Con)
I am grateful to the noble Lord, Lord McNicol, for making the point about the declaration of interests. I hope that, for once, I also have no interests to declare in a debate and no need to apologise after the event for not declaring them—but who knows? What is important is that the nation will benefit, and we may too; that is a good thing. I will answer some of the questions asked but am happy to follow up with answers to some of the more specific questions in writing.
The noble Lord, Lord Fox, made some important points about celebrating and congratulating businesses that go beyond the statutory minimum. We should bear this in mind. I do not have the statistics on how businesses function in terms of percentages and performance but, to be honest, all the businesses that I have ever worked around or been involved with have always operated a different process for paternity leave, maternity leave and so on. That is a great thing; we should not forget it. These are minimum standards. It is important that I emphasise that. This should not be “the” standard, as it were; we hope for and expect companies—indeed, all bodies—to try to go beyond it. As the noble Lord, Lord McNicol, rightly said—28 years ago, was it?
Lord Johnson of Lainston (Con)
Yes—24 years ago, the noble Lord had a greater degree of flexibility then than these minimum standards imply. I thank the noble Lord, Lord Fox, for raising that.
I also thank the noble Lord for making a point about the self-employed. Mothers are eligible for maternity leave as self-employed persons but self-employed fathers are not eligible for paternity leave. I have not covered this area in my ministerial work but I would be comfortable going back to my colleagues and asking them to scrutinise the opportunities there further. Bearing in mind that self-employed people—again, I have been self-employed to some extent—have very different working patterns and living patterns, we should not necessarily conflate the two, but it is absolutely right to review and assess how we as a society support families and carers of babies and children.
The noble Lord, Lord McNicol, made a number of important points. The first related to Northern Ireland. This area of legislation is devolved to Northern Ireland. We assume that it will follow the legislative work we are doing today—we cannot guarantee that but it is the assumption; there is some shaking of heads and nodding behind me—but, clearly, we believe that these minimum standards should be applied, certainly across Great Britain.
The noble Lord, Lord McNicol, asked whether we looked at widening flexibility. I do not have the answer to that because I was not engaged in the preparation of this legislation, but I will come back to him, if that is acceptable. All these measures are always taken in the light of balancing our desire to create the sort of society that we want with the need for economic growth and bearing in mind how businesses function. The issue with all these pieces of legislation and regulations is that they apply across the board to all businesses, and some businesses, particularly very small ones, can often find compliance difficult. They might not have the flexibility over the professional employee basis that many noble Lords here may be more used to, so I have some sympathy with the need to be quite clear about ensuring that these are minimum rather than general standards and that they can be operated by all companies across the economy.
I noted the noble Lord’s last point: 74% take-up of week 1, and 64%—or low 60s—take-up of week 2. That is precisely why we are making these changes: to encourage fathers to take that second week. We believe that additional flexibility will allow that.
The noble Lord asked about neonatal care regulations. I believe they are to come into play on 6 April, and they are also entitlements from day 1. If that is not the case, I will let him know. As far as I understand it, they operate slightly differently from paternity leave, but I am happy to clarify exactly what those new entitlements will be. Again, they will be a very important, welcome relief for many parents in an extremely difficult situation.
With that, I am grateful to noble Lords for their input in this valuable and important debate. I commend these regulations to the Committee.
Post Office Governance and Horizon Compensation Schemes
Lord McNicol of West Kilbride Excerpts(9 months, 1 week ago)
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Lord McNicol of West Kilbride (Lab)
My Lords, the Horizon scandal is widely accepted as one of the worst miscarriages of justice in British history. Given the magnitude and duration of the scandal, it is quite astonishing that it seems that every day we get more and more revelations. We get further from the truth and further from true justice for all those who have been victims of it.
Sunday’s allegations could not have been more serious, and the same applies for everything that has emerged since then, not least the memo that was unearthed last night showing Henry Staunton’s recording of a meeting with the then Permanent Secretary at BEIS, Sarah Munby, on 5 January 2023. In that, he was allegedly told to “hobble” into the election; not to
“rip off the band aid”
in terms of the Post Office’s finances; that
“politicians do not necessarily like to confront reality”;
and, finally, that
“now was not the time for dealing with long-term issues”.
This new evidence appears to endorse Mr Staunton’s claim made at the weekend. It is of the utmost importance that both the public and Parliament know the truth. Do the Government continue to deny that any of those conversations took place, as was stated categorically on numerous occasions throughout this week? Given the new evidence, will the Department for Business and Trade now commit to a Cabinet Office investigation into the serious and continued allegations that Mr Staunton has made?
Earlier this week, it was welcome that the Government agreed to publish copies of the letter from Sarah Munby to Henry Staunton on his appointment as chair of the Post Office in December 2022, but that does not go far enough. Given the Secretary of State’s own willingness now to place part of the record in the House Library, I ask once again what I asked on Monday, when we debated this—unfortunately, before the Statement had been made. Given the new evidence that has come to light, will the Government publish all correspondence and minutes of meetings between the relevant departments, UKGI and the Post Office, and put them all in the parliamentary Library?
Earlier this week, it was also suggested by the BBC that the Government knew that there was a cover-up in the Post Office eight years ago—in 2016—with Ministers having been told that an investigation was happening into how often and why cash accounts on the Horizon system had been tampered with remotely. Will the Minister comment any further on those claims about when that was known by the Government? How will the Government investigate those claims? Following that, will this matter also be handed over to Wyn Williams for full investigation? I am sure that we all agree that the secrecy must end, and that the full sunlight of public scrutiny should be brought to bear.
On the compensation itself, has the £1 billion figure referred to in the Statement already been allocated, and is it therefore ready to be paid to those who will receive it? Subsequently, if that is not the case, will the payments be specifically itemised and timelined within the next Budget?
Although Monday’s Statement and today’s repeat are rightly about the Post Office, people’s faith in government has already been damaged by scandals such as Hillsborough, infected blood, Bloody Sunday and Windrush. Victims of other scandals—especially the contaminated blood scandal—feel that they need to ask whether they have been the victims of deliberate inaction as well. Will the Government provide assurances that no such obstacles have been put in the way of any payments of this kind; and if so, how exactly do they explain the delays in so many cases?
The Post Office miscarriages of justice alone have shown the devastation that can occur when institutions are allowed to operate without oversight or are shrouded in secrecy, and I know the Minister shares everyone’s view on this. Throughout all this, we must not lose sight of the sub-postmasters and sub-postmistresses themselves, so I make no apology for returning to the issue of convictions and the overturning of them. Can the Minister update your Lordships’ House on the progress in this area? Have His Majesty’s Government set a timescale for delivering the legislation needed to quash the convictions?
Finally, the Minister often talks about compensation packages and money being paid in thousands, tens of thousands and hundreds of thousands of pounds to wrongly convicted—I would describe them as not just wrongly but malignly convicted—sub-postmasters and postmistresses. However, is he aware that the vast majority of Post Office payments for the specific issue of “damage to reputation and stress” are still generally only around the £5,000 mark?
Finally, again—I feel a bit like Columbo—there is a discrepancy between the Secretary of State’s speech in Hansard and the Statement. Would the Minister like to comment on it, and if not, will he write to me and place a letter in the Library? There is no mention in the Department of Business and Trade Statement of bullying by Mr Staunton, yet the Secretary of State says:
“I should also inform the House that while Mr Staunton was in post, a formal investigation was launched into allegations made regarding his conduct”—
we know that, but she goes further—
“including serious matters such as bullying”.—[Official Report, Commons, 19/2/24; col. 474.]
I am just a bit confused as to why it was in the Statement delivered in Parliament but not in the departmental Written Statement.
Lord Fox (LD)
My Lords, as we have heard, with every day that passes, more questions seem to come up.
In Parliament, the Secretary of State’s Statement was strident—I would say unusually strident—but no matter how loudly and aggressively she asserts her side of the issue, it will not go away without answers and evidence. I support fully the questions that the noble Lord, Lord McNicol, just asked—I will try to interrogate some other areas—but we need answers in order to support or otherwise the Secretary of State’s position. These are answers that the Government can give, not ones they can push into the Wyn Williams inquiry.
Minutes from a call on 27 January show that Kemi Badenoch said to Henry Staunton that she had received
“a briefing on the governance issues at the Post Office and that the complaints against”
Staunton
“are so serious that the government need to intervene”.
The Secretary of State said in Parliament that this included issues raised by other directors on the board. From whom did she receive the briefing on the governance in POL, and where are the notes on its contents? When were the directors’ issues first raised with the Secretary of State, and what form did these complaints take? Were they, for example, letters, emails, calls or meetings? Were any directors’ complaints submitted formally, and how many directors were involved in those submissions?
The Secretary of State’s public statements and comments conflate two issues. One is the possible disquiet as to Staunton’s progress on tackling governance within POL, and the other is an entirely separate accusation of bullying. Does the Minister agree that these two need to be properly separated? The conflation is adding to the confusion. As far as I can see, as yet, there is no documentation to support the bullying part of the Secretary of State’s response. The Secretary of State said that a “formal investigation” was under way into the complaint against Staunton. Who is leading this investigation and when was it started? Staunton says that he was not informed of this bullying complaint, so can the Minister confirm if, when and how Staunton was informed of this bullying complaint and whether he has yet to be contacted by an investigator?
Government, departmental and Post Office capacity is only so large. This very public and bitter argument is a major distraction. Given the huge quantity of energy that is being expelled on this dispute, all other activities suffer. Today, the Prime Minister declined to repeat the Secretary of State’s accusations, and if the Secretary of State misled Parliament, she clearly breached the Ministerial Code. Therefore, does the Minister agree that if we do not get a Cabinet Office inquiry, the Government’s ethics adviser should be asked to investigate this issue now?
Without publishing all the personal correspondence with the various intermediaries that link the Post Office with the Government, it cannot be established beyond any doubt who is telling the truth in this very public dispute. The problem for the Secretary of State and for the Government is that Mr Staunton’s central accusation has credibility. What we see is glacial progress in settling the Horizon victims’ cases. That was his central point. In one answer on Monday, the Minister outlined the bureaucratic appeal process open to those offered unacceptable settlements, and of course, these appeals slow things down considerably. Can the Minister at least acknowledge that this time-consuming and energy-sapping appeal process could largely be avoided if the original offers were at an acceptable level in the first place?
I have one final question. All pretence of an arm’s-length organisation has gone; the Government have the power to intervene and control. Will the Government step in and speed things up by making the process simpler, probably by collapsing the three schemes into one? Overall, will they ensure that the offers of compensation are realistic in the first place, so that all the sub-postmasters who have offers can accept them and move on?
Lord Offord of Garvel (Con)
As I said, we are in a situation now where dialogue quite rightly is happening—and minuted, as always—between officials and representatives of Post Office Ltd. The appointment of the senior independent director was one of the issues that the board were at odds over. The chairman wished to promote an internal candidate and the Department for Business and Trade wanted to bring in an external candidate—which was also the advice of the UK Government, the shareholder executive.
In this situation, when an investigation of why this was happening was brought to bear, that too was blocked by the chair. So there was a situation where the board was not working properly and we had to change the chair. It was as simple as that. The chair had to be changed to make sure the board worked properly. There was no concept of him being there to take the rap for the Horizon scandal.
He has made a second claim, and I advise noble Lords to read the notes carefully to understand this. The conflation going on here concerns the discussion with Sarah Munby in January. The chairman was appointed in December 2022. There was a discussion with the Permanent Secretary in January 2023. That was the first discussion after she wrote the letter saying “Here’s your three priorities”. It was the first meeting between the Permanent Secretary and the newly appointed chair, to say, “Right, you’ve been in post for a month, you’ve looked under the bonnet, what have you found?”
Lord McNicol of West Kilbride (Lab)
This is a brief point regarding the Minister’s description of the situation between the Secretary of State and the chair of the board, and the appointment of the SID. I seek clarification and want to check that I heard the Minister correctly. The Statement refers only to the chair, Staunton, looking to bring in his own person. It does not deal with the appointment. The Minister said the Secretary of State was looking to appoint the SID, a different person, and Henry Staunton did not want that person coming in as a SID, so that was the tension that was there, not the fact that he had carried out some nefarious process in trying to bring someone in.
Lord Offord of Garvel (Con)
That is a reasonable clarification. The clue is in the name “senior independent director”. The Department for Business and Trade was of the view that we should not be appointing an internal candidate to the role but that an external candidate should come in. That was the reason for the dispute.
On the matter of trying to delay, save money and not budget for compensation, this is on the record to be refuted. The conversation was between the Permanent Secretary and the chair one month into his appointment. A businessman comes in to review the company that he is now chairing. “Please can I have a meeting with you for you to tell me what you have seen? What are the pressure points, what’s good and what’s bad?” The conversation was entirely about the business operating model, not the postmaster compensation. That is a completely separate matter and the finance for it is ring-fenced. It is not within his budgetary concerns. They were talking about how this business model was fundamentally compromised and would not exist in the private sector.
But it is a public corporation and it needs to exist in the public sector. This is why we have this hybrid model. We have 11,500 post offices, of which 5,000 are in rural areas and 3,000 are the last shop in the village. That is not financially viable and would not survive any daylight in the private sector, but we all agree that it is legitimate that this is a vital public service for these rural communities, which is why the Treasury funds that to the tune of £50 million, specifically allocated to run a network which, frankly, is not profitable. That is an immediate discussion between the two and when you add in the pressures of last year, with the minimum wage increasing and energy prices increasing, you can see that there are budgetary pressures inside the operating model.
There is also a discussion about the Horizon computer. The Government have allocated £103 million to building a system to replace Horizon—which is now working fine but is clunky and clearly has not been the right system. So now a new system has been put in place. Any noble Lord in this Chamber who has done an IT project will understand how these budgets go—so there is a second pressure.
There are a number of business pressures being talked about. In the very first meeting between the chairman and his reporting senior civil servant, it is quite appropriate that they should talk about those pressures, and it may well be that the Permanent Secretary was explaining to a businessman, who had not worked with government before, about how government works and how communication works. Undoubtedly, a conversation was had between them, but the record now shows—and the letter written by Sarah Munby makes it very clear—that those discussions did not ever stray into the territory of “By the way, please can you solve your budget pressures by stopping or delaying compensation to postmasters”—that is simply not the case, and we can put it to bed now. It has been conflated and confused, but it is now on the record to show that it is simply not the case.
I turn to the compensation, and the question of whether the Government have been dragging their feet and why. There is absolutely no evidence that the Government have been dragging their feet and I will provide some evidence for that. There are three schemes in place: a scheme for the 900 wrongful convictions; a second scheme for the GLO 555, which, if you take out the convictions, is 477; and there is the Horizon shortfall scheme—the 2,500. That comes to just under 3,000 postmasters, and, today, 78% of all claims are paid and settled. Interestingly, of the 3,000 postmasters, 2,700 have received some sort of payment. Either they are settled, or they are interim, which means more than 90% of the cohort have received either a full and final settlement or an interim settlement on their way to final settlement. That was pushed through largely during 2023, and if we take the £160 million that has been paid out now to the 2,700, £138 million of that was paid out by December last year—before the series and the Bates documentary and under the tenure of Henry Staunton as chairman. Therefore, it is interesting that, under his chairmanship, there is no evidence—the opposite, in fact—that there has been any dragging of feet when it comes to compensation being made to the postmasters, of whom now 78% are fully settled and more than 90% have received compensation.
The noble Lord, Lord Fox, mentioned that this compensation process is clunky and bureaucratic. My noble friend Lord Arbuthnot, who is in the Chamber, will substantiate that the process has been put together by the subgroup; that is, the advisory group that Mr Bates has been involved with on how to make the process work and be fair. To be clear, the appeal process is more for the benefit of the postmasters and postmistresses to appeal, not for the Government to push back. The Government will not push back on the claims given; we need to give a process that, where an offer is made to a postmaster or postmistress and that individual does not feel it is high enough, they can appeal that process. That process has been designed by the advisory council, so, again, there is no evidence that we are dragging our feet.
In fact, when you look at the cohort of 477, who are part of the brave 555 group who have arguably been through the most trauma, having had to go to court and having been some of the most egregious examples, we want to process those claims as quickly as possible. We can go only as quickly as we receive the claims. What is interesting to me is that, of the 477 who have received the interim payment so far, only 58 full claims have been submitted, of which we have settled 41—we have settled 41 out of 58, we are settling as quickly as we can. Why is it only 58 full claims? It is because those postmasters and postmistresses are now in a position, with legal help, to access all the information to put their claim in, and they are taking their time to do that, and quite rightly so.
I think I can make the point that on convictions and compensation, the money is fully ring-fenced; it is not in the conversation about the operational matter of the Post Office—that is a completely separate issue—and we have committed to go as quickly as we can to make the payments and that is also why we are putting through legislation on the overturning of convictions.
Post Office Horizon Scandal: Compensation Payments
Lord McNicol of West Kilbride Excerpts(9 months, 1 week ago)
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Lord Offord of Garvel (Con)
The Government can go only as fast as the claims come in. Take as an example the GLO 555: 477 of them do not have any convictions. Of those 477, 58 have submitted a claim, of which an offer has been made to 48 and 41 have accepted. We cannot go any faster; we can go only at the speed at which claims are made.
Lord McNicol of West Kilbride (Lab)
My Lords, the allegations made by Henry Staunton over the weekend are incredibly serious. Thousands of people, as we have discussed many times in your Lordships’ House, have been robbed of their lives, liberty and livelihood. For them to experience any modicum of justice relies on the truth coming out. I have one specific question, because I know we will come back to this, probably on Wednesday, to discuss the Statement being made in the other place. Will the Government publish all correspondence and minutes of meetings between the relevant departments, UKGI and the Post Office, and put them in the parliamentary Library?
Lord Offord of Garvel (Con)
Once again, we are in a situation where we are dealing with private individuals and HR. We should not be doing that in this Chamber, or indeed in television studios; individuals’ livelihoods are at stake here. We did not want to be in this position, but we have to refute the allegations made against us. A judgment will be made by the Secretary of State as to all supporting documentation, and read-outs of minutes will be put in the House of Commons Library. At the end of the day, it comes back to the fact that we need a full inquiry to find out what has actually happened here.
Post Office Horizon Scandal: Racism
Lord McNicol of West Kilbride Excerpts(9 months, 1 week ago)
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Lord Offord of Garvel (Con)
I thank my noble friend. We both come at this from the same point of view: the private sector board. The board currently in place is not the board that prosecuted any of these postmasters. In fact, of the non-executive directors, three have been appointed in the last 12 months. There is no question that there has been a failure of governance. As we discussed last time, the governance of this company goes through the chair to the Secretary of State to Ministers. That is where we need accountability and where the inquiry will focus.
Lord McNicol of West Kilbride (Lab)
My Lords, as we have heard, the BBC recently reported a number of concerns and comments made by Post Office staff. One sub-postmaster was told:
“All the Indians are doing it. They have relatives so they take the money and send it to them abroad”.
But neither the terms of reference nor the completed list of issues for the inquiry explicitly mentions racism or discrimination. Is the Minister comfortable that the Wyn Williams investigation will deal with these specific issues of racism and discrimination in his report?
Lord Offord of Garvel (Con)
I thank the noble Lord for that question. The inquiry was set up by this Government in 2020, initially on a non-statutory basis, immediately following the case with Lord Justice Parker in 2019. That was then upgraded to a statutory inquiry. So Wyn Williams has the full authority of the judicial process to get to the heart of this matter. We are also being advised, as we know, by the noble Lord, Lord Arbuthnot, and the advisory committee. It is very clear that we will get to the bottom of all these issues.
Post Office Appointments: Ministerial Responsibility
Lord McNicol of West Kilbride Excerpts(9 months, 3 weeks ago)
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Lord Offord of Garvel (Con)
Three new non-executive appointments were made in 2023 and there will be a new senior independent director appointed and a new chair. Two postmaster directors have also been appointed to the board. The current chief executive, who came in in 2019 at the point of the judgment, remains in place. We continue to have faith in him to move this thing forward quickly, with the right amount of oversight. We have confidence in the board as it is reconstituted. But, as has been said, the question is: why did the original failure happen? We need to find that out.
Lord McNicol of West Kilbride (Lab)
My Lords, the financial cost of the Horizon scandal is going to be in excess of £1 billion, and that does not take into account the personal cost to the postmasters and postmistresses, some of whom are here with us. Fujitsu has offered to pay a voluntary contribution but, more importantly, should the Post Office wish to sue Fujitsu, is it still in time to do that and when did the Post Office agree a standstill?
Lord Offord of Garvel (Con)
I thank the noble Lord for that question. On the specifics, I will write to him on the actual timeline, but the reality is that Fujitsu knows it has a major part to play here. It knows that it is under serious investigation. It has pre-empted that by coming out and saying that it feels a moral responsibility. My colleague, the Minister in the other place, has made it very clear that the cost of this debacle cannot land purely on taxpayers and I am sure there will be a very full investigation and compensation required from Fujitsu.
Post Office Network Subsidy Scheme (Amendment) Order 2024
Lord McNicol of West Kilbride Excerpts(9 months, 4 weeks ago)
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The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)
My Lords, under Section 103 of the Postal Services Act 2000, the Secretary of State for Business and Trade has the power to make payments to support the provision of the Post Office network. This power is subject to conditions, one of which includes a cap on the total amount of funding that can be given to the Post Office in any given financial year. The current cap, set in 2011, is £500 million, and we are proposing to increase this to £750 million per annum.
Raising the legislative cap on funding that can be provided to the Post Office does not reflect a funding commitment but is simply an enabling power to allow the Government to provide appropriate funding to the Post Office when needed. The rationale for the increased cap is simple: we must avoid a situation where the Government cannot legally provide the funding that the Post Office needs for its essential activities.
As all noble Lords will be aware, the Government currently provide funding support to the Post Office in a number of important areas, enabling it to maintain its delivery of key services across the UK.
First, funding is provided for compensating victims of the Horizon scandal. The scandal was one of the biggest miscarriages of justice in living history, and the victims must get the justice that they deserve. As part of this, it is essential that impacted postmasters are compensated fairly and as quickly as possible. The Government are contributing funding for a number of compensation schemes, as well as funding associated with delivering the compensation schemes. It is essential that this process is not held up at any stage of the process.
Secondly, the Government provide significant and vital funding to support the Post Office network. Post offices are the beating heart of communities. Through its network of over 11,500 branches, the Post Office delivers essential services across the United Kingdom. There are currently over 6,000 rural branches, representing 54% of the total network. Over 3,000 of these are described as being the last shop in the village, providing vital retail, mail and banking services together in one space and helping to sustain thousands of rural economies. These services are highly valuable to both individuals and SMEs in urban and rural areas across the UK. It will come as no surprise that, in the Association of Convenience Stores’ recently published annual local shop report, Post Offices were identified as the type of service considered by the public to have the most positive impact on a local area.
The Government have provided significant financial support to sustain the nationwide network: over £2.5 billion in funding in the past decade alone. The Government remain steadfast in their support for the network and have committed to maintaining the annual £50 million subsidy to safeguard services in the uncommercial parts of the network until 2025. Without that funding, most of these Post Office branches would be unsustainable.
The Government provide targeted investment funding to the company. The retail sector is facing challenging conditions. It is still feeling the effects of changing consumer behaviours arising from Covid-19 and the impact of cost of living pressures on consumer confidence arising from a range of factors including inflation and high energy and supply chain costs. As such, the Post Office is experiencing pressures as the business attempts to operate within this challenging commercial environment, while meeting the costs to right the wrongs of the past.
Further pressures have also arisen through the work to replace the outdated Horizon IT system. Although this is a Post Office-led programme, it is essential for the future of the company and the network, and the Government have already committed to providing £103 million to support the development of the replacement system and to ensure that the Horizon system is maintained before the replacement is rolled out. We have provided funding to meet the company’s immediate needs for this programme, and we are working closely with the Post Office to understand what funding may be required beyond that.
These three areas are critical to the future of the Post Office, and the current legislative cap risks the Government not being able to provide the Post Office with the funding it needs for essential activities. Having taken into account the current forecasts and inflationary context since the previous cap was set in 2011, the Government consider a new cap of £750 million to be reasonable, sensible and proportionate. I beg to move.
Lord McNicol of West Kilbride (Lab)
My Lords, I thank the Minister for outlining this SI. It is one of the shortest statutory instruments that I have had to deal with. I aim to give it a bit of colour. We on these Benches will not oppose it, but it raises a number of questions, which I will run through, giving the civil servants in the Box a bit of time to answer them and to help the Minister if needed.
A cap has been set at £500 million since 2011—so for quite some time now—and has not risen with inflation over the years. Pre the scandal and having to pay and settle some of the problems—let us deal with the scandal completely separately—has the money from the Government to the Post Office come close to that cap over the last four or five years?
The only question to the DBT from the Secondary Legislation Scrutiny Committee, in paragraph 54 of its eighth report, was not really answered. If this £750 million is not enough, will the DBT come back to Parliament with another SI to uplift it? That is purely in the context of the scandal, because in normal times £750 million should be adequate. It is an uplift of 50% from the previous cap limit, so my expectation is that the cap was never hit. However, the department did not answer the SLSC’s question about whether the Government would return to it. I think the department’s answer was that it was confident that £750 million would be enough. It is worth asking whether, if there is a need to come back for more, the Government would seek to do so.
In dealing with the scandal and the payments from it, is there a gross figure that the Government are expecting or looking to pay across all the compensation schemes? We have individual sums—there is the £600,000, and bits and pieces across different schemes—but is there an expected overall compensation figure on the back of the Horizon scandal?
Also, if I remember correctly, one of the senior executives at Fujitsu commented at Davos that, as a business, Fujitsu would be looking to make some recompense. Do we know what level of financial recompense it is looking to make towards the scandal? Would that money be paid to Post Office Ltd or to the Government, since they are basically underwriting any and all of the compensation payments?
A number of questions have arisen on the back of this very short SI. This will come back to the Floor of the House through Oral Questions and Statements or via Written Questions, so I am more than happy for the department to write to me or put a letter in the Library on some of the detail of my questions, if the Minister does not have them to hand.
Lord Offord of Garvel (Con)
I thank the noble Lord for those questions, all of which are perfectly reasonable.
The first question was about the £500 million limit from 2011. Of course, up until 2022 we did not have inflation, so it has not been an inflationary environment. Part of the increase is recognising the inflationary hike that we have had and part of it is recognising that significant compensation has to be paid out. I do not know the precise amount of spend against that £500 million; it has not been above it.
To give some idea of this number, we know that, for example, in the last 10 years we have spent £2.5 billion just supporting the network. If you divide that by 10—although it has not been £250 million a year—you get the idea that that is over or under as a scale. Some £50 million has also been given to support the loss-making branches that we want to keep open, of which there are 3,000 in rural areas. There have also been the IT costs: another £100 million to build the new IT system to replace Horizon.
All of that has been within and is manageable within the £500 million, but now we move to the new world of compensation. So far, £153 million has been paid out. That has, therefore, been within the £500 million cap. On the question of how much will ultimately be paid out, guidance has been given that this could, shockingly, end up being £1 billion, but that would be over a number of years. We expect that to be accommodated within the increase to £750 million. That is how it has been budgeted.
Fujitsu has expressed that it has a “moral obligation”. That has not yet been tested as to amount and recipient. That will now be negotiated. I can see a situation where the Williams inquiry establishes the facts and a lot of repercussions come out of that, as we have said in the Chamber. One of those will be a discussion with Fujitsu about the right amount that it needs to contribute. My ministerial colleague in the other place has been very clear that it should not just be the taxpayer who has to foot this bill. Therefore, Fujitsu will need to off-set that. Quite how that will happen and where it will go is not yet decided, but that will be a significant part of that off-set.
I hope that answers in the main the noble Lord’s questions. Clearly, we all knew the Post Office to be a valuable asset in our own communities, but our awareness of this issue has been raised considerably following the TV series. Therefore, this is effectively a mechanism to ensure that the Post Office is in funds to allow the compensation to be made quickly, as we have indicated many times. We need to right the wrongs of the past in this Horizon scandal. This is an important part of that. This order therefore ensures that the Government can provide appropriate levels of funding to the company over the coming years. I urge noble Lords to support it.