Steel Industry

Lord Sikka Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Lord Sikka (Lab)]

My Lords, the Minister said that the Government seek to take control of blast furnaces at Scunthorpe without taking control of British Steel. They are trying to avoid the words “nationalisation” and “public ownership”, but that is really where we are heading. British Steel’s most recent accounts show a falling turnover, increasing losses and a negative net worth. It is bankrupt and there should be very little compensation, if any.

Steel is essential for civil and defence industries. In a world of trade wars, we need to be self-sufficient. We need permanent public ownership of the steel industry. I do not support temporary nationalisation, under which the public purse revives the industry and the Government then hand it back to the private sector for more subsidies.

One of the reasons for the current crisis is that privatisation of essential industries has failed. The 1988 privatisation of steel by the Conservative Government was completely divorced from any industrial strategy, need for jobs and self-reliance. There are those who object to nationalisation but, at the same time, have been content for Governments to hand vast subsidies to the steel industry. This free money enables companies to acquire assets and income streams that enrich their shareholders, and they keep coming back for more.

Steel-making is in crisis because of the failure of other privatisations. Steel-making relies on extensive use of energy but our energy costs are absolutely extortionate. British businesses pay the highest price in the developed world for industrial electricity. It is twice the EU average, 2.6 times the Korean cost, four times the US cost and even more compared to China. In the last four years, the UK’s 20 biggest energy companies have made operating profits of £514 billion and, in doing so, have destroyed steel and other industries.

With the use of electric arc furnaces, UK steel would be even more expensive and uncompetitive. Some 34,000 gallons of water are used to produce one tonne of steel and water costs are extortionate too. No steel nationalisation or industrial strategy can succeed without control of the key costs. Can the Minister explain how the Government will control profiteering associated with energy and water industries?

Yesterday, the Prime Minister said that he will

“protect British jobs and British workers”

and added:

“Jobs. Investment. Growth. Our economic and national security are all on the line”.


Against this background, people in Scotland and Wales really deserve a straight answer. Grangemouth, Scotland’s only refinery, is set to close with the loss of thousands of jobs, but the Government have not sought to bring it into public ownership. Why? The Government did not prevent the closure of traditional steel-making at Port Talbot in Wales. Tata could have accompanied its electric arc furnace with another plant making direct reduced iron, as suggested by trade unions. Again, the Government did not support that strategy. Why not? The inevitable conclusion is that a London-based Government protect jobs in England but do not really care about job losses and decline in Scotland and Wales. Can the Minister please explain why the Government are willing to save the Scunthorpe plant but not Grangemouth or Port Talbot?

Scunthorpe Steelworks

Lord Sikka Excerpts

Monday 31st March 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

The Government will simply not allow the end of steel-making in the UK. We are looking seriously at options for primary steel-making here. With the help of independent experts, we are reviewing the requirements and viabilities of technologies for the production of primary steel in the UK, including direct reduced iron. As I say, steel is an absolute priority for this Government, and we will be producing a steel strategy very soon.

[Lord Sikka (Lab)]

My Lords, it is good to hear the Minister talk about developing a steel-making strategy, but I am sure that she appreciates that it is impossible to have a successful steel-making strategy without controlling the cost of energy. The cost of industrial energy in the UK is about seven times that of China and three to four times that of France or Germany. I have met steel executives in this place, who are basically saying that their industry cannot survive unless the Government control the profiteering of energy companies. How are the Government going to control profiteering by energy companies?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we continue to do everything that we can to protect the steel industry. That obviously includes looking at the costs concerned. If necessary, we are committed to providing £2.5 billion to help rebuild the steel industry over the next five years. This will be available through the National Wealth Fund and other routes. We are continuing to look at what further steps need to be taken to protect the steel industry in this country.

Post Office Horizon Compensation Scheme

Lord Sikka Excerpts

Thursday 27th February 2025 Lords Chamber

[Lord Sikka (Lab)]

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Lord Sikka (Lab)]

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

[Baroness Jones of Whitchurch (Lab)]

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

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

Post Office Horizon

Lord Sikka Excerpts

Wednesday 24th July 2024 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, of course we are mindful of those cases and are carefully watching the numbers that remain in that camp. The usual routes of appeal remain for those cases. In particular, those individuals can apply to the Criminal Cases Review Commission to be referred back to the Court of Appeal, if it considers that

“there is a real possibility that the conviction would not be upheld were a reference to be made”.

I hope that advice will be taken by a number of those individuals.

[Lord Sikka (Lab)]

My Lords, for nearly 20 years, institutions of government and corporations claimed that there was nothing wrong with the prosecutions of sub-postmasters. Now, of course, we know different. With that in mind, I urge the Minister to appoint an independent inquiry into the 100 or so convictions of sub-postmasters that were secured by the Department for Work and Pensions. In many cases, the affected individuals have passed away and their families are traumatised.

[Baroness Jones of Whitchurch (Lab)]

The noble Lord makes a very good point. He is absolutely right about the long delays that took place, and I think we around this House have all accepted that that was unacceptable. I hope that all parts of government have learned the lesson from that. On the individuals and the question of whether there should be an independent inquiry, we believe that the best way to deal with this issue now is through the current arrangements being set up, rather than by having another third party involved. I am sure that all these matters will be taken into account in the eventual recommendations.

Post Office (Horizon System) Offences Bill

Lord Sikka Excerpts

Report stage & 3rd reading
Thursday 23rd May 2024 Lords Chamber

Moved by

[Lord Sikka]

1: Clause 1, page 1, line 9, after “Service” insert “or the Department for Work and Pensions”

[Lord Sikka (Lab)]

My Lords, I thank the Minister and his team for meeting me yesterday to discuss some of the issues relating to Amendment 1, which seeks to amend Clause 1 and quash convictions of postmasters secured by the Department for Work and Pensions. I will not hold up this Bill by pressing the amendment but would like to put some matters on the public record for consideration by the next Government.

Based upon some evidence and testimonies of individuals and, in the case of those who have passed away since convictions, information given to me by their families, I believe there is a strong case for an independent review of all the DWP convictions of postmasters. These convictions took place at a time when the government department and public bodies were insisting that their evidence was sound. The Minister has already said that the DWP cases were not influenced by Horizon. But my view is that, for any fraud to be discovered or prosecuted, there has to be some baseline which states the normal state of affairs. Was that normal state of affairs as per the data generated by the Horizon system?

After 20 years, the affected individuals and their families no longer have court transcripts or the bundles of evidence. Courts themselves do not have copies of the transcripts or the bundles of evidence. Lawyers acting for the parties do not have copies of the transcripts or the bundles of evidence. That makes it very difficult to know whether those prosecutions were fair or whether, in the heat of the moment and the prevailing climate that postmasters were guilty, certain kinds of assumptions were made. I am hoping that the DWP and the Ministry of Justice have copies of each of the cases and all the transcripts, and that they have reviewed or will review each case thoroughly. Without reviewing each case, it is hard to know whether any of the convictions were safe.

Some anecdotal evidence in family and professional letters suggests that convictions may not be safe. For example, there is a letter from the law firm Williamson & Soden, dated 18 April 2004, to a client, now deceased, whom I shall call Mr X out of respect for his family, who do not want him named. This letter says:

“I write to confirm the outcome of your trial at Wolverhampton Crown Court. As you are aware, having heard all the evidence, the Jury found you not guilty to all seventeen counts against you and you were finally discharged. You will be pleased to know that you cannot be re-charged for these offences and you are no longer subject to bail”.


Of course, it is not unusual for the courts to absolve individuals, but my point is that the case shows that the DWP’s construction of this case and evidence was obviously flawed. How many other cases were based on flawed evidence? That is the issue here.

In that case, the same person, now deceased, wrote a letter saying that

“completely unfounded allegations were brought against me by the DWP with scant regard for the evidence or facts available, and I find it incredible that the Senior Investigating Officer in this matter”—

I will call her TC as, again, I do not want to give the person’s name, although I mentioned it to the Minister—

“was willing to admit, in open court, that she has been neglectful in her duty in securing evidence, which could have possibly proved my innocence months ago”.

These allegations were made against a senior DWP investigating officer.

I have given the identity of this person to the Minister, but he said that DWP cannot find anyone with that name in its records, which inevitably raises further questions about how DWP can claim that its prosecutions were sound. Does this mean its files are deficient and it has not got the data? If Ms TC’s evidence was faulty in one case, how many other cases was she involved in? These are the kinds of questions I have. I urge the next Government to mount an independent investigation of DWP prosecutions of postmasters.

Finally, I thank the Minister for his courtesy, integrity and professionalism throughout this debate and on other occasions when we have crossed cocktail sticks across this Floor.

[Lord Beith (LD)]

My Lords, we would not be considering an amendment like this on Report but for the foreshortening that the general election has imposed. But it is valuable that the point has been brought forward. A little earlier, the Minister gave us a pretty blood-curdling description of some of the offences that might have been covered or have secured convictions as a result of DWP prosecutions.

However, that should not frighten us off looking carefully at the point that bothers me: a person mixing up money, who is in a state of desperation because he or she is told that they owe £10,000 because of the Horizon system and who then commits an offence involving the DWP’s money and is prosecuted by the DWP. The Minister may be able to give me some assurance that this combination of offences, or this mixed offence, can be satisfactorily dealt with within the present terms of the legislation. He may have checked a number of cases already to see whether there are any examples where somebody has been driven to commit a relatively minor offence, prosecuted by DWP, because of the position they were in in relation to Horizon. Can he give us any helpful clarifying points on that?

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)]

My Lords, I am grateful to the noble Lord, Lord Sikka, for the attention he has brought to convictions prosecuted by the Department for Work and Pensions. Amendment 1 would result in convictions for relevant offences in England and Wales that were prosecuted by the DWP being quashed at Royal Assent. I reiterate the Government’s view, which I set out in a certain amount of detail in Committee earlier in this Chamber, that the cases prosecuted by the DWP were of a very different nature from those prosecuted by the Post Office and the Crown Prosecution Service.

The Government’s view is therefore that it is right that they remain excluded from the scope of the Bill and that these convictions should not be quashed through this legislation. I thank the noble Lord, Lord Beith, for his question; I can assure him that DWP prosecutions had nothing to do with the Horizon system. There are no instances that we are aware of where someone committed an offence prosecuted by the DWP because they were accused of Horizon shortfalls. With that, I ask the noble Lord to withdraw his amendment.

[Lord Sikka (Lab)]

I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Post Office (Horizon System) Offences Bill

Lord Sikka Excerpts

2nd reading
Monday 13th May 2024 Lords Chamber

[Lord Sikka (Lab)]

My Lords, I welcome this Bill, as it enables some postmasters wrongly convicted to secure some compensation and wipe the slate clean, though the scars of injustice will remain with them and their families for ever.

I will raise four broad areas of concern. First, as has been pointed out, Clause 1 quashes convictions prosecuted by the Post Office and the Crown Prosecution Service only. It does not quash the 61 cases prosecuted by the DWP against postmasters in England and Wales. The DWP was the state prosecutor of postmasters until the end of 2012, when its prosecutorial function was assigned to the CPS by the Director of Public Prosecutions. Can the Minister say whether any of the CPS prosecutions being quashed were initiated by the DWP?

The omission of the DWP prosecutions from the Bill is utterly unfair. Just like the Post Office and the CPS, the DWP used Horizon-generated data and faced lies and cover-ups from the Post Office. It has now been conclusively shown that the Post Office and the CPS convictions were unsafe because of unreliable evidence, lies and cover-ups. It is hard to see why the same data, evidence and channels of generating evidence are somehow considered reliable for prosecutions by the DWP.

The DWP convictions were mostly prosecuted between 2000 and 2006, when there was a clear conspiracy of silence and cover-up around the flaws in the Horizon system and when the Post Office concealed a lot of information. Since then, many of the Crown Court transcripts and bundles of evidence relating to those convictions have been destroyed. Therefore, the Government’s argument of investigating these on a case-by-case basis is pretty much impossible and unlikely to provide any fairness to those individuals.

The DWP position is stated in a letter signed by Mrs Alison Riley, a senior lawyer with the DWP legal advisers in the Government Legal Department, from 28 September 2023, addressed to Professor Christopher Hodges of the Horizon Compensation Advisory Board:

“I can say with some confidence that in the majority of cases we have found that those cases prosecuted by the DWP did not rely on evidence from the Horizon system but rather relied on physical evidence such as order books, vouchers and date stamps”.


Let us look at those words again. The letter used the phrase

“with some confidence”,

instead of “with absolute certainty” or “with 100% confidence”. The letter seems to suggest that there is some doubt. It also used the phrase

“in the majority of cases”.

Does that mean that there were cases where somebody was wrongly prosecuted by relying upon Horizon-generated data? Were there cases in which the DWP used Horizon-generated data to secure prosecutions? How many cases were there, which this letter is perhaps not identifying? I hope the Minister will be able to tell us.

Can the Minister say whether any convictions secured by the DWP have ever been quashed by the courts, at any time, from the year 2000 onwards? Has any DWP investigator, official or witness retracted evidence given on oath? If so, that makes all the convictions unsafe. Can the Minister categorically say that all 61 cases have been independently reviewed? Which documents were reviewed, when was this done and by whom? Were the victims invited to respond to the review? Has any post-conviction disclosure ever been made to postmasters who were previously prosecuted and convicted by proceedings brought by the DWP? Were they given the appropriate information? Against a wall of silence and lies by the Post Office, some people convicted by the DWP may even have been denied appeal, but the revelations of last three years surely change that. Can the Minister say how many of those prosecuted by the DWP have actually been denied appeal and are perhaps now deserving of it?

I am reminded of the maxim of the English jurist, William Blackstone:

“It is better that 10 guilty persons escape than that one innocent suffer”.


I therefore urge the Minister to amend the Bill and quash the convictions of those prosecuted by the DWP. If not, he should at the very least appoint an inquiry to examine the safety of the DWP convictions.

My second point is this. On 16 January, at Second Reading of the then Post Office (Horizon System) Compensation Bill in this House, I urged the Minister to remove the Post Office’s involvement in setting the terms of compensation and in administering any aspect of compensation schemes, as that would only multiply the pain for postmasters. I understand from some postmasters—one of whom I spoke with earlier today—that the Post Office is still involved with the group litigation order scheme. It is also involved with the Horizon shortfall scheme, at least where some 360 to 370 disputed cases are concerned. It is good to know that there is a panel of King’s Counsels, but the problem is that the Post Office set the terms of reference, the guidance and the principles of the scheme. No matter how independent the panel, it is duty bound to follow those guiding principles. The Post Office basically cannot be trusted, and its involvement is a source of discomfort. Can the Minister shed some light on why the Post Office is still involved in these schemes, and what is to be done to remove it from them?

Thirdly, the Horizon inquiry has provided strong evidence of wrongdoings which warrant criminal charges. However, whenever any question is asked, the Minister’s standard response is that we must wait until the end of the Horizon inquiry and the subsequent report before any action is taken. That position is deeply unsatisfactory. It is hard to know why prosecutions have not already begun on the basis of evidence which has already been provided to the inquiry. Any delay would mean that many would escape justice altogether. It is quite conceivable that, in time, many will simply say that they are fragile, too old and have selective amnesia so simply cannot remember.

Just last Friday, the inquiry took evidence from Mr Rod Ismay, who used the phrase “I do not know” 125 times and said “I cannot remember” at least 40 times. What will happen when these individuals are eventually charged, possibly in another five or six years? They will simply get away. I urge the Minister to begin some criminal inquiries and charges now and not wait until the end of the inquiry.

My final point is the observation that the root cause of the Post Office scandal is the power of giant corporations to bludgeon people into submission and silence, all with a view to boosting profits, executive salaries and improving the bottom line. That is evident in many other cases: for example, P&O Ferries knowingly flouted the law to sack workers; water, rail, and energy companies are all abusing people; there is Grenfell; there is the finance industry, a serial offender in mis-selling financial products; drug companies are overcharging the NHS; G4S and Serco, which is overcharging the Government for contracts. Yet we have not really seen any move from the Government to democratise corporations, to empower the people, and to hold this unaccountable power to account. Can the Minister explain when exactly we can expect some reversal and some checks on the corporate power? People at the moment are struggling—they cannot get legal aid to take anybody to court. Regulators are, basically, in bed with many of the companies, and they are promoting competitiveness rather than safeguarding the customer’s interests. Governments are shielding corporate misdeeds. In this House, I provided evidence of how the Government shielded and covered up HSBC’s money laundering and made sure that it did not really face the full consequences. Without empowering citizens and curbing corporate power, Post Office-type scandals will recur. Can the Minister explain to the House why, in 14 years, little or nothing has been done to call corporations to account?

--- Later in debate ---

[Lord Offord of Garvel (Con)]

My Lords, I will cross-check the record, but my understanding is that these 13 cases are recent and came to the Court of Appeal after the Hamilton judgment, so the courts were aware of the background in those cases.

The noble Lords, Lord Arbuthnot of Edrom, Lord Sikka and Lord McNicol, and the noble and learned Lord, Lord Falconer of Thoroton, questioned why this legislation does not include the cases prosecuted by the DWP, which we believe amount to 62. The noble Lord, Lord Sikka, asked whether any DWP-prosecuted cases were quashed; we are not aware of any convictions being quashed by the Court of Appeal. These cases, unlike many of the cases prosecuted by the Post Office or the CPS, involved wider corroborating evidence beyond that supplied by the faulty Horizon system, so are unlikely to be unsafe in the same way. The existing and established appeal processes remain available in relation to these cases.

I agree wholeheartedly with the noble Lords, Lord Sikka and Lord Holmes of Richmond, about the importance of delivering financial redress as quickly as possible. I am pleased to say that, as of 30 April, we have paid out more than £200 million in redress to over 2,800 claimants. Under the main Horizon shortfall scheme, 88% of claims have now been received and 72% paid out. We are going as fast as we can; we are reliant on the appeals coming forward and claimants making claims. We expect that, at the moment, many of those with overturned convictions are waiting for this Bill to pass and we expect their claims to come in more quickly following this legislation.

Financial redress is clearly not in scope of this legislation, but I hope it reassures noble Lords to know that, once the necessary legislation has been passed, we will provide a route to full, fair and rapid financial redress for quashed convictions. We will include information about redress in the notifications which we send to postmasters when their convictions are overturned. Our aim is that the redress process will follow seamlessly from the process of overturning convictions.

[Lord Sikka (Lab)]

Before we leave the issue of DWP convictions, can the Minister confirm or otherwise—he might wish to write—whether any DWP investigator, official or witness has at any point retracted evidence given under oath to any Crown Court?

[Lord Offord of Garvel (Con)]

I will need to write to the noble Lord on that point.

As my colleague in the other place, Minister Hollinrake, said, we want to minimise any pause between the Bill coming into effect and redress payments being made.

To be clear, the GLO compensation scheme is independent of the Post Office. As requested by postmasters in our consultation, it is run by the Department for Business and Trade. Claims which are not agreed will be assessed by a panel whose members are independent of government and the Post Office. Any errors in decisions from the independent panel can be taken to the reviewer of the GLO scheme, Sir Ross Cranston. The Government are funding postmasters with overturned convictions to receive independent legal advice on their claims and offers. Retired High Court judge Sir Gary Hickinbottom has been put in place to chair an independent panel to resolve disputes on pecuniary losses. Horizon shortfall scheme claims are assessed by an independent panel of experts who provide a recommendation to the Post Office. To date, there have not been any instances where the Post Office has offered a lower amount than the recommendation of the panel.

The noble Lord, Lord Sikka, and the noble Baroness, Lady Jones of Moulsecoomb, raised the accountability of Post Office executives. We await the outcome of the Wyn inquiry, which will provide clarity on this issue. Finding people guilty without looking at all the evidence is how we got into this mess in the first place. Postmasters were prosecuted without proper disclosure; we must not make the same mistake again in holding people accountable for this scandal, however tempting it might be. The public can be very reassured by the detailed investigation being conducted in public by Sir Wyn Williams. Each week reveals more shocking news, and I have no doubt that justice will be served by the inquiry.

A number of noble Lords have quite rightly mentioned Fujitsu. The noble Baroness, Lady Jones of Moulsecoomb, has raised Fujitsu and its role in the scandal a number of times in this Chamber. It is right that the company has voluntarily decided not to bid for future government contracts for the time being while the inquiry is ongoing, unless the Government ask it to. The Government also welcome Fujitsu acknowledging that it has a moral obligation to contribute to compensation. The Government are in active conversations with the company at a very senior level about this.

I thank the noble Lord, Lord Browne of Ladyton, who has consistently raised the concept of the interrogation of computer evidence used in prosecutions. The Government are committed to preventing any further miscarriages of justice, like the Horizon scandal. There has been a proliferation of digital material in modern criminal cases, particularly in cases such as fraud and serious sexual offending but also in lower-level high-volume offences such as drink-driving. For this reason, any hasty changes to the legal position risk serious and significant unintended consequences for the running of the criminal justice system. However, the Lord Chancellor is fully considering all options available, and more consideration can be given to this matter and reported to the House through this process.

I thank the noble Lords, Lord Browne of Ladyton and Lord Holmes of Richmond, and the noble and learned Lord, Lord Falconer of Thoroton, for their comments on the territorial extent of the Bill. We all wish to see justice being applied in all four parts of the United Kingdom. The other place has agreed to extend the Bill to Northern Ireland, in recognition of the unique challenges faced by the Northern Ireland Executive in bringing forward their own in a similar timeframe to the rest of the UK. Their legislative process is lengthy and difficult to expedite, and the legislation would have to compete with the many other priorities accumulated during the two-year suspension of the Assembly. The Government are also cognisant of the extent of cross-community support for the extension of the Bill to Northern Ireland.

The Government’s position on Scotland remains unchanged. Scotland does not face the same challenges in bringing forward legislation within its Parliament as Northern Ireland does. It is for the Scottish Government to bring forward their own proposals to address prosecutions, and for those to be scrutinised by the Scottish Parliament in line with the devolution settlement. I hope that reassures the noble and learned Lord, Lord Falconer of Thoroton, and the noble Lord, Lord Holmes of Richmond, that my officials have been supporting their counterparts in the Scottish Government to bring forward their own legislative proposals. I understand that they intend to do this shortly.

I turn to another of the very uncomfortable situations raised by the Horizon scandal, mentioned by the noble Lord, Lord Sahota, who spoke so powerfully about the racism experienced by victims of the Horizon scandal. I agree that this issue is very important. The Sir Wyn Williams inquiry has touched on this already in its oral evidence sessions. The Government are keen to hear anything that the inquiry concludes on this matter, including any recommendations for the future.

On the issue raised by the noble Baroness, Lady Brinton, in relation to Capture, the precursor computer system to Horizon, at this point we have not found sufficient evidence to conclude that Capture led to people being wrongly convicted. Capture was very different from Horizon: it was a stand-alone spreadsheet, not an integrated accounting system. There were bugs in it, but they were admitted to by the Post Office. It was not an interactive system that could be manipulated by a third-party source, as was the case with Horizon. It helped postmasters balance their accounts, rather than operating as a black box, reporting accounts across the network to Post Office headquarters. Given the limited information that we currently have about Capture and resulting convictions, there is not yet any evidence that any miscarriages of justice took place. It is therefore the Government’s position not to seek to overturn these convictions or to consider Capture cases within the Horizon system inquiry.

However, I would like to reassure the noble Baroness that we are looking into what can be done on Capture. As soon as the Government found out about issues with the Capture system, we asked the Post Office to investigate. We are in the process of appointing an independent forensic investigator to look into the Capture software and how the Post Office addressed concerns about it. Once the investigator has reported, we will return to the House to set out our plans, but we do not consider that this should hold up the more important matter before us, which is overturning the Horizon convictions.

On the post-legislative process, I thank the noble Lord, Lord Sandhurst, for his very useful contribution and his two points about creating a website for those who have been exonerated by this Bill. He has indicated that we do not have full contact details for all our claimants in this case. For reasons of confidentiality, it would not be right to create a public web page that would list the names of those exonerated. However, all those that are in scope will be written to on Royal Assent, and those that we have been able to identify in scope but have not been contacted can get in touch with the Government to have their cases looked into. We will ensure that GOV.UK is utilised to promote access to exoneration and financial redress. All guidance on the exoneration process and the financial redress scheme will be on GOV.UK.

I am grateful for the cross-party support shown towards this legislation and the valuable support of the Opposition Front Benches, represented by the noble Lord, Lord McNicol, and the noble Baroness, Lady Brinton.

In closing, the Government recognise the profound impacts that the Horizon scandal had on those who were falsely accused. I listened to the noble Lord, Lord McNicol, refer to individual cases, and we all know of examples in our local area where lives have been ruined, and each one is a very sad story on its own. Therefore, we legislate with that at the forefront of our minds, and the objective of this Bill is to exonerate those who were so unjustly convicted of crimes that they did not commit and provide fair redress as swiftly as possible. I beg to move.

National Minimum Wage Legislation

Lord Sikka Excerpts

Thursday 21st March 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

In the recent Supreme Court judgment on Uber, it was made clear that those who qualify as workers under existing employment law are entitled to core employment rights and that all gig economy businesses must ensure that they fulfil their legal responsibilities. We now have a situation in which the national minimum wage is two-thirds of hourly median pay, and under OECD rules that means it is no longer classified as low pay. We know that 5% of our workforce is on national minimum wage, which is a great success.

[Lord Sikka (Lab)]

Currys, EasyJet and Greggs are part of a parade of companies that never forget to pay bosses but somehow forget to pay the minimum wage to workers. Their memory can be improved by effective sanctions requiring that the fine for not paying the minimum wage must equal remuneration of the entire board, of which at least 50% must be paid personally by directors. When will the Minister introduce this sanction?

[Lord Offord of Garvel (Con)]

One of the sanctions available to the Government is the naming and shaming scheme, which is very successful. We have a large number of companies which have been subject to that, and we have therefore increased greatly the number of companies complying as a result. When HMRC finds employers which breach this, it can impose a penalty of up to 200%; the penalties are severe for companies which do not comply.

Horizon Scandal: Psychological Support Services

Lord Sikka Excerpts

Monday 4th March 2024 Lords Chamber

[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.

[Lord Sikka (Lab)]

My Lords, last week I met several wronged sub-postmasters, most of whom were earning barely the minimum wage. They have been wronged by Ministers, senior civil servants, lawyers, Post Office directors and investigators, and executives at Fujitsu. Can the Minister explain what legal advice and financial help the Government have so far given, or will give, the wronged sub-postmasters to enable them to bring the culprits to justice?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. As I have said before from the Dispatch Box, there is help available as part of the compensation schemes for the claimants, to put their claims together and get access to lawyers and healthcare. As I said, 78% of claims have been settled. We are now dealing with the most difficult claims. In the meantime, there is a statutory inquiry going ahead, which will get to the bottom of this, and we will understand the full extent of how this sorry saga came about.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL]

Lord Sikka Excerpts

2nd reading
Friday 1st March 2024 Lords Chamber

[Lord Sikka (Lab)]

My Lords, I congratulate my noble friend Lord Woodley on this much-needed Bill, which will make the UK a better place for workers and businesses alike. As my noble friends Lord Woodley and Lord Hendy have explained, the Bill does not completely ban fire and rehire; it merely curbs the abuses and requires companies to properly consult employees on a statutory footing before any major restructuring that might lead to fire and rehire.

The Bill has reminded me of the words of a former US Republican President, who said:

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration”.


That President was Abraham Lincoln and his views are as relevant today as they were in 1861.

We all know that within our economic system there are antagonisms between labour and capital, but there is also a mutual dependence of the two. Workers’ rights are an indispensable part of wealth creation and building a sustainable economy. The Bill comes at a time when fire and rehire is being used as a bully-boy tactic to undermine workers’ pay and conditions across a number of industries.

A study by the Observer newspaper stated that 70% of employers using fire and rehire of staff on worse contracts maintained healthy profit margins and that, in most cases, also increased executive pay. British Gas used fire and rehire tactics to dismiss 500 engineers, but it has now reported a tenfold increase in profits in just one year. At Asda, some 7,000 workers are being impacted by fire and rehire as private equity owners seek to boost their returns.

We cannot build a sustainable economy by increasing worker insecurity. That has not been done anywhere, yet it is what the Government are trying to do here. Workers’ economic security is undermined wherever employers wield the capacity to demand, deny or discontinue work completely at will and with impunity. The Work Foundation estimates that in 2023, around 6.8 million workers—around 21% of them—were in severely insecure work, with wholesale and retail, agriculture, professional and scientific, and hospitality workers particularly badly affected. The Chartered Institute of Personnel and Development has reported that, since the pandemic, nearly one in 10 workers have been told to reapply for their jobs on worse terms and conditions or face the sack.

Women are 2.3 times more likely to be in insecure work than men. People from ethnic minorities, 18 to 25 year-olds and 1.45 million disabled workers are more likely to be in insecure work than any other sections of our population. Fire and rehire increases insecurity, anxiety and physical and mental health problems. Up to 300,000 people with mental health problems arising from their work situation lose their jobs each year. Around 51% of long-term sick leave is due to stress associated with work and insecurity. Since 2019, the total annual cost associated with poor mental health has increased by 25%. Employers are losing £56 billion a year because of the insecurities created for workers. Through this Bill, we can recover a part of that: it offers a road to economic recovery and improved labour supply.

A considerable body of scholarly research shows that improved worker rights and rewards provide a solid foundation for strong and stable economic growth by supporting demand and stabilising local currencies and financial systems. Better worker rights are essential for levelling up and result in higher productivity growth, thus leading to faster, stronger and sustainable economic growth. Improved worker rights result in a better distribution of income, both among workers and between workers and companies. In other words, better worker rights lead to a larger output that is more evenly distributed as well. As the benefits of faster growth are more evenly distributed, local demand tends to be stronger and more stable, preventing our town centres becoming economic deserts with swathes of empty shops.

In the face of fewer safeguards for workers, cuts in income reduce demand and Governments increasingly rely, as the current Government are doing, on a shrinking proportion of the population to reflate the economy. Households with unpredictable employment rights and loss of livelihoods resort to pawning things and borrowing money, which ultimately leads to lower spending, lower consumption, a higher risk of financial distress and higher risks to the financial system. We all know what happened before the 2008 banking crash; many people simply could not afford to pay their mortgages. That is one of the consequences.

In short, the Bill curbs the abuse of fire and rehire policies and facilitates economic benefits. I strongly urge all Members of this House to support it

Post Office: Executive Remuneration

Lord Sikka Excerpts

Tuesday 27th February 2024 Lords Chamber

Asked by

[Lord Sikka]

To ask His Majesty’s Government on which dates since 1999 they exercised their right as the sole share- holder of the Post Office to (1) approve, or (2) disapprove, the executive remuneration policies and amounts.

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

Under current arrangements, the Government, as shareholder, approve the targets underpinning executive performance pay. Targets are typically approved on an annual basis as these schemes are usually revised each year to ensure that targets are up to date. The Government also approve CEO and CFO remuneration, in principle before their formal appointment. For the CEO, this was provided in June 2019 and, for the CFO, in January 2015. Such approvals have historically been made in line with the Government’s guidance on senior pay in the public sector at the appropriate juncture.

[Lord Sikka (Lab)]

My Lords, it is shameful that year after year, the Government approved remuneration of Post Office directors boosted by a higher bottom line number and inflated by theft from sub-postmasters. Why has none of that so far been clawed back, and why have the Government approved bonuses for Post Office directors for appearing at the Horizon inquiry?

[Lord Johnson of Lainston (Con)]

I am very grateful to the noble Lord for raising this point. I think we all agree that this is an extremely distressing situation for the postmasters involved. A committee hearing is going on in the other place, which I believe we will discuss later this afternoon. I reassure all Members of this House that the Government never approved the bonuses for the section relating to co-operation with the Horizon inquiry. Frankly, the idea that you should reward executives for performing their duty is surprising, and we certainly did not confirm those bonuses. That is a very important point. The second important point to make is that the executives, as I understand it, have paid back the portion of the bonus relating to that, but that does not change the fact that we need to review how Post Office executive remuneration functions. There has been a number of different reviews of the governance of that, and the Government are taking significant note of them.