Post Office Mediation Scheme

Andrew Bridgen Excerpts

Wednesday 17th December 2014 Westminster Hall

[Mr Arbuthnot]

I know that the hon. Gentleman was intending to have an Adjournment debate; I am very sorry that I pinched his idea and did it instead. I am grateful for his support on this issue. He has been making these points for some time. We must get to the bottom of these cases, and I am afraid that we cannot rely on the Post Office to see right.

My constituent, Jo Hamilton, pleaded guilty. She had a choice between risking prison for theft and pleading guilty to false accounting, and she decided that the risk was too great. I do not believe that that is the way our criminal law should work. Residents of her village, South Warnborough, do not believe that she is a crook any more than I do, so they paid thousands of pound towards the money that the Post Office was demanding.

Another sub-postmaster, Julian Wilson of Astwood Bank, gave an interview to Radio 5 Live last week. He had a similar story. His wife was convalescing from a tumour and her father had been diagnosed with terminal cancer. He therefore did not want to put his family under strain, so he pleaded guilty to false accounting to avoid the accusation of theft. Like Jo Hamilton, he now has a criminal conviction. Noel Thomas of Anglesey—it is good to see the hon. Member for Ynys Môn (Albert Owen) in his place—was found guilty of theft and sent to prison, as were many others up and down the country.

It may, of course, be that the trade of sub-postmastering was infiltrated by a sudden rash of criminals. I have met a lot of those people, and I personally do not believe it.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will my right hon. Friend confirm that the Post Office is able to bring criminal prosecutions in cases that have already gone to the Crown Prosecution Service, even if the CPS believes that there are insufficient grounds for a prosecution?

[Mr Arbuthnot]

As my hon. Friend suggests, and as my hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) suggested earlier, it is becoming increasingly untenable for the Post Office to act as its own prosecutor without the independent look that the Crown Prosecution Service would bring. My impression is that the Post Office shares that view, and the sooner it can get rid of its responsibility to prosecute—I believe it should happen today—the better.

In the light of all those cases, Members of Parliament got together. My right hon. Friend the Member for West Dorset (Mr Letwin) and I went to see the chairman and the chief executive of the Post Office, who then came to meet right hon. and hon. Members. They suggested that they should set up an independent forensic investigation, and they appointed Second Sight to do that work. Second Sight identified concerns that gave rise to the mediation scheme that we are discussing today.

Second Sight did not identify major software issues in its interim report. It must follow that the mediation scheme was set up to deal with the issues of support and the surrounding issues relating to the sub-postmasters. The Post Office agreed to a mediation scheme that was to include those who had pleaded guilty. It is almost too obvious to say this, but in view of what the Post Office has been doing I have to do so: I would never have agreed to a mediation scheme that excluded people who pleaded guilty, such as my constituent, Jo Hamilton. I would not have agreed to one, and neither would right hon. and hon. Members throughout the House.

That is what the Post Office agreed; let me turn to what it actually did. In the working group for the mediation scheme, the Post Office began this year to argue that the issues of concern that were identified by Second Sight should be excluded from mediation—for example, the absence or ignorance of contracts, and the failure of audits and investigations—despite its agreement with Members of Parliament that the scheme would cover the issues in the interim report. I understand that the Post Office has been arguing in recent months at the working group stage to exclude 90% of the cases coming before the working group, despite everybody’s understanding that exclusion from mediation was to be the exception, not the rule. Extraordinarily, the Post Office argued to exclude people who had pleaded guilty, despite its express agreement to the contrary with me and other right hon. and hon. Members, and despite the fact that it knew that we would not have agreed to a mediation scheme otherwise.

--- Later in debate ---

[Andrew Bridgen (North West Leicestershire) (Con)]

It is a great pleasure to serve under you in a debate on this huge topic, Ms Dorries, even if it is for as little as six minutes.

I, too, pay tribute to my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) for his leadership on this issue over many years. It has been an honour and a privilege to serve under him on his working group of MPs for the last two years.

The issue first came to my attention because of the plight of a constituent, Mr Michael Rudkin. For 15 years, he was a sub-postmaster. He served as the most senior member on the national executive of the National Federation of SubPostmasters and as the chairman of the federation’s negotiating committee. He was responsible for negotiations with Post Office Ltd and Royal Mail Group, so he is an experienced sub-postmaster. I would like to share with Members his experience of the problems with the Horizon system, which demonstrates that significant questions need to be asked of the Post Office, although it is reluctant to answer them.

Mr Rudkin’s story starts on Tuesday 19 August 2008. In his official capacity as a negotiator on behalf of sub-postmasters, he was invited to a meeting at the Fujitsu/Post Office Ltd offices in Bracknell to discuss problems with the Horizon system. If Mr Rudkin is telling the truth, which I have no doubt he is, this sequence of events raises questions about the system, which the Post Office must answer.

On arrival that morning, my constituent signed the visitors’ book in reception and waited for his chaperone, a Mr Martin Rolfe. Mr Rolfe took him to the second/third floor, and they entered a suite where Mr Rudkin recognised Horizon equipment on the benches. There was only one other person in the room—a male of approximately 30 to 35 who was reluctant to engage in conversation with Mr Rudkin or Mr Rolfe.

Mr Rolfe asked Mr Rudkin to follow him through a number of pass card-protected security doors to some stairs. They went down to the ground floor and then entered the boiler room. Mr Rudkin states that a number of men dressed in casual office wear were standing around the doorway. They became very uncomfortable about Mr Rudkin’s presence and left.

Having entered the boiler room, Mr Rudkin instantly recognised two Horizon terminals. There were data on both screens, and an operative was sitting in front of one of them, on which the pure feed for the Horizon system came into the building. Mr Rudkin asked if what he could see were real-time data available on the system. Mr Rolfe said, “Yes. I can actually alter a bureau de change figure to demonstrate that this is live”—he was going to alter a figure in a sub-postmaster’s account. He then laughed and said, “I’ll have to put it back. Otherwise, the sub-postmaster’s account will be short tonight.” Mr Rudkin expressed deep concern, because he had been told that no one had remote access to a sub-postmaster’s account. At that point, he was politely but speedily taken to reception, and he was told to leave the building.

Mysteriously, the next day, Wednesday 20 August 2008, a Post Office Ltd auditor—a gentleman Mr Rudkin knew, by the name of Paul Fields—arrived at Mr Rudkin’s sub-post office. He proceeded to tell Mr Rudkin that his branch had a loss of £44,000. Interestingly, Mr Rudkin maintains that the investigator knew the size of the loss before he even entered the premises.

Mr Rudkin was absolved of all knowledge of the loss by Post Office Ltd, but he was ordered to pay the money back at the rate of £1,000 a month from his salary. As we have heard, the sub-postmaster is completely liable under the contract for all losses. As Mr Rudkin points out, why would someone steal money from themselves when they know that?

After Mr Rudkin had paid £13,000 back to Post Office Ltd, the Post Office started proceedings against Mr Rudkin’s wife for false accounting. It also applied for a confiscation order on all his property and had his bank account frozen under the Proceeds of Crime Act 2002. Mr Rudkin has since cleared all his debts to Post Office Ltd. In the process, he has lost his business, his reputation, his position as a magistrate, some property and his good name, and he has been unable to work since.

Second Sight—the team of independent investigators appointed by the Post Office to look into the matter—questioned the Post Office about Mr Rudkin’s allegations and his visit. Initially, Post Office Ltd consistently denied the visit had ever taken place—until Mr Rudkin produced an e-mail from Mr Rolfe from the day before the visit, which invited Mr Rudkin to visit and said that Mr Rolfe would meet him in reception, at which point the Post Office did admit that the meeting had taken place.

Second Sight has repeatedly requested e-mail data from before, during and after Mr Rudkin’s visit, as well as a copy of the visitor’s book, but all those things have been withheld or are, we are told, now missing. That raises serious questions about the Post Office.

Second Sight told me that it has looked at the contract sub-postmasters are asked to sign and that, in its view, a person would have to be an economic and legal illiterate to be willing to sign it, because it is so slanted in favour of the Post Office. As we know, the Horizon system is imposed on sub-postmasters by the Post Office. Effectively, the sub-postmasters become the fall guys—they are ultimately liable for all losses—so there is little incentive for the Post Office to ensure that the system or the support for it are robust.

The way in which Post Office senior management have dealt with our working group of MPs has been extremely high-handed. I share my right hon. Friend’s concerns: if Post Office management speak to Cabinet members and senior Members of Parliament in the way they do, the way they treat their sub-postmasters must be feudal—

[Nadine Dorries (in the Chair)]

Order. Could you wind up, please, Mr Bridgen?

[Andrew Bridgen]

I will, Ms Dorries.

There are many questions to be answered, and I hope that as a result of parliamentary pressure and debates such as this, we will get the Post Office to move to a position where genuine negotiations can take place with aggrieved parties on a level playing field. We are some way from that yet, and I honestly think we will need a full clear-out of Post Office management before we get a change of attitude in this important public institution.

--- Later in debate ---

[Jo Swinson]

I will give way after the next sentence or two. I understand the concerns expressed by hon. Members, but two out of 24 is nothing like the figure of 90% that has been put forward. A basic principle of mediation is that both parties agree to it voluntarily, so that it can be entered into in the proper, constructive spirit.

[Andrew Bridgen]

Will the Minister give way?

[Jo Swinson]

I will give way to the hon. Member for Batley and Spen (Mike Wood) first. I will tally up the interventions.

There would be no point in entering a mediation if one of the parties was adamant that it could not reach any possible positive outcome. Most of the cases recommended for mediation, however, are going to mediation.

[Jo Swinson]

I do not accept the premise of the question. The scheme was set up and it was agreed that any case could apply to the scheme, even those cases in which the individual had pleaded guilty to a charge. The working group, which is made up of representatives of the Justice for Subpostmasters Alliance through Second Sight, the Post Office, and its chair Sir Anthony Hooper, will consider the report from Second Sight about whether a case should go to mediation. As a result of the process, the cases then go to mediation, but it was never anticipated that every single case would do so. There is the point at which the working group considers it.

[Andrew Bridgen]

rose—

[Mr Arbuthnot]

rose—

[Jo Swinson]

I will give way to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) first, then to my right hon. Friend.

[Andrew Bridgen]

I do not know what the Post Office has been saying to the Minister, but it has been saying a different story to the MPs on the working group. We have heard examples of people losing everything in their life, but is she aware that one of the criteria for refusing mediation is the Post Office stating that the claim by a sub-postmaster for compensation is too high? In other words, if sub-postmasters have suffered a huge loss, the Post Office is using that as a criterion to exclude them from mediation—because their claim is too large, because they have lost too much.

[Jo Swinson]

At present, we are talking about only two cases in which that has happened—the Post Office has refused mediation in only two cases. Perhaps there is some degree of confusion, but Sir Anthony Hooper, the independent chair of the working group, provided that information. If hon. Members wish to challenge it, I will happily go back to Sir Anthony about the information provided. I have to work, however, on the basis that that Court of Appeal judge is providing me with accurate information. I hope hon. Members appreciate that.

I will now give way to my right hon. Friend the Member for North East Hampshire.