Post Office (Horizon System) Offences Bill

David Davis Excerpts

2nd reading
Wednesday 20th March 2024 Commons Chamber

[Kemi Badenoch]

I thank the right hon. Gentleman for that point. That is also something that we considered carefully. It is part of the trade-off that we had to make in doing something unprecedented: Parliament overturning convictions. We respect the judgment of the Court of Appeal—it has gone to an appellate judge. We are willing to consider some of those cases individually just to ensure that nothing has been missed, but the Bill has been drafted in consultation with the Crown Prosecution Service and the judiciary. We want to ensure that we are bringing everyone with us. Concerns such as his have been raised, but this is more or less the consensus that we think will get the Bill done, and allow redress, as quickly as possible.

[Sir David Davis (Haltemprice and Howden) (Con)]

I will elaborate on this point further when I speak—hopefully, if I catch Mr Deputy Speaker’s eye—but there is already data about the cases that the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) referred to, those that are outside the Horizon case itself but were attempting to get themselves exonerated on the basis of other data. As far as I can see, they failed precisely because they were not part of the Horizon case, so I ask the Secretary of State to return to this issue before Report and look at whether we can solve that problem.

[Kemi Badenoch]

I thank my right hon. Friend for that intervention. That is something we can look at again at further stages of the Bill. We understand the issue that hon. Members are trying to resolve, and agree with them that we need to make sure that everybody who deserves justice gets justice, but we also have to be careful to make sure that we are not exonerating people who we know for a fact have committed crimes.

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[Sir David Davis]

Let me reinforce the point made by the right hon. Member for North Durham (Mr Jones). There are people writing to me this week about the current handling of their cases by the Post Office and Post Office lawyers; frankly, it is barbaric. The Post Office needs to be taken out of it.

[Kemi Badenoch]

I reassure my right hon. Friend that this is something I am looking at in great detail. The Post Office has clearly been a dysfunctional organisation for a very long time, and that is one reason why I have been actively taking steps to look at the management and processes in place, which, as he rightly says, many of the sub-postmasters have lost faith in.

It goes without saying that work to offer prompt financial redress alongside the Bill continues. As of 1 March, 102 convictions have been overturned through the courts. Of those 102 cases, 45 people have claimed full and final redress, and of those 35 have reached settlement. The Post Office has paid out financial redress totalling £38 million to postmasters with overturned convictions. Under the Horizon shortfall scheme, as of 1 March, 2,864 eligible claims have been submitted, the vast majority of which have been settled by the Post Office, and £102 million has been paid out in financial redress, including full and final settlements and interim payments.

Finally, under the group litigation order scheme, working from the same date, 132 claims have been submitted, 110 have been settled by my Department, and £34 million has been paid out in financial redress, including full and final settlements and interim payments. Officials in my Department are working hard to get those cases settled quickly, and we have made offers within 40 working days in response to 87% of complete claims.

In summary, the Bill amounts to an exceptional response to a scandal that was wholly exceptional in nature, and has shaken the nation’s faith in the core principles of fairness that underpin our legal system. We recognise the constitutional sensitivity and unprecedented nature of the Bill, but I believe it is essential for us to rise to the scale of the challenge. The hundreds of postmasters caught up in this scandal deserve nothing less. Of course, no amount of legislation can fully restore what the Post Office so cruelly took from them, but I hope the Bill at least begins to offer the closure and justice that postmasters have so bravely campaigned for over many years, and that it affords them the ability to rebuild their lives. For that reason, I commend the Bill to the House.

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[Jonathan Reynolds]

I am always keen to hear from the Minister. I thought I was fair in making the point he raises in my introductory remarks. I simply make the point that the constitutional significance of legislation like this requires a level of public consent. The statement that the Prime Minister made in January, just after Prime Minister’s questions, would not have been possible without the sheer breakthrough in public consent and the demand for change and for justice that came from that. I will always be fair to the Government’s Ministers, and I point out even to some of their critics that we were dealing with things. We had the legislation that colleagues had worked on. It is fair to say there was less interest in some of that in the Chamber before we had the television programme, but let us be frank that we had the impasse of people not wanting to go back to the process. The estimate we had at the time was 10 to 15 years. That is what brought us to that point, and we have to recognise that, as well as paying tribute to the role that arts and culture can play in bringing things to an audience, which we should welcome.

Finally, I think I speak for everyone in the Chamber when I say that in no way does anyone take lightly what we are proposing to do today. This action is unprecedented, and we should make every effort possible to ensure that such action never again has to be considered.

[Sir David Davis]

This legislation is not totally the first precedent. There have been cases relating to people who were shot in the first world war for cowardice and then exonerated after the event, and so on. Does the shadow Secretary of State agree with the notion that we should put a sunset clause on this provision, to ensure that it in no way becomes a precedent?

[Jonathan Reynolds]

When we look at the precedents, it is interesting to note that there is clearly a legal difference between quashing a conviction and a pardon after an event has taken place, which is the precedent we are more familiar with. I am receptive to what colleagues are saying about a sunset clause from a judicial or safeguarding point of view. Clearly we want to capture as many people as possible who deserve to have their convictions quashed. When we get to Committee, which I assume will be on the Floor of the House, I am sure there will be an attempt to do that.

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[Sir David Davis (Haltemprice and Howden) (Con)]

I hope the Secretary of State will not take this amiss and will understand that I mean no criticism of her or her Minister of State, or indeed his predecessor, my hon. Friend the Member for Sutton and Cheam (Paul Scully), when I say that the Bill represents the best of a bad job. Everybody has said it already; there is a difficult trade-off between natural justice and a fast, low-stress solution for the postmasters. That is what this Bill attempts to achieve.

That being said, it is not the way I would have done it. It is not what I would have proposed. The courts should and could have considered all the cases in which the convictions were based on Horizon evidence in one set of proceedings. I took senior legal advice on this; it would have been perfectly possible to take three or more former Supreme Court justices out of retirement, give them a courtroom and task them to deal with this in three months. They could have bracketed very similar cases together—there would have been hundreds in those categories—and then they could have focused on the ones that were really difficult. Regrettably, it is rumoured that the judiciary itself rebuffed that course of action, which I think was unwise and plain wrong. As the right hon. Member for North Durham (Mr Jones) pointed out, the judiciary has a responsibility, too. That is why we have gone this route, and I have every sympathy with what Ministers are trying to do.

Even so, the Bill still risks lumping the genuinely innocent majority with a very small potentially guilty minority. Each difficult case could have been dealt with on its individual merits rather than abandoning due process in the rush to bring this disgraceful episode to a close. We got into this situation by failing to follow proper processes, and I am wary that the Government, almost by default, are again failing to follow proper process to extricate themselves from this historic mess.

Despite my misgivings, I will not stand in the way of the Bill, because it will serve the vast majority of postmasters to secure justice for them. For that reason, I will support the Bill. However, that is not to say that the legislation will not continue to create problems of its own. I recommend that Members read some of the early reports before Report stage. The BAE Systems Detica report, which everyone should read, is a six-month review of the Post Office’s fraud and non-compliance issues in 2013. It paints a picture of complete chaos in the Post Office’s accounting systems—not just Horizon but all the accounting systems. Over a decade ago it was known that:

“Post Office systems are not fit for purpose in a modern retail and financial environment”.

Note that it refers to “systems”—plural—not just Horizon. The report goes on to say that ATM—cashpoint—accounting was clearly flawed and that

“removing the ATM reduces the risk of SPMR being suspended”.

By SPMR the report means sub-postmasters, and I am afraid that suspended means persecuted, as that was outcome. That was not Horizon related.

That matters because dozens have come forward to raise concerns over a second IT system used by the Post Office, called Capture. Again, documents show that Capture was known by the Post Office to have issues early on. The culture of denial in the Post Office over the decades is truly extraordinary. The Bill will exclude people who have already had their appeal cases heard and rejected. Those rejections may well have occurred because the evidence that the appeals were based on was not Horizon but some other failure of the accounting systems. We must be careful not to give up once we pass the Bill, but to see if we can also absolve people who are not guilty because of the wholesale chaos that existed.

[Duncan Baker (North Norfolk) (Con)]

rose—

[Sir David Davis]

I give way to probably the best-informed man in the House on this matter,.

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[Duncan Baker]

My apologies. The debtors would have said that those innocent sub-postmasters owed the Post Office corporate accounts what we now know to be tens of millions of pounds. But they were wrong—that was fictious and they were not owed that money. Will we ever get to the bottom of that and restate the Post Office’s accounts, which must have been materially wrong year after year throughout that period from 2010?

[Sir David Davis]

My hon. Friend has more experience of this issue than anyone, and he reinforces my point. Frankly, if I had a magic wand I would force the Post Office to re-audit every set of accounts for the last 20 years and give back the money, but that will not happen: it would drag on forever, and we know the stress that it is causing postmasters even today. My worry is that we may feel at the end of this process that we have solved the problem, but there will be some—perhaps only dozens or hundreds, not thousands—who will be left not absolved or exonerated, but who deserve to be. That is the risk of this approach.

[Liam Byrne]

Given the right hon. Gentleman’s argument, will he reflect on whether we should include in the scope of the Bill those who went to the Court of Appeal initially but lost, or those who were not given leave to appeal, on the basis that we simply did not know then what we know now? Should we provide for that handful of cases—perhaps under 40—in the Bill rather than exclude them?

[Sir David Davis]

Those are precisely the cases I am focusing on; there may be others that we do not know about but they are the most obvious ones. I agree but, again, if I had a magic wand, I would use the mechanism that I mentioned of unretiring a few Supreme Court justices and saying, “These are more complicated and require a bit more insight. You can’t deal with these en bloc. Will you please reconsider them?” On the one hand, I want to exonerate people who are truly innocent but, on the other, postmasters still call me up and say, “Whatever you do, don’t exonerate the guilty.” It seems to me that the best way is a judicial or quasi-judicial route over and above what we are doing here. No doubt we will debate that at some length on Report.

I will still support the Bill because, at the end of the day, it is the difficult compromise that the Government have found. They have got to where they are by talking to everyone, including the right hon. Member for North Durham, who is not in his place just now, and taking all the expert advice. The Bill is necessary.

I had a telephone call just yesterday from a victim of the scandal, which I mentioned in my earlier intervention. Her name is Janet Skinner, and she is not my constituent but she called me anyway. She told me that 15 years later, she is still going through misery and, despite having promised me that they would not, Post Office management are putting her through an inquisition, demanding documents from her from 15 years ago. During that time she was in prison and had to sell her house, so she probably has no documents, given the disruption of all that. The Post Office itself will have those documents somewhere, and if it does not, it ought to have them.

That barbaric mindset is still going on from, frankly, a sickeningly inadequate and self-absorbed Post Office management, as we saw when they gave evidence to the Committee of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne). That is a problem, and we have to get the Bill under way as fast as possible. I pay enormous credit to both the junior Ministers who have dealt with this, my hon. Friends the Members for Thirsk and Malton (Kevin Hollinrake) and for Sutton and Cheam. They were both formidably good at their job at a time when the whole Whitehall and Post Office system was desperately trying to ignore the issue. They did a heroic job of dragging it back up the priority list. The Minister needs to force the Post Office to solve the problem, or, as the right hon. Member for North Durham said, force someone else in its place to put this right quickly, easily, gracefully and with minimum stress for the postmasters.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I have been listening intently to everything that has been said today. I would like to reflect on the number of times I have stood here and talked about the Horizon business. I do not want to repeat my previous remarks, but I agree with everything that the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) said, which has been repeated in this Chamber many times.

We are coming close to a point where we may see movement towards justice for sub-postmasters. The exoneration Bill is vital to that. I am deeply disappointed that Scotland has been left out of the Bill. I have been working hard with the right hon. Member for East Antrim (Sammy Wilson), and I have had many meetings with Northern Ireland MPs from all parties. If Northern Ireland is to be included in the Bill, I can see no reason why Scotland cannot be.

[Sir David Davis]

I have every sympathy with the hon. Lady and in particular with Northern Irish Members on this matter. Northern Ireland is a very special case in so many ways, for reasons we all know. Is there a reason why the Scottish Parliament and the Scottish Government could not simply replicate the Bill and carry it through?

[Marion Fellows]

I thank the right hon. Gentleman for his intervention. There is absolutely no reason, and the Scottish Government are indeed prepared to do that. There is ongoing work on that, but it will mean that Scottish victims will have to wait longer for exoneration.

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[Paul Scully]

For sure. We cannot do enough for these people. They have been cast out as pariahs in their communities. They have been charged, they have been put in prison, they have lost houses, families and health, because of a body that is ultimately owned by the state. We, as a collective body, have destroyed these people’s lives. There is not enough that we can do for them.

We are looking at what is in the Bill and at all the other compensation schemes as well, but we have to act. We are having to conduct this mass exoneration in the first place not just that the wheels of justice turn slowly, but because these people are so triggered, whether by PTSD or simply by total mistrust of the system, that they do not want to go through another process with someone in authority saying kind words, warm words, and then letting them down for the second time—or worse. It is actions, not words, on which we will be judged. When I stood up at that Dispatch Box, I knew that whatever I talked about, I could not expect the postmasters to trust me. I knew that they would trust me on the basis of my actions, and I know that my hon. Friend the current Minister feels the same way.

I welcome the Bill. It is important for us not to let perfection be the enemy of the good. Let us get this done, because we cannot come on to the second Bill and these people’s compensation until they have been exonerated—not pardoned, for they have done nothing wrong. Let us make sure that we accentuate that as well. That is why I am keen for us to rush this legislation through. Yes, we need to scrutinise it, but it is a short Bill, so we can do that quickly, and then we can get on to that life-changing money that I—that we—keep talking about, and try to restore some semblance of their lives to those whose lives have been destroyed.

This is Second Reading, and we will get into the specifics in Committee and on Report, but let me offer a few possible solutions. The solution that my right hon. Friend the Member for Haltemprice and Howden (Sir David Davis) talked about earlier—bringing back judges—would at least add capacity to the system. My hon. and learned Friend the Member for Bromley and Chislehurst (Sir Robert Neill), who is no longer in his place, previously said something similar when he said that we do not necessarily need this kind of law, which is, frankly, trampling quite a lot on the independence of the judiciary. That is why the Government had to move really carefully, which is one reason for some of the concerns raised by the Business and Trade Committee about the people who have not been able to go to appeal, or who will not be included because they have been refused leave to appeal or have failed in their appeal.

There is still more that we can do for victims of this scandal. They will be able to appeal at another time, but maybe there is something we can do, in the way that my right hon. Friend the Member for Haltemprice and Howden and my hon. and learned Friend the Member for Bromley and Chislehurst suggested in their contributions, to accelerate their cases and not just let them have to go through the same situation that they would otherwise have done. May I respectfully suggest that that may be the case for Scotland and, indeed, Northern Ireland? I am not an expert or a lawyer, and it is not for me to give advice, but it occurs to me that if the proposed amendment does not go through and the territorial extent stays as it is—that is for this place to judge in other stages of the Bill—perhaps there are other methods that we can use to make sure that postmasters in Scotland and Northern Ireland do not receive compensation more slowly.

We all want this to be done as quickly as possible. The postal affairs Minister, my hon. Friend the Member for Thirsk and Malton, has talked about getting the majority of the compensation delivered by August. Clearly, that is not going to happen, because we have only just got this Bill through, so we will have to exonerate the postmasters. However, if we can get the Horizon shortfall scheme and the rest of the GLO largely done by that time, and restore these people’s lives to some sense of normality, then we can do the rest of it. We still have not finished, because we have to get Sir Wyn Williams’s report back and get the investigation done.

Some previous contributors to the debate said that it might take weeks or months to deliver the compensation, and that there might be complications. I remember speaking to the solicitors who represented the 555 people involved the GLO. I said, “If we gave you lots and lots of money and you distributed it, how long would it take?” The answer was about 18 months. It is about how we apportion the money and work it through—the same kinds of things that the advisory committee has been wrestling with—and the solicitors would have to do that internally. It is not a matter of giving people life-changing sums of money in one block and then everybody is okay; it is about making sure that we can work through the system, which will inevitably take time.

When I made Sir Wyn Williams’s investigation non-statutory, it was to get speed into the system to make sure that we did not have to “lawyer up”, as it was described. I always wanted money to go to the victims, not to lawyers talking about the same things again. As I say, if we can get the compensation out, we have to get the answers. We keep on talking in this place about the Horizon scandal, the infected blood scandal and any number of scandals, and I keep hearing people say that it must never happen again. Do you know what? It usually does. Why? Because we talk and talk about it, but we do not learn the true lessons or get the answers.

[Sir David Davis]

One of the things we need to consider, both now and later, is how we stop this happening again. I reiterate the point I made in my speech: when the inquiry looked at it, there was systemic failure right across the board. My hon. Friend is right to say it was a human failure, a system failure and an organisational failure. The Post Office is an arm’s length department. What we are finding with this and other cases is that arm’s length departments are disasters when it comes to correcting mistakes and delivering accountability. Does he agree that we should think about that when we are doing this?

[Paul Scully]

As usual, my right hon. Friend is absolutely on point. In our Department, we had a number of arm’s length organisations, which is true of other Government Departments as well. They are representatives of the Government, and we elected politicians or the Government will inevitably be held accountable; if there is no direct relationship, it is very difficult to speak from the Dispatch Box with enough authority and information to be able to take that accountability.

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[Mr Jones]

I think it is. In fairness, the Minister wants to get these cases done quickly, as does the advisory board. One controversial thing is that some people will get a little more money than they lost. I am comfortable with that, because I would sooner they get the money than it go to the lawyers or the process be dragged out. If we can get those cases dealt with speedily—some progress has been made on that—we can then get the effort and force put into sorting out the more complex ones.

[Sir David Davis]

The right hon. Gentleman rightly says that some people may get a little more money than perhaps come out of the arithmetic, but would most of us not pay anything to avoid what they have gone through?

[Mr Jones]

Exactly. If somebody gets more money out of this than they have in quantum lost, I am comfortable with that, as I believe is the Minister. It is better putting it into their pockets than into the pockets of lawyers, who will take their time, with this adding to the trauma that these people will have in dealing with these cases over many years.

Let me turn to the Bill’s Horizon pilot scheme provisions, because we have to address not only the Horizon scheme but the pilots that came before it. Condition E for overturning a conviction in the Bill is that the “Horizon system” was being used at the time of the offence. Clause 8 makes provision in respect of

“any version of the computer system known as Horizon (and sometimes referred to as Legacy Horizon, Horizon Online or HNG-X) used by the Post Office”.

We know that there is a difference between those pilot schemes and the actual Horizon scheme that took over—I know that, having been able to recite some of these things in my sleep.

People used a Horizon pilot scheme in the north-east as early as 1996—one went on to be convicted and others lost their livelihoods and were made bankrupt. I recognise that 1996 is the start date in the Bill, but I checked the Post Office’s website again this morning and it says that the roll-out and pilots of the Legacy Horizon system, as referred to in the Bill as part of condition E, started in 1999. So what systems were people piloting in 1996? Were they piloting Legacy Horizon? If they were, that would be at odds with what is on the Post Office’s website. I would like the Minister to refer to that and provide clarification in his wind-up, as a lot of those cases were in the north-east of England, in the area I represent.

Let me turn to another system, one that was pre-Horizon: the Capture system. As I understand it, it was software developed by the Post Office itself. I came across it through a case that had been referred to me. Given all the publicity about the Horizon scheme, it amazed me that the Post Office did not come clean and say, “Oh, by the way, we had Horizon, pre-Horizon and the Capture system beforehand.” If we look at the cases, we see that this was very much because of the attitude of the Post Office towards the prosecutions. We had sub-postmasters who were accused of stealing money and their contracts were terminated. In some cases, they were prosecuted. There was a ridiculous situation in Coventry, where a woman was taken to court and prosecuted. The judge threw out the case on the first day, saying there was no case to answer, but lo and behold, what did the Post Office do? It took a private prosecution against her to recover the £30,000 it claimed she had stolen, which bankrupted her. That shows the mentality of those in the Post Office.

A lot of those cases mirror Horizon cases. I have referred 10 cases to the Minister, five of which relate to individuals who went to prison. As I have done before, I put on record the excellent reporting by Karl Flinders of Computer Weekly and Steve Robson of the i newspaper on those cases. It has been down to me, those two and others to do the detective work, so we need the Post Office to turn up the heat and ensure we get answers. Will the Minister tell the Post Office that it is not a good idea to threaten legal action against journalists? This week, after his latest story, Steve received a phone call threatening him with legal action. That is not very bright, especially as he had all the evidence to back up his story. If that is still the attitude of the Post Office, that shows why the current management need to go.

I understand why the Government cannot include Capture in this legislation, but we need a mechanism to deal with those cases because Capture is important. I have 10 cases, but there are clearly more out there. Clause 7 gives the Secretary of State powers to make “further consequential provision” by regulation. Will that provide a potential way to include Capture cases? The Minister has all the information and he is on top of the brief. I raise the issue today and I will propose an amendment in Committee to see whether we can flesh out the matter, but we need a way to deal with those cases. I have 10 cases, but there are certainly more out there.

[Sir David Davis]

I am delighted that the right hon. Gentleman has raised that point. I referred in my speech to the 2013 BAE study that highlighted Capture, ATM cash management and a variety of other issues associated with audit failure, and basically described a chaotic management system. Earlier postmasters may not have been exonerated by subsequent analysis because people were looking at Horizon and nothing else, but we owe it to them to get this right, even if that is after this Bill has moved through the House.

[Mr Jones]

People might think that because the system is not Horizon, the Bill does not apply to them, but the cases I am dealing with show that there was an injustice. I have spoken to individuals who went to prison. The computer systems were not same, but the Post Office showed the same attitude in the way it went at individuals. It did not believe the postmasters—they were going to be found guilty, come what may.

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[Mr Jones]

I have seen some of those individuals at first hand at the public inquiry. People have said that everyone who is going to make a case has come out of the woodwork already, but that is not true. People are still coming forward. I am hearing about cases on a weekly cases. I thank right hon. and hon. Members from across the House who are keeping me busy by referring cases to me. Please send them to me—I am quite happy to help deal with them. I noticed this morning that there are another three cases in my inbox. The hon. Gentleman makes the key point that we need to look at those individuals to ensure we get some type of justice for them. I have to say that I was surprised by this, but, following the television programme, nearly 1,000 new cases came forward on the Horizon shortfall scheme alone. We may wonder what these people were doing all this time. Well, in some cases, they were not aware of what was happening. In other cases—

[Sir David Davis]

They were hiding.

[Mr Jones]

They were hiding, yes, because of shame and things such as that. It is only now that we realise what a massive miscarriage of justice this was that people have had the confidence to come forward. This Bill will help with that.

I shall come off Capture, because I think the Minister has got my point, but I return to those cases that have already gone to appeal. I do not criticise the Government on this, but we must find a system for dealing with those few cases that have gone through. It is no good the Court of Appeal hiding behind the fact that they have gone through, because, as the hon. Member for Sutton and Cheam has said, new evidence has come out of the inquiry that was not available to the courts at the time. We cannot just leave those people hanging—I cannot remember off the top of my head how many individuals there are, but there are not that many.