Horizon Settlement: Future Governance of Post Office Ltd

Duncan Baker Excerpts

Thursday 19th March 2020 Commons Chamber

[Mr Jones]

I will come back to that, which is something that I think my hon. Friend the Member for Kingston upon Hull East (Karl Turner) will refer to in his contribution.

The board minutes from 1999 show that the Post Office knew there were bugs in the system and software problems. It denied all the way through that, for example, the amounts that sub-postmasters inputted could be changed. That was just not true. It could be remotely done, and the hon. Member for North West Leicestershire and his constituent Mr Rudkin, who visited the headquarters where the data was being stored, proved that. In classic style, when he raised that the Post Office denied that he had ever visited the data centre in the first place, until he proved that he had. It was just one cover-up after another. The denial culture in the Post Office was described by Judge Fraser, in what I thought was a very good his judgment, as

“the 21st century equivalent of maintaining that the earth is flat”,

because the evidence was there all the way through. There is no way that anyone who took an objective look at the system, in terms of the Post Office or Fujitsu, the contractor, could argue that it was perfect.

[Duncan Baker (North Norfolk) (Con)]

It has also come to light that the people who were fixing the system from behind the scenes, as the right hon. Gentleman mentioned, and who could go in and balance the tills as it were, were incentivised and paid to be speedy and quickly fix the issues, which made a lot of these cases even worse, so that balances that were already poor got even worse.

[Mr Jones]

It was even worse than that: for many years the Post Office denied that that could ever be done. It was only in 2011, after campaigning by me and others, that the Post Office had the forensic accountants Second Sight take a look, and it discovered exactly what the hon. Gentleman has just outlined. But what does the Post Office do? It set up a mediation service, but still denied that there was any problem, even though the evidence was there.

As for the operator, Fujitsu, it knew that there were glitches. Indeed, I have to say that it is as guilty of the cover-up as the Post Office. I cannot comment on the judgment—I think the judge has possibly referred the case to the Crown Prosecution Service to get its involvement, so I do not really want to go into the detail—but Fujitsu has a lot to answer for.

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[Karl Turner (Kingston upon Hull East) (Lab)]

I congratulate my right hon. Friend the Member for North Durham (Mr Jones) on securing this debate and on moving the motion. We have had discussions over the years about this case, which is a massive scandal, the likes of which I have not seen before.

Before my election to this House in 2010, I prosecuted and defended in criminal proceedings from my local chambers in Hull and, prior to that, I worked with a firm of criminal solicitors. It was there that I met Janet Skinner, who is a constituent of my hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson). Janet Skinner was prosecuted by the Post Office for dishonesty—theft, fraud and other related offences. I took Janet Skinner’s instructions. It was a very brief encounter, from memory. It was probably a conference that would have lasted no more than 20 minutes, but I remember her instructions and, indeed, she has reminded me of them since. She could not understand why she was being accused of dishonesty. When she explained the situation to me, it was clear that what she had committed, if anything, was the offence of false accounting. Why? Because when her books did not balance, she would ring the helpline and it would tell her—and other sub-postmasters and mistresses—off the record, “You just need to make the books balance.” Effectively, they were told to make up numbers. The helpline said, “Put the information in, then you can close the system down for the night and trade the next day.” That was utterly disgusting.

My analogy is that it is like being trapped in a burning building. You ring the emergency services, you explain the situation and you are advised to smash a window to escape the building. Once you have, you are eventually prosecuted for criminal damage. That is the scenario. It is not a perfect analogy, certainly not for a criminal lawyer, because there is an inbuilt defence in criminal damage of reasonable excuse.

Janet Skinner was of good character, with no previous convictions. She reminded me recently that she had never even had so much as a parking ticket to her name. But if she had sat down with a probation officer for pre-sentence report, it was clear it would not be a good one. Why? Because she would have said, “I didn’t do anything.” When she was asked if she was sorry, she would have said, “No, I am not sorry because I do not think I have done anything wrong.” I did not represent her at the sentencing hearing as it happens, but when she was sentenced, the judge would have questioned whether she was likely to commit further offences because she had admitted no culpability whatever and she was not sorry. She was not sorry because she had done nothing wrong. We now know that she should not have been investigated, she should not have been interviewed and she certainly should not have been prosecuted. We now know that she should not have pleaded guilty to false accounting and that she certainly should not have gone to prison for nine months.

Since I have been involved in representing victims of this scandal, I have been contacted by other sub-postmasters, and a few days ago I received some startling documents. In 2006, a sub-postmaster was prosecuted. I have documents showing discussions between lawyers within the Post Office conceding that there was no theft, no dishonesty, no fraud and no false accounting in this case, yet she was prosecuted. It is utterly disgusting. When this person found out that these documents existed, because they had been leaked to her, she asked the Post Office whether they would produce the documents to the Criminal Cases Review Commission and she was met with aggression the likes of which I have never seen. She was told that these documents were privileged and that if they were leaked she could be in serious trouble. There was bullying, aggression, and constant lies from the very beginning—lie after lie after lie.

I have read Mr Justice Fraser’s judgment—it is a pleasure to read—and to someone reading the judgment it is clear that lies were constantly told. I am prepared to accept that Ministers and Government officials were misled from the very top of the Post Office and Fujitsu. What do we do now to put matters right?

[Duncan Baker (North Norfolk) (Con)]

Does this not underline the simple fact in all of this, that the Post Office’s only consideration in all of this was to protect itself at the cost of the total injustice that so many people faced?

[Karl Turner]

I am grateful to the hon. Gentleman. I have described this as the most grotesque version of predatory capitalism I have ever seen. Why? Because £1 billion was invested and senior officials in the Post Office and Fujitsu did everything they possibly could to protect themselves. They knew. Let us be absolutely clear about that. They knew that there were victims who might go to prison—or who had already gone, at that point. It is utterly disgusting.

--- Later in debate ---

[Duncan Baker (North Norfolk) (Con)]

When I spoke in the Westminster Hall debate on 5 March, I said that I had a declaration of interest to make. May I declare that I was once a postmaster? In 2015, I was somewhat of a pin-up for the Post Office when I won postmaster of the year at the retail Oscars. Really, I could not sell a stamp; it is the team who should take all the honour. I resigned as a director of the company that ran those post offices and now have no interests. I also want to make it clear that none of my post offices or staff were affected by the scandal.

However, this is a valid point to make—I wonder whether anyone else in the Chamber can claim to have been a postmaster at any point in their career. I think it gives me a unique insight and ability to comment on this scandal. As I said in the Westminster Hall debate secured by my hon. Friend, the brilliant Member for Telford (Lucy Allan), I will concentrate on the governance issues. I shall make three points.

Not only have I used the Horizon system and had first-hand experience of making up the losses, which is always a worrying moment, but I can empathise utterly with the awful situation of the hundreds of innocent victims. We have heard it before and we will hear it time and again this afternoon: innocent people have lost their life savings and young people—men and women—have been jailed and then struggled to rebuild their lives because of the criminal record. I have constituents in North Norfolk who have gone through such trauma. Their story is every bit as dreadful as the other cases we will hear about.

I question whether the £58 million that has been set aside to recompense the victims will be enough. I think we probably all agree that it will not. After the lawyers take a large portion of that fund, what will be left? That is not right. The Government must intervene, as the main shareholder, to ensure that people are recompensed properly.

The board of Post Office Ltd is, unquestionably, accountable for this fiasco. Action must be taken so that board members are properly dealt with for this injustice. What kind of corporate governance structures failed to allow this to happen? Those who have been jailed and who have criminal records must have them overturned.

I turn to the three governance issues that need to be put right. Together, these issues show the failings in the organisation. My first point is about the total withdrawal of the Crown network. It is an absolute necessity that we still have a backbone of Crown post offices in this country. We have gone from 600 a few years ago to just 100. Why is that relevant? We are talking about systems like Horizon going wrong. If you have a backbone of Crown post offices that work effectively, they are often a test bed for new products and systems. They provide continuity in the network when so many franchised operations come and go depending on the operators’ success.

Let us also remember the staff, as an organisation is only as good as the people who work in it. It is the staff who are the real holders of long-standing deep knowledge, and they should act as the wider custodians of the network. If the Post Office had listened to its staff in the first place when they raised the flag, this perhaps would not have happened. There should be an immediate moratorium on the programme of Crown disposals to ensure that the Post Office’s backbone is preserved.

Secondly, a total decimation of the wider branch network is going on at the moment, and it remains a concern to many people—not just to the people who work in the Post Office, but to many communities that use it—that they and their communities are losing their branches. It is not anecdotal to suggest that the number of permanent sites falls year after year. All the longer-term projections will see them continue to go, despite the Government enforcing the Post Office to not shut its branches.

Let me go back to the contribution of my hon. Friend the Member for Broadland (Jerome Mayhew), the eminent barrister that he is. His Fakenham branch closed just around Christmas time. Replacing a physical branch with a mobile post office is not adequate for that community. I urge the Minister to put some governance in place to make sure that such branches are not lost. I say to him, please step in to try to stop these closures, because these post offices are so vital in our communities.

My final point goes back to the remuneration of our sub-postmasters. It is really quite clear that the commissions that a sub-postmaster earns from running a post office are so low that many of the franchise operations have to have a retail offering as well. In many rural areas where footfall is lower—and it is getting lower all the time—we need to ensure that we preserve those that remain. We want to have a vibrant network, so will the Minister please look into that?