Future of the Post Office: Green Paper

Gareth Thomas Excerpts

Monday 14th July 2025 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

The Post Office is a vital part of the UK’s social and economic fabric. It supports communities, high streets, and small businesses across the UK. This Government inherited a Post Office in crisis, but we are determined to tackle the root causes of the issues the Post Office faces, provide the stability it needs, and put the organisation on a solid and sustainable footing.

It has been 15 years since the Government last set out their vision for the Post Office, during which time there have been significant consumer changes and wider pressures on the Post Office, as well as the need to address the legacy of the Horizon scandal.

Today, we are publishing a Green Paper that seeks to open a dialogue on the future of the Post Office. It explores difficult questions about how we ensure a modern, trusted and financially resilient Post Office, while protecting essential services. This Government’s ambition is to strengthen the Post Office network. We want a network that the public use and value. We want branches to be visible on the high street, operating full working hours, and we want them to have a strong retail offer, alongside a wide range of in-person services.

In a fast-changing world, the Post Office is in a unique position to bridge the digital divide for the millions of people who rely on face-to-face services. We want to support the Post Office to continue to improve and develop the banking and other critical services it provides.

We must also be honest about the challenges. People use post offices differently from how they used to, presenting challenges for the Post Office and postmasters alike. These are not challenges unique to the UK; many countries have needed to adapt and modernise their postal services to reflect changing consumer behaviour.

Through this Green Paper, we are looking to reaffirm what the Post Office does best, while recognising the need to make the network more sustainable and less reliant on Government funding. We are also clear that cultural change is essential. We are committed to learning from the Post Office Horizon IT inquiry and ensuring a transparent, accountable, and postmaster-focused culture. Our Green Paper proposals explore short-term ways to improve Post Office’s governance, as well as long-term structural reforms—such as mutualisation or a charter model—once financial stability is achieved.

This consultation represents a once-in-a-generation opportunity to secure the Post Office’s future, and we want to hear from everyone with a stake in it—postmasters, businesses, community organisations and members of the public.

I am also pleased to announce that the Government plan to provide up to £118 million of additional investment funding to the Post Office this financial year. This will support the implementation of the Post Office’s transformation plan, which aims to put the company on a path to operational and financial stability, and enable the delivery of a new deal for postmasters that includes improving postmaster remuneration and involving postmasters in central decision making. This funding will also contribute to the costs of making necessary network investments, to support the continued delivery of services in communities. This funding is subject to the completion of subsidy control processes and compliance with the Subsidy Control Act 2022.

I am laying before Parliament the Green Paper, “Future of Post Office”, and depositing copies of “The Value of the Post Office Network” report and supplementary data tables in the Libraries of both Houses.

[HCWS814]

Future of the Post Office

Gareth Thomas Excerpts

Monday 14th July 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

With permission, Madam Deputy Speaker, I wish to make a statement on the Green Paper that we are publishing today on the future of the Post Office.

Post offices have stood as a cornerstone of British national life for generations, serving constituents in every part of the UK. They are a lot more than just places to send letters or collect parcels; they are hubs of economic and social activity. They are a lifeline to small businesses, provide access to essential services, including everyday banking services, and are a critical part of our high streets. They also have a unique role in rural areas, particularly permanent branches, and act as the beating heart of communities.

In recent years, however, the need for change has become clear. Twelve months ago, we inherited a Post Office in crisis—declining financial sustainability, unstable leadership, a network struggling to maintain services, and a reputation shattered by the Horizon scandal and its appalling treatment of sub-postmasters, as Sir Wyn Williams’s first report last week underlined only too clearly. This Government are determined to strengthen the Post Office network, and today’s Green Paper begins a national dialogue on the future of the Post Office so that we can create a modern, resilient and financially sustainable organisation.

We recognise that the Post Office, just like other postal services around the world, faces significant challenges that are driven in no small part by changing consumer habits fuelled by the digital transition, changing high streets and a changing economy. We want a Post Office network that the public uses, values and, above all, trusts. We want branches to be visible on the high street, in rural and urban areas, and in all communities, offering a wide range of in-person services.

I do not believe that people are ideologically wedded to a smaller or bigger Post Office; they just want a Post Office that works for them, their businesses and their communities. Our preferred approach is for the overall size and shape of the Post Office network to remain the same so that we minimise the impact on communities. We want to strengthen branches to modernise them and expand what they do. There are, though, a range of strong views on the Post Office network, so we will carefully consider all the views put to us about its future.

We need a Post Office that not only preserves its role in providing vital services to communities, but embraces the needs of modern Britain. The challenges are significant. Many branches are not profitable for the postmasters running them. Average weekly customer sessions have declined by 34% since 2007, and the shift to online services continues. While some services, such as parcel drop-offs and banking transactions, are growing, others, such as Government services, have seen significant decline. But we are also seeing innovation across the network. Drop and collect branches are being rolled out to meet the growing demand for parcel services. Over 160 banking hubs are now operational, with a commitment to roll out 350 by the end of the Parliament. As the banks continue to close branches, we are keen to support the Post Office to improve and develop the banking services it provides. Working with our Treasury colleagues, we will host joint discussions on this issue with the Post Office and the banking sector in the coming months.

Above all else, we know the Post Office needs stability, which we are committed to providing. We are backing that commitment with over £500 million investment during this Parliament, including up to £136 million in this financial year to invest in new technology and replace Horizon. Horizon should have gone long ago. Instead, it will be many months yet before it is replaced. Fujitsu should only be part of the Post Office’s grim past, not its current and immediate future. We are determined to end the use of Horizon and draw a line under Fujitsu’s involvement with the Post Office. The task of replacing Horizon is hugely complex. It has been embedded in the Post Office network for more than two decades and remains critical to the delivery of the essential services that many of our constituents depend on from the Post Office. Never again must we allow the Post Office to put blind faith in its technology.

We will support the implementation of the Post Office’s transformation plan, which aims to make the company more efficient, enabling it to continue offering cash and banking services in the coming years. We will also fund innovative equipment for postmasters to help customers beat the queues. Indeed, this plan aims to achieve operational and financial stability by 2030 and includes a commitment to boost annual postmaster incomes by £250 million by the end of the decade. Already, a £20 million uplift has been delivered in 2024-25, with £66 million planned for this financial year.

After all the Post Office has put its people through, it is now essential that it reorientates its culture towards postmasters, involving them in central decision making. The first steps have been taken with the creation of a consultative council and the election of postmaster non-execs. I am acutely aware that there are those who say that more is needed and, indeed, that is why in this Green Paper we are exploring options for further strengthening those structures.

In the longer term, we are open to more fundamental reforms. Two ideas that have been put to us include the potential mutualisation of the Post Office—giving postmasters and communities a much greater stake in the organisation—and a charter model that separates the Government’s role in setting the purpose from the board’s role in running the business. We will assess other suggestions for the Post Office’s long-term future, including on its future commercial direction, such as closer working with Royal Mail. These are perhaps not decisions for the moment, but we want to begin the debate and conversation now, so we are ready to act when the time is right.

The Green Paper is an important step towards rebuilding trust in the Post Office and embedding a culture of transparency, accountability and compassion. It is important to stress that no decisions on changes to governance arrangements will be made until after the inquiry’s final report to allow us all to consider Sir Wyn Williams’s recommendations on governance issues together with Green Paper responses.

This is a once-in-a-generation opportunity to reimagine the Post Office. The Green Paper is ambitious but grounded in reality. It asks difficult questions about how we ensure long-term sustainability while protecting essential services. We want to hear from everyone with a stake in the Post Office’s future. The Post Office must be modern, resilient and trusted. The Green Paper will be, I hope, the first step in delivering that vision, and I commend this statement to the House.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I thank the Minister for advance sight of his statement. The Post Office really is the Heineken of Government services: it reaches parts of the UK that other arms of government do not. The Post Office is much more than a business; it is a vital part of the UK’s social and economic fabric. It connects communities, supports local economies and ensures access to essential services across the country. From rural villages in constituencies like mine to inner cities, postmasters are trusted figures who provide a lifeline for people who rely on face-to-face services, particularly the elderly, the digitally excluded and small businesses. The network plays an increasingly important role delivering banking services and hubs as the traditional bank network continues to close. While the number of letters sent has declined and more Government services are online or direct to bank accounts, there are areas where the Post Office has seen strong growth: bank deposits to post offices are up by 68%, parcels up by 68% and tracked priority mail has risen by 72%.

The Minister promised that the Government would publish the Green Paper on the Post Office in the first half of 2025, so I will give him that—it was nearly there. The Government clearly want to get this consultation out before recess when there is arguably less parliamentary scrutiny. I would like to take this opportunity to encourage the public to respond to the consultation over the summer.

The Green Paper seeks to reduce the taxpayer subsidy over time, but of course, with 50,000 workers throughout Britain, the Post Office itself faces a £45 million hike in its bill from the national insurance jobs tax. The post offices that are eligible for retail, hospitality and leisure business rates relief have seen a 140% increase in their business rates. The Employment Rights Bill will cost the Post Office another £8 million. It is no wonder that Nigel Railton, the Post Office chairman, blamed the autumn Budget for increasing costs and said that it was why the Post Office needs a fresh start.

The Minister told the House on 8 April that

“access criteria have already been published that commit the Government to provide 11,500 post offices.”—[Official Report, 8 April 2025; Vol. 765, c. 750.]

He says in the Green Paper that his preference is to maintain the size of the network. Will he commit today to there being 11,500 post office outlets at the end of this Parliament? Did the Government consider reducing the branch requirement in the Green Paper? If so, why did they change their mind? Was he advised by his officials that it would take the closure of one in five post offices to end the network subsidy? If that is not what he was told, what was he told? Where is the cut-off point for that subsidy?

The Minister says that the Government will consult on a change to access requirements as it could be argued that they are too stringent, but for rural areas they are not. Approximately 14% of post office branches are the last shop in the village—there are many such branches in my constituency—so will the Minister confirm that rural branches will not be closed just to be replaced by others in city centres? Does he not realise that for many rural areas, the post office is the only shop for miles around and is therefore the only place one can access free cash?

How much did the Post Office get from the framework agreement with the banks? Should it not get a better and more long-term agreement? How much will the Government ask Fujitsu to pay towards the £2 billion estimated cost of compensating the postmasters who were wrongly accused over the Horizon system? The Minister appears to have kicked Post Office mutualisation into the long grass. I can see why he would not want to do it during the time of the inquiry, but could there be a pilot during this Parliament?

Post offices and the postmasters who run them are the backbone of our local communities, so I urge the public to take this opportunity to champion their local post office and reply to this summer consultation.

[Gareth Thomas]

I am grateful to the hon. Lady for encouraging sub-postmasters and anyone who is interested in the future of the Post Office to contribute their views to the Green Paper.

As the hon. Lady rightly set out, and as I hope I underlined in my statement—the Green Paper is certainly very clear on this—we think that branches up and down the country are a vital part of our country’s economic and social fabric, and we are determined to strengthen the post office network so that they can play a continuing and even more effective role in our economic and social lives.

The hon. Lady rightly underlined the significance of banking services going forward. As an aside, she mentioned the decline of other traditional post offices—letter volumes have halved since 2011. That helps to underline the significance of banking to the future of the Post Office. We are clear that the Post Office could offer more if the banks are willing to work with it. The successful completion of the banking framework negotiations was an encouraging sign in that regard. As I set out in my opening remarks, we are, alongside Treasury colleagues, determined to sit down with the Post Office and the banks to see what more we can do together. There is a commitment to 350 banking hubs over the lifetime of this Parliament, but if we can improve the way in which the banks work with the Post Office, we could see a much more significant role for the Post Office in the provision of banking services on far more high streets up and down the UK.

On national insurance contributions, I gently say to the hon. Lady that difficult decisions had to be made in the Budget because of the financial situation that we inherited, but we have taken a range of decisions to steady the network. I am sure that she is grateful to the Chancellor of the Exchequer for the additional finances put aside to invest in the future of the Post Office.

The hon. Lady quite rightly underlined the broader point that Fujitsu has a moral obligation to contribute towards the cost of the scandal. As I have said, we need to wait for the final report by Sir Wyn Williams to understand the full sense of Fujitsu’s culpability.

Lastly, on mutualisation, as the hon. Lady alluded to, we think it right to concentrate in the short term on prioritising the financial and operational stability of the Post Office, given its significant challenges. In the longer term, it may well be possible to make serious and sustained governance changes. I have a genuinely open mind on that question and will look carefully at the views we receive on it in the Green Paper.

[Clive Efford (Eltham and Chislehurst) (Lab)]

I welcome my hon. Friend’s statement and the consultation on the Green Paper. Does he agree that we should see the withdrawal of banks from high streets like mine in Eltham as an opportunity for the Post Office to expand what it can offer, not just to individuals but to small businesses in local communities? That is an opportunity rather than a burden for post offices, and we should seek to maintain them wherever possible.

[Gareth Thomas]

I agree with my hon. Friend about the even greater role that banks could play on our high streets by working with the Post Office. It is one area that Post Office senior management has identified as key to the Post Office’s commercial future. We have set aside significant sums of money to invest in new technology to make it easier to work with the banks and do even more. I hope that banks and the financial services community will recognise that they have a considerable opportunity to do more in providing services to all our constituents by working with the Post Office. I look forward to sitting down with the Post Office and the financial services industry, alongside Treasury colleagues, to see whether we can take advantage of that opportunity.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Gareth Thomas]

I am grateful to the hon. Lady for her welcome for the Green Paper. She rightly underlines the significance of the Post Office, particularly to the digitally excluded, to the elderly and to people in rural areas. Given the other part of my ministerial brief, which is on small businesses, I recognise just how important the Post Office is to small businesses up and down the UK.

The hon. Lady also underlined the significance of banking services for the Post Office. I hope I have made it very clear today that we think that there is an opportunity to go even further to bring more banking services to all our communities through the Post Office.

The hon. Lady asked about what happens when individual post office changes are being contemplated. A set of consultation arrangements has been in place for some time, and we are not seeking to change it. Whenever an individual post office changes, I recognise that it can be unsettling for local communities; there is always an appetite for that branch to be put back in place as quickly as possible. It is therefore important that whenever such a change is contemplated, the Post Office moves quickly to engage with local communities, including the hon. Member who represents the community.

On financing, we have set aside at least £500 million over this Parliament to invest in the Post Office. More than half of the network is loss-making; not enough was being provided to the Post Office to fund the network, which is why we increased the funding to cover the loss-making part of it last year. We have done so again this year and will continue to do so.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Minister for his statement. As a fellow Labour and Co-op MP, I welcome the inclusion of mutualisation among the long-term ideas for the Post Office. Does he agree that post offices, particularly in rural communities like Little Hallingbury in my constituency of Harlow, are a vital part of the community and that they therefore lend themselves to that model of business?

[Gareth Thomas]

I commend my hon. Friend for championing the Post Office branches in his constituency. He rightly underlines the importance of branches in rural communities; they have an essential role in communities up and down the UK.

As my hon. Friend will recognise, I have some history in the area of mutualisation. I am sympathetic to mutuals; I do think that it is important that we address the immediate challenges that the Post Office faces in its financial and operational sustainability before we contemplate long-term changes. There are risks with mutualisation, so we need to consider the pros as well as the cons before making any long-term change, but that is why the Green Paper is important: it will allow that debate to begin.

[Christine Jardine (Edinburgh West) (LD)]

A number of semi-rural and suburban communities across my constituency—Newbridge, Blackhall, Ratho—have lost their post offices recently. Their banks have also gone, so there is a dearth of local facilities. At the same time, the Horizon scandal has undermined public trust across those communities. Does the Minister agree that one of the main problems in protecting the Post Office and making it sustainable will be that lack of public trust? How will he overcome it?

--- Later in debate ---

[Gareth Thomas]

The hon. Lady is absolutely right that the reputation of the Post Office has taken a huge hit as a result of the Post Office scandal, and it will take a long time for trust to return. There is a series of steps that we have to take to rebuild that trust. There is the obvious challenge, which the House considered last week, of delivering redress to the victims of this appalling scandal, but there are also things we have to do to improve the trust between the existing postmasters in every community and the senior management of the Post Office from now on. The Post Office’s establishment of a consultative council and a postmaster panel and its commitment to improving postmaster remuneration are important first steps in that regard. The Green Paper provides an opportunity to think about what else the Post Office can do.

[Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)]

This is an issue that has been highlighted by others in the Chamber, and my constituency is no different: it has been subject to a significant number of bank closures and ATM removals. In Cumbernauld, the precincts or the surrounding villages, the post office is the one place where people in local communities can access cash. Given that so many small businesses are still cash-first, what will the Minister do to ensure that access to cash remains within a post office setting?

[Gareth Thomas]

I commend my hon. Friend for championing the post office in Cumbernauld and the communities around her constituency that depend on it and on the Post Office more generally. The most significant thing that we can do to help small businesses to access and deposit cash close to where they operate is to continue to try to improve the banking services provided through the Post Office. I hope that the banking industry will seize the opportunity of the Green Paper to work with the Post Office and with the Government to explore what more we can do collectively in that regard.

[Claire Young (Thornbury and Yate) (LD)]

In rural areas such as my Thornbury and Yate constituency, it can be difficult to travel to post offices in towns because of the lack of buses. If the Government are considering relaxing the distance and access criteria for post office provision, will they take that issue into account in setting new criteria?

[Gareth Thomas]

As I hope I made clear in my opening statement, and as the Green Paper certainly makes clear, our preference remains keeping the current size of the network and maintaining the access criteria. I say gently that there are strong views on that question, including some within the sub-postmaster community, but our preference at the moment is to maintain the current size of the network and the existing access criteria, because of the significance of the post office to every rural and urban community.

[Ms Julie Minns (Carlisle) (Lab)]

I thank the Minister for his statement and his clear recognition of the importance that the post office plays in rural constituencies such as mine. Sadly, residents in some of the remotest parts of my Carlisle constituency have been adversely impacted in recent months by the sudden closure of post office outreach services. However, the closure of an outreach service is not currently subject to the same consultation requirements as the closure of a permanent branch. As part of the proposals for the future of the Post Office, will the Minister consider strengthening the requirements relating to the closure of outreach services?

[Gareth Thomas]

I am happy to consider any submission that my hon. Friend wants to make to the Green Paper. Indeed, I am happy to consider the thoughts and ideas of hon. Members across the House. My hon. Friend mentioned a particular issue in her constituency; if it is helpful, I am happy to meet her to discuss it in more detail.

[Pete Wishart (Perth and Kinross-shire) (SNP)]

Scotland has seen an 8.3% decline in post offices, while London has seen an increase of 9.3% across the past decade. The Minister will know that outreach offices help people in rural areas and post offices to thrive. The Green Paper recognises that, but the Government seem to dismiss it. What is he going to do to help rural post offices? Will he reconsider his attitude and his views towards outreach offices? What will he do to reduce the number of post office closures in Scotland?

[Gareth Thomas]

The most important thing that we can do to help Post Office branches in rural areas in Scotland, and indeed across the UK, is to prioritise improving the commercial future of the Post Office. In that regard, it is important to invest in new technology—a replacement for Horizon is critical—and in technology to enable the banks to provide more banking services to all our communities using the Post Office, as I hope they will. The key priority for Governments across the UK, if we are to improve the opportunities for every branch to better serve every community across the UK, is to improve the commercial fortunes of the Post Office. The Green Paper sets out plans to do so, but I welcome views from across the House on what more we can do.

[Luke Akehurst (North Durham) (Lab)]

I thank the Minister for his statement. He knows from previous questions I have asked that I am concerned for the future of the Chester-le-Street post office, which is moving from having directly managed branch status to franchise status. I also welcome what is going on with the post office in Stanley, which has become a much-needed banking hub. Does the Minister agree that with a little more commercial flair and imagination about what services are provided, the Post Office should not be a business in retreat but could play a significant role in increasing footfall on high streets up and down the country, helping to reverse their decline and encourage regeneration?

[Gareth Thomas]

My hon. Friend is absolutely right; with good will on all sides, and with financial and operational stability, which I think we are beginning to see, there is a significant future ahead for the Post Office. As he says, the Post Office can continue to play an important role in reviving our high streets. The opportunity for banks to work with the Government and the Post Office to provide more banking services to all our constituents through the Post Office, could play a key role in helping to revive the high street and meet the needs of our constituents.

[Caroline Voaden (South Devon) (LD)]

Since the election, three post offices in my constituency have closed—in Churchstow, Aveton Gifford and Dittisham—through the resignation of postmasters and, in one case, the death of the local postmaster. Each time, the Post Office says that it is carrying out a review, and each time it quickly decides to close the post office and, as the Minister himself said, the beating heart of those communities is then lost. Dittisham residents must now travel nearly 5 miles to the nearest branch. There is no bus, so elderly residents who do not drive cannot get to the nearest post office. Will the Minister guarantee that while the consultation is ongoing, no more rural post offices will be lost, and that as part of the Government’s thinking, more flexibility could be built into the Post Office’s business model, so that innovative and enthusiastic potential postmasters who want to reopen post offices in some of these villages can be allowed to do so?

[Gareth Thomas]

One crucial issue that we considered when we developed the Green Paper was how to address postmaster remuneration, because in some communities the Post Office has struggled to find people who are willing to take on the running of a franchise. It is important that Post Office senior management have improved postmaster pay, with £20 million last financial year, a commitment to £66 million this financial year, and a plan to go even further. I hope that will make a significant difference to the ability to find people to take on franchises, and not just in urban areas but in the rural areas the hon. Lady describes. She will forgive me for not knowing her constituency as well as she does, but if she wants to contact me about particular issues with branch closures, I would be happy to look at those.

[Jo Platt (Leigh and Atherton) (Lab/Co-op)]

I welcome the Minister’s statement, and the announcement of a national dialogue about the future of our Post Office. As a fellow Co-operative party Member, I welcome the model of mutualisation, which would also suit our local branch. Given the decline of Leigh’s high street, the announcement of changes to our main post office was a major concern. Can he reassure staff in Leigh that they will not lose their jobs as a result of franchising? Will he confirm whether the Communication Workers Union has been fully consulted on the changes affecting our community?

[Gareth Thomas]

My hon. Friend has long been a proud member of the Co-operative party and is interested in mutualisation, and I look forward to discussing these issues with her in due course. Discussions on the franchising of the remaining Crown post offices are still ongoing, both with franchisees and local communities, and specifically regarding arrangements for staff. The Post Office and the Communication Workers Union are continuing to talk to each other about how to manage the transition, and I welcome the positive dialogue that has taken place between them both.

[Helen Morgan (North Shropshire) (LD)]

I was pleased to hear the Minister say that the overall size and shape of the post office network should remain the same so that we can minimise the impact on communities, but in my constituency the size and shape of the Post Office is rapidly shrinking because of the fundamental fragility of the way it is set up. The retirement of a single sub-postmistress, because of rents going up on her shop, has led to the closure of outreach services across the constituency. The access criteria consider someone to be within three miles of a post office if that post office is an outreach service and open for a single hour a week. That is not acceptable for rural communities, many of which do not have a bus for many hours during the day. Will the Minister commit to looking at a sustainable model for rural post offices, so that people can genuinely access cash and the other services they need, particularly if they do not have a car?

[Gareth Thomas]

I completely accept the significance of the Post Office in rural communities in particular, but it is equally essential that we have access to Post Office services in urban areas. The hon. Lady references the fragility of the Post Office, and that has certainly been the case in certain communities when finding postmasters who are willing to step forward and take on the role of running a Post Office franchise. That is why the initial steps that the Post Office management have taken to increase postmaster remuneration are important, by helping to make the role more attractive. It is also important that the Post Office has established a consultative council, to look properly at the way that postmasters are consulted and involved in big decisions about the future of the Post Office. If the hon. Lady thinks it would be useful, I would be happy to speak to her separately about the specific issues that her constituents face, and to understand a little more about the specific problems she has raised.

[Tom Gordon (Harrogate and Knaresborough) (LD)]

I thank the Minister for his statement, and I add my thanks to our postmasters, including Andrew Hart in my constituency. Last year, residents in Knaresborough faced a prolonged period without a Post Office service. I had extensive communication with Post Office officials about service continuity, minimum standards, types and awards of contracts, and I found them evasive when I asked them questions about that. As the Minister says, such issues of governance will be addressed in the inquiry, but how might that feed into the Green Paper consultation? Will he meet me to address some of my concerns about the issues that we are facing locally?

[Gareth Thomas]

In principle, I am very happy to meet the hon. Gentleman to discuss the issues with post offices in his constituency. He gives me the opportunity to put on the record my appreciation for the work that all our postmasters do. They are hugely important servants of all our communities, and they play a crucial role for our constituents—I am grateful to the hon. Gentleman for that opportunity. The Green Paper is an opportunity for people in rural areas as well as urban areas to come forward with their views about the future of the Post Office. I hope that all hon. Members will encourage their constituents to think about taking that opportunity, and take a moment to send in their comments.

[Andrew George (St Ives) (LD)]

I am pleased that the Minister has announced that the overall size and shape of the network will remain the same, and he has also indicated that remuneration must be part of the consultation. As he will know—I have corresponded with him on this matter—the towns of Porthleven and Newlyn in my constituency have been without post offices for a number of years, because no one is prepared to take them on at the remuneration levels that are available. Is the Minister prepared to consider whether he sees those post offices more as Government offices, and to expand their role in terms of information, connectivity, and feedback across a number of Government Departments, to build up the services available in post offices? If he is meeting people, will he meet me to discuss how we can resolve the situation in my constituency?

[Gareth Thomas]

The hon. Gentleman is right that we need to make the task of running a post office more attractive. That is why improving both the culture, so that postmasters feel listened to, and the remuneration are hugely important immediate tasks. The best commercial opportunities for post offices lie in the provision of banking services, rather than Government services. I hope that the banks and the financial services industry will have heard the message from Members from all parts of the House: we want them to do more to work with Government to take advantage of the potential opportunities. As I have committed to meeting other hon. Members to discuss local issues, I had better do the same for the hon. Gentleman.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

I thank sub-postmasters across Glastonbury and Somerton, and across the country, in particular Jim Gordon from Martock. Many post offices in my constituency have closed in recent years, including those in Somerton, Butleigh, Charlton Adam, Charlton Mackrell, Keinton Mandeville and Sparkford, depriving their communities of a vital service. I recently met Mr and Mrs Thievendran from Somerton Stores, who are interested in opening a post office on their premises but are unable to do so because of the prohibitive costs involved. The owner of the Baltonsborough Village Store was considering doing the same but told me that the costs are extraordinary. What steps will the Minister take not only to put existing post offices on a sustainable footing, but to help rural towns and villages without a post office to regain one?

[Gareth Thomas]

As I have said, in our view we should retain the current size of the network and the current access criteria, which are key to ensuring that every community, whether rural or urban, has good access to post office services. I encourage the hon. Lady to reach out to the Post Office to discuss the particular issues facing the businesses to which she has referred, which are interested in running post office branches but feel unable to do so, to see whether anything can be done to ease those local challenges.

More generally, the issue the hon. Lady raises partly speaks to the challenge of increasing postmaster remuneration. Post Office senior management clearly recognise that: there was a £20 million uplift in postmaster remuneration in the last financial year, there will be a £66 million increase this year, and Post Office management are committed to looking to go even further. I hope that will make the opportunity to run a post office much more attractive, and may address some of the financial challenges she raised.

[Martin Wrigley (Newton Abbot) (LD)]

I was slightly concerned that the franchising of Crown post offices, such as the one at Teignmouth in my constituency, has already gone ahead, prior to the consultation. Turning to a different issue, Royal Mail is obligated to provide a post box within half a mile of any house, but many new estates in my constituency have no access to a post box—they are just not there. Will the Minister put pressure on Royal Mail to ensure that post boxes are provided?

[Gareth Thomas]

I thank the hon. Gentleman for raising that specific matter. I will happily draw the attention of the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), who is responsible for Royal Mail, to that issue. The hon. Gentleman will have to forgive me, but I am not aware of the details of the issue in his constituency, but he may want to write to us at the Department so that we pass the details directly to Royal Mail.

Post Office Horizon Inquiry Report: Volume 1

Gareth Thomas Excerpts

Tuesday 8th July 2025 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

Today I welcome the publication of volume 1 of Sir Wyn Williams’ Post Office Horizon IT inquiry report. This volume will illustrate the human impact of the scandal on victims and outline recommendations for the redress schemes set up to compensate victims.

Once published, a copy of the inquiry report will be placed in the Libraries of both Houses and made available on www.gov.uk.

I would like to thank Sir Wyn and his team for their tireless efforts since the inquiry was first established on 29 September 2020, and all those who have provided evidence. In particular, I pay credit to and thank those victims who have engaged so courageously with Sir Wyn, providing evidence of their experiences of one of the worst miscarriages of justice we have seen.

The Government will thoroughly consider the findings presented today. We will provide a response to the inquiry’s recommendations in due course.

[HCWS790]

Post Office Horizon Inquiry: Volume 1

Gareth Thomas Excerpts

Tuesday 8th July 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

Sir Wyn Williams has today released the first volume of his report into the Horizon scandal, which caused so much harm to so many innocent people. The fearless and diligent work of his inquiry has, I believe, won the trust and admiration of postmasters. The inquiry has asked penetrating questions of a large number of witnesses and has scrutinised more than 2 million pages of evidence. I know that the whole House recognises the bravery of the postmasters who fought against enormous odds to see their cause recognised.

Sir Wyn’s report reminds us that blameless people were impoverished, bankrupted, stressed beyond belief, and lost their jobs, marriages, reputations, mental health and, in some cases, their lives. I am sure that the whole House shares my gratitude to Sir Wyn and his team for their work so far. This is only the first volume of their final report, spelling out the scandal’s human impact and looking at the redress schemes that have been put in place in response. The second volume will in due course deal with the causes of the scandal and how repetition can be avoided.

To be clear, I am very sympathetic to Sir Wyn’s 19 recommendations in the volume published today. Clearly, a number of them require careful consideration. We will respond to them promptly, as some concern the ongoing delivery of Horizon redress schemes. Sir Wyn has set us a deadline of 10 October, and we will meet it.

The House will see that Sir Wyn has accepted that

“the Post Office, the Department and Ministers continue to adhere to the aims of providing financial redress, which is full, fair and prompt.”

He also concludes that the majority of people who have accepted offers under the group litigation order scheme

“will have done so because, for them, the offer was full and fair.”

That said, Sir Wyn makes some understandable criticisms, especially of the Horizon shortfall scheme, which we will need to study closely and address.

We inherited a compensation process that was widely seen as too slow, adversarial and legalistic. Well over four years after the first High Court case exposed the scandal, only 2,500 postmasters had had final settlements. There were clearly significant gaps in the compensation process, and many victims had not come forward. Indeed, there was no compensation scheme in place for those postmasters whose convictions had been overturned by Parliament.

A year ago, the Government had paid £236 million in redress. We have now quadrupled that to nearly £1.1 billion. We have launched a compensation scheme for postmasters who have had their convictions overturned—the Horizon convictions redress scheme—and have merged the Post Office’s compensation arrangements for overturned convictions into it. Through the Post Office, we have delivered a £75,000 fixed-sum offer to over 4,200 victims who opted for it.

We have also launched an independent process to allow people to appeal their HSS settlements or offers. That should provide, as Sir Wyn says in his report,

“an opportunity to put right any failures to deliver redress which is full and fair”

for HSS victims.

We have also begun discussions with Fujitsu on their contribution to the costs of the scandal. As the House knows, and as Sir Wyn’s report underlines, there is still a lot more to do. I know that the postmasters who have yet to agree final compensation are frustrated with the delay; so am I.

We have consulted regularly with the Horizon compensation advisory board and others on what more we can do to improve redress. Sir Wyn’s recommendations are very helpful in that regard. Two of his recommendations address issues that we have already been working on across Government and with the advisory board. I can confirm that we accept Sir Wyn’s recommendation that claimants should be able to bank the best offer that they get from the GLO process and that it should not be put at risk if they choose to go to the independent panel.

Secondly, we will provide redress for family members of postmasters who suffered because of the scandal. I have met the group Lost Chances for the Children of Sub-postmasters, which has campaigned with considerable courage on this issue. Sir Wyn rightly recognises that designing a suitable compensation scheme for family members raises some very difficult issues. None the less, we want to look after those family members who suffered most—meeting Sir Wyn’s recommendation that we should give

“redress to close family members of those most adversely affected by Horizon.”

Given those challenges, we will now discuss the details of how a scheme should be run with claimants’ lawyers, the independent advisory board and the Lost Chances group. It will be open to close family members of existing Horizon claimants who themselves suffered personal injury, including psychological distress, because of their relatives’ suffering. Other than in exceptional circumstances, we will need contemporaneous written evidence of that personal injury.

There are some fundamental lessons to be learned, to which Sir Wyn points, about how compensation following wrongdoing on this scale should be delivered in future. In particular, the Post Office should never have been allowed to run it, decisions on funding should have been made much more quickly, and it should not have needed an ITV drama to stimulate action to overturn hundreds of unjust convictions. We cannot now turn back the clock to fix those fundamental mistakes. We must instead address two challenges.

The first challenge is to make sure that if there is ever another terrible scandal like this one—we all sincerely hope there is not—the victims do not need to bring a traumatic court case to expose it. The second challenge, if another such scandal happens, is that the Government must be set up to offer trusted redress from the very start. Sir Wyn argues that there should be a standing public body to deliver redress in any further scandal. I have a considerable amount of sympathy with that argument, but clearly we need to analyse the options fully before we commit to it. We will reflect on how to address those twin challenges and will bring back our conclusions to the House.

We can never properly recompense a person for being wrongly denied their freedom, for the humiliation of being wrongly accused or for seeing their loved ones in profound distress or worse, and neither can we recompense them for their good reputation being taken from them. I cannot assuage the anger of the victims, nor will the anger that I feel on their behalf ever be assuaged, but we are determined to do more on redress and beyond, and to do it quickly, to give more of the victims of this appalling scandal at least a measure of the peace that they so rightly deserve. I commend Sir Wyn’s report to the House.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I thank the Minister for advance sight of his statement. We welcome the release of volume 1 of the Post Office Horizon inquiry final report and I put on record my thanks to Sir Wyn Williams and the inquiry team for all the work that they have done, alongside all those who gave evidence.

This inquiry lays bare one of the greatest miscarriages of justice in modern British history. Volume 1 focuses on redress and the human impact of the Horizon scandal, which has been evolving since 2000. The human impact is particularly devastating, with the report revealing that at least 13 people may have taken their own lives as a result of the Post Office Horizon IT scandal. It also recognises that family members have also suffered from this miscarriage of justice. Even though, as the Minister says, we can never recompense a person properly for this miscarriage, I am sure the whole House will want to ensure that the victims are fully compensated by the schemes, and I would like to put on the record my tribute to the work of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who set up this process of redress.

The report has recommended that the Government and/or the Department, and where appropriate the Post Office and Fujitsu, shall provide a written response to Sir Wyn’s recommendations by 10 October. Can the Minister confirm that the Government will be able to say by 10 October whether they will accept all 19 of the report’s recommendations? The report details that there is still much to be done to ensure justice for the victims, so who and how will those responsible be held answerable for the years of denial and suffering?

This was not simply a technical failure; it was a failure of oversight, governance and accountability. The report finds that the Post Office and Fujitsu knew, or at the very least they should have known, that the Horizon IT system had faults. The sub-postmasters are also described

“as victims of wholly unacceptable behaviour”

by the two companies. Sir Wyn has stated that there are still more than 3,000 claims to resolve and that there have been egregious delays in compensation. Will the Minister therefore update the House on the most recent status of the compensation schemes? What steps is he taking to address these concerns, and how are the Government ensuring that full, fair and fast compensation is delivered without further bureaucracy or delay?

Will the Minister update us on what action is being taken in relation to Fujitsu, which is still being awarded Government contracts? Fujitsu said that it would wait until the inquiry reports to offer compensation, so will the Minister confirm that there is now nothing preventing Fujitsu from paying interim compensation? Will he also confirm that it will be made clear how much he believes Fujitsu should contribute to the redress scheme?

In the spending review, the Government allocated £86 million from its transformation fund for the Post Office, specifically earmarked to support investment plans, including replacing the existing Horizon computer system. Will the Minister update the House on the progress of securing a new computer system for the Post Office and whether that system will replace the Horizon system in its entirety? What assessment has he made of the earlier Capture accounting software and its legacy of problems?

Finally, to move on from this protracted miscarriage, will the Minister confirm when we will see the much anticipated Green Paper on the future of the post office network and how the public can have their say on that consultation? The time for half measures is over. Justice delayed is justice denied, and those affected by this scandal deserve nothing less than the full force of the Government’s commitment to truth, reform and redress. Taxpayers also deserve to know how much Ministers think Fujitsu should pay to resolve these terrible wrongs.

[Gareth Thomas]

I thank the hon. Lady for her comments and questions. She was right to say in her opening remarks about this being the greatest miscarriage of justice in our country’s history. The responsibility is therefore on us all to do everything we can to make sure the victims receive full and fair compensation, and to ensure that there is never a repeat.

The hon. Lady specifically challenges me on the question of the 10 October deadline that Sir Wyn Williams has put in place. I can confirm that we are determined to meet that deadline. It is particularly important that we do so, as some of his recommendations concern the ongoing delivery of the Horizon compensation schemes and we do not want, inadvertently or not, to delay or hold back any of those claims.

The hon. Lady rightly gives me the opportunity to again pay tribute to the hon. Member for Thirsk and Malton (Kevin Hollinrake) for his work when he was the Post Office Minister. Without question, we would be even further behind without the considerable amount of work and effort that he put in. There are many others in the House who have campaigned long and hard on behalf of the sub-postmasters, including the right hon. Member for Goole and Pocklington (David Davis), who I see in his place, and my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), who chairs the Business and Trade Committee.

The hon. Lady asked who and how will those responsible be held to account. She knows that Sir Wyn Williams is due to publish the second part of his report, which focuses on those very questions. We will consider carefully what he has to say about that when we receive his report. I suspect that she already knows that the Metropolitan police is leading an investigation into whether criminal responsibility is at play. More than 100 police officers are working on that investigation and they have identified a number of individuals of interest. We will see what they do with regard to those individuals in due course. As the hon. Lady and the House will understand, Ministers are not in any way involved in such decisions.

What further steps have we taken to deliver and speed up compensation? The hon. Lady will be aware that we have issued the opportunity for sub-postmasters who apply to the Horizon shortfall scheme and who want to accept a fixed-sum payment of £75,000 to do so. We have put in place an appeals process to try to give those who feel they have not received a fair offer to date a chance to get full and fair redress.

There are particular challenges in the Horizon shortfall scheme. If I am honest, it is the scheme that I worry about the most, not least because there are 1,700 cases in which there does not appear to be any evidence of shortfalls. That does not mean that there were no shortfalls; it means that, at this stage, we do not have evidence of what those shortfalls were. As the House would expect, I have gone back to the Post Office and made it clear that we want it to reinvestigate, to see whether evidence can be found in as many of those cases as possible. We are looking very carefully at what we can do about the rest.

On Fujitsu, we will need to see Sir Wyn’s final report to understand fully the degree of Fujitsu’s culpability. I have made it clear to Fujitsu that we think it should bring forward an interim compensation payment, and I hope that it will see the report today and recognise the need to do that.

The hon. Lady also asked me about the Green Paper. We hope to publish it very shortly. One of the issues that it will consider is the future of the Post Office’s IT systems, because we certainly need to move on from the past and Horizon. We will set out in a bit more detail at that point what work we are doing in that regard.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Chair of the Select Committee.

--- Later in debate ---

[Gareth Thomas]

I want to take this opportunity again to pay tribute to the work of the Business and Trade Committee under my right hon. Friend’s chairmanship. As he has said, there has been a series of recommendations from his Committee, and I recognise that we have not always agreed with all those recommendations. For me, the question about whether to offer legal advice to Horizon shortfall scheme claimants has always been a finely balanced judgment. I say that because it has always been clear that the victims wanted a fast route to secure compensation without the involvement of lawyers, and the fact that so many have accepted the fixed-sum payment is an indication of that appetite. Nevertheless, I recognise that Sir Wyn Williams has given us a clear steer on that particular question, and we will consider that extremely carefully and very quickly.

On the question of whether the Post Office should be stripped completely of responsibility for the Horizon shortfall scheme, there is no doubt that if we were starting afresh, the Post Office would have no responsibility for any of the compensation schemes. When I looked at the question of whether to start over again in the delivery of the compensation schemes and at who should be responsible for their delivery, I recognised that to change completely the processes as they had been set up would see further delay in getting compensation to the victims. I say gently to my right hon. Friend that Sir Wyn Williams has not said today that the Post Office should not be involved in the Horizon shortfall scheme’s delivery. We have been clear that we need to take away responsibility for the most complex cases, and we have set up the appeals scheme to do so. Given the numbers who have come forward with appeals on the Horizon shortfall scheme, I hope that we will be able to give confidence to those people that they will have a chance to get full and fair redress.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

[Sarah Olney (Richmond Park) (LD)]

I thank the Minister for giving me advance sight of his statement. The Horizon scandal was an appalling miscarriage of justice, and today’s report highlights the extent of the human suffering that it has caused. Reading the stories of some of the victims in this report was truly heartbreaking, and it could not be clearer that far too many people’s lives have been irreparably affected. No scandal of this kind can be allowed to happen ever again. We warmly welcome the publication of the first volume of the independent inquiry’s report, which has the full support of the Liberal Democrats, and I sincerely hope that it will focus Ministers’ minds in getting victims the compensation and justice that they deserve as soon as possible. It is shocking that victims of this scandal have had to wait this long for their rightful compensation and justice. The Government need to move at speed and bring an end to this unacceptable delay.

Although we welcome the promise of full compensation, the Liberal Democrats will continue to hold the Government to account in order to ensure that victims get the payments they deserve as quickly as possible, so will the Minister confirm that the Government will implement the recommendations of today’s report in full? Will they set out a timeline for when all victims can expect to receive full and fair compensation? What conversations have the Government had with the Post Office and Fujitsu about restorative justice in the light of Sir Wyn’s recommendations? Lastly, when will the Government finally introduce legislation on a full duty of candour, for which sub-postmasters and the victims of so many other scandals and disasters have so long called?

[Gareth Thomas]

I welcome the hon. Lady’s comments, and I welcome the challenge to the Government to go further and faster on delivering compensation, not just from her and her party, but from across the House. She asked a similar question to that from the hon. Member for West Worcestershire (Dame Harriett Baldwin), who spoke for the official Opposition, on whether we would accept the recommendations that Sir Wyn has set out today. As I made clear in my opening remarks, we are very sympathetic to all his recommendations. Indeed, I was able to confirm today that we have accepted two of his recommendations: to provide compensation for family members and to move on the question of the best offer. I hope that gives the House confidence that we will meet the deadline that Sir Wyn Williams has imposed on us.

The hon. Member for Richmond Park (Sarah Olney) rightly joins all sides of the House in challenging Fujitsu to recognise its responsibilities. I hope it will read Sir Wyn’s report and conclusions afresh and recognise that it now needs to make an interim payment. Restorative justice is one of the significant recommendations in Sir Wyn’s list, and we will consider that very carefully. There is a series of options as to how one might deliver restorative justice, and there would clearly need to be consultation with the victims. We will think through the different steps that we need to take in that regard.

[Rosie Wrighting (Kettering) (Lab)]

I add my support for the introduction of a redress scheme for close family members. On the Business and Trade Committee, and in my constituency surgeries, I have heard from family members, and it is clear that the trauma of this injustice has been passed down through generations. Can the Minister share any further details on how he expects the scheme to operate, and more importantly, who will be responsible for overseeing the schemes and any actions taken in regard to families affected by the Capture system?

[Gareth Thomas]

I welcome my hon. Friend’s work on the Business and Trade Committee and more generally in pushing the Government to do more on full and fair compensation. On the question of family members, Sir Wyn makes it clear in his report not only that offering a compensation scheme for family members is the right thing to do, but that there will be significant design challenges in how such a scheme is put together. We will work with the independent Horizon compensation advisory board, with claimants’ lawyers and with the campaign group Lost Chances on the design of such a scheme.

My hon. Friend briefly mentioned Capture, as did the hon. Member for West Worcestershire. We are in the process of working with a number of the victims of the Capture scandal and their legal representatives to design an effective compensation process for them. There are again some significant challenges around the availability of evidence, given that the use of the Capture software was before the introduction of the Horizon computer system, and so the amount of evidence available is significantly less. None the less, we are working at pace on the design of such a scheme.

[John Cooper (Dumfries and Galloway) (Con)]

As a member of the Business and Trade Committee, I was aghast to find that the Capture system predates Horizon and goes as far back as 1992; so we are 33 years on. The Minister has touched on the difficulties of getting evidence from that time. Has he made any assessment of how many victims might be involved in this Capture scheme? It looks as though it might be a burgeoning scandal on the scale of the Horizon scheme.

[Gareth Thomas]

I thank the hon. Gentleman for his work on the Business and Trade Committee, too. He gives me the opportunity to pay tribute to the noble Lord Beamish, who campaigned for a considerable period of time to bring the House’s attention to the issue of Capture sub-postmasters. No definitive number exists of how many Post Office branches used Capture. There is a rough estimate that some 13.5% of all Post Office agency branches—roughly 18,000 between 1992 and 2000—used Capture before the Horizon system was rolled out in 1999. Given the lack of evidence, we are very much trying to learn the lessons from some of the Horizon compensation schemes in the way in which we design the Capture scheme. We will take forward 150 cases almost as a pilot process and will take stock at the end of that process to see what further work and further tweaks to the design of the scheme we need to make, so that we can deliver fair redress to all those victims of the Post office scandal, too.

[Kate Osborne (Jarrow and Gateshead East) (Lab)]

Sir Wyn rightly highlights the role Fujitsu must play in restorative justice. I remind the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin), and the House that I asked the previous Government to pause and review all Fujitsu contracts, which they refused to do. I thank the Minister for all his work on the matter and for the meetings he has kindly had with me. Does he agree with me and Sir Wyn that it is time that Fujitsu contributed to the compensation and that it is also time we stopped the billions of pounds of Government contracts that it continues to be awarded, including its bid for HMRC’s trader support service, which is worth £355 million alone? I look forward to a response from the Minister’s office to the letter I sent him highlighting this yesterday.

[Gareth Thomas]

My hon. Friend has been one of those who campaigned consistently over a long period of time for justice for sub-postmasters, in particular for her constituent Chris Head. I hope he and she will recognise that one of the recommendations in Sir Wyn’s report that we confirmed today we will accept is in no small part due to Mr Head and her campaigning on that particular question.

My hon. Friend is absolutely right that there is a moral obligation on Fujitsu to contribute to the cost of the scandal. That has been clear for a long time. I welcome the fact that Fujitsu has acknowledged that and has begun discussions with the Government. Sir Wyn’s report today further underlines the case for Fujitsu to make an interim payment towards the costs of the scandal. On her point more generally about the role of Fujitsu, there is no question but that Fujitsu wants to move out of responsibility for the Horizon system, and I suspect we all want Fujitsu to move out of working with the Post Office. None the less, we need Fujitsu at the moment to continue to maintain the Horizon system, which is key to the work of Post Office branches up and down the country in all our communities, while we work at pace to put in place a better system going forward.

[Sir Andrew Mitchell (Sutton Coldfield) (Con)]

This Minister well knows that, across the House, many colleagues for years now have raised deep concerns about what happened. I raised it myself on 10 June 2020, 5 October 2020, 27 April 2021 and 15 December 2021. Many colleagues years and years ago were citing the monstrous injustice and grotesque breach of human rights and civil liberties of our fellow citizens, but it took the ITV drama of 1 January 2024 for the earth to move. That rather begs the question: what is the point of Parliament and its elected representatives? Is it not about time that the institutions of the state got out the handcuffs and held the tax-funded villains who perpetrated this monstrous injustice to full and total account?

[Gareth Thomas]

I commend the right hon. Gentleman for his campaigning on this issue. I know that he has continued to push different Governments and different Post Office Ministers on the issues around this scandal, and I have no doubt that he will continue to do so. He is absolutely right that the people responsible for this scandal need to be held to account. Sir Wyn’s further report will lay bare who is responsible, and the work of the police is ongoing. As I said earlier, 100 police officers are working on this case. They are in touch with sub-postmaster representatives and have identified a series of people who are of interest to their inquiry. As he will understand, Ministers are rightly not involved in those specific discussions, but we are watching with great interest the progress of that police inquiry. We will certainly look to act on the recommendations that Sir Wyn makes when the final part of his report comes out.

[Tulip Siddiq (Hampstead and Highgate) (Lab)]

I thank the Minister for his statement. This scandal was a sorry chapter in our country’s history, and I hope that those who were affected are compensated quickly and fairly. I am sure the Minister will know that this scandal disproportionately affected people from black, Asian and minority ethnic backgrounds. Of those who were prosecuted, 40% were from BME backgrounds, but I do not feel the report recognises the sensitivity. I recognise that the report cannot address every single angle, but I feel that the way BME people were affected disproportionately could have been highlighted more. What will he do to address the disparity as he moves forward in addressing this scandal?

[Gareth Thomas]

My hon. Friend raises a significant issue, and one that I have no doubt had a bearing on the way in which the scandal unfolded. She will understand that for a formal view on who was responsible and what went wrong, we need to wait for the final report from Sir Wyn Williams. But it is quite clear that a significant number of sub-postmasters from an ethnic minority are still waiting for compensation, as indeed a generally significant number of postmasters are waiting for compensation. We need to ensure that all those from an ethnic minority receive compensation, as equally we must give priority to every single person who has yet to receive compensation.

[Chris Law (Dundee Central) (SNP)]

The Government have been told routinely by organisations such as Scottish Postmasters for Justice and Redress that compensation for victims of the Horizon scandal is taking too long and that the application process is akin to the trauma of a second trial for victims. We have also heard today that Sir Wyn Williams’ report illustrates that victims continue to face an “unnecessarily adversarial attitude” from the Post Office and that the UK Government continue to drag their feet in offering full and swift redress. Given that the Minister previously stood at the Dispatch Box and said that

“justice delayed is justice denied”,—[Official Report, 18 December 2024; Vol. 759, c. 373.]

and given the human toll of the scandal revealed today, will this Government finally and immediately end these obstructive processes so that redress can be tackled straight on without waiting for the second volume?

[Gareth Thomas]

There is no question but that the compensation process has taken far too long. The scandal could have been stopped a lot earlier. Everybody who was a victim of the scandal should have had compensation—certainly by the time we took office. Having said that, we have set out to speed up the delivery of compensation. We have quadrupled the amount of compensation paid out to victims of the scandal. We have moved at pace to plug some of the obvious gaps in the compensation process. I completely accept the challenge made by the hon. Gentleman, by others across the House, and indeed by sub-postmasters who have yet to receive compensation, that there is still a lot more to do.

[Ian Byrne (Liverpool West Derby) (Lab)]

I thank the Minister for his statement and for his powerful words, but the publication of the report confirms the heartbreaking scale of the human impact of this shocking miscarriage of justice. The concealment and cover-up of the Horizon scandal follows a familiar pattern. Institutions deceive and distort because they put their reputation before truth and justice, as we have seen before in the infected blood scandal, the nuclear test veterans scandal and, of course, the Hillsborough disaster, among many others. The law that bears that disaster’s name would end the culture of cover-ups that we have heard about today. Does the Minister agree that the report shows why the Government must honour their pledge and promise to enact the Hillsborough law in full and end the culture of cover-ups, which does so much damage to the innocent victims and their families, and to the country’s reputation?

[Gareth Thomas]

I have absolutely no doubt that we need to see, in full, who was responsible for this disaster and why. Sir Wyn Williams’s work on that is critical. We await his final report, which will look at what happened, why, and who was responsible. That transparency will be hugely important to help the Post Office, and the country as a whole, to learn lessons from this appalling scandal. If we need to introduce measures to ensure that the Post Office is never in such a position again, we will certainly look to bring them forward.

[Sir Julian Lewis (New Forest East) (Con)]

The Post Office Horizon scandal has often been compared with the contaminated blood disaster. By coincidence, this very afternoon the relevant all-party parliamentary group, led by the hon. Member for Eltham and Chislehurst (Clive Efford), has been having a meeting with the Infected Blood Compensation Authority. Even if the Minister does not go all the way with Sir Wyn Williams’ suggestion that there might be a standing body responsible for delivering compensation, will the Government look at the experience of the compensation body for that scandal rather than allowing separate disasters to be compensated for in separate stovepipe arrangements?

[Gareth Thomas]

To be clear, Sir Wyn Williams’ recommendation of a standing body to deliver compensation is very much to ensure that if there is ever a future disaster on this scale—and we all hope that there is not—the Government are better set up to respond to it. He has not specifically suggested that we transfer into such a body the responsibility for the delivery of compensation schemes at this stage, because doing so would undoubtedly slow down the process. I think that there are parallels with the infected blood inquiry, but there are also differences. We need to learn lessons on the delivery of compensation from the infected blood scandal, the Post Office scandal and other scandals that came before. In that regard, the National Audit Office published important work last summer, which will certainly help to inform our judgment about the case for such a standing body.

[Clive Efford (Eltham and Chislehurst) (Lab)]

I associate myself with the comments of the Chair of the Business and Trade Committee, my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), about the involvement of the Post Office—I hope the Minister has checks and balances in place to test what information it provides, because it clearly cannot be trusted. My question is about Fujitsu, which stayed quiet while sub-postmasters, including a former constituent of mine, went to prison. The Minister said that the Government are in negotiations with Fujitsu, which sounds like Fujitsu will not pay the compensation that it should. Will he say more about who will be the final arbiter in determining how much Fujitsu should pay in this scandal, which it is fundamentally at the root of?

[Gareth Thomas]

I take this opportunity to commend my hon. Friend for his consistent campaigning on this issue. He is absolutely right to underline the moral responsibility that Fujitsu has to contribute to the cost of the scandal. I welcome the fact that Fujitsu has accepted that it has such a moral obligation. I have made it clear to Fujitsu that I think it should bring forward an interim payment, and discussions with it have begun, as I said, but it will be important that we receive the final report from Sir Wyn Williams to understand properly the scale of Fujitsu’s responsibility going forward, as compared with the responsibility of other players in this appalling scandal. I am absolutely clear that Fujitsu does have a clear responsibility. It could begin to act now, and I hope that it does so.

[Christine Jardine (Edinburgh West) (LD)]

A constituent who I have been representing for two years was unfairly dismissed as a result of the Horizon scandal. I appreciate the effort that the Minister and his predecessor have put into this matter. The report makes it absolutely clear that the compensation system is too cumbersome and complicated for many people, and the Government have said that they will do everything they can to speed it up, but some people are waiting not only for compensation but for recognition of the injustice that was done to them. What will the Minister do to reassure those people and work on their behalf to get them the recognition that will lead to compensation?

[Gareth Thomas]

The hon. Lady makes an important and significant point and gives me the opportunity to comment on that particular constituency case, which she and I have discussed a couple of times. She is absolutely right when she alludes to the fact that there are victims of the scandal who have not yet come forward or, perhaps for a number of reasons, put in compensation claims. I hope that the publication of Sir Wyn’s report, and his comments—the criticisms and challenge to the Government on going further, as well as the reassurance that he has offered—will give those who have not yet put in a claim the confidence to do so. On the specific case that she knows very well and has discussed with me, I am determined to move forward. I have taken a number of steps to do so, and I will come back to her.

[David Davis (Goole and Pocklington) (Con)]

The Minister plainly agrees that this injustice has gone on too long. Earlier today, I spoke to Janet Skinner, one of the postmasters whose life was wrecked in 2007 when she served nine months in prison after wrongful conviction. She has spent 18 years since then struggling to get compensation and is still battling for it now, forced to wade through endless paperwork and a cruel bureaucratic maze. In her own words, the compensation process has been

“harder than anything I’ve ever had to do before—and I’ve been to prison.”

That is what she said to me today.

Sir Wyn’s report is welcome. I hope it ignites a fire under the Minister, although I know that he is committed to solving problems like Janet’s in months, not years. Can he give me the undertaking that he will solve these problems in months, not years?

[Gareth Thomas]

On the right hon. Gentleman’s direct challenge, I certainly want to do that. I completely share his view that every victim who still has not had compensation has waited too long, and that I in particular, and the whole House, have a responsibility to keep up the pressure to get full and fair compensation for those victims as quickly as possible.

The right hon. Gentleman will recognise that we have made some progress in the last 12 months: we have quadrupled the amount of compensation that has been paid out and set up new compensation schemes to begin to address some of the obvious gaps. However, I completely accept the challenge that he, and perhaps Janet Skinner, posed: that we need to go further and faster.

[Sammy Wilson (East Antrim) (DUP)]

I also welcome Sir Wyn’s report. It reminds us of the cynical, dishonest and illegal behaviour of Post Office and Fujitsu officials, who caused so much misery to so many people who were doing an honest job and were wrongly accused. The Minister rightly said that he is determined to move on and get redress for those victims, but as long as Post Office officials have anything to do with this compensation scheme, I believe that his honest aim will be thwarted.

Last week I met with four postmasters in Northern Ireland, who told me that despite requests for documentation—some dating back to January—it is still not forthcoming. It is being drip-fed, which means that when new information is sought, they go back to the beginning of the 40-day period. Even when forensic economists have looked at their claims, in some cases they are discounted by up to 90%. I can only say that those are obstructionist tactics. As long as those who still believe that they did nothing wrong are in charge, we will not achieve the objective of quick redress.

[Gareth Thomas]

I recognise and understand why there is considerable scepticism across the House about the Post Office continuing to have any role in the delivery of any part of the compensation process. As I said, when I first came into this role, I looked very carefully at whether we should essentially start over and take the Post Office out of the compensation process. I was persuaded that if we did that, we would significantly delay still further the delivery of compensation to the victims. Sir Wyn Williams made a similar point today while making a series of recommendations to Government to go further and faster, in particular on the Horizon shortfall scheme. As I have alluded to, I am extremely sympathetic to his 19 recommendations. There are some that we need to look at in more detail before I come back to the House and, particularly, to Sir Wyn.

The right hon. Gentleman referenced conversations that he has had with a number of sub-postmasters in his constituency, or in Northern Ireland more generally. If he wants to bring those cases to my attention outside this session, I would be very happy to look at them.

Corporate Businesses and Franchisees: Regulatory Environment

Gareth Thomas Excerpts

Wednesday 2nd July 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

In the usual way, I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for securing this debate. Having crossed swords with him when our positions were reversed, I approached this debate with particular wariness, not least because he has assembled a very distinguished cross-party group of Members to participate in this debate.

We heard from not only the right hon. Gentleman, but the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friends the Members for Stockport (Navendu Mishra), for North Durham (Luke Akehurst) and for Reading Central (Matt Rodda), and the hon. Member for Boston and Skegness (Richard Tice). Each of them made important points. I very much agreed with the opening remarks of the right hon. Member for South Holland and The Deepings about small and medium-sized businesses being the backbone of our communities. They are important; they are fundamental to the strength of each of our constituencies. The Government are determined to do much more to support our SMEs going forward. That is why, on the point made by my hon. Friend the Member for Reading Central, we will publish a strategy for supporting SMEs.

The right hon. Member for South Holland and The Deepings was right that we as a country should do more to celebrate our entrepreneurs and to champion their interests. They are brave; they are risk takers; they create wealth; and they make all our communities better and richer. We are determined to encourage more people to come forward as entrepreneurs, to take risks and succeed, and to grow businesses. We have already taken a number of measures to support SMEs. The Secretary of State for Business and Trade has already committed to establishing a business growth service inspired by the US Small Business Administration. That is why one of the outcomes of the spending review was a two-thirds increase in the capacity of the British Business Bank. The vast majority of that funding will go to help tackle the considerable challenges that SMEs face in accessing the right forms of financial support.

The right hon. Gentleman rightly raised the issue of access to public procurement for British SMEs. I am sympathetic about the need to open up public procurement to SMEs. Again, we will have more to say on that in the small business strategy, when it is published shortly. Cabinet Office colleagues are very much working in this space, too.

The right hon. Gentleman also rightly raised the matter of the difficulties that small and medium-sized businesses face when legal issues arise. Again, we will have more to say on that in the small business strategy shortly. Towards the end of his remarks, he made a powerful link to an appalling miscarriage of justice: the scandal of how the Post Office treated its sub-postmasters. There are many lessons to learn from that. I hope that he will take confidence from the Government’s determination to do that when he sees the Green Paper on the future of the Post Office, which we are seeking to bring forward. I am sure that the whole House appreciates the work that Sir Wyn Williams is doing to draw conclusions about what went wrong in the scandal, and about what more we need to do to learn the lessons and ensure that nothing like that ever happens again.

[Sir John Hayes]

I thank the hon. Gentleman for the way in which he is responding. There is a close parallel between the way the Post Office is constructed—its business arrangement, and the connection between independent post offices and the centre—and the matters that I described. Will he ensure that his small business strategy includes something on franchising? That is a really important part of getting right our approach to regulation on the relationship between smaller businesses and corporate giants.

[Gareth Thomas]

I have already given a flavour of what might be in the small business strategy. I will leave the right hon. Gentleman to wait a little longer, if I may—he will have to forgive me—before he sees the strategy in full.

Let me come to the substance of the right hon. Gentleman’s concern. He rightly and understandably mentioned the experiences of a number of franchise operators who allege mistreatment and being badly let down by Vodafone during covid. No one in the Chamber will have failed to have been moved by those stories. I have read a number of them in correspondence from colleagues on both sides of the House.

There are, without question, serious allegations being levelled at Vodafone. As the right hon. Gentleman said, and as I am sure he will understand, I am unable to comment on ongoing legal disputes, but I will respond on behalf of the Government as best I can, given the ongoing nature of the case. Until now, there has not been sustained concern about the quality or effectiveness of the self-regulation of franchises in general. However, I recognise that this case has raised concerns across the House, and I will track very carefully what happens in this case, the final outcome, and the conclusion of any court case.

As hon. Members will no doubt be aware, franchising is growing in the UK, and it makes a big contribution to our economy, at just over £19 billion annually, according to the latest British Franchise Association survey. The franchising industry is covered by the same general protections in law as other businesses, and I will come on to some of those in a moment. In addition, the franchising industry also effectively self-regulates through the British Franchise Association, which has a code of ethics, and the Quality Franchise Association, which provides a code of conduct. On the whole, as the House will recognise, there are significant advantages to self-regulation: greater flexibility and responsiveness, and lower costs.

[Luke Akehurst]

Is the Minister aware—this is my understanding from the franchisees—that Vodafone left the BFA, and walked away from its self-regulatory framework and code of conduct?

[Gareth Thomas]

My hon. Friend will forgive me, but I will not comment on the particular circumstances of Vodafone and its relationship with franchisees in general, or those former franchisees who are bringing court action. However, I note his comment.

[Navendu Mishra]

I have worked with the Minister on a number of issues relating to his ministerial role, and he has always been helpful and proactive. As he is representing His Majesty’s Government, does he feel that there is a need to legislate on this issue, and that the code of conduct simply does not go far enough? Also, as my hon. Friend the Member for North Durham (Luke Akehurst) has just said, there might be cases of larger corporations opting in and out as and when it suits them.

[Gareth Thomas]

As I said, I recognise that this case has raised concerns across the House about the quality and effectiveness of the legislation that governs franchisees and, indeed, other businesses, and about the arrangements around franchisees, and their relationships. As I say, up to now, we have not had significant representations that the quality of regulation of franchises is not adequate. However, I recognise the concerns across the House that this case has brought up, and as a result, I will track very carefully how the court case unfolds.

I was noting the advantages that, on occasion, self-regulation brings. They include freedom when it comes to contracting. Individuals and businesses have the right to enter into agreements and set their own terms, free from unnecessary Government interference. That freedom allows franchise agreements to be tailored to individual needs. People can set up shop more easily on the high street or elsewhere with the power of a big brand behind them. On the whole, self-regulation also allows the franchise industry to set standards and guidelines based on deep, industry-specific expertise. It allows the industry to adapt more quickly to market changes, too.

It is my understanding that the franchise agreements are the main instruments governing the relationship between franchisors and franchisees. Those agreements normally cover key issues such as fees, territory rights, contract duration and dispute resolution mechanisms. The Government of course encourage anyone entering a business contract such as a franchise to seek independent legal advice before agreeing to the terms and conditions laid out in those agreements.

I have talked a little bit about self-regulation and its benefits, and I alluded earlier to the fact that there are existing protections in law that cover all businesses, including franchises. For example, under the Misrepresentation Act 1967, anyone who has entered into a contract as a result of misrepresentation may be able to rescind the contract and claim damages. Misrepresentation is a false statement by one party to another that induces that person to enter the contract. Ultimately, it would be for the courts to decide whether a misrepresentation had occurred and what the remedy would be. There are other forms of legislation, too, including the Unfair Contract Terms Act 1977, which may apply to business-to-business contracts. That references the application of a reasonableness test, but that again is a matter for dedicated legal advice.

[Sir John Hayes]

The Minister is absolutely right, of course. Contract law is well established and business contracts are enforceable in the way that he sets out, but the problem with franchising is that it is a hierarchical relationship that creates a kind of dependency. The franchisee is dependent on the larger business, so there is an in-built advantage if that larger business is inclined to be permissive in the way that it applies the terms of the contract, or even varies its terms. The parallel I drew in my speech was with supermarkets and primary producers. The supermarkets have so much power that the primary producer is implicitly weakened in that commercial relationship.

[Gareth Thomas]

The right hon. Gentleman made a very interesting speech with a series of interesting analogies, and I have noted those and the points that he made. As I have said, I will track this particular court case and its conclusions. I always try to make myself available when hon. and right hon. Members want to discuss particular issues that are pertinent to my brief, and as things unfold, I make that offer to the right hon. Gentleman too.

I should stress again that only the courts can really decide on the application of contractual terms. It is absolutely right that affected businesses seek independent legal advice on the particular circumstances of their situation. As the right hon. Gentleman will be fully aware, legislation cannot prevent wrongdoing. It can deter and it can punish, but only after the event. It is important for companies, obviously, to conduct business fairly. We already have rules that encourage this, whether in relation to criminal offences of fraud, audit requirements or prompt payment reporting, which my Department has begun to strengthen and on which we will publish further proposals shortly.

I am sure the right hon. Gentleman will agree that investors and the public expect and deserve access to truthful reporting from our most important businesses on their finances and related issues. This is critical for trust, and ultimately it is critical for economic growth. That is why, through the audit and corporate governance reform Bill, we are developing legislation to uphold standards and the independent scrutiny of companies’ accounts while ensuring real accountability for company directors.

Section 172 of the Companies Act 2006 already requires company directors to frame regard in their decision making to a wide range of stakeholder interests. That includes the impact of the company’s operations on the wider community. It also requires directors to have regard to the desirability of the company maintaining a reputation for high standards of business conduct. This requirement applies to a company’s business transactions, including the treatment of franchisees. Large companies must report annually on how their directors have complied with these requirements. Taken together, the section 172 duty helps to provide assurance that companies are run responsibly and that directors are mindful of the impact of their decision making beyond the company and its shareholders.

The right hon. Gentleman touched on the additional regulation of franchises and the wider franchise model. As he will know, this Government are dedicated to implementing an ambitious regulatory reform agenda. In March, we published our action plan for regulation, outlining changes to streamline rules and regulations to support growth. While that plan includes a clear commitment to cut regulatory administrative costs for business by 25%, it also includes a commitment to strengthening accountability for regulators. That includes simplifying their duties to ensure that the regulatory environment focuses on growth, investment and, crucially, transparency.

Our modern industrial strategy also includes an ambitious package of regulatory reforms that will support our growth-driving sectors and the wider economy, but as we stated at its launch, that is not the end of the journey; it is just the beginning. Where there are changes that we can make to increase the UK’s economic resilience and channel support to the most productive parts of our economy, we want to continue to work with Members across this House to implement them.

In conclusion, let me thank the right hon. Gentleman and other hon. Members who have participated in the debate. Franchise regulation is a complex and difficult issue and, as I have said, this particular case has raised concerns across the House. As I promised, I will continue to look closely at how the case develops and ultimately what conclusions are reached. I am happy to continue conversations about this case and its implications outside the Chamber.

Question put and agreed to.

Hospitality Sector

Gareth Thomas Excerpts

Tuesday 1st July 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

It is a pleasure to serve under your chairmanship, Ms Butler, for I think the first time, and I hope it is the first of many. I congratulate the hon. Member for Kingswinford and South Staffordshire (Mike Wood) on securing this important debate. I recognise that he has long been an enthusiast for hospitality businesses in his constituency, and I welcome the opportunity to consider the important contribution that all hospitality businesses make to our communities up and down the country. Indeed, I think of some of the great hospitality businesses in Harrow, in my constituency, such as the great Trinity pub or the wonderful Battels café.

As well as the hon. Member for Kingswinford and South Staffordshire, we heard from the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald), the right hon. Member for East Hampshire (Damian Hinds), and the hon. Members for Ynys Môn (Llinos Medi), for Strangford (Jim Shannon), for South Northamptonshire (Sarah Bool), for West Dorset (Edward Morello) and for Westmorland and Lonsdale (Tim Farron).

We also heard particularly important and strong contributions from my hon. Friends the Members for Truro and Falmouth (Jayne Kirkham) and for South East Cornwall (Anna Gelderd). They referenced the significance of the visitor economy for hospitality businesses, and I am sure that they will welcome the fact that, this autumn, the Department for Culture, Media and Sport will publish a new visitor economy strategy. That has been co-designed with the new Visitor Economy Advisory Council, which includes UKHospitality. They referenced the dynamic and creative hospitality sector in Cornwall, and I was grateful to have the chance to personally sample some of those opportunities recently. My hon. Friends also referenced the case for fair funding for Cornwall, and the significance of a partnership between Cornwall and Homes England. I will make sure that their points are heard by colleagues in the Ministry of Housing, Communities and Local Government.

The hospitality sector contributes over £50 billion to the UK economy, spread across all corners of the UK, and employs millions of people. The sector makes not just a significant economic contribution, but an important social one because, as one or two hon. Members referenced, hospitality is also an opportunity for people. Working in pubs, restaurants and bars is often a key entry point, particularly for young people who need to gain essential skills and experience to progress in life. It is also often an entry point for those being given a second chance in life. For example, the excellent Greene King is working with 65 prisons across the UK to provide inmates with hospitality training. The company aims to hire 400 prison leavers by the end of this year. The Pret Foundation does fantastic work with homeless people, and has an ambition to get 500 people who face homelessness into jobs in their stores by 2028. The hospitality sector’s unique ability to employ and train people from all walks of life makes its economic contribution so much more than just that.

Hospitality is also crucial to our communities and personal lives. Hospitality businesses such as pubs support community cohesion. They provide welcoming spaces for those who feel isolated and alone to enjoy the company of others. In short, hospitality is the backbone of our high streets, towns and villages; it is the lifeblood of all our communities.

I fully understand the significant challenges that the sector faces, many of which are a hangover from the pandemic lockdown restrictions and the cost of living crisis. Depleted cash reserves and increased debt levels have hampered the ability of many hospitality businesses to invest and grow. These challenges are sometimes not helped by a regulatory landscape that does not always function as effectively as it could, holding back growth from many hospitality operators, which simply want to grow and invest in their local communities.

Let us not forget that this Government inherited a very challenging fiscal situation, which meant the Chancellor had to take difficult decisions in relation to tax and spending. Schools, police and local hospitals in all our constituencies are set to be better funded because of the difficult decisions she had to take in the Budget last year. The investment in infrastructure, or in social and affordable housing, that all our constituents need would not be happening without the decisions the Chancellor made last October. I know that many hospitality businesses have been impacted by those tough choices, but they are important for delivering the long-term stability and growth that our country needs and that our hospitality businesses, as well as the rest of the economy, will benefit from in the long run.

We will deliver on our manifesto commitment to create a fairer business rate system that protects the high street, supports investment and is fit for the 21st century. The Chancellor has committed to reforming business rates from 2026-27, with a permanently lower multiplier for retail, leisure and hospitality businesses. For many years the hospitality sector has asked for that, and we will deliver it.

I recognise the contributions from a number of hon. Members about the situation in Scotland, where—despite having had their biggest ever increase in funding as a result of the decisions the Chancellor took last October—the Scottish Government have not chosen to extend hospitality relief in the fullest way to all hospitality businesses.

[Jamie Stone]

I am a fair-minded person, and I would not dream of laying responsibility for the lack of affordable housing at the Minister’s feet. But does he agree that a message should be sent to the Scottish Government to get going on this one? I have just seen some terrifying statistics for north-west Sutherland about young people leaving. The old monster of highland depopulation is staring us in the face in that part of the highlands.

[Gareth Thomas]

The hon. Gentleman is right to make his point. One would hope that the Scottish Government would be as committed to taking action as the Government here in the UK. I hope he and other Scottish colleagues will see a change of heart and approach from the Scottish Government.

I understand the sector’s concerns about employers’ national insurance contributions. We are protecting the smallest businesses by increasing the employment allowance to £10,500. That means 865,000 employers will pay no national insurance contributions at all, and more than half of employers will see no change or gain from the package. The majority of hospitality businesses are micro-sized, so many will benefit from the increase.

We are also committed to reducing the regulatory burdens facing the hospitality sector. We recently launched a licensing taskforce to come up with recommendations for cutting red tape and removing barriers to business growth. We have received a report from the licensing taskforce containing many extremely interesting and thoughtful proposals, and we will make an announcement on our response to the taskforce work shortly.

We have also introduced a hospitality support scheme to co-fund projects, aligned with the priorities of the Department for Business and Trade and the Hospitality Sector Council. That includes support initiatives such as Pub is the Hub, to encourage local investment in rural communities—the hon. Member for South Northamptonshire made a point about that. In addition, we are extending the growth guarantee scheme, where Government will help smaller businesses to access loans and other kinds of finance up to £2 million, by covering 70% of the potential losses for lenders.

Later this summer, we will publish our strategy to support SMEs over the long term. The paper will focus on boosting scale-ups across key policy areas, such as creating thriving high streets, making it easier to access finance, opening up overseas and domestic markets, building business capabilities and providing a strong business environment.

The SME strategy will complement the industrial strategy in helping to create the conditions for further economic growth. The industrial strategy will support the whole economy by creating an improved operating environment to create long-term stability and generate greater dynamism for new start-ups to emerge. Supporting industrial strategy sectors will have spillover benefits for the rest of the economy—from innovation pull-through to technology diffusion. As an example, growth in the creative industries will create spillover opportunities for hospitality businesses.

As we look ahead, we will continue to work closely with the hospitality industry to co-create solutions to ensure that we generate growth together. In particular, we will work with the sector to iron out the issues that are of most concern. For example, we understand the current challenges relating to dual-use packaging under the extended producer responsibility scheme. We are therefore working with hospitality businesses to develop exemptions for waste disposed of commercially through the use of agreed evidence to show that that would be highly unlikely to end up in household waste streams.

Also, as we set out our ambitious plan to raise the minimum floor of employment rights, we will strike the right balance between fairness for workers and business investment and growth. Improving employment conditions benefits economic growth. It helps to put more money in employees’ pockets, which will help all businesses, including hospitality businesses, in the long term. We will do this by working in partnership with business, including the hospitality industry, to deliver our plan to make work pay, and we will consult on key proposals such as zero-hours contract reform in the autumn.

We will of course continue to work closely with the Hospitality Sector Council to co-create solutions and achieve growth in collaboration with the industry. That includes identifying regulatory barriers to investment and growth, and addressing skills shortages. We have established Skills England. We are reforming the existing apprenticeship offer into a growth and skills levy that allows more flexibility for both employers and learners wanting to pursue the apprenticeship route. The Department for Education has said that it will explore one of the key asks of the hospitality sector—the idea of foundation apprenticeships for hospitality. We are determined to help the hospitality sector to continue to unlock innovations and improve sustainability, and in that way bring down its costs. We will also look at how the Hospitality Sector Council can help us to deliver on our priorities for wider investment and growth, and support work to reinvigorate our high streets.

We all know that hospitality businesses are fundamental. They are crucial to our economy, crucial to our communities and fundamental to our high streets. And they matter to all of us individually, to our friends and to our families. The Government recognise the role of hospitality in creating places that people want to live, to work and to invest in, and we will continue to work in partnership with the industry to deliver growth and to break down barriers to opportunity.

[Dawn Butler (in the Chair)]

For a two-minute wind-up, I call Mike Wood.

Capture Redress

Gareth Thomas Excerpts

Thursday 19th June 2025 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

I am today delivering on the Government’s commitment to provide an update on the form, scope and eligibility criteria of the redress scheme for postmasters negatively affected by the Capture software.

This follows the Government accepting the findings of the independent investigation by Kroll Associates, which concluded that there was a reasonable likelihood that Capture could have created financial shortfalls for postmasters.

Our approach to redress

Over the past months, we have been working with stakeholders, including postmasters, the Horizon Compensation Advisory Board, the National Federation of SubPostmasters, and others to develop a fair and sound approach to redress. In doing so, we have drawn on lessons from other Government schemes to ensure that this one delivers timely, accessible support, recognising both financial losses and wider personal impact.

Unlike the Horizon schemes, Capture presents a different set of challenges due to time elapsed and a lack of documentation that still exists. To accommodate this, the scheme is being designed to provide a practical and fair way to recognise harm, even where records are limited.

The scheme has two clear stages to make the process as simple as possible: first, an eligibility review to confirm who can access redress; and secondly, a panel review to ensure that each claim is independently assessed.

Eligibility Review

To be eligible for redress, claimants must demonstrate that they:

were a postmaster between 1992 and 2000;

used the Capture system in their branch; and

suffered a financial shortfall related to a Capture software error.

Eligibility will be determined based on the claimant’s statement and available supporting documents. We will also work with the Post Office to source any additional information where it exists. The scheme will also accept applications from relatives of deceased postmasters or those who need additional support.

All claims will undergo an initial eligibility review by trained caseworkers. In recognition of the time many postmasters have already spent waiting for resolution, those deemed eligible will promptly receive a preliminary payment. This ensures early acknowledgement of loss, ahead of a further assessment by an independent panel.

Independent panel and appeals

The panel will take a holistic view of each claim, including assessing the credibility and strength of evidence provided.

Claims will be assessed on the balance of probabilities, using a guided scoring and banding model that reflects both financial and non-financial loss. This allows consistency in awards, while remaining flexible and fair—an approach informed by other Government schemes, such as the infected blood compensation scheme.

The panel will recommend an appropriate payment for each eligible claimant. Claimants will also have the right to appeal the panel’s recommendation in certain circumstances, in line with similar redress schemes.

To ensure impartiality, the panel will operate entirely independently of Government and will be composed of experts across relevant fields.

Separate consideration for convicted individuals

This scheme is specifically for those without a criminal conviction related to Capture. For those who may have criminal convictions related to Capture, the appropriate route is through the Criminal Cases Review Commission or its Scottish equivalent. The Government remain committed to supporting the CCRC in its ongoing investigations. If any convictions related to Capture are identified and overturned, we are committed to ensuring that appropriate redress is provided for those affected.

Next Steps

As this approach departs from the structure of existing Horizon redress schemes, we want to ensure it is fair, proportionate and accessible. To support this, we will launch with a phased roll-out for an initial 150 claimants. Lessons from this first phase will inform any refinements needed ahead of wider roll-out.

We expect the scheme to open for applications in autumn 2025. Over the coming months, we will finalise guidance and publish further details on applying. We urge those who believe they are eligible to begin searching for evidence that they may hold and to prepare their case for once applications open.

We remain committed to delivering swift and fair redress —recognising the enduring hardship, and the need for a trusted, transparent process ensuring that those affected by the Capture system receive what they deserve

[HCWS713]

Businesses in Rural Areas

Gareth Thomas Excerpts

Wednesday 18th June 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

It is genuinely a pleasure to serve under your chairmanship, Mr Western—thank you for your reminder of the etiquette at the end of the debate—and to respond to what has been an extremely important debate on supporting the many remarkable rural businesses across the country. In the usual way, I take this opportunity to thank the hon. Member for North Norfolk (Steff Aquarone) for securing this debate, and for what I understand is a long-standing interest in this vital issue for our rural community.

If there were any doubt about the importance of the rural economy, the sheer numbers of hon. Members who have contributed to this debate have surely put that to bed. I say gently to the Opposition spokesperson, the hon. Member for Mid Buckinghamshire (Greg Smith), that I heard some impressive speeches from Members on this side of the House, but I none the less recognise the significance of the contributions from those on the other side. Such was the range, I fear that I will not be able to do justice to all the different points that were made. I recognise that one or two contributions were as much about getting me to deliver messages to other parts of Government as they were about my own Department.

Rural businesses are without doubt the lifeblood of our countryside. More than half a million businesses are registered in rural areas, contributing over £315 billion a year to the economy in England alone. The diversity of the rural economy is striking: 86% of rural businesses span sectors beyond just agriculture, forestry and fishing. The Government fully recognise the immense potential for growth in our rural areas. That is why we are committed to creating the right conditions to allow rural enterprises of all kinds to thrive and succeed.

First, we are taking steps to improve rural infrastructure —the keys to unlocking that growth potential. The hon. Member for North Norfolk waxed lyrical about the significance of rural bus services, which I absolutely accept. He will be only too aware of the significance of the decisions, to which I think he alluded, that the Bus Services (No. 2) Bill will bring into force. It will put decision making about what bus routes should be provided into the hands of local leaders across England, including in rural areas. That will allow local communities to determine for themselves how best to design their bus services, so that they genuinely have control over routes and schedules, helping both local communities and—crucially, in the context of this debate—rural businesses.

[Joe Morris (Hexham) (Lab)]

On transport, it is not just buses but road infrastructure that is important for our communities and businesses, whether that is the Lord Crewe Arms in Blanchland, in the south of my constituency, or Falconry Days in Simonburn, in the north. Filling potholes is important to ensure that we can get to appointments and to businesses, but the lack of advertisements from councils on when they are conducting roadworks impacts tourism businesses. Does the Minister agree that Northumberland county council could do a far better job of communicating with small businesses about when it is repairing roads, so that tourism bookings do not drop off?

[Gareth Thomas]

I am disappointed to hear that my hon. Friend’s local county council is not liaising about roadworks more effectively with small businesses in the rural areas that he represents, and I hope that it will hear his intervention and take action. He is right that we need to ensure that we are investing not just in buses—I will come back to that point—but more generally in the roads that serve rural and urban areas. We have committed more than £2.3 billion for local transport links in smaller towns and villages, which I hope will make a real difference in all the communities where hon. Members have expressed concerns about the quality of bus services.

A key theme that has surfaced in this debate—certainly a lot of Government Members were keen to stress it—is digital connectivity. I hope that the fact that the Government are investing over £1.9 billion in broadband and 4G connectivity will help to give confidence across rural and urban communities that the crucial issue of digital connectivity is being taken forward in a way that supports residents and small businesses. Good digital and transport connections are essential for rural businesses to access markets, suppliers and talent.

As well as taking steps to improve rural infrastructure, we are backing rural entrepreneurs and businesses with finance and advice. The British Business Bank has supported more than 200,000 businesses, in every constituency of the UK, to grow over the past decade. Its regional funds provide vital debt and equity finance to firms outside London and the south-east.

Meanwhile, our nationwide network of growth hubs offers free, impartial guidance to rural enterprises on everything from start-up to scale-up. I hope that the business growth service, which my right hon. Friend the Secretary of State for Business and Trade has announced, and which we will say more about shortly, will also help to make a significant difference to rural businesses in terms of the quality of advice that they can access.

[Mr Angus MacDonald]

Will the Minister acknowledge the disparity in energy price between rural areas and urban areas? Businesses in urban areas can access mains gas and pay 6p per kilowatt for their energy, whereas businesses in rural areas pay 24p per kilowatt for their energy. What a disadvantage that is for rural areas.

[Gareth Thomas]

The hon. Gentleman underlines the need for significant investment in green energy. Other hon. Members referred to the need to support renewable energy, particularly community renewable energy schemes, as part of the solution to issues around rural prosperity and to tackle the energy challenges that we are all familiar with.

We are investing directly in rural areas through schemes such as the rural England prosperity fund, which is worth £33 million this year. That funding will provide capital grants for new business facilities for product development and community infrastructure improvements that benefit local economies.

We are committed to sustaining vital services and amenities in rural areas. Our £2.7 billion a year for sustainable farming ensures continued investment in environmental land management and nature recovery, underpinning the agriculture sector. We are also working to enhance access to banking, particularly in rural areas, including through the roll-out of banking hubs across the UK by the end of this Parliament.

Rural businesses can also look forward to benefiting from measures such as reforms to the apprenticeship levy, helping them to invest in skills—a key concern that was raised in this debate. I know that rural businesses, as well as businesses in urban areas, are really concerned about that.

We also heard a couple of contributions from hon. Members about the significance of post offices in their communities. Again, I recognise the critical role that post offices play in rural communities, and indeed, the potential for the Post Office to do more. As some hon. Members will know, we are bringing forward a Green Paper on the future of the Post Office shortly, which I hope will give further confidence about the potential for the Post Office to do more in rural areas, as well as more generally.

[Jamie Stone]

Will the Minister give way?

[Gareth Thomas]

I will for the last time.

[Jamie Stone]

The Minister may or may not know, although I thank him for it, that a banking hub will shortly open in Wick, in the extreme far north of the United Kingdom. I would be grateful if he could ask his civil servants to come up and take a look at it once it is up and running, because there might be something to learn from it as to how other very remote parts of the UK can be serviced.

[Gareth Thomas]

I thought the hon. Gentleman was going to invite me to come to Wick, but I will certainly pass on the invitation to my officials. We are keen to learn from the experience of the banking hubs that have worked, that are up and running, and that are now seen as being effective. There is more that the Post Office can do to provide more of the services that banking hubs provide, and we are keen to work with the financial services industry to make sure that that happens.

Hon. Members asked a series of questions about tax and I suspect that we will come back to those issues in a number of forms. I just say gently to the Opposition spokesperson that we inherited a very difficult financial situation—a £22 billion black hole. If we are to provide, as we rightly should, the schools, teachers, hospitals and police forces in rural communities, difficult decisions had to be made about the finances going forward.

Lastly, we also want to make sure that we are opening up new markets for businesses in rural communities to access, which is why the trade deals that we have agreed with the United States, India and—crucially, too—the European Union are so significant. I welcome the opportunity to discuss the importance of rural businesses to growth across the UK. We know that there is more to do in this space and we are determined to do it.

Oral Answers to Questions

Gareth Thomas Excerpts

Thursday 12th June 2025 Commons Chamber

[John Slinger (Rugby) (Lab)]

18. What support his Department plans to provide to entrepreneurship incubators in towns.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

The Government continue to support entrepreneurs through start-up loans via the British Business Bank and through programmes such as growth hubs in England and “Help to Grow: Management” training across the UK. Later this year we will publish our small and medium-sized enterprise strategy, one key element of which will be to signal our determination to do even more to champion our entrepreneurs, including through a new vision for business support, built around the coming business growth service.

[Mr Quigley]

You will be pleased to know that I do not have a book coming out, Mr Speaker. I am reading the one that my hon. Friend the Member for Central Ayrshire (Alan Gemmell) has written, and it is excellent, but I should probably say on his behalf that any likeness to characters in this place is entirely coincidental.

I thank the Minister for his response. I have seen at first hand his commitment to supporting Britain’s entrepreneurial spirit, but I worry that on the Isle of Wight unreliable cross-Solent transport is holding back entrepreneurs. Local businesses do not lack ambition; they lack a dependable link to their supply chains. Some are even considering leaving the island. Will the Minister meet me to discuss a long-term solution to cross-Solent travel that supports, rather than punishes, island businesses?

[Gareth Thomas]

I welcome my hon. Friend’s commitment to championing entrepreneurs on the Isle of Wight. We know that there is huge untapped potential in the entrepreneurial talent across the UK, and we are determined to do even more to unlock it, including on the Isle of Wight. As he will know, the Department for Transport, which leads on cross-Solent travel, has been clear that ferry services to and from the Isle of Wight are vital for islanders and for business. I know he has already had some contact with ministerial colleagues at the Department for Transport to discuss these issues, but if he thinks I can be helpful, I will be happy to meet him.

[John Slinger]

Towns like Rugby have a proud industrial heritage and an exciting present, and we are building a dynamic and sustainable business and industrial future. It was very welcome that the Chancellor revised the Green Book to make sure that investment and economic growth are spread more fairly across the country, beyond the major city regions. Can my hon. Friend set out what support may be available for towns like Rugby to attract and encourage people to start and grow their own businesses—for example, entrepreneurship hubs in towns rather than cities, so that they can play a role, and targeted tax reliefs for firms setting up in places like Rugby?

[Gareth Thomas]

I welcome my hon. Friend’s commitment to championing entrepreneurs in his constituency. He may know that we already have some 41 growth hubs across England, including the Coventry and Warwickshire growth hub, which provides a bespoke service for first-time entrepreneurs, tailored advice and support to start-ups and those wanting to scale up a business. We are determined to do more to help entrepreneurs and will set out our plans in our SME strategy, which is due to be published relatively shortly.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

I recently met a load of entrepreneurs and small businesses in Mid Leicestershire who all have the same concern about the low VAT registration threshold of just £90,000. That is stifling their growth, because it adds a lot of bureaucracy and cost. What representations will the Minister make to the Chancellor to ensure that those small businesses can flourish?

[Gareth Thomas]

The hon. Gentleman will not be surprised to know that we receive representations on the VAT threshold from a number of small businesses, and we ensure that they are heard by Treasury colleagues. He will recognise that VAT raises a significant sum of money for the public finances, and given the mess that we inherited, we had to take some difficult decisions about those public finances to protect funding for hospitals in his constituency, and indeed other public services across the country.

[Caroline Voaden (South Devon) (LD)]

Recently imposed general product safety regulations have added yet another layer of cost and complexity to exports to the European Union. That is particularly hitting entrepreneurs and microbusinesses, many of which have had to end exports to their EU customers. Did the Department have any discussions with its EU counterparts during recent trade negotiations about exempting small and microbusinesses from those rules? If not, is it doing any work to support small businesses in particular, which have had to end exports to EU customers because of the new regulations?

[Gareth Thomas]

We have been talking to businesses about what they can do in the light of the new regulations, and we are in the process of improving significantly the range of support available to businesses online. The Secretary of State recently set out our plans for a new business growth service, which will significantly improve the speed and quality of advice that businesses can get from the Government.

[Harriet Cross (Gordon and Buchan) (Con)]

4. What steps he is taking to help reduce employment costs for employers.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

Just last month, we relaunched the Board of Trade to focus on the targeted support and help that small businesses need to take up opportunities from the UK’s free trade agreements. The recent trade deals with India, the United States and the European Union aim to reduce red tape, improve customs processes, slash tariffs and open new markets for small exporters up and down the UK.

[Liz Twist]

Small businesses—like Rezon in my constituency, which makes groundbreaking brain protection sports headwear—are working hard to grow and export, but it is often hard to know where to get the right advice. What practical support are the Government giving to small businesses to help them export and take full advantage of those trade deals?

[Gareth Thomas]

I thank my hon. Friend for her question and for the opportunity to attend a wide-ranging roundtable with local businesses in her constituency, at the end of last year. Our new workshop, “Introduction to Export”, is in collaboration with the North East combined authority, and is aimed specifically at helping local small businesses that are thinking about exporting to new markets for the first time. A range of other support is available on the Government website, and that will be significantly improved as a result of the coming business growth service.

[Aphra Brandreth (Chester South and Eddisbury) (Con)]

6. What steps he is taking to support high street businesses.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

We have announced plans to reform business rates, launched high street rental auction powers for councils that will help businesses to access currently vacant properties, worked with industry to open over 150 banking hubs, and introduced the Crime and Policing Bill to provide retailers with greater protections from assault and shoplifting. Our forthcoming small and medium-sized enterprise strategy will set out our further plans to help businesses on the high street and beyond.

[Aphra Brandreth]

Chester South and Eddisbury is home to some truly special high streets, lined with independent shops and pubs that play a vital role in the life of our communities. I have spoken to local business owners, especially in hospitality, who are already feeling the pressure. Following the spending review, the chief executive of UKHospitality said that

“the overwhelming challenge holding back hospitality from meeting its potential is the current tax burden”.

Does the Minister accept that unless action is taken to ease the burden on high street businesses, especially in hospitality, the Government risk undermining the very communities they claim to support?

[Gareth Thomas]

I say gently to the hon. Lady that when she had the conversations that she says she had with businesses in her constituency, I am sure she pointed out the huge economic mess that this Government inherited and the £22 billion black hole in public finances. That is why the Chancellor of the Exchequer had to make some very difficult decisions in last year’s Budget. We have set out a series of plans that will make a genuine difference on our high streets, including new opportunities to persuade landlords to open up premises for rent. We will set out further plans in the coming small business strategy, and our industrial strategy will also help to generate growth in high streets and beyond.

[Dave Robertson (Lichfield) (Lab)]

The town of Burntwood in my constituency has a high street that has been struggling after 14 years of neglect by the Conservatives. One of the things holding Burntwood back is the lack of access to high street banks. Will the Minister update us on what the Department is doing to support access to banking in our high streets as a key pillar of driving the regeneration of high streets like the one in Burntwood?

[Gareth Thomas]

My hon. Friend is absolutely right to focus on the need for face-to-face banking in communities and high streets up and down the country. We are committed to working with the banks to roll out 350 banking hubs by the end of this Parliament, but we also think that the Post Office can do more to help to improve access to banking services. On the particular issue in his constituency, if it would be helpful, I would be very happy to sit down and talk to him about what else he might be able to do to secure a banking hub for his constituents.

[Mr Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

The Retail Jobs Alliance is very clear in its warning that the Government’s changes to business rates will

“accelerate the decline of high streets, reducing footfall…and creating a cycle of economic downturn.”

That letter was also signed by the Union of Shop, Distributive and Allied Workers—a Labour-affiliated trade union. Once again, the Minister and the Department for Business and Trade have a choice. Will they stand up for high street retailers, actual employers and even their own affiliated trade union, or will they just go along with Treasury diktat?

[Gareth Thomas]

Once upon a time, the Conservatives supported business rates reform to help the high street; the hon. Gentleman now seems to be shifting his party’s policy. Indeed, time after time his Government promised that they would reform business rates, but one of the reasons they lost the confidence of British business at the last election was because they did not act to reform business rates. We have said that we will introduce permanently lower business rates for retail, hospitality and leisure. The Chancellor of the Exchequer set out our initial thoughts on that in the Budget in October, and we will publish an update on where we are on that issue in the coming months.

[Greg Smith]

We support business rates reform, but when Labour’s own trade union says that its plan is not going to work, Ministers should really sit up and listen.

Let me turn to another issue affecting our high streets: shoplifting—which continues to devastate many high street retailers. I see that in my own constituency in high streets in Princes Risborough, Wendover and Great Missenden. How is the Minister actively engaging with the Home Office, police and crime commissioners and police forces to move shoplifting up the agenda across the board, just as my home force of Thames Valley has done with its Disc scheme? Before he comes back with police numbers, let me tell him that there are more police in Thames Valley than ever before, let alone since 2010. Just talking the talk on numbers is not enough. What is he going to do proactively to make this issue go up the agenda?

[Gareth Thomas]

I think the hon. Gentleman, in his own way, is congratulating the Government on increasing police numbers in his constituency, and he is certainly right to do so. We have committed to an extra 3,000 police officers over the course of this financial year and a total of an extra 13,000 by the end of this Parliament. We are also taking action to end the immunity that his party introduced for shoplifters and taking steps to increase the powers that the police have to take action when shoplifters and others are violent against retail staff.

[Laura Kyrke-Smith (Aylesbury) (Lab)]

7. What steps he is taking to support small businesses.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

19. What steps he is taking to support small businesses in Great Grimsby and Cleethorpes constituency.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

Our small business strategy will be published later this year and will set out our plans to champion entrepreneurs, improve access to finance and help small and medium-sized enterprises to reach more markets and adopt new technology. As I alluded to earlier, we are developing our plans for our new business growth service, simplifying access to support and advice for small businesses. We are also tackling the challenge of late payments, including the introduction of a new fair payment code and upcoming legislation requiring large companies to report annually on their payment performance.

[Laura Kyrke-Smith]

In Aylesbury town centre, we have some fantastic businesses, from Darlington’s to the Rockwood pub and Nafees bakery. They provide an amazing service to the community, but with issues such as traffic, parking and antisocial behaviour, they can struggle to get customers into town and through their doors. I congratulate the Minister on the work he is doing, but can he tell us more about how his small business strategy will support our high streets and town centres, like Aylesbury, to thrive?

[Gareth Thomas]

I very much enjoyed my visit to my hon. Friend’s constituency and the roundtable we had with some of the fantastic businesses there. I very much hope that Conservative-controlled Buckinghamshire council will finally get its act together and sort out some of the traffic and parking issues she mentioned. We will set out our plans to do more to help small businesses across the country, including in Aylesbury, in our SME strategy. One particular measure that we will be able to take action on is to improve access to finance for small businesses, following the Chancellor of the Exchequer’s significant increase in the capacity of the British Business Bank yesterday.

[Joe Powell]

Small businesses on our high streets across my constituency, from Earl’s Court Road to Queensway, Notting Hill Gate and Portobello Road, are fed up of being blighted by candy shops, low-grade souvenir shops, Harry Potter shops and even barbershops, with accusations of VAT and business rates evasion and even links to money laundering and serious organised crime. Can the Minister outline what steps the Department is taking, in conjunction with the Minister responsible for high streets, His Majesty’s Revenue and Customs and the National Crime Agency, to crack down on these operations and create a legitimate level playing field for our small businesses?

[Gareth Thomas]

I recognise that my hon. Friend has been very persistent on this issue, and he is entirely right to be so. We have been working with colleagues in the Home Office and the National Crime Agency to take action to crack down on illegitimate businesses that threaten to undermine the legitimate ones that exist on all of our high streets. In March, the National Economic Crime Centre co-ordinated a three-week crackdown on barbershops and other cash-intensive businesses where there were concerns, visiting almost 400 premises and securing freezing orders over a series of bank accounts totalling more than £1 million.

[Melanie Onn]

I thank the Minister for his answer, but I really do need to press him, because my constituents in Great Grimsby and Cleethorpes are as fed up as those of my hon. Friend the Member for Kensington and Bayswater (Joe Powell) with seeing high streets dominated by dodgy vape shops and unlicensed barbers. While some of those businesses are legitimate, a recent BBC investigative report shows that many are involved in money laundering and organised crime. Obviously, the Minister is aware of the situation, but is he working closely with the Home Office to try to tackle this blight? We probably need a national strategy, not a three-week operation.

[Gareth Thomas]

My hon. Friend is right to say that this is not just an issue for our high streets, such as those mentioned by our hon. Friend the Member for Kensington and Bayswater (Joe Powell), but a concern up and down the country. The National Crime Agency and Home Office colleagues are seeking to take action against illegitimate businesses, and my hon. Friend will recognise that the announcement in yesterday’s spending review of additional police officers, with more to come over the spending review period, will help us with that activity.

[Graham Stuart (Beverley and Holderness) (Con)]

If the book that the hon. Member for Central Ayrshire (Alan Gemmell) has written is a political thriller about fighting for small business, I am sure it features five heroes on the Government Front Bench doing everything they can to promote small business. But readers will ask, “Who is the villain of the piece?” Is it not obvious that it is the Chancellor of the Exchequer, who is doing everything possible to undermine business, with 276,000 people having lost work since the autumn statement, and 109,000 in the month of May alone? When will the Ministers—the heroes of this story—fight against the Chancellor, who is getting so much so wrong?

[Gareth Thomas]

It is a little while since I have been called a hero by the right hon. Gentleman, but I am glad that I have finally had some recognition from him. I do not think that the Chancellor of the Exchequer is a villain at all; indeed, I think the spending review she announced yesterday will help to unlock investment in our high streets and our small businesses up and down the country. The record investment in research and development and in infrastructure, and the additional capacity for the British Business Bank, will help to unlock billions of pounds of new investment and many more job opportunities across the country.

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

Charlotte from Harpenden and her family run Gatwards, one of the oldest family-run jewellers in the UK. It is a small business that has been there for so many years, but it has been hit by the rise in national insurance contributions and changes to business property relief and inheritance tax, meaning that it will shelve plans to hire staff and the premises are in peril. Will the Minister work with the Treasury to review the impact of these policies on small businesses and our high streets?

[Gareth Thomas]

We will always work across Government with the Treasury to look at issues that affect businesses, whether on the high street or beyond. In the discussions the hon. Member has had with the particular businesses in her constituency, I am sure she will have noted our plans to reform business rates, which will help many businesses in the retail, hospitality and leisure sector. She will also have noted that more than 40% of businesses will pay no business rates in the coming year.

[Lincoln Jopp (Spelthorne) (Con)]

Lky7 Sports is a small cycle and nutrition business in Ashford in my constituency. It has been hammered by the loss of small business rate relief, and wrote to me yesterday saying:

“The Government say that they are helping small business, but this is a joke when our business rates have gone from nothing to £1,800. We are seriously considering closing the shop down.”

What advice does the Minister have for that boss?

[Gareth Thomas]

I am sure that the hon. Gentleman— I say this gently to him—will have explained to that particular business that we inherited a very difficult economic situation because of the decisions that his party took, including on tax, but our small business strategy will set out more plans to help small businesses, such as the one in his constituency. Our business rates relief package will make a significant difference for retail, hospitality and leisure. [Interruption.] He asks when we will publish the small business strategy—it will be shortly.

[Alison Hume (Scarborough and Whitby) (Lab)]

8. What progress his Department has made on developing an industrial strategy.

--- Later in debate ---

[Dame Harriett Baldwin (West Worcestershire) (Con)]

Postmasters who were hit by the Horizon scandal will be concerned to hear Sir Alan Bates describe the compensation process as a “quasi-kangaroo court”. Can the Minister reassure postmasters about the redress that they are due, and reassure taxpayers about the redress that he is seeking from Fujitsu?

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

I thank the hon. Lady for her question, and she is absolutely right to draw attention to the continuing need to speed up compensation to sub-postmasters. Since we came into government, we have increased fourfold the amount of compensation paid to sub-postmasters, but there is an awful lot more to do. On the issues that Sir Alan Bates raised, the hon. Lady will know that under the group litigation order scheme, through which his compensation issues are being addressed, there are various independent points on the journey at which to consider the offer—

[Mr Speaker]

Order. If Ministers do not want Members to get in, please will they say so, because they are taking all the time from Back Benchers, which is really unfair to them? Back Benchers have put forward their names and come here to ask questions, and Ministers are just enjoying themselves too much.

--- Later in debate ---

[Chris Bloore (Redditch) (Lab)]

T5.   Rusty’s Collectables is a great new addition to Redditch high street, offering unique items such as Pokémon and Marvel collectables. Owners Russell and Amee have successfully moved from online to the high street. Can the Minister explain how the Government will help more entrepreneurs like them to turn great ideas into high-street businesses?

[Gareth Thomas]

I thank my hon. Friend for his question. Through our small business strategy, we will set out very shortly further plans to support businesses to get on the high street. The increase in money in the British Business Bank, announced yesterday by the Chancellor, will also significantly increase access to finance for such businesses.

[Mr Speaker]

I call Sarah Pochin—not here.

--- Later in debate ---

[Josh Babarinde (Eastbourne) (LD)]

Eastbourne businesses Qualisea, Gianni’s and Gr/eat are up in arms, as I am, that East Sussex county council’s shambolic management of the Victoria Place pedestrianisation means that works will now fall in the summer, their busiest trading period. What provision will Ministers make to ensure that businesses hit by such disruption can be properly compensated?

[Gareth Thomas]

The hon. Gentleman will understand that I do not have the details of that specific case, but if he wants to write to me I will happily look into it.

[Mr Speaker]

That completes questions. We will now let the Front Benchers change over.

Business and the Economy

Gareth Thomas Excerpts

Wednesday 21st May 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

Although that felt like a very long 50 minutes, it is always nice to see the hon. Member for Arundel and South Downs (Andrew Griffith) taking centre stage for the Conservative party. As one of the authors of the Liz Truss Budget, he is a constant reminder of the fiscal mess the Conservatives very kindly left this Government to confront.

Once again, the Opposition are trying to make us all believe that we are living in an alternate reality where the economy is shrinking, not growing, and investment is low, not high. There is only one problem with that analysis: none of it is true. Figures published last week showed that the economy grew by 0.7% in the first quarter of this year—the fastest growth of any G7 economy. The Office for Budget Responsibility’s forecast for growth has been revised up for future years, and the latest forecast from the International Monetary Fund predicts that the UK will see the third highest growth in the G7 over the course of this year. This Government have a plan for change, and it is working.

[Harriet Cross]

I just wanted to clarify whether inflation at 3.5% is higher or lower than inflation at 2%, which is where it was last July.

[Gareth Thomas]

I say gently to the hon. Lady that the current rate of inflation is an awful lot lower than the 11% it rose to under her party.

I was a bit surprised that there was nothing in the shadow Secretary of State’s lengthy speech on trade until my hon. Friend the Member for Peterborough (Andrew Pakes) provoked him. We have secured three massive trade deals: with India, the United States and, this week, the European Union. That will slash the cost of doing business abroad, reduce border checks, cut tariffs and axe red tape. Those trade deals will support jobs for British people, and create opportunities for Great British businesses in our biggest current markets, and in one of the world’s biggest future markets.

The Conservatives tried to do a deal with India, but could not; it has taken us just 10 months. They wanted a trade deal with the US—indeed, they had four years to do a trade deal with President Trump—but they could not; we have managed to do one in just four months. The deal they did with the EU was the worst trade deal in history; every opportunity they had to minimise red tape and border checks, they rejected. What was the result? Businesses stopped exporting to Europe in their thousands. Our deal with Europe sticks to our red lines, will save businesses thousands of pounds, will cut the cost of food in our supermarkets, and will help to get great British food products—from sausages to shellfish to seed potatoes—back into European markets.

Once upon a time, the Conservatives were in favour of free trade and trade deals. Now, they are against just about everything. Far be it from me to give advice to the Opposition, but the party in opposition is still allowed to support measures that are obviously in the national interest.

[Dr Luke Evans]

The key thing is, the Conservatives are in favour of free trade, just not at any cost. That has been the biggest problem with these deals. The Minister says that the previous Government did not sign off on them, and for jolly good reason—that is the point we are trying to get across. There will be people queuing up to come to the UK because they see us as a soft touch now and think they can get anything out of us. That is what we want to stop.

[Gareth Thomas]

Well, I am grateful to the hon. Gentleman for confirming once again that he is against the India trade deal, against the deal with the US and against the deal with the European Union.

I turn now to business investment. The Opposition’s motion claims that

“investors and entrepreneurs are being driven overseas”.

I hate to break it to Opposition Members, but the facts tell a rather different story: business investment actually rose by 5.9% in the first quarter of this year, the fastest quarterly growth in two years. In other words, business investment is higher than when the Conservative party left office.

[Dave Doogan]

Is the Minister a little worried that the unexpected growth in the first quarter of this year was businesses making capital investment to get in ahead of tariffs?

[Gareth Thomas]

One way that the hon. Gentleman could help businesses in Scotland would be to call for the Scottish Government to do what we are doing in this country and extend business rates relief to hospitality and leisure.

Investors from across the globe are choosing to put their money in the UK. Our international investment summit last year saw £63 billion committed to the UK—double the amount secured by the previous Government, when the Leader of the Opposition was the Secretary of State for Business and Trade—which is set to generate 38,000 new jobs. Crucially, the leaders of companies that committed to invest in our country at our international investment summit have hailed our pro-business approach as a driving factor behind their decision.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

I am sure Members across the House agree on the need and desire to promote growth and business investment. However, small and mid-sized businesses in my constituency—especially those in the hospitality sector—have been particularly squeezed, not just through the change of rate of national insurance, but with the threshold lowering, as they employ a lot of younger people on sometimes part-time wages. Will he make representations to the Treasury for those hospitality businesses to be included in future fiscal considerations?

--- Later in debate ---

[Gareth Thomas]

I can assure the right hon. Gentleman that we are always talking to businesses in the hospitality sector and across the economy. I say gently to him, though, that we had to take those difficult decisions in the Budget because of the mess that we inherited from his party. Businesses in the hospitality sector and beyond need to ensure that our schools, hospitals and police are properly funded.

[Sir Gavin Williamson]

rose—

[Gareth Thomas]

I am happy to give way to the right hon. Gentleman one more time.

[Sir Gavin Williamson]

Could the Minister set out to the House how much his Government actually raised through additional taxes in the Budget, and how much the Government set out in terms of additional spending?

[Gareth Thomas]

Those assessments were published in the Red Book at the time of the Budget. The right hon. Gentleman can do his own research and look those figures up.

Turning back to the international investment coming into our country and the support from business leaders for our measures, Iberdrola’s executive chairman said at the time of our international investment summit that

“the clear policy direction, stable regulatory frameworks and overall attractiveness of the UK”

have led the company to double its investments over the next few years, reaching up to £24 billion. We have seen more ringing endorsements of this Government’s approach since the summit. In April, the CEO of BlackRock, Larry Fink, praised our pro-growth agenda and said that investment in Britain is “undervalued”. He said that he has more confidence in the UK economy than he did a year ago. Meanwhile, the chief executive of JP Morgan, Jamie Dimon, has told the Financial Times that he backs this Government’s economic reforms, noting that there is much to like about the new Government’s pro-growth agenda. Our forthcoming industrial and trade strategies are further steps to support businesses and accelerate growth in the sectors of our economy with the most potential.

There has not been a strategy to help small businesses for more than a decade. The Conservatives cut support to small businesses to get into new markets. They cut support to help businesses to adopt new technologies and they failed to tackle the scandal of late payments from big businesses.

[Jerome Mayhew]

The Minister talks about growth and his pro-growth policy. In quarter 1, he had the unexpected growth of 0.7%. The UK Treasury’s April 2025 survey of independent forecasts assesses that the entire growth for the year is 0.8%. Does that mean that he is looking forward to 0.1% growth for the whole of the rest of the year? His policy is not working, is it?

[Gareth Thomas]

With due respect, the hon. Member is wrong. The OECD says that we will have the second fastest growing economy in the G7.

Let me come back to small businesses. Since taking office, we have sought to hardwire the views of small businesses into everything that we do. Together with the Federation of Small Businesses, we have announced robust measures to tackle late payments. Large companies will soon have to include their payment performance in their annual reports—a massive incentive to pay their suppliers more quickly. We have also launched our new fair payment code, overseen by the Small Business Commissioner. We intend to go even further, developing a strong package on late payments, including stricter maximum payment terms and strengthened powers for the Small Business Commissioner.

[Jerome Mayhew]

Will the Minister give way?

[Gareth Thomas]

Oh, go on then.

[Jerome Mayhew]

The Minister said that I was wrong. And, yes, it was the Treasury’s own survey, so perhaps it was wrong, but is the Bank of England wrong as well? It has a forecast of 0.75% growth for this year, and even the OBR has a forecast of just 1% growth. His growth policies are simply not working, are they?

[Gareth Thomas]

With due respect to the hon. Gentleman, he needs to track these things over a period of time. The Bank of England has revised the growth numbers up for this year, as a result of the measures that we have been taking.

As I said earlier, we have had to take some difficult decisions in the Budget to fill the £22 billion black hole left to us by the previous Government to tackle record NHS waiting lists, to invest in schools and to invest in our police. But we have been making headway to deliver on our manifesto pledge to reform business rates. One reason the Conservatives lost the confidence of the business community is that, time after time, they promised to reform business rates and never actually did. We are delivering lower tax rates for retail, hospitality and leisure properties from 2026-27. We are also scrapping the Conservative party’s policy of immunity for low-value shoplifting, and providing additional funding to crack down on the organised gangs who target retailers. We know that this has plagued businesses for years, with both staff and store owners feeling powerless. That changes now.

At the same time, we are reforming the British Business Bank to free up precious capital for businesses to expand. This includes our start-up loans and the growth guarantee scheme, so that, if people want to set up a new shop or business, the support is there to help them. It is why my Department launched a call for evidence on access to finance for SMEs last month, as part of our work on our upcoming small business strategy. All of this work is having a positive, tangible impact: the newest ONS statistics revealed that the number of businesses set up in this first quarter is up 2.8%, compared with quarter 1 last year.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

The Minister mentioned talking to businesses, but I would urge him to do a little bit more listening to them. My right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) asked how much in additional taxes and spending commitments was raised in the Budget, but I did not hear an answer. Can he please give the House an answer? If he does not know, will he agree to write to my right hon. Friend and leave a copy in the Library, so that we can all know the answer?

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[Gareth Thomas]

As I understand it, the hon. Lady actually supports the investment that those tax changes are delivering—she supports every penny of that investment coming into our economy. I wish the Conservative party—perhaps the hon. Lady has some influence with the shadow Chancellor—would set out its plans to raise a similar amount of money, if it does not like our spending plans.

I was reflecting on the newest ONS statistics, which show a 2.8% increase in the number of new businesses during this first quarter. Despite what Conservative Members have claimed, business closures are actually down 4.4%. The latest business confidence index of the Institute of Directors showed a significant rise in economic confidence, with their members stepping up recruitment and investment plans for a second month in a row.

[Dr Evans]

Employment statistics are really important. In the Minister’s constituency, unemployment has risen by a staggering 31% in the past year. In my constituency, it has gone up by about 10%. That will have a real impact. Perhaps he will come on to how he will support people into work, because it looks like unemployment has gone up by 10% across the country. That is a real concern for people, as they need to work and look after their families.

[Gareth Thomas]

The ONS numbers on employment show an extra 200,000 jobs in the economy since the general election, so I gently encourage the hon. Gentleman to look at a slightly wider range of statistics.

The shadow Secretary of State once again turned to the making work pay and Employment Rights Bill agenda of the Labour party. Let me remind the House that the reforms are about increasing job security for working people. They are about raising both the national minimum wage and the national living wage so that more than 3 million eligible workers receive a pay rise of up to £1,400; ending exploitative zero-hour contracts; and bringing an end to unscrupulous fire and rehire policies.

[Alison Griffiths]

I hear what the Minister says about job security, but if businesses will not be providing jobs because of day one rights, as my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) has so eloquently laid out, there will not be more people in work—[Interruption.] As my hon. Friend says, that is what the figures already show.

[Gareth Thomas]

With due respect to the hon. Lady, it is not one or the other: a pro-worker economy is a pro-business economy. That sentiment has been echoed by experts such as Simon Deakin, a professor of law at the University of Cambridge. He says that, on average, strengthening employment laws in this country has had pro-employment effects. He said that the consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity. Right now, it is worth noting that optimism among business leaders is rising, with improved expectations for investment, hiring and costs. Employment has risen by nearly 200,000, as I have said, since we took office. Payroll employment remains near record highs at around 30.3 million, and wage growth has been consistently outpacing inflation. These indicators suggest a labour market that remains robust and responsive, not one being held back, as the Opposition contend.

Let there be no doubt: this Government are delivering on our plan for change with investment and reform to deliver growth, put more money in people’s pockets, rebuild Britain and realise a decade of national renewal. We are the party of entrepreneurs and wealth creation. We are the party of workers, the party for economic growth and the party of social justice. The Conservative party has no ideas, no imagination, just a dismal record that it does not have the courage to face up to. We are delivering for British workers and for British businesses, so I urge the House to reject the motion before us.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

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[Chris Vince]

In all honesty, A1 Bacon has not contacted me about the Employment Rights Bill. As I said, it is concerned primarily with the increase in tariffs since we left the EU. I do not want to reopen that debate, as some hon. Members across the House seek to do, but I hope that the deal negotiated by the Prime Minister will help deal with that issue while ensuring that we maintain our sovereignty, which so many people who voted leave clearly want.

I want to recognise some other businesses in Harlow. What is brilliant when we are first elected as MPs is that we get to see many hidden treasures in our constituencies that perhaps we could not see before we were elected. One of my early visits was to Harlow Group, which makes components for Boeing aircraft that travel the globe. I understand that it is the only business in the UK that produces the boxes into which all the electrics go on a Boeing 747, which is pretty awesome. I also pay tribute to Wright’s Flour; New Ground café; Stort Valley Gifting, where I do my Christmas shopping, as did my predecessor; O-I Glass; and Ecco, which is a fantastic environmentally friendly charity that I will visit next week. Of course, the Minister would rightly criticise me if I did not mention our wonderful local Co-ops.

[Gareth Thomas]

I would never criticise you.

[Chris Vince]

Thank you very much. One thing I will raise with the Minister, which has been fed back from my local Co-op—I am sure it is the same at his as well—is the increase in retail crime. I hope that he will take that seriously. He is nodding appreciably. I look forward to hearing him talk about that in his wind-up.

Harlow is a great town. I have always said that it may not be the oldest new town, it may not be the newest new town, and it may not be the most successful economically, but it is absolutely the new town with the biggest heart. This morning, as a member of the all-party parliamentary group on new towns, I looked at some data produced by Visa on all the towns in the country and the challenges that many of them face. The challenges that Harlow faces, based on the metrics that Visa used, did not come as a big surprise to me. In relation to growth in particular, they were housing and productivity. The solutions that will increase Harlow’s productivity and that of the country as a whole come down to three key areas.

First, I will talk about skills. I pay tribute, as I have a number of times in the Chamber, to the fantastic work of Harlow college, which for many years has supported Harlow’s next generation of young people, giving them the skills they need not only for today, but for the jobs of tomorrow.

Equally, I want to talk about the importance of transport links. I will later do a little pitch for Harlow; I hope that the Minister does not mind. We are ideally located between London and an international airport, so there is lots of potential.

The other thing is transactions, and stimulating the economy through the transactions we make. I welcome the £20 million of Government investment in Harlow town centre, but I do want more for my town. I appreciate that the right hon. Member for Salisbury (John Glen), who is not in his place—I told him that I would mention this—has today’s Adjournment debate on this issue, but I will continue to lobby for the new site of the UK Health Security Agency to be in Harlow, which would mean 3,000 new high-tech jobs, providing Harlow’s next generation with the opportunity not only to aspire, but to really achieve in those jobs of the future. Economic inactivity rose in Harlow under the previous Government. My big ask of this Government is to invest in my town and my community.

Anyone who knows me will know that I am a pretty positive guy. [Hon. Members: “Hear, hear!”] Thank you. The Minister set out the reasons why we should be positive. The UK has the fastest growing economy in the G7, we have had four interest rate cuts in a row, and this week and last week we have signed three international deals to boost trade. For the first time in a long time, there is hope on the horizon for the people of Harlow. I know that under this Government, this country will have a great future on the world stage. My only ask of the Minister is to ensure that Harlow is part of that bright future.