Draft Post Office Network Subsidy Scheme (Amendment) Order 2024

Debate between Kevin Hollinrake and Lloyd Russell-Moyle

Wednesday 17th April 2024 General Committees

[Kevin Hollinrake]

I thank Members for their important contributions, all of which I shall cover, if I think I can.

The hon. Member for Bethnal Green and Bow asked how the money is being allocated. As I said, this is a cautionary raising of the cap, rather than money specifically going out today. She also asked how the 2025 funding package is being spent. There is the £50 million annual subsidy for uncommercial parts of the network and £190 million to meet the costs of participating in the Post Office Horizon IT inquiry and delivering redress to postmasters. Some £103 million helps the development of a replacement for the Horizon IT system, but she might be reassured to hear that there are zero pounds for bonuses.

On our engagement with the Post Office, I meet monthly with the chief exec and other members of the board. I met today with the National Federation of SubPostmasters in one of its meetings to constructively challenge the Post Office management, which I attend on a monthly basis. I also meet the board itself—I did so recently—including the non-executive postmasters on it. I meet postmaster victims, as I did today. I was delighted to host Lee Castleton and others in Parliament today, where they met the Prime Minister and the Leader of the Opposition. It is important that those meetings are held, such as the one I did last week at Fenny Compton for a BBC programme.

The engagement is about not only righting the wrongs of the past, but the future. The post office network has a bright future, with revenue opportunities that are very much around access to cash and how the banking framework can bring more revenue into post offices. It is crucial not only to increase revenue, but to reduce costs at the centre. It is important that the Post Office itself reduces central costs so that more of the money that flows into the organisation as a whole goes to the postmasters themselves to create more profitable businesses.

The shadow Minister referred to governance. We decided to part company with Henry Staunton and the Secretary of State was absolutely right to do what she did. We hope to see improved governance with a new chair, whom we hope to appoint shortly.

We have been clear, certainly for the past 14 or 15 months in which I have been in this post, that Fujitsu has not only a moral responsibility—it accepts that, as it said before the Select Committee—to own up to how it contributed to what happened, but a financial responsibility. It will contribute significantly to the compensation bill, and we have already had conversations about when that will happen. The right approach is for the inquiry to hear all the evidence, after which we can decide how blame is apportioned and who is culpable.

The inquiry’s evidence sessions are due to be concluded by the end of this year, with the report published early next year. By that point, we will know the full extent of the compensation bill, and that is the right time for final conversations with Fujitsu about how much it should contribute. I appreciate the cross-party support for those conversations. We will have ample opportunities in debates such as this, as well as those on the Floor of the House as we debate the convictions legislation, to press the case publicly with Fujitsu that we expect a significant contribution to be made. I thank the hon. Member for Bethnal Green and Bow for her support and kind words.

The SNP spokesman, the hon. Member for Gordon, talked about the reduction in services at post offices. He was right: there is no doubt that there has been a significant reduction in the amount of money generated at the post office level compared with 10 or 15 years ago. Letter volumes are a part of that, as are Government services, driving licences and passports, but what has happened is largely due to consumer behaviour, not our interventions. We do not think it is right for us to dictate to our citizens how they should access Government services.

I am sure the hon. Member for Gordon and other members of the Committee do not go to a post office when they renew their passport or driving licence; they probably renew online. It is far more convenient for people to do that, so we should not dictate to our citizens how they access vital public services. It is very important, of course, that we find other sources of revenue for the Post Office, which I will talk about again in a second.

The hon. Member asked whether the cap would impede delivery if there was a flood of new applications for redress. No, absolutely not. This is just one of the mechanisms by which we deliver compensation. The other mechanisms are through the Horizon convictions redress scheme, which is separate, and the GLO scheme. We do not feel that the cap, as a separate means of delivering compensation, will in any way prevent the right money going to the right people.

I thank my right hon. Friend the Member for Suffolk Coastal for her engagement on the matters important to her. She is right to point out that the subsidy for the uncommercial parts of the network is £50 million. We are trying to make sure that the uncommercial parts become more commercial, to deliver more services—particularly around parcels. The Post Office is moving to parcel hubs. I think 8,000 post offices up and down the country offer their customers at least three different options for sending parcels—Royal Mail, Evri or DPD —and that number is increasing. A range of different parcel carriers can provide services, and those are all revenue opportunities for post offices.

Banking is a lucrative source of revenue for the Post Office and is getting more lucrative. As my right hon. Friend said, bank closures have saved banks around £2.5 billion a year, and that number is increasing, so it is only right that a significant proportion of that saving should go into the Post Office network and improve remuneration through the banking framework. The hon. Member for Brighton, Kemptown said that the banks should be more generous in their negotiations with the Post Office. Those conversations are progressing reasonably well, but we are keen to make sure there is a better deal for the Post Office and that significant amounts of revenue flow into post offices through that source.

Additionally, Government legislation on access to cash means that banks are forced to leave behind in the communities they abandon banking facilities that include post offices and banking hubs. There will be between 500 and 1,000 banking hubs rolled out over the next few years. There are 40 already, but another 60-odd are in the pipeline, so there will be significant numbers of banking hubs around the country, which represent opportunities for postmasters, who tend to get the first bite of the cherry to operate those hubs.

[Lloyd Russell-Moyle]

The banking hubs are particularly good where banks are leaving, but communities already bereft of their bank have not had the opportunity for the post office to come in, so there is still work to be done. Does the Minister agree?

[Kevin Hollinrake]

Yes, I do. There can be timing differences, and we urge the banks to put those facilities in place before they leave those communities. Banks are separate commercial entities, and we have legislated to say that they must provide services such as access to cash in those communities. We have made those steps, and they are resulting in significant numbers of banking hubs being rolled out across the country, which are opportunities for our communities and our postmasters.

My right hon. Friend the Member for Suffolk Coastal mentioned the Kelsale outreach branch, which we have met about. We are keen to support her campaign to ensure those communities are still well served. She is right to point out that there should be transparency around where that money goes. A £50 million annual subsidy is going into the Post Office every year, some of which, potentially, will be provided through the raising of this cap. It is also about the Horizon IT inquiry and redress, and the IT system. The key message we have for Post Office Ltd is that it should be reducing costs at the centre to ensure that more of that subsidy, and more of the income resulting from the services provided by post offices, is going to the postmasters to make those post offices more financially viable, so that we see fewer closures.

The hon. Member for Brighton, Kemptown asked about what criteria we apply when talking about which post offices to put where. There are clear criteria. There are around 11,700 post offices across the country, and 99% of the population should be within three miles of a post office. The hon. Member mentioned a 10-minute drive; three miles in 10 minutes is probably on the same page, depending on where we are talking about—sometimes in north Yorkshire it takes longer than that. Those access criteria were set in 2007-08, during a previous Administration.

The hon. Member for Brighton, Kemptown wants to increase the subsidy. I hear what he says, but I do not know where he is going to find the money—perhaps he could talk to the shadow Chancellor about that. As far as the Government are concerned, we are providing a significant amount of money to the Post Office to ensure that it is sustainable. However, we want it to be independently viable, and that is about driving revenue while reducing costs at the centre. That is our clear strategy. The hon. Member also asked whether all the money for all the schemes is coming through the raising of the cap. No, it is not. There are other schemes and methods of getting money into payments of redress: the GLO scheme and the Horizon convictions redress schemes.

In conclusion, the Government are committed to ensuring the long-term sustainability of the Post Office, and are working closely with it to ensure that the company receives the funding it needs. The Post Office needs to continue righting the wrongs of the past from the Horizon scandal, to go on providing essential services across the UK, and to invest in the future through programmes such as the replacement for the Horizon IT system.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Post Office Network Subsidy Scheme (Amendment) Order 2024.

Horizon: Compensation and Convictions

Debate between Kevin Hollinrake and Lloyd Russell-Moyle

Monday 8th January 2024 Commons Chamber

[Kevin Hollinrake]

I thank my hon. Friend for his question. I reassure him that repetition is no barrier to contribution in this place, as he will recognise. I also thank him for his work on the Select Committee, which is hugely important. We heard the words “You’re the only one” time and again in those dramatisations. It was horrific. It was a blatant lie, and somebody must have known that it was a blatant lie. Those lies led to some people going to jail and others suffering other forms of financial detriment, and detriment to their health and that of their families. Should prosecutions flow from that wherever possible? I would say yes.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I share the thoughts of almost everyone—there has been almost cross-party unanimity on this issue—but I am still worried about the ongoing treatment of sub-postmasters and their liability. In 2018, my local post office was subject to an armed robbery. Those who ran the post office were hauled up to the regional office, where they were interrogated. They felt like criminals. They were not allowed to bring their reps from the Communication Workers Union; they were told they could bring reps only from the National Federation of SubPostmasters, which they had no trust in. In the end, although of course they were found not to have given over the money willingly, they left and handed over the post office to someone else. There is a problem with the liability of sub-postmasters, and particularly the fact that the Post Office has closed Crown post offices, which would not have such liability. Will the Minister look again at how liability works for sub-postmasters?

I echo the calls that we should look again at private prosecutions. The CCRC said in its 2020 report that the private prosecutions process is haphazard and the fact that the Government do not even know what private prosecutions are going on, because there is no central register, is detrimental to the very reforms they might need to make. Will the Minister at least look at having a central register of private prosecutions, and a regulatory overview, possibly of the Crown Prosecution Service? It was created for the very purpose of separating prosecutions from the police, and we now need to do that for other public services as well.

[Kevin Hollinrake]

I thank the hon. Member for raising that troubling case, which I am happy to look into on his behalf, if he would like. I think he said that case was in 2018, since when I feel there has been a change in relationship between the Post Office and the network—I am not saying that it is universally good or universally supported by the network, but there has been some improvement—including the recruitment of 100 regional managers, so there is more of a relationship-based approach between the network and Post Office Ltd.

On private prosecutions, as I said earlier, we should look at that in the context of this particular scandal as well as the wider connotations of private prosecutions. The Justice Secretary has committed to do that, and I am sure that he will report to the House in due course and take on board the Justice Committee’s important recommendations on this matter.

Economic Crime (Transparency and Enforcement) Bill

Debate between Kevin Hollinrake and Lloyd Russell-Moyle

Committee stage
Monday 7th March 2022 Commons Chamber

[Kevin Hollinrake]

It is a real pleasure to speak after the right hon. Member for Barking (Dame Margaret Hodge). We have worked together on so much, and we have worked on this legislation for a long time.

I will talk about new clause 2 when I come to my comments on whistleblowers, but the main thing I want to talk about is amendment 64. Many hon. Members have spoken about the danger of asset flight. In reality, we know it is happening already; people are not going to wait for this legislation to come into effect to try to hide their money. Whether the transition period is 18 months, six months or 28 days does not really matter, because the individuals in question can move their money around so quickly that much of it will have happened already.

I have supported amendment 16 in the name of the official Opposition, but I would like to think that my manuscript amendment 64, which I am very grateful to Mr Speaker and the Deputy Speakers for selecting, might be more effective. There are some other important amendments that have been tabled, such as new clauses 28 and 29, on freezing orders, but the difficulty with those new clause, as I said in my earlier intervention, is that we cannot freeze something that we do not know exists. That is very difficult to do. We need to look behind the curtain at who owns the assets. That is obviously what this Bill does; it is primarily about transparency and being able to see who owns what.

I am grateful for the support of many people on manuscript amendment 64, including my hon. Friend—he should be right honourable—the Member for Weston-super-Mare (John Penrose), the Government’s anti-corruption champion. We have worked closely on this, and as soon as we looked at the Bill we thought, “There’s something missing here. Clearly, these people are going to move this money around very quickly to make sure it’s not touched.”

I think this amendment probably does something, although I am not a lawyer—I looked at this over the weekend and I did not have any legal input, so I cannot say it is totally fit for purpose and I am interested to hear what the Minister has to say about it. He has engaged on this issue all the way through and been willing to discuss with me, as we did yesterday, what we can do to close this potential loophole. The amendment would simply require beneficial ownership to be registered with Companies House, which links into the Land Registry’s requirement to ensure that something is properly registered with Companies House before it allows a transfer or a sale to happen. Without the Land Registry doing that, of course, people cannot sell or transfer a piece of land or property.

[Lloyd Russell-Moyle]

The hon. Gentleman is making a very good speech on the importance of that relationship between the Land Registry and Companies House. Does he agree that the requirement still to pay to access the Land Registry dims the light that is shone, rather than enhancing it, and that making it an open registry, with Companies House as an open registry as well, would aid the process of light-shining?