Post Office Board and Governance

Debate between Kirsten Oswald and Kevin Hollinrake

Wednesday 28th February 2024 Commons Chamber

[Kevin Hollinrake]

I thank the hon. Lady for her question and for representing her constituents so effectively. I am keen to have continued conversation with her. All the schemes that have been established thus far require a contractual relationship between the Post Office and the individual, and I know that was not the case for her constituent. A number of Members of this House have addressed the issue, and we will continue to look at it.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Whether we are talking about my constituent Roger, a former postmaster whose case certainly needs review, constituents in communities such as Clarkston and Neilston, who have experienced the most recent post office closures in East Renfrewshire, or the brilliant postmasters operating locally, none of them deserves this mess. This is turning into a regrettable circus to all looking in from the outside. What assurances can the Minister give me today that that will not be allowed to divert or distract from a genuine focus on the swiftest possible resolution, and on delivering a sustainable future for the Post Office?

[Kevin Hollinrake]

I thank the hon. Lady for making that point and for representing her constituents so well. Yes, absolutely, we understand that this is distracting, or could distract, from work to ensure not just that we make right the wrongs of the past, but that the Post Office has a strong future, as she put it. I totally agree. We think that the Post Office does have a strong future. Revenue streams have been affected by changes in how and where people acquire certain things or access certain services, but the banking framework—we encourage the Post Office to be more ambitious in its negotiations with the banks on the remuneration that flows from the framework to postmasters—and the parcel hubs are an opportunity for the future. We believe that the Post Office has a strong brand and strong future. We are keen to support its efforts to ensure that the future is bright for all postmasters.

Post Office Ltd

Debate between Kirsten Oswald and Kevin Hollinrake

Monday 29th January 2024 Commons Chamber

[Kevin Hollinrake]

I am happy to look into any cases that the hon. Gentleman refers to. There are clear set criteria: the Post Office has to maintain 11,500 branches nationwide, and 99% of the population has to be within three miles of a post office. The Post Office is maintaining its requirements under those criteria, but I am very happy to talk to the hon. Gentleman about the issue. Of course, we are looking at how to ensure that the network of individual post offices is sustained over the long term with new revenue streams, including through the access to cash legislation that the Government have put in place and things like parcel hubs. We think there is a bright future for the Post Office, but I am very keen to work with the hon. Gentleman to make sure of that in his particular cases.

[Kirsten Oswald (East Renfrewshire) (SNP)]

I recently raised serious concerns with the Minister that the UK Government are not putting enough effort into making sure that post offices have a sustainable future—something that was of concern before the ITV drama shone a light on this issue. It is a challenge, and I do not feel that I really got an answer, so I am coming back to the topic again: we really need to know that we have a clear, proper plan for ensuring that there is no further deterioration of the network and to help build it back up. People in places like Neilston in my constituency, whose post office closed two weeks ago, or Clarkston, whose post office closed on Saturday, need those services. Those closures are billed as temporary, but they are only temporary if someone has the confidence to take up the opportunity to be a postmaster—who would feel that way now? What is the Minister’s plan to address the issue and make sure we have post office services for all our communities?

[Kevin Hollinrake]

I agree with the hon. Lady. We need sustainable post offices, and that is about revenue. There have been changes in consumer habits and business levels, which have caused difficulties for postmasters. As I said, the Government have legislated for access for cash, which is a new opportunity for post offices. The banking framework delivers more revenue into those post office branches; we are keen to see that enhanced and for the Post Office to be more ambitious about that relationship, with that money flowing straight into the profit and loss accounts of individual postmasters’ branches. There are many other opportunities, including parcel hubs and foreign exchange. I am happy to discuss the matter offline, if that would be helpful.

Horizon: Compensation and Convictions

Debate between Kirsten Oswald and Kevin Hollinrake

Monday 8th January 2024 Commons Chamber

[Kevin Hollinrake]

My hon. Friend is right to point out the nature of the public service provided by sub-postmasters. The great passion and the store set by sub-postmasters, such as Jo Hamilton, about their role in the community and the service they provided to that community came across loud and clear in the ITV broadcast. It was not just about losing a job, but about losing their place in the community, so my hon. Friend is right to draw attention to that.

It is important to resolve these situations quickly now, for the reputation of the Post Office, overturning convictions and getting compensation out of the door to everyone affected by the scandal, and we are working towards that every day. The post office network is still revered across the country, so I believe it still has a strong reputation at an individual level, but we must make the network more sustainable and viable. If the network is more lucrative, that will attract more people into becoming sub-postmasters. We are working on that all the time, through initiatives such as the banking framework and other opportunities.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Many constituents have contacted me looking for swift and straightforward action. I am interested in what the Minister has outlined, but it will be important to see further flesh on the bones as we progress, and very quickly. I would like to hear more from him about how we can best deal with those hard-to-reach cases, such as people who may have walked away absolutely scunnered and significantly out of pocket, who may not come forward without the concerted action that they deserve.

The protracted nature of the issue has dampened people’s enthusiasm for taking on a post office—we cannot shy away from that and our communities deserve that we do not do so. In my constituency, the post office in Neilston will close on Saturday in what is known as a “temporary closure”, but it is only temporary if someone will come forward to take it on. Too many communities in East Renfrewshire and further afield do not have post offices, which are essential. I take on board what the Minister has said, but what more can be done, over and above what he has set out? Much more is needed to make sure that people have the confidence to take on the post offices that our communities need so much.

[Kevin Hollinrake]

I thank the hon. Lady for her question. She is right that we need to make the compensation schemes and the overturning of convictions swifter and more straightforward, and she is right to point to the fact that some people are reluctant to come forward in the first place. We are keen to deliver a solution that does not require sub-postmasters to come forward in order for us to overturn a conviction, as has been called for by Members of this House. We have been looking at that and we are working on it right now.

I represent a rural constituency and the Government provide significant financial support of £50 million a year for rural post offices. We are determined to restore the reputation of post offices through this work and make them more financially stable generally, by increasing the remuneration opportunities for postmasters. We think that is the route that will ensure people will come forward and run post offices in rural locations, which is as important to me as it is to the hon. Lady.

Lloyds, HBOS and the Cranston Review

Debate between Kirsten Oswald and Kevin Hollinrake

Tuesday 4th February 2020 Westminster Hall

[Kevin Hollinrake]

The hon. Member is absolutely right. The biggest learning we have is that the whole process must be independent. It simply cannot be fair to have any review carried out within the bank’s boundaries that provides compensation for victims. It must be independent and independently verified. I very much appreciate her work and support on the all-party parliamentary group on fair business banking.

The all-party group, which I co-chair, made many calls saying that the process simply was not right. The Minister supported those calls, and we commissioned a review. Andrew Bailey, head of the Financial Conduct Authority , and the future Governor of the Bank of England, engaged in constructive collaboration with us and made an excellent choice of reviewer in Sir Ross Cranston, who has done a tremendous job. Most importantly, he got every stakeholder round the table before he properly commenced the review. He consulted us on many occasions, and we had great confidence in his ability to assess properly whether the review was fair.

Sir Ross’s findings were shocking—that is, shocking to anyone not familiar with the process. Anybody familiar with it, whether a victim or victims’ support group, knew exactly what he would say. We should be very grateful to him. It is a long report, but its essence is that: the Griggs review did not deliver fair or reasonable offers of compensation; it was not open or transparent; it had serious shortcomings; it took too adversarial an approach to assessing consequential loss; and, crucially, its design meant that it could never deliver fair and reasonable outcomes. Those were his findings.

We are pleased that the chief executive of Lloyds, António Horta-Osório, has written to us and the victims, and he met us. He has apologised unreservedly for the bank’s conduct in the review and committed himself personally to getting this right. It should not have been a surprise to anyone—he had been warned on many occasions that the process was flawed. Nobody should be surprised about the result if we allow a business to mark its own homework—it shows a fatal misunderstanding of how businesses operate. I speak as a businessperson who has been in business for 28 years and is still in business today. I do not think I should be allowed to regulate my business or regulate where I have customer complaints; independent oversight is critical.

Milton Friedman, the leading economist, once said that the social responsibility of business is

“simply to increase its profit”.

Warren Buffett recently said that the Government have to play their part in modifying the market system. We cannot simply leave this stuff to business; we must ensure independent oversight and fair regulation. Business is not afraid of regulation; it just wants stable, fair regulation, not over-regulation.

A bank found guilty in court of defrauding its own customers, which denied that fraud and even disgracefully mistreated whistleblower Sally Masterton in her efforts to keep the fraud out of the public eye, is allowed to compensate its victims, through its own process. The lessons we learn from the process are not just about how to compensate victims fairly and give them justice for their mistreatment but about how the regulators have dealt with it. We undermine our system of free market capitalism if we let these powerful and dominant capitalists go unchecked.

I will briefly list some of the representations that the all-party group has made over the years. My predecessor as chair wrote in February 2017 to António Horta-Osório about Lloyds’s plan to take forward the review. He said that there were unacceptable exclusion clauses, the process would be poor when it came to the consequential loss and it was critical that redress was transparent, balanced and legally binding. That was three years ago. We recommended the use of an independent process through the Chartered Institute of Arbitrators which would have been much fairer.

We did not leave it there. Over the past three years, I have had many meetings with the senior management team at Lloyds—I recently met the chief executive—including Lord Blackwell, the chair of Lloyds, as has the director of policy for the all-party group, Heather Buchanan. There has been much correspondence between us. In July 2018, we wrote again to Lloyds and said that the victims were still being treated with contempt. The reply from Lloyds—from Adrian White, the chief operating officer—said:

“We strongly believe that the offers made are both fair and reasonable.”

That demonstrates the institutional arrogance of Lloyds and the wider sector, as people were constantly pointing out that the review was not fair. Any protests about the process were simply ignored. For us, it is not that the bank did not know about it; it simply chose to ignore us and many others.

The key is where we go now. Perhaps this is not the first step, but it is incredibly important that the FCA undertakes an investigation under the senior managers regime on both the Griggs review and the people responsible for that review within Lloyds. Lloyds must take responsibility for the review and other things connected to the whole saga, including the disgraceful treatment of Sally Masterton, the whistleblower, who was mistreated for five years. She was discredited by Lloyds to the FCA, for which she was finally compensated in 2018, yet nobody has been held to account for the mistreatment of a whistleblower pointing out some of these very issues.

Another thing we will need to look at is the people who are not part of Lloyds but are connected to the review. The legal advisers Herbert Smith Freehills are clear that they misled the Financial Conduct Authority about Sally Masterton, the whistleblower. They advised Lloyds on the establishment of the Griggs review, on its operation and on some legal points incorrectly, according to Sir Ross Cranston. It is unthinkable that Herbert Smith Freehills should have any influence on the future redress scheme. That must be an absolute minimum; it cannot happen as we go forward. They should also be the subject of an investigation by the Solicitors Regulation Authority.

The Cranston review offers us a crucial opportunity; it is a watershed moment. It is not just about Lloyds but about the wider banking sector.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Is the hon. Gentleman aware that a freedom of information request to the Financial Ombudsman Service showed that, between 2015 and 2018, complaints about Clydesdale Bank, now Virgin Money, were disproportionately high in comparison with their larger competitors? There were 404 complaints in total and, worryingly, the percentage of those upheld was only 13%. Does he agree that it is time for the chief executive officer of Virgin Money, as a self-professed challenger to the status quo, to step up and make sure that these legacy cases are dealt with?

[Kevin Hollinrake]

I absolutely agree with the hon. Lady. This is not just about Lloyds. A number of independent reviews have taken place, but they have been undertaken by the relevant banks. That simply cannot be right, in terms of justice for victims or their feeling that justice has been done. Justice being seen to be done is a basic principle that, it seems, the banking sector does not have to adhere to.

When the APPG was initially talking about future redress, it proposed a financial services tribunal, similar to an employment tribunal, where there would be no adverse costs, so a claim could be taken forward more easily. That would help to reduce the power imbalance between banks and businesses. A comment that came back from one of those commissioning the review on behalf of UK Finance, the banking representative organisation, was that the courts were not the right place for banking disputes to be settled. Well, they are the right place for the rest of us to settle disputes—that is what our system is built upon.

We need impartial, independent processes. I will talk about the right process for that moving forward, because there is an obvious new alternative approach we can take.