Post Office: Horizon Accounting System

Lord Berkeley Excerpts

Tuesday 25th February 2020 Grand Committee

Asked by

[Lord Berkeley]

To ask Her Majesty’s Government what steps they intend to take in response to the judgment in Bates v Post Office [2019] EWHC 3408; and whether they intend to take any action against the directors responsible for the Horizon Accounting System.

[Lord Berkeley (Lab)]

My Lords, I am pleased to have secured this debate. It comes only a couple of weeks after a very useful Starred Question from the noble Lord, Lord Arbuthnot, who has been working on this campaign for years. Good luck to him. I also pay tribute to the journalist Nick Wallis and Private Eye, who have been keeping this issue going. It is a 10-year campaign for justice by hundreds of sub-postmasters who have been really badly treated by the Post Office.

I will concentrate on how those who have suffered will be compensated and what action, if any, will be taken against the perpetrators. Noble Lords will know that the number of personal tragedies has grown over the years. I will quote just one about Mr Gary Brown from Rawcliffe in Yorkshire, who produced a very long and sad description of what happened. After several years of the Horizon system charging him for what he did not owe, he ended up with a till £32,000 short, which, for a small trader, is appalling. The computer said that he was short, so what did he do? He called the auditors. The Post Office interviewed him and searched his house. In the end, he had to sell his house and he was desolate, all because Royal Mail refused to believe that its Horizon system was faulty.

Luckily, Mr Brown and others suddenly discovered they were not alone. He was among hundreds of sub-postmasters from the 11,000-odd branches who were suffering from these accounting discrepancies. Many complained that they were not to blame and that the Horizon system was at fault. Many were accused of stealing money. That is a really serious accusation for a small business. Some had to pay the Post Office tens of thousands of pounds and many lost their businesses, but they formed this group of 500-odd sub-postmasters to take forward a campaign, which culminated in a judgment last December, which we have talked about before but we need to talk about again.

The judgment is against the Post Office and has some pretty horrible comments about Fujitsu. Mr Justice Fraser saved some of his harshest words for Fujitsu, which runs Horizon. To quote Private Eye, he found that

“‘on too many occasions’ Fujitsu personnel knowingly entered incorrect codes when closing enquiries, blaming ‘user error’ when they had already concluded this wasn’t the case.”

That is a criminal thing to do to these small businesses.

It is worth quoting some of Mr Justice Fraser’s judgment. He said:

“The approach by the Post Office to the evidence of someone such as Mr Latif demonstrates a simple institutional obstinacy or refusal to consider any possible alternatives to their view of Horizon, which was maintained regardless of the weight of factual evidence to the contrary.”


This went on for a year, when the Post Office tried to get Mr Justice Fraser removed because he did not agree with it—it is wonderful to get rid of a judge if you do not like him. He concluded:

“This approach by the Post Office has amounted, in reality, to bare assertions and denials that ignore what has actually occurred … It amounts to the 21st century equivalent of maintaining that the earth is flat.”


That is a pretty strong judgment. After many attempts, the Post Office finally had to give up and accept that this was the answer.

So who is to blame, and what next? The Post Office is managed by BEIS, and one has to ask who was on watch over these 10 years. We started off with the noble Lord, Lord Mandelson, and then it was Vince Cable, then Sajid Javid and of course there were many junior Ministers—I will not read out a long list of them. But what did they do about their company on our behalf, which was abusing its position and defrauding perhaps 10,000 postmasters of their health and livelihood?

I have not found any serious apologies for this yet. When we discussed this in a Starred Question on 4 February, the noble Lord, Lord Duncan, apologised and the noble Baroness, Lady Neville-Rolfe, also mentioned that she had been a Minister. They were genuine, but who was running the Post Office then? It was Adam Crozier from 2003 to 2010. Moya Greene took over and split the Post Office and the Royal Mail and then Paula Vennells was in charge from 2012 to 2019. She was quoted in some of the Government’s public relations papers as the chief executive who took the Post Office from a £120 million loss to breaking even. According to the Daily Mail, she was paid £3.7 million in six years. But, more importantly, she was presiding over a company that tried every means at its disposal to deny, obfuscate and challenge in court any attempt by the sub-postmasters to get an independent inquiry into the failures of the IT system and compensation, which is pretty rich. Of course, as ever, because she then left, she has been promoted to run something in the health service.

The judge found against the Post Office on all counts and awarded the postmasters £58 million, but it was quite clear that most of that will go on legal costs. How can you achieve £58 million in legal costs? Of course you had a Post Office that kept on challenging things. Fujitsu also behaved in a manner that might be seen to be criminal or dishonest—I do not know—but it is a question that needs to be answered. Maybe there should be an independent public inquiry. That is the only answer.

So what will the Government do to provide some proper compensation to the victims of the failure—it may be fraud and greed—of the company that we as taxpayers are supposed to own? It is easier to spin out legal processes for years and avoid blaming anyone in the Post Office, officials, Ministers and so forth, but should there be a public inquiry? Should there be action against Fujitsu over Horizon? I do not know. But the postmasters, who reasonably believed that the Government and their company—our company—would behave in an open, honest and transparent way, have been very badly let down. They deserve urgent and generous compensation.

I welcome the helpful remarks of the noble Lord, Lord Duncan, the other day as far as they went, and I hope that our new Minister will be equally helpful and supportive of an urgent resolution. But there is also a need for the Government and Parliament to review how senior people, who clearly failed and brought their companies into disrepute, are moved and promoted, while those whom they destroyed are left to suffer with nowhere to go.

I have one last thought. Ten years ago, the Royal Mail included the Post Office, which now issues stamps with the Queen’s head on them, so one might expect the Queen and other members of the Royal Family to feel some attachment to the Post Office. As noble Lords know, I have had some questions about royal and Duchy finances, but I have never had cause to question their business ethics or employment practices—and I would not. But we can be sure that they would never stoop to such appalling treatment of their lowest paid staff as forcing them into penury or worse as their Government have done. This should have been the approach of Ministers and directors of the Post Office. They failed miserably and we must make amends. The Government must make amends and compensate all those affected.