Post Office: Horizon

Lord Callanan Excerpts

Thursday 24th February 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, with the leave of the House, I will repeat an Answer to an Urgent Question given in the other place earlier this morning:

“I will update on Horizon matters since I last provided a Statement in December. I met with the BEIS Select Committee last month and last week the Select Committee published its interim report into the Post Office and Horizon IT scandal. The Government will consider the Committee’s recommendations and will respond in due course.

People need to know how this scandal came about and what protections are in place to avoid history repeating itself. That is why the Government established the Post Office Horizon IT Inquiry to investigate what went wrong. The evidence from postmasters who have participated since the inquiry hearings began last week has been harrowing to hear. I thank these postmasters for their courage and willingness to revisit the trauma they have experienced. Compensation cannot take away the suffering affected postmasters have experienced, but we are determined that each eligible person gets what is due to them and that it is paid as quickly as possible.

Of the 72 postmasters whose convictions have been overturned, over 95% have so far applied for an interim compensation payment of up to £100,000, of which 63 offers have been accepted and paid. The Government are pushing for final settlements for quashed convictions to follow as quickly as possible. Negotiations on the first two have begun. The Government are determined that all unjust convictions are quashed. The Post Office is reaching out to affected postmasters. The Post Office is also in discussion with other public prosecuting bodies responsible for the convictions of postmasters which may have relied on Horizon evidence to ensure that those postmasters are also contacted and enabled to appeal.

Offers have been made to over 40% of applicants and compensation has been paid to 764 postmasters who have applied to the historical shortfall scheme. Twenty-eight postmasters so far are proceeding through a dispute resolution process aimed at achieving acceptable settlements. At least 95% of cases should have been dealt with by the end of this year.

With compensation for overturned convictions and the historical shortfall scheme both well under way, the group of postmasters on whom my attentions are now focussed are those who exposed this whole scandal by taking the Post Office to the High Court. I know many honourable Members support the Select Committee’s view that it is unfair that they should have received less compensation than those who were not part of the case. I sympathise with that view too. I cannot yet report a resolution of that legally complex issue, but we are doing everything we can to address it.

The compensation which postmasters are due will exceed what the Post Office can afford. The Government are therefore stepping in to meet a good deal of the cost of that compensation. I recognise that this is an unwelcome burden on the taxpayer, but the House will agree that the alternative is unacceptable.”

[Lord McNicol of West Kilbride (Lab)]

I thank the Minister for repeating the response in the other place. The Horizon scandal is the UK’s biggest miscarriage of justice. The Minister has partly answered my question, but I will push him a little further on it because we are really keen to ensure that the 555 litigants who originally exposed this do not receive a lesser amount.

The judge-led inquiry into the scandal began this week, as the Minister said. He is right that we have heard some extremely moving testimonies. Can he confirm that the 555 litigants—the group who exposed this issue—will be able to claim full compensation and that the Government will spend some time and resources looking specifically at that? I appreciate that the Government are trying to achieve 95% by the end of the year, but now only 30% have had their claims processed. What pressure are the Government putting on the Post Office to speed the process up?

[Lord Callanan (Con)]

I thank the noble Lord for his excellent questions. On this, I agree with many of the points he made. Regarding the 555, who he rightly highlighted, as I said, they have been pioneers in this area. My honourable friend the Minister for Small Business is working at speed on this issue. They exposed the scandal by taking the Post Office to the High Court. They performed a huge public service by doing so, and I know that many noble Lords will support the Select Committee’s view that it is unfair that they have received less compensation than those who were not part of the case. I know that my honourable friend shares that view, and he has said that resolving that is the most important issue he currently faces. It is important to recognise that this is a legally complex issue because the case was settled in the High Court, but I know that officials and my honourable friend are working at pace to try to resolve it.

With regard to the historical shortfall scheme, things are slightly better than the noble Lord suggested; we are now up to 38% of the cases having been resolved. The Post Office’s best current estimate is that the scheme will cost £153 million across about 2,300 claims. It is important that we work through them as quickly as possible. Some of them are complex but they need to be worked through and resolved.

[Lord Fox (LD)]

My Lords, I know the Minister has been working hard on this issue and he should be commended by all sides of the House on the effort that he is putting into it. The Statement says the Government are stepping in and that that is unwelcome. We should remember that the genesis of this problem came with faulty software and a system that did not work; it was made worse by the events that followed. We should also remember that Fujitsu, the company that provided that software, had revenues last year of over £20 billion, and we calculate that since 2013 the Government have awarded it a further £3 billion in contracts. Does the Minister share my surprise and indeed incredulity that Fujitsu has not been asked to provide some of the money that the Government are now unfortunately having to step up and pay?

[Lord Callanan (Con)]

I thank the noble Lord for his praise for me, but it is slightly unjust; it is the Minister for Small Business who is responsible for the Post Office and is putting in the hard yards on this issue, and I will certainly pass on the noble Lord’s commendations.

I have considerable sympathy for the view that the noble Lord, Lord Fox, outlines. A public inquiry is taking place and that is the proper place for blame to be apportioned. We all have our suspicions and views, but let us wait for the outcome of the inquiry to see exactly where fault lies—whether with Ministers, officials, Post Office executives, Fujitsu or whoever—and then we can take the appropriate action.

[Lord Cormack (Con)]

My Lords, it is a great pity that my noble friend Lord Arbuthnot cannot be here today because we all owe him an enormous amount for his work. That should be firmly on the record. My noble friend Lord Arbuthnot himself raised the point about Fujitsu the last time we discussed this issue. While it is of paramount importance that those who suffered are properly compensated—in so far as they can be, because they can never be fully compensated—that money should come not from the public purse but from those who supplied deficient goods, with anything that is left topped up by the public purse. I want to press a point that I have made several times to the Minister: it really is in everyone’s interest that we get this concluded as soon as we possibly can. People are still suffering and indeed still dying.

[Lord Callanan (Con)]

Again, I find myself agreeing in large part with my noble friend. I am happy to join him in paying tribute to my noble friend Lord Arbuthnot, and to the many other noble Lords on all sides of the Chamber and indeed Members on both sides of the House of Commons as well who have campaigned for many years to draw attention to this outrageous situation. Again, I do not really want to apportion blame until we have the results of the inquiry. The job of the inquiry is to find out who or what was responsible for the case. We all have our suspicions but let us wait and see what the inquiry comes up with and then draw the appropriate conclusion.

[Baroness Chakrabarti (Lab)]

My Lords, I wholly endorse everything that has been said about Fujitsu and the possibility of applying the “polluter pays” principle in this area, as in others. Will the Government also consider the potential dangers of large bodies corporate—be they local authorities, the Post Office or others—abusing the ancient right for individuals and families of private prosecution? I urge the Minister and his colleagues to consider whether it is really appropriate for these bodies to be prosecuting serious crimes in their own interest in future.

[Lord Callanan (Con)]

The noble Baroness makes an important point. Certainly the Post Office has said it will not be conducting any further prosecutions. This is a wider question than this particular case, and it is not an area with which I am overly familiar. I know the question has been asked and other people are looking at it, but I will take it back to the appropriate department.

[Lord Lexden (Con)]

Have serious and sincere expressions of contrition been made by those who held senior management positions when this scandal took place? Have any of them offered to dip into their own not insubstantial financial resources to assist the process of reparation for those who have suffered so much?

[Lord Callanan (Con)]

My noble friend makes a very good point. Again, let us wait for the outcome of the inquiry to see exactly where the blame lies and what suitable redress can be provided.

[Viscount Stansgate (Lab)]

My Lords, can the Minister remind the House whether the compensation that is due to the people who have suffered this terrible injustice extends to the consequential effects on the lives of those who have been declared bankrupt?

[Lord Callanan (Con)]

It is a complicated picture. There are a number of different compensation streams. There are the original GLO participants who took the case to the High Court. The problem there is that that case was settled—the point that I was making earlier—although there is considerable pressure, with which I sympathise, for them to be compensated further. There is the historical shortfall scheme and then there is the compensation due to those who probably suffered more than anyone, in that they were prosecuted, found guilty and often jailed or bankrupted accordingly. So there are a number of different compensation streams, and we need to make sure that everyone receives the compensation they deserve.

[Lord Stevenson of Balmacara (Lab)]

My Lords, the Minister will be aware that we have previously raised the question of the powers of the inquiry. Obviously, the inquiry has got going, and quite significant information has already been released. My concern was—I think the Minister has answered this before, but I would like to get him to repeat it—whether the inquiry, although not being held under the Inquiries Act, has the powers to call all the evidence that it may require in order to get to the bottom of this. That includes not just Fujitsu but Ministers.

[Lord Callanan (Con)]

My understanding is that, yes, Sir Wyn has all the powers available to him. We would be happy to look at any further powers that he needs if he does not have them, but my understanding is that Ministers going back over the relevant period, officials, executives of the Post Office and Fujitsu will all be playing a part in the inquiry and giving evidence to it.