Sub-postmasters: Compensation

Lord Callanan Excerpts

Thursday 5th March 2020 Lords Chamber

[Lord Arbuthnot of Edrom]

To ask Her Majesty’s Government what assessment they have made of the level of compensation received by sub-postmasters as a result of the Horizon accounting system litigation, as compared to the losses those sub-postmasters incurred due to Post Office Ltd’s policies.

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

My Lords, while the Government are pleased that a resolution has been reached on this difficult matter, the Post Office led the mediation and the Government were not party to it. While the financial settlement is a major step toward resolving some of these grievances, there is much more for the Post Office to do, including resetting its relationship with postmasters and addressing historic shortfalls for postmasters who were not part of this group litigation.

[Lord Arbuthnot of Edrom (Con)]

My Lords, I am grateful to my noble friend. Many of your Lordships will have been delighted to hear the Prime Minister say last week in Prime Minister’s Questions that there would be an independent inquiry into what he described as the Post Office Horizon IT system “scandal”. Can my noble friend give us details of that inquiry, in particular of how it will be independent of not only the Post Office but the Government?

[Lord Callanan]

First, I pay tribute to my noble friend for rightly pursuing these matters with dogged determination. We probably would not be where we are today without his work and that of many others on this issue. The Government recognise the strength of feeling about the negative impact that the court case has had on postmasters. As my honourable friend, Paul Scully MP, announced at BEIS Oral Questions on Tuesday, we are looking into what needs to be done. We will outline the next steps following the Prime Minister’s announcement as soon as possible.

[Baroness Burt of Solihull (LD)]

My Lords, we on these Benches welcome the Prime Minister’s commitment to an independent inquiry into what he described as a “scandal”. We hope that those who did not take legal action will get full and rapid compensation, though I appreciate the Minister’s comments on the set-up. But no compensation can make up for the emotional trauma and loss of reputation, livelihood and health that has cost people dearly. Will the Minister agree, like us, to press for full compensation as well as restoration of moneys lost?

[Lord Callanan]

The noble Baroness makes an important point. In the near future, a scheme will be announced with the aim of addressing the historic shortfalls for postmasters who are not part of the group litigation. The Government will challenge and monitor the progress of this scheme. There is also the important issue of people convicted of offences: 57 cases have been referred to the Criminal Cases Review Commission. If a case is referred to the Court of Appeal and a conviction is overturned, there are avenues for people to pursue compensation there as well.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I want to follow up on the point made by the noble Lord, Lord Arbuthnot. At Prime Minister’s Questions, as has been said, the Prime Minister committed to an independent inquiry on the back of a Question from Kate Osborne about whether he would launch such an inquiry. The Prime Minister said that he would follow up on that but No. 10 communications later said that no decisions had been taken with regard to a specific independent inquiry. I was not clear from the Minister’s earlier answer whether we are going to progress with an independent inquiry to get to the bottom of this matter. We had a very good debate in the Moses Room on it last week, and a lot of information came out. Can the Minister say whether there will be an independent inquiry and, if so, what its timescale will be?

[Lord Callanan]

We agree that there needs to be a full examination, with due rigour, of what happened and what the next steps will be, but I cannot go further than the answer that I gave earlier to my noble friend—that, as soon as we can, we will announce the next steps following the Prime Minister’s announcement.

[Lord Howell of Guildford (Con)]

My Lords, it is possibly worth remembering in this case that a major national organisation running a public service has stamped on and destroyed the lives not merely of local innocent people but of local people who are key members of their communities, serving those communities and doing their best to maintain the community spirit. Can this matter be addressed with intense urgency? Otherwise, some very sad personal tragedies will follow.

--- Later in debate ---

[Lord Callanan]

My noble friend is absolutely correct and I agree with what he says. There were a number of tragedies and some people committed suicide as a result. There is no question but that the Post Office management at the time behaved disgracefully but none of them is now in post. It is very important that we get on with these matters as quickly as possible. Some of them are subject to the judicial process, which my noble friend will know I cannot comment on, but I hope that there will be a resolution as soon as possible for these sad, unfortunate individuals.

[Lord Hain (Lab)]

What lessons have the Government drawn from this? This is a public corporation that has acted in an authoritarian way to trash the reputations of pillars of the community—people who are respected in the local community. There must be some lessons to be drawn by the Government. What are they?

[Lord Callanan]

The noble Lord is entirely right: a number of lessons need to be drawn. The Post Office is an independent company where the shareholding is owned 100% by the Government, and we appoint an independent director to the board. During the unfolding of this scandal, BEIS officials were clearly misled by the Post Office and the information provided was not correct. We are looking at a new governance framework to address these matters going forward and, again, an announcement on that will be made in due course.

[Baroness Redfern (Con)]

My Lords, it has been acknowledged this morning that the PM said a few days ago that we need to get to the bottom of the matter. Does the Minister agree that an inquiry needs to begin sooner rather than later and that its scope should include the possibility of changing the police records and decriminalising those who were falsely accused?

[Lord Callanan]

I hope that we can get the matter resolved as quickly as possible. The work of the CCRC is important and the Government cannot interfere in it. I understand that decisions on this issue are expected fairly soon and will then have to go back to the Court of Appeal. I think we all wish that the judicial process could be speedier at times but we have to let these matters take their course. However, I take on board my noble friend’s concerns.

[Lord Polak (Con)]

My Lords, in a previous discussion on this issue, I asked the Minister about the role of the Government’s non-executive director on the board of the Post Office. In reply, he said:

“His role has evolved from a perhaps more passive approach to a much more active one going forward.”—[Official Report, 4/2/20; col. 1711.]


Can my noble friend tell us what this new active approach of the Government’s non-executive director is?

[Lord Callanan]

My noble friend makes an important point. As I said in response to an earlier question, we are looking at the framework of the decisions. This is not just about the role of the non-executive director; it is about the whole oversight of the organisation by BEIS—how we improve the governance and monitoring of what is, in effect, an independent company. Operational decisions are a matter for the board of the Post Office, but clearly the fact that I am standing here in front of your Lordships answering questions now shows that it is a company owned 100% by the Government. Lessons need to be learned and we need to get to the bottom of this. I have spoken personally to the new chief executive of the Post Office, as have other ministerial colleagues, and we are satisfied that he now has a grip on the situation. The accounting system has been improved and the board is co-operating fully with the work of the Criminal Cases Review Commission, as indeed it should.