Post Office Legislation

Lord McNicol of West Kilbride Excerpts

Thursday 14th March 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, as we have said many times before, the Fujitsu/Horizon scandal is truly shocking and one of the most egregious miscarriages of justice in British history. The scandal has brought blight and devastation to the lives of thousands of falsely convicted sub-postmasters and sub-postmistresses. Over 20 years on, they and their families still suffer from the consequences and trauma of all they have been through. I pay tribute to them for their determination in pursuing justice, especially those who took the very courageous and difficult step of challenging the Post Office. Without their bravery and perseverance, the campaign would not be where it is today.

We of course welcome the legislation that has been laid before Parliament. Before giving a full verdict on it, we will need to properly scrutinise the detail and analyse its potential impacts. In the first instance, the legislation still leaves a series of outstanding issues, including the question of when justice and compensation will be delivered and to whom.

I ask the Minister: what steps have he and Ministers in the other place taken to prevent this rightly exceptional piece of legislation being used by government in a nefarious way in future? How are we protecting against the abuse of this legislation further down the track? The flip side of that is that there are many other scandals that courts, reviews and government are working through. Could the principle of this legislation be used by them?

As I have said before, I seek assurances on the territorial scope of the legislation, which currently applies only to England and Wales even though the Post Office is not devolved and the Fujitsu Horizon system and the impacts of the scandal are UK-wide. Approximately 30 cases need overturning in Scotland and Northern Ireland but a series of outstanding questions remain as to when sub-postmasters and sub-postmistresses in Scotland and Northern Ireland in particular will receive their justice. I welcome the Minister’s assurances that there will be regular dialogue with the devolved Administrations, given the different legal processes, but I will be a bit more specific: can the Minister update your Lordships’ House on what conversations his department has had with colleagues in Northern Ireland, who have expressly requested that the cases there be included in the scope of this legislation?

This is probably harder to deal with but can the Minister also update your Lordships’ House on what conversations the department has had with colleagues in Scotland about the progress on exonerating sub-postmasters there? As we know, 80% of the redress budget is yet to be paid out and considerable uncertainty remains about when sub-postmasters will receive their full compensation. We all agree, I am sure, that they have waited long enough and that the delays are causing only further financial distress and suffering.

The Commons Business and Trade Committee recommends that there be a “legally binding timeframe” for the period between an offer first being tabled and a settlement being reached. Would the Minister care to comment on that recommendation? If those legally binding targets are not adopted, what assurances can the Minister give that Minister Hollinrake will meet his target of ensuring that all compensation is out of the door by the end of the year? I know that the Minister here and the Minister in the other place are committed to ensuring that there are no further delays but sub-postmasters and sub-postmistresses will want to know when this will actually happen.

Given the recent chaos in the Post Office’s leadership, we welcome the decision to take it out of the redress process. In fact, last week, the noble Lord, Lord Arbuthnot, and I called for this. Redress must have independent oversight; I thank the Government Ministers and their teams for implementing this. Financial redress alone cannot come close to repaying sub-postmasters and sub-postmistresses for their suffering, although it is important that we get it right. As we have previously discussed, some of those impacted by the scandal have sadly passed away; they did not live to see this legislation and their innocence proven, nor to receive the compensation that they rightly deserved. Can the Minister clarify the process for those who have passed away so that their families can receive closure?

On the families, especially children and partners, we see today in the news that a number of children of sub-postmasters and sub-postmistresses are looking to take legal claims against the Post Office. Can the Minister inform your Lordships’ House of the Government’s attitude towards this? It is vital that the Government act with the urgency and speed that are needed to correct this injustice. We on these Benches stand ready to work with the Government to ensure the speedy implementation of this Bill.

I have just one question regarding the Explanatory Notes. On page 7, paragraph 41, the sentence just trails off. It starts:

“Clause 2 gives the meaning of ‘relevant offence’ with reference to several conditions set out in the subclauses”.


That is fine, but it continues:

“All of the conditions must be satisfied for an alleged offence to”.


It just stops. Can the Explanatory Notes be updated? I understand that this was rushed through, and that is absolutely fine, but it would be helpful if we could have just a bit of clarity of what the end of the sentence is meant to be.

[Baroness Brinton (LD)]

My Lords, the Liberal Democrat Benches echo the comments of the noble Lord, Lord McNicol, about the consistent and determined efforts of the wronged postmasters who still are fighting for the redress that they deserve. I thank the Minister for the Statement. We on these Benches are pleased to see that legislation will start to correct the fundamental wrongs done to most of the postmasters convicted as a result of the Horizon scandal.

However, the Statement says that

“this legislation will quash all convictions that meet a clear set of conditions”.

These are defined in paragraph 11, on pages 3 and 4 of the Explanatory Notes for the Bill, which was introduced yesterday in another place; the noble Lord, Lord McNicol, referred to those Explanatory Notes just now. Can the Minister explain how these criteria were decided upon? How many of the convicted postmasters are excluded from this redress scheme as a result, and why? I appreciate that all this has been done in a hurry, but even if my questions cannot be answered now, please can the answers be clearly articulated to those who will speak on this Statement so that we can understand why? At the moment, it is not clear who is and is not included as a result of Clause 2 of the Bill.

As I mentioned in a number of previous interventions on this issue, we know that software issues were reported in the predecessor systems to Horizon. Indeed, in 1997, when the noble Lord, Lord Lilley, was Paymaster-General, there was a steady stream of complaints during the pilot rollout. The i newspaper has also revealed the problems with the Capture scheme, under which a number of postmasters were also convicted. It said yesterday:

“Steve Marston … was using Capture, an IT system rolled out by the Post Office in the early 90s when he suffered unexplained shortfalls of around £79,000. He insists he never stole ‘a penny’ from his branch at Heap Bridge, Greater Manchester, but felt pressured into pleading guilty in 1998 in order to avoid a prison sentence, a tactic the Post Office has admitted was widely used by investigators to secure convictions”.


Can the Minister explain why this group of postmasters, who were using Capture when there were complaints, are also excluded from this Bill?

The Minister says in the Statement that the Bill only covers England and Wales; the noble Lord, Lord McNicol, has already covered this. It specifically excludes Scotland and Northern Ireland. The Statement says:

“However, we are fully committed to working with the Scottish Government and the Northern Ireland Executive through regular, weekly official-level engagement to progress their own approaches”.


If that is the case, why has the Justice Minister in the Scottish Parliament, Angela Constance, expressed her real concern that Scotland is not included? She said:

“We, along with the Northern Ireland Executive, urged the UK Government to introduce UK-wide legislation as the best way to ensure there is a quick, fair and equal solution for all the affected sub-postmasters, particularly as the Post Office is reserved to Westminster, so this announcement is extremely disappointing”.


Given that, in that same paragraph, the Statement goes on to say

“The financial redress scheme will be open to applicants throughout the UK, once convictions have been overturned”,


why on earth has the decision been made by the Westminster Government to exclude Scotland and Northern Ireland, when neither of those devolved Governments want that?

The Statement made it clear, at last, that the Post Office will no longer have responsibility for redress and should be subject to independent oversight. My noble friend Lord Fox and I, and others from these Benches, have also raised this as a fundamental problem of trust for many postmasters, so its removal is welcome. However, I ask whether the Department for Business and Trade is truly independent of the process, not least because of the debate about the speed of processing of claims that happened in January following the differing statements from the Prime Minister, Kevin Hollinrake MP and the Secretary of State, Kemi Badenoch. The Government are responsible for the payments—I shall come on to that later—but this gives them some skin in the game and one thing has to happen now, which is to give postmasters confidence that oversight is truly independent. Can the Minister therefore describe how independent the independent panels or independent individuals will be? Who will appoint them? Will there be a departmental official on the panel? Will departmental staff clerk the panels? Will the independent panels include a postmaster?

The Statement says that there will be legislation to make sure that the payments are exempt from taxation. A regulation on taxation exemption under the compensation arrangements for both the Horizon and infected blood schemes was presented to Parliament in December 2023. Is this a further simple amendment to that regulation, or is it further, separate secondary legislation, or is it a new Bill? How will it differ? Can the Minister explain?

The final section of the Statement refers to the Select Committee’s recommendation of a legally binding timeframe for redress—here, I echo the questions from the noble Lord, Lord McNicol—but I think there is some sympathy for ensuring speed wherever possible. However, the Statement said that it would be impossible without imposing penalties on forensic accounts. That seems to be an extremely narrow focus. There is a balance to be struck between ensuring as swift as possible processing of payment and debate between postmasters and forensic accountants about what is due to postmasters. The critical reason for independence is to ensure that postmasters are afforded a truly fair debate, which many say has been denied them in the initial offers received from the scheme when it was run by the Post Office.

Finally, I have been going through the central government supply estimates for 2023-24 and obviously looked at the Budget papers. I am still struggling to find the compensation payments—in total, approaching about £1 billion—in either the department or Treasury tables. Can the Minister help? I have raised this matter now with, I think, three Ministers and would be grateful if the Minister could write to me and point me in the right direction for the figures. I know that Liam Byrne has also raised these points in the Select Committee he chairs.