Post Office Management Culture

Marion Fellows Excerpts

Thursday 8th February 2024 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP) [R]]

I beg to move,

That this House has considered the management culture of the Post Office.

I thank the Backbench Business Committee for allowing this debate. I spoke in Westminster Hall on this very subject in July 2023, but it is even more pertinent now.

The Horizon IT scandal resulted from the Post Office’s management culture. In his March 2019 judgment on Bates and others v. Post Office Limited, Mr Justice Fraser stated:

“There seems to be a culture of secrecy and excessive confidentiality generally within the Post Office, but particularly focused on Horizon.”

Following this damning judgment, Nick Read, who had been appointed as chief executive officer, set about changing the management culture of Post Office Ltd when he took over in September 2019. In a letter to the Select Committee on Business, Energy and Industrial Strategy in June 2021, he stated that he was

“undertaking to drive a culture of genuine commercial partnership between Post Office and postmasters with openness and transparency at its core…a major programme of improvement has been underway. The goal is to overhaul the culture of the organisation”.

I reiterate his words: “openness and transparency” and

“to overhaul the culture of the organisation”.

Since last July, we have seen a spate of historical scandals emanate from Sir Wyn Williams’s statutory inquiry, from Post Office staff pursuing prosecutions despite knowing of Horizon issues, to others boastfully emailing colleagues to celebrate having sent innocent sub-postmasters to jail, and auditors omitting evidence in witness statements. It has been another shameful chapter in the Post Office’s history and, at the outset, I commend the work of the inquiry for bringing these issues and many others to light.

It is worth pointing out that more than 40 current management staff were there throughout the Horizon scandal period. Some have given evidence to the inquiry demonstrating elements of the toxic management culture that has gone on too long. The continual disclosures that have blighted the inquiry appear to be another “spanner in the works,” as one victim said. The clear case of obfuscation on the watch of the current management of Post Office Ltd suggests that very little has changed in the organisation.

[Amy Callaghan (East Dunbartonshire) (SNP)]

My hon. Friend is making a powerful opening speech, and I commend her efforts on this issue more generally. Does she agree with me and many of my constituents in East Dunbartonshire that the Post Office has a difficult culture of secrecy? That culture was highlighted by the ITV drama “Mr Bates vs The Post Office”, which resonated with so many of our constituents. Does she agree that sub-postmasters were othered by Post Office Ltd and the Government, and that they were not listened to or respected?

[Marion Fellows]

I absolutely agree. The ITV drama exposed what happened, despite numerous efforts by many distinguished people in this place and the other place, by journalists such as Nick Wallis and by Computer Weekly. Many thousands of people knew about this scandal, but not the general public.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I congratulate the hon. Lady on securing this debate. She has heard me speak often enough about the culture in the Post Office. Does she agree that following the money is often a good approach? Last year, the cost of administering the Post Office centrally went up by 10%, but the money going to sub-postmasters went down by 2%. When those figures are reversed, we will know that there has been a genuine change of culture within the Post Office.

[Marion Fellows]

I could not agree more with the right hon. Gentleman. I frequently agree with him on Post Office matters. This is important, because the all-party parliamentary group on post offices, of which he is a member and I am the chair, is a true cross-party group. There is no party that does not have a member of the APPG.

Sean Hudson of the Communication Workers Union described the management culture perfectly:

“Every serious management failure results in a culture of offering that failure up for external investigation at significant expense to POL and the taxpayer, without learning from those mistakes.”

It has since transpired that the legal fees for resolving disclosure issues in the past year alone cost £24 million. That money could have gone into the network to help struggling sub-postmasters, many of whom are working for below the minimum wage. For context, POL announced remuneration improvements this year of just £26 million, which in no way take into account the rise of costs and overheads. Some of the issues were only brought to light through the perseverance of campaigners through freedom of information requests that revealed that not all relevant evidence had been disclosed to the inquiry. Some of the issues outlined came to light before the transmission of ITV’s “Mr Bates vs The Post Office”, which has had a monumental impact on the public consciousness in Britain. It is important that that was beamed into front rooms across the nation. It has caused deep distrust of Post Office management among the general public.

With the words “openness and transparency” in mind, I want to bring to the attention of the House the case of my constituent Salman Aslam. Salman, or Sal, is a young man who ran a post office in my constituency for five years, before he walked away last year. Sal took over the post office from his father, when he was in remission from Hodgkin’s lymphoma. Sal began noticing shortfalls, which he continually plugged himself and which ranged from £4,000 to £16,000 at a time. He estimates that he has paid in about £100,000 of his own money. When audited last year, a shortfall doubled in front of his eyes to £80,000, He decided he could no longer go on, for the sake of his finances, and of his mental and physical health, which doctors were saying was under threat due to his levels of stress.

Throughout the five-year ordeal, Sal contacted the Post Office for help continually, but none was forthcoming, and after handing in his keys, the Post Office was not in touch for more than a year, leaving him in a perennial state of stress and fear. Sal went public with his story a few weeks ago—I had a hand in that—and once the story went out, Post Office Ltd immediately sprang into action and the communications department got in touch with him. That is not indicative of a change of culture. It echoes tales of the past that are all too familiar: desperate postmasters reaching out to POL for help, but receiving little in return; and communication from POL arriving only after some negative press.

Throughout the Horizon scandal, POL prioritised institutional reputation over the welfare of sub-postmasters, whom Mr Read himself recently told the Business and Trade Committee were the trusted asset that made the network what it is. Sal is one of many postmasters who have been in touch in the past weeks to tell me that they are experiencing shortfalls—not historical shortfalls, but ones that have occurred in the past year. Issues with Horizon appear to be continuing to this day, which is seriously concerning. Is the Minister aware of ongoing issues with Horizon? What has he done, or is he going to do, to address these? Sal, like all the victims who preceded him, is in this position through no fault of his own. Today, I call for an undertaking from the Government, the Post Office’s sole shareholder, that he will not be pursued for the ghost debt of £80,000, and I ask the Government to examine what kind of redress he can expect, having sunk so much of his own money into his post office to cover repeated shortfalls generated by Horizon. I have other constituents who are also in that position.

The culture of change that Nick Read has called for has not been apparent. In 2023, POL was rocked by scandals once again, with one appropriately named “bonusgate”. The former Chair of the Business and Trade Committee, the hon. Member for Bristol North West (Darren Jones), outlined the statutory definition of “false accounting” at a meeting and said:

“it seems to me that in the annual accounts that Post Office reported to Parliament there was false or misleading information presented that did lead to…financial gain”.

I said in July:

“That is the management culture of POL: bonuses for doing ‘a reasonable job’.”—[Official Report, 13 July 2023; Vol. 736, c. 161WH.]

We should compare that with the compensation schemes, which have been fraught with difficulty every step of the way. The fundamental principles of public life, including openness, honesty, and integrity, have not been upheld by the management of POL for decades.

Regrettably, even the compensation schemes established to address the injustices of the lamentable Horizon chapter are not immune from POL’s unjust approach. Dan Neidle, a renowned tax expert, soon realised that the schemes are designed to ensure that the lowest amount of compensation is paid out. The application forms are so legally intricate that even a legal expert such as Mr Neidle expressed the need for legal advice in order to complete them, but POL provides only token amounts for legal advice. The original absence of an option to claim punitive damages, something a lawyer would notice, puts applicants, many of whom are elderly and financially vulnerable, at risk of missing out on a significant portion of their compensation. I have seen a heavily redacted offer, and that is what happened to a sub-postmistress who was spat at by members of her local community after rumours of her stealing abounded in the neighbourhood. This is appalling, shameful and a stain on us all.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

The hon. Lady remarked earlier about the number of people coming forward following the ITV series, and I am keen for people to do that. It is important to say to all postmasters that they will be treated fairly. I know that she has some concerns about that, and she is right to raise concerns where she has them. I, too, have concerns about some elements of the original Horizon shortfall scheme. We are looking at that, in conjunction with the advisory board, to see what might be done to make sure that those payments were fair.

Let me draw the hon. Lady’s attention to some of the stats on the new group litigation order scheme. We may be talking about the simpler cases coming forward here, but with 58 claims received, 52 offers have been made and 41 have been accepted without even a reference to the independent panel for people who are unhappy with the offers made. I do believe that the offers made are fair, but I am also happy to be challenged, in order to make sure that they are.

[Marion Fellows]

I thank the Minister for his intervention. I know that he has worked hard since he took over his post to make things better, but it would not be right if I did not continually and continuously push him.

[Kevin Hollinrake]

indicated assent.

[Marion Fellows]

He is acknowledging that.

At this point, it is worth reading out a letter from Professor Chris Hodges, the chair of the Horizon Compensation Advisory Board, who has been similarly scathing. He writes:

“Dear Nick Read,

My colleagues on the Advisory Board and I remain deeply unconvinced by the substance of what you say on legal issues. We continue to hear stories your former Sub-Postmasters and Mistresses are confused, intimidated and hurt by the behaviour of the Post Office and its lawyers in negotiating settlements generally and in continued use of legalistic terminology. This is especially true for the significant number who remain deeply traumatised, and who do not understand the practice of terminology of what they see as an aggressive approach to settling claims. This is irrespective of whether the language or behaviour may or may not be technically permissible, and irrespective of the fact that they may have legal representation. Your reliance of legal argument and legal terminology similarly does not impress us. We do not perceive demonstration of behaviour that is anything like a sympathetic understanding towards the people your organisation has harmed. We suggest that this should give you cause for deep concern.”

[Andrew Bridgen (North West Leicestershire) (Ind)]

The hon. Lady is giving an excellent speech about a sad chapter in the Post Office’s life. As someone involved from the beginning, back in 2012, Ron Warmington’s first investigation into the Post Office Horizon scandal concluded that the Post Office always tended to promote from within, which led to an incestuous management style and the keeping of secrets. Does the hon. Lady think that may be part of the problem?

--- Later in debate ---

[Madam Deputy Speaker]

If the hon. Gentleman was not in the Chamber at the beginning of the hon. Lady’s speech, it is not in order for him to make an intervention in her speech. I have allowed it because the House is quiet this afternoon, but the rules are there for a good reason and they have to be observed. It is perfectly in order for the hon. Gentleman to intervene in another speech, later, after he has been in the Chamber for a while. I have to make that point because if I do not make an example of the hon. Gentleman now, on a quiet day, we will totally lose control on busy days, when lots of people want to do that, and it is not right. There are very few people here this afternoon and there is plenty of time, so in these circumstances I have allowed the hon. Gentleman to make his point and I will allow the hon. Lady to answer it.

[Marion Fellows]

I agree with the hon. Gentleman. He has been one of the people who has been pursuing this business for many years, and I pay tribute to him for that.

Shockingly, the Post Office’s attempt to suppress the truth continues as it cautions sub-postmasters under the Horizon shortfall scheme against mentioning compensation terms to anyone. The overall process of seeking fair compensation is described by one applicant as “soul destroying”, raising concerns about the added suffering imposed on those individuals who have already endured so much. Again, I have a personal example of a constituent I am trying to persuade to apply, but he is terrified because he signed a non-disclosure agreement. Because he has heard about how others have been treated, he is even more afraid to apply.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for her speech. One issue that burdens me— I think it burdens us all in this House—is those who unfortunately took their own lives as a result of what has happened. I am conscious of the families left behind now carrying that burden. Does the hon. Lady agree that there should be some methodology to ensure families who are left without a loved one are helped through the process, which they might find equally terrifying and worrying?

[Marion Fellows]

I absolutely agree with the hon. Gentleman. Many victims have described themselves as suffering from post-traumatic stress disorder. There is no scheme in place to help them and their families through what has been a traumatic and absolutely awful time for all of them, especially when someone has died before they have been vindicated. There are many recent examples of that.

[Kevin Hollinrake]

I am sorry to intervene on the hon. Lady yet again, but people might listen to her speech more than mine at the end, so I am keen to get a point on the record about the non-disclosure agreements. In evidence to the Select Committee, the Post Office has been quite clear—it is certainly our position—that nobody will be held to their non-disclosure agreement, so everybody should feel completely at liberty to discuss the terms of their settlement with Members of Parliament and others, as they feel appropriate. It is important to get that on the record.

[Marion Fellows]

I really thank the Minister for his intervention because hearing direct from the Minister that he will not be pursued will provide my constituent with some element of comfort. However, people are still traumatised years later because of the treatment they have had and it is hard for them to believe that people will not pursue them. I will show my constituent a clip of what the Minister just said.

I have met recently with Christopher Head, who is in the Gallery today. He is a Horizon victim and campaigner who, out of his own good will, helps others in applying for compensation. I do not want anyone else to add to Christopher’s burden because he is doing such a good job. He has told me of the difficulties people face and that he himself received an offer that was only a minuscule fraction of his estimated Horizon losses. Alan Bates recently talked about his offer as well.

Many sub-postmasters I have spoken to recently told me that they plugged shortfalls out of their own pocket for years. The Minister has advised those people to apply for the Horizon shortfall scheme, and I sincerely hope that many more people will take advantage of that. Will the Minister ask Post Office management to make their records of those payments available to individuals? Have Post Office management let the Minister know when they will give an estimate of the excess claimed in Horizon shortfalls, from the introduction of the system to the end of financial year 2019-20? That is important because all that excess money, which was not owed, was put into Post Office Ltd and management bonuses were paid on profits.

The Post Office network is in disarray. Sub-postmasters have no faith in the current management of Post Office Ltd to turn things around. What they see is an organisation that is top-heavy, with multiple layers of management and directors, who have self-interest at heart.

[Andy Slaughter (Hammersmith) (Lab)]

The hon. Lady is making an excellent speech. For obvious reasons, she has focused on the Horizon scandal, which has horrified the country, but the malaise within the Post Office management goes much further than that. Over the last 10 years, I have noticed the so-called temporary closure of many sub-offices that never reopen, and the loss of town centre post offices, some of which have been there for a century or more. Does she agree that the fundamental duty of the Post Office to run a viable network across the countries of the UK is simply not being fulfilled, and that lies at the door of Post Office management?

[Marion Fellows]

I could not agree with the hon. Gentleman more. I have lost three post offices in the last year, but not one vacancy has been filled. As we all know, it is the poorest and most vulnerable who regularly use post offices. I will be applying to the Backbench Business Committee for another debate on the continuation of the network. The network also includes pick-up and drop-off offices—PUDOs, in the vernacular—that are not real post offices. Those who work there are not under Post Office terms and conditions, as they work for Payzone, which Post Office Ltd owns. The post office network is in disarray and postmasters have absolutely no faith in the current management. All the while, as the hon. Gentleman says, the network is crumbling, post offices are closing, and sub-postmasters are being asked to take on additional work for less pay, being punished for reducing hours as they try to keep overheads down in the middle of an economic crisis, and seeing their life investment lose value with each subsequent scandal that is uncovered. Lack of sub-postmaster support continues to this day, in stark contrast to the postmaster support policies championed by POL in the briefing that it gave me for this debate.

I have heard evidence of a recently widowed postmaster, who was told by a senior manager that Post Office Ltd

“does not have a roadmap for bereavement”,

meaning that people were left alone without support, except from their fellow sub-postmasters. In the same briefing, Post Office Ltd outlined that it had increased fees for banking deposits by 20%. As Richard Trinder, chair of Voice of the Postmaster, put it:

“20% of not a lot, is still not a lot.”

Communities are losing a vital social asset, and the post offices that remain are being powered by the altruistic nature of hard-working sub-postmasters, pillars of the community, who are running out of energy. In 2012, the societal value of POL was estimated to be £2 billion. Does the Minister have an updated figure? I do not expect an answer on that today.

The Minister’s announcement that the Government will legislate to exonerate convicted sub-postmasters is welcome. Lord Arbuthnot said that

“a mass problem requires a mass solution.”

Will the Minister commit to changing the governance format, which clearly has not worked for decades? It is high time for the Government to adopt a new approach, as the current arm’s length governance arrangement has allowed scandal after scandal to fester under the watch of successive Labour, Conservative and coalition Governments. Essentially, sub-postmasters find themselves subsidising a Government-owned network at significant personal cost. Moreover, when issues arise, they are left to navigate the path to justice on their own. The pressing need for genuine support for those on the frontline is evident. Will the Minister elaborate on the Government’s plan for the post office network, excluding PUDO services?

Government oversight has not solved any of the issues of the past, including Horizon. It is the hard work and tireless campaigning of sub-postmasters themselves, journalists such as Nick Wallis, and campaigners such as Alan Bates and Christopher Head, the Justice For Subpostmasters Alliance, Eleanor Shaikh, Dan Neidle, Tim McCormack, the CWU, Voice of the Postmaster, the National Federation of SubPostmasters, and many Members in this place past and present, that has continued to push the Government on the issue. Will the Minister, on record, please confirm that sub-postmaster organisations, such as Voice of the Postmaster and the CWU, will no longer be excluded from discussions with Post Office Ltd? It is essential that those who power the post office network are front and centre of any decision-making process that will carry the Post Office forward. For those who are not aware of this, the NFSP is financed by Post Office Ltd. I am making no judgment on how it performs in respect of its members, but we need a wider range of postmasters who will be consulted on and worked with if we are to change things going forward.

I have seen a rather large list of 23 directors in the senior leadership team at Post Office Ltd, not one of whom is a postmaster national executive director or a postmaster experience director, so when Nick Read speaks of putting

“postmasters right at the centre of the business”,

are the postmaster director roles simply window dressing?

Until postmasters have a say in all levels of the business, the culture will not change. Only recently, a communications director at POL, Richard Taylor, was suspended for saying that

“some of them were guilty.”

It says so much that he felt able to say that publicly.

As Bates v. Post Office Ltd has shown the nation, it was the hard-working community sub-postmasters who built the trusted reputation and social value of the Post Office over centuries, and it was those within management who pulled it down. If it is to be rebuilt, then the rebuild must be led by those community pillars once again.

Mr Deputy Speaker, the speech I had written was twice as long as this. I know that I have probably overrun my time, but I still have so much more to say. Change must happen. The fact that there will be a general election this year—that is without doubt—must not stand in the way of change that is so, so needed.

--- Later in debate ---

[Marion Fellows]

I thank everyone who has taken part in this debate. It was quite a surprise that so many people turned up on a Thursday as the House rises for a recess. I intend to go on with this. I intend to secure more and more debates to keep this issue, as far as possible, in the public eye and in the eye of the House, the Minister and any Government that follow.

I will start by mentioning Fujitsu, which was raised by my hon. Friend the Member for Inverclyde (Ronnie Cowan). I, too, have written to it. I have had no response as yet, but I am ever hopeful. The hon. Member for Wansbeck (Ian Lavery) has been doughty in his questioning in the Select Committee and I have had the privilege of listening to him. As with so many of us, he has had many difficult cases which sometimes leave you almost gasping for breath. They fire you, as they have me, with a real sense of injustice. We have to follow through and make sure things are done.

I thank the hon. Member for Chesham and Amersham (Sarah Green) for what she said about non-disclosure agreements, and I thank the Minister for his response. It is important for people who have been affected by the Horizon scandal or by working for or in conjunction with Post Office Ltd as sub-postmasters to be able to come forward with their experiences and speak about what has happened to them. I also want to give special thanks to the hon. Member for Strangford (Jim Shannon), who has been very supportive in every debate that I have initiated, on this and on other subjects.

Let me gently remind the Minister that the chief executive officer of Post Office Ltd has been in post for more than four years. I think that many people, especially postmasters, expected to see more change during this period than seems to have happened. I am extremely pleased that the Minister is to continue discussions with representatives of Voice of the Postmaster and the CWU, and I hope that he will, in turn, gently remind the CEO of Post Office Ltd that he should be talking to those organisations as well.

I am pleased that things have moved forward a bit. The Minister is pleased that those in the GLO scheme are accepting £600,000, but it should be borne in mind that people are accepting offers because they have simply had enough. They want nothing more to do with the whole process, and they are broken by it. That is something on which we should all reflect deeply.

I am grateful to you, Mr Deputy Speaker, for chairing the debate—in part—and, as I have said, I am grateful to all Members who have taken part in it. I do not often compare myself to Arnold Schwarzenegger, but I will be back.

Question put and agreed to.

Resolved,

That this House has considered the management culture of the Post Office.