Horizon Settlement: Future Governance of Post Office Ltd

Paul Scully Excerpts

Thursday 19th March 2020 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

First of all, I congratulate the right hon. Member for North Durham (Mr Jones) and my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), who cannot be here today, for securing today’s important debate. I thank all Members for their contributions to this excellent and heartfelt debate.

We know that the Government recognise the role of post offices, and that was articulated by my hon. Friend the Member for North Norfolk (Duncan Baker). It is so important that we make sure that we build on the network. There is no programme of closures—there have actually been 400 new post offices in the past few years, and I want to make sure that we can develop on that, although individual post offices may open or close at various points. I want to make sure that I spend the rest of my time covering as many as possible of the questions that have been raised in this interesting debate.

It is impossible to ignore the impact that the litigation process has had on the affected postmasters and their families. We have heard about Tom Brown, Janet Skinner, Alan Bates, Kamran Ashraf, Siobhan Sayer, Elizabeth Barnes and Jacqueline El Kasaby, among others. As my hon. Friend the Member for Broadland (Jerome Mayhew) said, they are all real people, not just people on a spreadsheet or a list. They are individuals whose families have been affected, so I will not hide and I will not wash my hands of it. It is so important that we get as much done as possible, even if we cannot achieve everything that has been asked.

I am glad that the Post Office has accepted that it got it wrong in the past on the Horizon accounting system and in its dealings with a number of postmasters, and that it has apologised. I am glad that we got a comprehensive resolution to the litigation following several days of respectful, challenging and ultimately successful mediation, although several hon. Members have raised issues about where we go from here.

Beyond the financial settlement, the Post Office committed to directly address past events for affected postmasters, so it will shortly announce a scheme to address the historical shortfalls for postmasters who were not part of the group litigation. That scheme has been designed to offer a fair, fast and transparent means for postmasters’ historical issues to be resolved.

The terms of the settlement put the onus on the Post Office to implement the necessary cultural and organisational changes highlighted by the litigation, which means that the company should foster a genuine commercial partnership with postmasters. Clearly, it has to settle its past relationship with postmasters to look forward and ensure that postmasters can have confidence in their future relationship with it.

It is important that the necessary support for postmasters to operate branches successfully is available. That includes newly established area managers to deliver support on the ground, an improved branch support centre to support teams throughout the UK, an overhaul of postmaster training and, above all, a further increase to postmaster remuneration, as we heard earlier.

In terms of the management of the Post Office, there is a new chief executive officer and two new non-executive directors, so its leadership has changed significantly in the last few months as a result of the situation. I recognise the strength of feeling surrounding the case, which is why the Government and I are determined to take the necessary steps to ensure that lessons are learned from the Horizon litigation and that past issues will not be repeated.

We have talked about the independent review, which the Prime Minister mentioned a couple of weeks ago. We are looking at the best way to do it. There will be a further announcement as soon as possible in the very near future. I know that hon. Members want progress, but I want to ensure that we get it right, rather than rushing into the terms of reference and other details. I want to make sure, as I said, without hiding and without washing my hands of it, that we actually get something that means something to the affected postmasters.

[Lucy Allan]

Does the Minister agree that the most important thing is for the wrongful convictions to be overturned? We cannot learn lessons and move forward if that is not addressed. Will he please address that point?

--- Later in debate ---

[Paul Scully]

That is why the CCRC is looking at those cases and will therefore be able to refer them to the Court of Appeal accordingly. That option is now available, which would not normally be available without the CCRC looking at those cases.

I look forward to speaking at the Select Committee hearing that is due to be held on 24 March, covid-19 notwithstanding. The Government continue to proactively challenge the Post Office to restore and strengthen its relationship with postmasters and to deliver the terms of the settlement. On Monday, I met the Post Office’s chair and CEO to seek assurance on the steps being taken. Alongside my officials, I will work to make sure that we hold them and their governance to account.

In terms of future governance, the Post Office is a large, complex and diverse business, so it is important that it is allowed the commercial freedom to compete in the challenging markets it operates in. It must, however, be accountable to the Government for its decisions, as we have heard. Following the litigation and the subsequent settlement, the Government will monitor the Post Office closely to ensure that it delivers on its commitments to improving the organisational relationship with postmasters.

[Karl Turner]

Will the Minister give way?

[Paul Scully]

I will not, because I am running out of time. I stress that the Government have robust mechanisms in place to maintain oversight of the Post Office, and they are regularly reviewed. I have regular meetings with its chief executive officer and chair, and the Government have increased the frequency of wider shareholder meetings to make sure that, among other things, the actions arising out of the litigation can be tracked. UK Government Investments, as the shareholder representative for the Department for Business, Energy and Industrial Strategy, challenges the Post Office on its corporate governance and strategy, and on its stewardship of financial and other resources on behalf of shareholders, as well as holding a non-executive seat on Post Office Ltd’s board.

The Department also recently expanded the BEIS Post Office policy team, which works closely with UKGI to hold the Post Office to account at official level. We have a new framework document that makes sure that the responsibilities and accountabilities of the Post Office, BEIS and UKGI are clearly defined. We will publish that soon. It includes an open and transparent information-sharing agreement between the Government and the Post Office.

I will meet the Communication Workers Union, which has been referred to, at the end of the month to understand the views of postmasters—I look forward to that—and will be tracking progress at the highest levels of the Post Office in quarterly ministerial meetings with the CEO, Nick Read. Governance arrangements between the Government and all its arm’s length bodies are kept under regular review. In the light of developments in the Post Office, the Government have considered and addressed all those arrangements.

The right hon. Member for North Durham talked about the Post Office’s right to prosecute. This was a private prosecution; individuals and companies can bring such prosecutions—they are not limited to the Post Office. There is, however, a continuing duty to disclose material information that comes to light that might relate to the safety of any conviction, so the CCRC and those convicted will be able to take up that information.

I will write to the right hon. Member for North Durham with more detail about the Post Office serious case review team to which he referred. BEIS has pressed management on the issues around past prosecutions of postmasters, instigated a review of the Post Office’s handling of that in 2015, and supported the Second Sight mediation scheme. The chair committed to the review in 2015, but it took all the litigation for all the facts to come to light. The suspense account was referred to; Nick Read wrote to Lord Arbuthnot recently on the subject, and we will monitor it closely. On the CCRC and the convictions that the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) talked about, there is a meeting on 24 March to consider those cases further.

To conclude, I reassure the House that the Government are working hand in hand with post offices, the Post Office, postmasters and other stakeholders to ensure that there is follow-through on the lessons learned from the litigation and the steps to be taken following the settlement. I look forward to sharing with Members as soon as possible further details of the review on the issue promised by the Prime Minister. I will leave a minute for the right hon. Member for North Durham, but I thank all postmasters—those impacted by the litigation and those not—for the value that they add in providing an exceptional service to communities, people and businesses across the UK, and for their contribution to this case. I thank hon. Members once again for their contributions to this excellent debate, and for their interest in the Post Office.