Draft Post Office Network Subsidy Scheme (Amendment) Order 2024

Rushanara Ali Excerpts

Wednesday 17th April 2024 General Committees

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I thank the Minister for outlining the details and explaining why this statutory instrument has been brought to Parliament today. Since the exposure of the Horizon scandal, Labour Members have sought to work with the Government while applying the necessary scrutiny to ensure the most effective process for the wrongly accused sub-postmasters to receive the justice and compensation they deserve.

We will continue to provide the necessary scrutiny and critique where necessary, both in the Post Office (Horizon System) Offences Bill as it continues to progress through Parliament, and this piece of secondary legislation. I hope the Minister will not have too many objections. As the Minister has pointed out, the cap has been raised by the Government from £500 million to £750 million, and we do not oppose their reasons for doing so. I would, however, like to press the Minister on a few outstanding points.

The annual limit on the Government’s Post Office funding stood at £160 million until 2011, when the cap was raised to £500 million, and has remained unchanged. We can see the rationale, given the context of what has happened recently, of increasing the cap to £750 million. As the Minister has laid out, the Government have pointed to the range of factors that risk breaching the current £500 million spending limit: the focus on the compensation for sub-postmasters relating to the Horizon scandal, the funding for the replacement of the Horizon IT system, and the ongoing financial demands to keep the branch network operating given the cost pressures and the economic climate.

It is good to hear the Minister highlight the 6,000 rural branches. In discussions that I have had with sub-postmasters since I took on this position, it is very clear that there are huge pressures, and we have seen the closure of a number of post offices in different communities. I am sure the Minister will understand the unease many will feel about this uplift, given the recent scandals and the role of the Post Office in that context. That is not to say that the network of sub-postmasters, who have been doing such a phenomenal job around the country, is at issue. It is about management, leadership and many of the issues that have been exposed in the recent scandals, such as the removal of the chair and the other recent issues that have come through over the course of the inquiry hearings. That is what the public are hearing about regularly.

It would be helpful if the Minister provided some assurances. He has mentioned compensation, and his answer to the right hon. Member for North West Cambridgeshire was helpful. Can he explain roughly what those allocations might be, perhaps later if he is not able to explain today? Should that uplift be used, does he have in mind the kind of amounts intended for the compensation scheme, the Horizon replacement scheme and the wider network? Will those allocations strike an appropriate balance in providing that? Will that be sufficient or will there be a need to provide further uplifts?

The other issue that sub-postmasters have raised with me in discussions is a general concern about a bonus culture at the Post Office, as well as the wider culture at the senior management level and the tick-box attitude to sub-postmaster engagement. That is a snapshot of impressions that I have received, but it would be useful to know what discussions the Minister is having with the broader organisation, as well as management, about how that uplift will be used, and to receive an assurance that the uplift is going to be used properly and effectively.

The public will want to know that the uplift—the Minister may well be able to answer this right now—will not be used to provide bonuses and increase remuneration for people in senior management. As we have heard recently in the public domain and in the media, as well as in a Select Committee hearing in February, pay and remuneration issues have come up quite a lot. It would be helpful if the Minister can reassure us that this uplift is not about that.

I hope that the Minister will accept the spirit of another point I want to make. It is a wider point that has come up—I know he is doing a lot of thinking on this—about reform of the Post Office and tackling the wider sets of issues about institutional culture, the governance of the organisation and learning the lessons of what has been exposed through the Horizon scandal. Of course, there is much more work to do in following up the outcomes of the inquiry report. While we support the uplift, I hope that the Minister can address some of those questions. If he is not able to address all of them today, I hope that he will be able to do so subsequently.

I would like to ask a few questions about Fujitsu. As the Minister has sought the uplift in relation to the compensation programme, I would like briefly to turn to the specific issue of funding and his assurances about seeking to recover funds from Fujitsu, given its role in the Horizon scandal. As we all know, the tech giant’s faulty Horizon IT system is at the heart of the Horizon scandal. Its senior executives have already accepted moral responsibility, but it remains unclear what role it will have in the compensation process. As I think most Members will agree, it is only fair that Fujitsu at least contributes to the compensation funding, rather than leaving the British taxpayer to foot the entire bill. This is particularly pertinent given that Fujitsu has held Government contracts worth more than £3.4 billion since 2019. Many have raised this issue over the past weeks and months. I raised it on Second Reading of the Post Office (Horizon System) Offences Bill, and my colleague Lord McNicol raised it in the Lords when this SI was debated.

Based on previous Government responses, I think it is fair to say that the Government do intend to seek payments from Fujitsu, and we look forward to working with the Minister and his team to continue the pressure to make this happen as quickly as possible. However, we remain somewhat in the dark over how much progress has been made. It would be really helpful if the Minister outlined whether he has a timeline in mind for when payments will be made, how much progress has been made, and whether he requires cross-party support in getting the job done, with the total cost of compensation likely to be upwards of £1 billion. If the Minister is not able to provide further answers today, could he provide them in writing?

In conclusion, I thank the Minister for the work he has been doing and look forward to working with him to provide the necessary support to the post office sub-postmasters and their network to ensure that it is stabilised and gets the support it needs. The compensation programme is there to support victims as quickly as possible. I also look forward to working with him to ensure that Fujitsu is made to pay for what it is ultimately responsible for.

[The Chair]

I remind Members that the scope of the Bill is setting a new cap on spending of up to £750 million. I call the SNP spokesperson.