PARLIAMENTARY DEBATE
Post Office Executives: Bonuses - 10 May 2023 (Commons/Commons Chamber)
Debate Detail
The situation is extremely concerning and deeply regrettable and the Post Office is right to apologise. This is a very serious issue, particularly as it comes at a time when it is essential that the public have confidence that the culture and processes at the Post Office have been improved.
Since becoming aware of this incident, I have acted swiftly, calling for an immediate explanation from the Post Office as to how this mistake occurred and asking what steps the Post Office board is taking in response. I met officials in my Department and UK Government Investments yesterday to discuss what further action is needed.
The Post Office has rightly apologised to the inquiry and issued a clarification on its website. The Post Office chief executive officer and chief finance officer have returned the remuneration associated with the sub-metric relating to the Post Office’s support for the inquiry. The Post Office CEO has also apologised to Department for Business and Trade Ministers.
But more needs to be done. As a first step it is important that the facts are established. The Post Office has rightly announced that the incoming chair of its remuneration committee, Amanda Burton, will lead an immediate investigation into this incident. She was appointed non-executive director on the Post Office board at the end of last month and brings to the role experience and expertise from her time in the legal profession. The scope of the investigation is to ensure that the remuneration committee’s approach and processes on rewarding its executives in this case was consistent with corporate governance best practice. I expect this investigation to report back to me within two weeks with its findings and recommendations.
I can also announce that my Department is commissioning a wider independent review of the governance around Post Office decisions on remuneration. It should make recommendations about any further changes that are needed. This will run alongside the Post Office remuneration committee chair’s investigation of this specific incident. Further details will follow.
Finally, let me finish by reiterating that the Government remain steadfast in their commitment to ensure swift and fair compensation to postmasters who suffered as a result of the Horizon scandal and are grateful for Sir Wyn’s work leading the Horizon inquiry. We will keep the House updated on this issue.
Two months ago I sat in the front room of a 78-year-old lady in Newcastle whose son had contacted me because she had not applied for compensation. That woman was traumatised: she was never spoken to about this for 20 years and was broken because of the shame involved in her prosecution. When this news broke on Friday night I thought about her and I was angry, but I am not as angry as many of the victims, who have been misled and lied to with a cover-up over the years.
Nick Read was brought in as a new broom, and he apologised to the victims on behalf of the Post Office. Well, that apology means absolutely nothing. This is a man who will get a bonus of over £400,000, which is based not on a mistake, as the Minister said, but on a deliberate lie. Added to that, two of the four people on the advisory board are Tom Cooper, who is his Government’s own representative on the board, and Ben Tidswell, who is chairing the review of historical compensation. How could those two people remain on the board? As the Minister knows, the victims of the Post Office have no confidence in it. I was prepared to give them the benefit of the doubt, but frankly it is rotten to the core still. It needs to change.
May I ask a couple of questions? First, when was the Minister made aware of this? What is the actual role of Tom Cooper, who is the Government’s representative? We have had this for many years, Minister: there were independent Government advisers on that board who oversaw the Post Office spending £100 million of taxpayers’ money to fight an unjustifiable court case against the postmasters. Will he publish who has got a bonus and who has given it back? If he says that the criteria were not clear or were misunderstood, will he publish them? When he does his inquiry, will he come back to the House to give a full explanation about what is going on?
Finally, may I say this to the Minister? Victims of compensation are waiting for their compensation. I know it has been a difficult task. They do not trust the Post Office, which is still dragging its heels in getting information out. Unless we get that, people are not going to get justice. The only thing that needs to happen is that the chief executive should resign or be sacked.
To respond to the right hon. Gentleman’s specific questions, I was made aware of this on 6 May, Saturday; the officials were made aware on 5 May. It is absolutely right that we should have been notified of this earlier. I met with Tom Cooper yesterday, together with other officials and UK Government Investments representatives. Tom has accepted that mistakes were made, including on his behalf. Tom Cooper was already due to leave his role as the shareholder representative, which is the UKGI role he plays, and is being replaced by Lorna Gratton.
The criteria for the bonus are published in the annual report, but I am happy to commit to come back to the House and report, by whatever means, on the findings of the remuneration committee and the independent expert external report that will look at these issues in the round. As I said in my remarks, I absolutely think that the Post Office needs to change its culture and its approach to these matters, and wider matters arising from the Post Office scandal. We are determined to make sure that people get fair compensation; I know that the right hon. Gentleman, too, is determined to make sure that happens, and he has been a doughty campaigner for that cause for many years.
Here we are again. Just when we thought we had reached a low in the ongoing saga that is the Post Office’s Horizon scandal, a new low is reached. The Minister is right that the situation is concerning, but it is much more than that: it is a disgrace. After years of fighting compensation claims against honest sub-postmasters, using every trick in the book to draw things out for as long as possible, the Post Office somehow found it appropriate to hand out bonuses for co-operating with Sir Wyn Williams’s inquiry, which executives had a statutory obligation to do anyway. The Post Office even implied that the bonuses had effectively been approved by Sir Wyn, which he has denied, saying that the confirmation it received from him was misleading and inaccurate. This is, in no uncertain terms, completely unacceptable.
The Horizon scandal is one of the greatest injustices in modern British history, and these bonuses add further insult to injury. The Post Office has very serious questions to answer on corporate governance, not least in relation to the remuneration committee. I am glad to hear that an inquiry is being undertaken, but there are also questions about Government oversight if the Minister himself had been kept in the dark for weeks. I would be grateful if he could clarify what role Tom Cooper played as an adviser, what he knew and when he knew it. I think the Minister has made this commitment, but can he give a timescale for when he expects to publish Amanda Burton’s report?
The Post Office and the Government must now convince the British public that they understand not only the scale of what happened, but the priority and importance of urgently getting compensation to victims. Sub-postmasters have had their lives ruined, and they need more than repeated apologies and further delayed compensation. They must also be confident that lessons have been learned from these failures. Sadly, it seems the Post Office has failed to do that.
The Government must get a grip of what happened and how it was allowed to take place. Can the Minister confirm how and when the Government became aware of the bonus payments? He said it was last Friday and Saturday, but how did it happen? Will the Government confirm whether they asked for the bonuses to be repaid? Finally, will the Government now confirm that the interest on compensation paid to victims will be exempt from tax?
Clearly we have to follow due process, including good employment processes, in publishing any report by Amanda Burton. I cannot make a commitment on that, or on the repayment of bonuses, due to employment laws and regulations.
Finally, we are determined to resolve the tax problem that some people in the historical shortfall scheme have suffered. We are working on that at pace right now.
The Post Office was right to apologise, but it should not have had to apologise in the first place. The rotten core of what is still happening in Post Office Ltd needs to be exposed to daylight and be completely cleansed. I know the Minister is keen to do that, and I look forward to his inquiry—not an internal inquiry—into what went wrong. Surely to goodness, Post Office Ltd should not be awarding itself bonuses for co-operating with a Government inquiry into wrongdoing of the extent of the Horizon scandal. Furthermore, lying about the inquiry’s chair is beyond the pale. I have railed against this so many times in this House. Members will be pleased to hear that I do not intend to go on any longer, but this needs to be sorted.
The Post Office is awarding enormous bonuses, or tried to award enormous bonuses, but the postmaster in Dorchester, the county town of Dorset, is so screwed down on transaction fees that he is now personally subsidising the county town’s post office in order to survive. That cannot be right, and I am hopeful that the Minister might be able to give me some reassurance that this sort of area will be properly considered and looked into, to make sure it is stopped.
I am sorry about what has happened to the hon. Gentleman’s constituent, and the hon. Gentleman and I have talked about it previously. We want all people who have suffered as a consequence of the Post Office scandal to come forward and make sure that they submit a claim for compensation. That is the most important thing now. We have set aside £1 billion to compensate postmasters for various different detriments that they have suffered, and our message to all postmasters affected by this scandal is: please come forward, you will be treated fairly. There is an independent processes to make sure that is the case, including the advisory board, of which the right hon. Member for North Durham (Mr Jones) is a member.
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