PARLIAMENTARY DEBATE
Post Office: Horizon Compensation Arrangements - 24 February 2022 (Commons/Commons Chamber)
Debate Detail
People need to know about how this scandal came about and what protections are in place to avoid history repeating itself. That is why the Government established the Post Office Horizon IT inquiry to investigate exactly what went wrong. The evidence from postmasters who have participated since the inquiry hearings began last week has been harrowing to hear, and I thank those postmasters for their courage and their willingness to revisit the trauma they have experienced. Compensation cannot take away the suffering that affected postmasters have experienced, but we are determined that each eligible person gets what is due to them, and that that is paid as quickly as possible. Of the 72 postmasters whose convictions have been overturned, more than 95% have applied so far for an interim compensation payment of up to £100,000, of which 63 offers have been accepted and paid. The Government are pushing for final settlements for quashed convictions to follow as quickly as possible, and negotiations on the first two have begun. The Government are determined that all unjust convictions are quashed. The Post Office is reaching out to affected postmasters.
The Post Office is also in discussion with other public prosecuting bodies responsible for the convictions of postmasters that may have relied on Horizon evidence to ensure that those postmasters are also contacted and enabled to appeal. Offers have been made to over 40% of applicants and compensation has been paid to 764 postmasters who have applied to the historical shortfall scheme. So far, 28 postmasters are proceeding through a dispute resolution process aimed at achieving acceptable settlements. At least 95% of those cases should have been dealt with by the end of the year.
With compensation for overturned convictions and the historical shortfall scheme well under way, the postmasters on whom my attention is now focused are those who exposed the whole scandal by taking the Post Office to the High Court. I know that many hon. Members support the Select Committee’s view that it is unfair that they received less compensation than those who were not part of the case. I sympathise with that view too. I cannot yet report a resolution of that legally complex issue, but we are doing everything we can to address it.
The compensation that postmasters are due will exceed what the Post Office can afford, so the Government are stepping in to meet a good deal of the cost of that compensation. I recognise that is an unwelcome burden on the taxpayer, but the House, and I am sure taxpayers themselves, will agree that the alternative is unacceptable.
The issue was first highlighted to me by my constituent Michael Rudkin in 2011. He had been forced out of his position as a national representative of sub-postmasters and his wife had been advised to plead guilty to a crime that she had not committed because of a flawed computer system, which Post Office officials were too arrogant to believe could possibly be to blame, and because of a Post Office management whose relationship with the sub-postmasters I described in this House as “feudal” in 2015.
My constituents are just two of the hundreds who lost their jobs, assets and reputations in what is the largest miscarriage of justice in this country’s recent history. Their lives have been affected for 20 years or more. There is no excuse for further delays to compensation. They were wronged by the Post Office and let down by Ministers and officials who apparently took the Post Office’s word without question. They deserve justice and adequate compensation now—not in months and years when the Department, which is partly culpable for the situation, finally gets its act together.
I have written to the Minister, as I have been passed a letter from the Under-Secretary of State for Business, Energy and Industrial Strategy, Lord Callanan, addressed to Lord Arbuthnot, who was also part of the original Post Office working party and maintains a strong interest in the issue from the other place. The letter states that no formal request for the funding of sub-postmasters’ compensation has been submitted to the Treasury by his Department. Can the Minister clarify whether that is still correct?
Does the Minister agree that all the sub-postmasters who lost out due to the faulty Horizon accounting system should be compensated? I need not remind him that many hundreds of sub-postmasters are due compensation, not just those who have been wrongly convicted, who number at least 736, but the many hundreds—I suspect thousands—who made up shortfalls created by the faulty Horizon system out of their own pocket under threat and coercion from the Post Office but who were not criminally prosecuted. Can he inform the House whether a system has been set up to identify those individuals and put in place a scheme for their compensation?
I warn the Minister and the Government that it is better for us to get on the front foot with the issue, rather than let a claims management company look at the opportunity, which will undoubtedly result in more litigation and delay at a far greater cost to the Government, and ultimately the taxpayer. The Minister will have read the damning Business, Energy and Industrial Strategy Committee interim report by now. It is time that we accelerated compensation, got closure for the sub-postmasters and ensured that it can never happen again.
My hon. Friend asked about the 555 and our commitment. As I have said, the 555 have been pioneers in this area, and I will absolutely work at speed. I do not want this to go on a moment longer than necessary, which is why we have tried to do everything we can to short-circuit any bureaucratic processes to be able to get on and compensate everybody fairly. The 555 postmasters who secured the group litigation order exposed this whole scandal by taking the Post Office to the High Court, and they performed a massive public service by doing so. I have written to the Select Committee with details of the costs and the preparations we have made with the Treasury.
When talking about this legally complex issue, we must remember the timeline of this and the timescale with which we are working. Horizon was installed in 1999, and the prosecutions started in 2000. In 2004, Alan Bates set up the Justice for Subpostmasters Alliance, and in 2009 press reports really started to look into the concerns about those prosecutions. Over this 20-year period, many different Ministers have been involved and there have even been Post Office reorganisations, but now—after this 20-year scandal, frankly—we want to make sure, at pace, that everybody, including the 555, get justice, answers and fair compensation.
The Horizon scandal is perhaps the most devastating miscarriage of justice in British history, damaging the lives of over 700 wrongly convicted sub-postmasters and their families, and the lives of so many who have been affected but have not been convicted. I join the Minister in paying tribute to those postmasters who have been relentless in their quest for justice. As the judge-led inquiry into this scandal has just begun, we have now been hearing extremely moving and devastating testimonies. I recommend that every Member spends time listening to the accounts just to understand how widespread this injustice has been.
Last week’s very important Select Committee report shows that, 12 years on, we are still painfully far from all the sub-postmasters receiving the compensation they deserve. Sadly, 33 of them have died before receiving any recompense. My thoughts and those of the whole House will be with their loved ones.
Given the cripplingly slow pace of justice, I want to press the Government on a few issues. First, without the extraordinary efforts of the 555 litigants, much of what we know would not have come to light. The Minister expressed his sympathy, but as Labour has pushed for time and again, will he now confirm that this group will be able to claim the compensation that is due, as he has hinted, and if so, when? Secondly, a year on from the historical shortfall scheme closing—I understand that over 2,500 have applied—only 30% of claims have been processed. Can the Minister outline what steps he is taking to hold the Post Office to account in urgently getting through this backlog, and can he clarify the definition of “eligible” that he stated? Finally, could he provide the House with an update on how long it will be before we get closure on compensation for all those affected?
The Minister is right that we will need to learn the lessons, understand the causes and ensure that this never happens again. The devastating reality of this scandal will be felt by so many families for years. The Government have taken some of the right steps, and we do appreciate that, but justice is not happening quickly enough and it is not going far enough.
Again, the historic shortfall scheme is not moving as fast as anybody would like. The Post Office has paid the de minimis cases and the most straightforward, smaller amounts. For the rest, it is working through the early cases, which will then benchmark the value of compensation for others. That will then allow the Post Office to start rattling through these cases a lot quicker. The Post Office says that it wants this to be 95% finished by the end of the year. I want to say 100% by the end of the year, and that is the kind of timescale I am working on.
The Treasury is not a blockage. Clearly, we are having conversations with the Treasury not only to ensure that we can underwrite the additional costs for the Post Office beyond what it can afford, as it has outlined in its accounts, but to give the Post Office the future that it needs. Realistically, we will not be able to get to that until we have sorted out the past. We continue to work constructively.
Compensation is one thing, but over 800 people were prosecuted and fewer than 80 have had those overturned. What pressure can my hon. Friend put on to speed up that process, and when are we going to start talking about Fujitsu and its role in this?
“put a bit of stick about”,
because the Post Office’s handling of the historical shortfall scheme has been nothing short of another scandal in itself. I recently took part in what I can only assume was ironically titled a “good faith meeting” in which the Post Office itself was not represented. It only had a lawyer from Herbert Smith Freehills, which, I understand, is not exactly at the budget end of the market. At the end, they said to us, “Of course, if you want to take this further, you should be aware that the offer we have made could be withdrawn”. That is how the Post Office is approaching the issue. It is still the same culture that caused the problem in the first place. My more recent meeting was a bit more promising, but it is clear that anybody who has settled under that HSS has probably not had a just settlement and the Minister and his Department need to look at it.
On post office closures, at the moment we are exceeding the 11,500 criterion, which still stands, alongside the access criterion. It is incredibly important to have that social value that I have talked about.
This is exactly why we set up the inquiry. My Department has said from the beginning that we will work with the inquiry in the fullest sense to ensure that we offer all the information, support and evidence that Sir Wyn wants, and I have received an assurance to the same effect from Fujitsu and the Post Office itself. I am determined that that process will be carried out.
As for the independence of the scheme, Herbert Smith Freehills acted for the Post Office in the litigation to reduce compensation, so how can it be right that it now acts with the Post Office in delivering compensation? That cannot be right, especially given that Herbert Smith Freehills oversaw the Lloyds Bank compensation scheme that was judged independently to be unable to deliver fair and reasonable outcomes to the victims, so it all had to be done again. If we do not put independent oversight into this—with a High Court judge—it will all have to be done again as well. We must act now to change the way in which this is working.
The report produced by the Business, Energy and Industrial Strategy Committee makes difficult reading for those who took their cases to court and are worse off than those who did not. Constituents of mine who are affected have been asking, where is the equality for all that was promised? Their reputations are shattered and they are financially bereft. Will the Minister direct his team to right this wrong as quickly as possible?
Contains Parliamentary information licensed under the Open Parliament Licence v3.0.