Horizon: Compensation and Convictions

Statement

The following Statement was made in the House of Commons on Monday 8 January.

“The Post Office scandal is one of the greatest miscarriages of justice in our nation’s history, shaking people’s faith in the principles of equity and fairness that form the core pillars of our legal system. I am very pleased that last week’s excellent ITV drama ‘Mr Bates vs The Post Office’ has brought an understanding of the Horizon scandal to a much broader audience. I have received much correspondence about the scandal and the emotional impact that the dramatisation has had. Those of us who have been campaigning and working on the issue for some years were already well aware of what happened.

I pay particular tribute to Alan Bates and his fellow postmasters, including Jo Hamilton and Lee Castleton; to the right honourable Member for North Durham, Mr Jones; to my right honourable friend the Member for Haltemprice and Howden, Sir David Davis; to my honourable friend the Member for Telford, Lucy Allan, and the honourable Members for Jarrow, Kate Osborne, and for Motherwell and Wishaw, Marion Fellows; to the noble Lord, Lord Arbuthnot, and other members of the Horizon compensation advisory board; and of course to key figures in the media. They played a key role in seeking justice and compensation for the victims. I also thank the shadow Secretary of State, the honourable Member for Stalybridge and Hyde, Jonathan Reynolds, for his continually constructive approach, as well as my ministerial predecessors, including my honourable friend the Member for Sutton and Cheam, Paul Scully.

Watching last week’s ITV programme has only reinforced our zeal for seeing justice done as quickly as possible. We are already a long way down that road. Sir Wyn Williams’s inquiry is doing great work in exposing what went wrong and who was responsible. Full and final compensation has already been paid to 64% of those people affected. I have previously said to the House that my main concern now is regarding those still waiting for full and final compensation, and the slow pace at which criminal convictions related to Horizon are being overturned by the courts. Before Christmas, the advisory board published a letter that underlined exactly that.

This is not just a matter of getting justice for those wrongly convicted. Overturning their convictions is also key to unlocking compensation. Each person whose Horizon conviction is overturned is entitled to an interim compensation payment of £163,000. They can then choose whether to have their compensation individually assessed or to accept an upfront offer of £600,000. That offer is already speeding along compensation for a significant number of people.

In the light of the advisory board’s letter about overturning convictions, I have spoken to the right honourable Member for North Durham, Mr Jones, and to the noble Lord, Lord Arbuthnot. I have also had a very positive meeting this afternoon with my right honourable and learned Friend the Lord Chancellor. All of us in the House are united in our desire to see justice done, and we have devised some options for resolving the outstanding criminal convictions at much greater pace. The Lord Chancellor will, rightly, need to speak to senior figures in the judiciary about those options before we put them forward, but I am confident that we should be able to implement measures that address the concerns expressed by the advisory board. I hope that the Government will be able to announce those proposals to the House very shortly.

Of course, there is clearly great concern about the role of the Post Office in prosecuting these cases. The Post Office rightly decided to stop undertaking private prosecutions in 2015. If we are to make sure that a scandal such as this can never happen again, we need to look at the way in which private prosecutions such as these have been undertaken. Any company can bring private prosecutions in this way: this is not a special power of the Post Office. I know that the Lord Chancellor wants to give this issue proper and thoughtful consideration, and I am sure that he will report to the House about the issue in due course.

Getting justice for the victims of this scandal and ensuring that such a tragedy can never happen again is my highest priority as a Minister, as it has been throughout my 15 months in office. When we talk about compensation, we have to remember that the lives of the postmasters and their families caught up in this scandal have been changed for ever. They have faced financial ruin, untold personal distress and a loss of reputation that no amount of financial compensation can fully restore. The Government recognise that we have a clear moral duty to right those wrongs to the best of our ability. To support those whose lives were turned upside down by the scandal, we have provided significant funding for compensation. We have also been clear that it should not be the taxpayer alone who picks up the tab. We will wait for the inquiry to report to make clear the extent of any other organisation’s culpability for the scandal and any individual accountability.

Our aim is to ensure that every victim is fully recompensed for their losses and the suffering they have had to endure. To date, more than £148 million has been paid to 2,700 victims across all compensation schemes, 93 convictions have been overturned and, of those, 30 have agreed full and final settlements. Just over £30 million has been paid out in compensation to those with overturned convictions, including interim payments. Of course, we want to ensure that the process for agreeing compensation is fair, transparent and open to independent assessment. That is one of the reasons why I am today announcing that retired High Court judge Sir Gary Hickinbottom has agreed to chair an independent panel that will assess the pecuniary losses of those postmasters with overturned convictions where disputes arise. That will bring independent oversight to compensation payments in a similar way to Sir Ross Cranston’s oversight of the group litigation order scheme and the independent panel in the Horizon shortfall scheme.

Of the original 555 courageous postmasters who took the Post Office to court and who first brought the Horizon scandal into the public eye, £27 million has been paid out to 477 claimants in addition to the net £11 million received through the December 2019 settlement. Forty-seven members of the original GLO group have also received compensation following the overturning of their convictions, totalling more than £17 million. We have received full claim forms from 59 of those postmasters who are eligible for the GLO scheme and issued 43 offers. There have been 21 full and final settlements paid and a further seven full and final settlements accepted. That brings the total number of accepted full and final GLO settlements to 28. I would encourage claimants’ lawyers to continue to submit GLO claims, because my department stands ready to review them and turn them round quickly.

It is worth noting that the 2,417 postmasters who claimed through the original Horizon shortfall scheme have all received offers of compensation. Around 85% have accepted those offers, worth over £107 million. In total, over £91 million has been paid out through the scheme, with the Post Office now dealing with late applications and with cases where initial offers were not accepted.

However, this is not just about compensation; it is about restoration—the restoring of people’s good names and the restoring of the public’s trust, both in our postal service and in our justice system. It is therefore only right that we get to the bottom of what went wrong and of who knew what and when. Although the scale of the problem is immense, the Government are unwavering in their resolve to tackle it, to compensate those affected and to leave no stone unturned in the pursuit of justice. We owe that to the victims, to their families, to the memory of postmasters who have died since this tragedy first came to light and to those who, tragically, took their own lives after being accused of awful crimes they never committed. We owe it to everyone who has been caught up in this tragic miscarriage of justice.

I thank all Members across the House who are supporting us in this effort. Together we stand united, not just in memory of those who have suffered but in shared purpose to ensure that such a tragedy can never, and will never, happen again. I commend this Statement to the House”.

My Lords, in preparing for today, I had a look back over previous Statements, debates and Written and Oral Questions that we have debated in your Lordships’ House. What shocked me the most was just how repetitive it all is: the same interventions, the same problems, the same people and the same lack of solutions. I have raised questions and spoken in debates on this issue many times since 2019, and I am just a newcomer. We have all known about the scandal for years, thanks to some great campaigning by individual sub-postmasters and by parliamentarians across the political divide and across both Houses. They include the noble Lord, Lord Arbuthnot, and Kevan Jones MP in the other place, to name just two.

The scandal is an absolute disgrace on so many levels: financially, judicially and on a human level. Most worryingly, it is a governmental oversight failure as well. We all know the details: thousands of sub-postmasters sacked or prosecuted in the space of 16 years and wrongfully labelled as thieves and fraudsters by the Post Office, Fujitsu and our judicial system. Their lives were made hell, and all because of an IT glitch in the system. What makes this so shameful are the lengths to which Post Office Ltd went to cover it up. The fact that it spent £32 million denying these claims and bullying those wrongfully accused into false guilty pleas is bad enough. But what makes this story even worse is that we got the national moral outrage not when the cases went to the highest court in the land and were won, three years ago, but only when ITV produced a drama on the scandal. As my noble friend Lady Chakrabarti asked earlier, where has the moral outrage of the state been in the last two decades?

Many postmasters and postmistresses have so far received only a fraction of their costs and expenses. Can the Minister guarantee that compensation payments will immediately follow any exonerations under the terms of the scheme as they stand today, and can he indicate any sort of timescale for this? We have waited so long. I know that he, like his predecessors, appreciates that victims cannot continue to wait for years for payments. Sixty sub-postmasters have died since the scandal, four of them taking their own lives. The final compensation is critical, but so too is overturning the convictions. Justice must be served for those workers and their families, which is why Labour has called for all sub-postmasters to be exonerated in full. As my colleague Jonathan Reynolds MP said in the Commons,

My Lords, as we have heard, it has taken a television drama to set light to what has been smouldering for a very long time. I suppose that all those associated with that drama should be congratulated, because they have managed to do what we failed to do: to ignite public indignation to such an extent that the Government had to move. In that respect, they deserve a great deal of congratulations. Of course, the script has been played out here and, thanks to the noble Lord, Lord Arbuthnot, at the start, and others, we are very familiar with it.

I have a few questions about where we are now. First, we welcome the news that Scotland Yard is looking into potential offences in relation to the Post Office overall, but can the Minister confirm that this will be able to progress in a speedy way in a twin-track approach alongside the public inquiry? It is very important that both these things can happen as fast as possible. We do not want one to impede the other, so can the Minister assure us that this twin-track approach will be pursued?

Turning to compensation, in the case of individual assessment, can the Minister please enlighten your Lordships’ House on the role of retired judge Gary Hickinbottom’s panel? This was announced only on Monday and, according to the Minister then, this panel is apparently going to assess the pecuniary losses for those with overturned convictions if there is a disagreement. Is this now obsolete, or will it still be operating? If it is still operating, why does it deal with only pecuniary issues when the Secretary of State has on a number of occasions said that this harm goes way beyond simply those? How is this to be incorporated into the two announcements spread over three days?

In the Commons, the Father of the House, Peter Bottomley, said that

“the titanic error was a belief in technology”—[Official Report, Commons, 8/10/24; col 86.].

It was that belief, coupled with zero faith in the decency of the sub-postmasters, that set the problem going. In that, the role of Fujitsu was central, and it is clear that the failure of its technology was at the heart of the issue. It remains to be seen how it perpetuated the myth of its technology, and that is what the public inquiry will address; but however you look at it, it continues to benefit from UK consumers’ and taxpayers’ money. It is still operating Horizon for POL, and benefiting as a result to the tune of tens of millions of pounds annually. That is not all: further government contracts have been issued. Is this right? Is it appropriate that this should continue?

I thank the noble Lords, Lord Nicol and Lord Fox, for their contributions and detailed questions. It is worth reminding ourselves of the timeline of this sorry story. The Horizon accounting system was introduced in 1999, and between 1999 and 2013—a 14-year period—the 700 postmaster direct prosecutions in England were brought. In 2017, the group litigation order was got together and in 2019 the High Court judge discovered that the case was flawed and the judgment was made, whereupon 75% of the settlement money had to go to fund the litigation.

In 2020, the then Prime Minister committed to holding an inquiry into the Horizon scandal, so that starts the clock on government action. The Criminal Cases Review Commission then began its work and referred the initial 39 cases to the Court of Appeal. In 2020, the Horizon shortfall scheme was set up, designed on the understanding that compensation was going to have to be made. So at that moment, there was an understanding that there was a major problem.

In 2021, the High Court quashed the 39 convictions in a landmark judgment, and the Government announced funding for Post Office Ltd to pay the compensation. On 19 September, my predecessor, my noble friend Lord Minto, made the announcement in this House on the £600,000 upfront offer, so that pre-dates the TV series.

My DBT colleague in the other place, Minister Hollinrake, was vocal on this issue when he was on the Back Benches, and now, as a Minister, he has committed entirely to getting justice. He has come up with the £600,000 scheme, which is saying to people, “You don’t need to go through any more trauma or see any more lawyers. Here is an interim payment of £163,000, and you can get up to £600,000 without seeing another lawyer, get your conviction overturned and be done and dusted”. Yes, it is clear that the TV series brought this to light and to public attention. However, it has been acknowledged in government that this is a big problem that needs to be sorted. I commend my colleague, Minister Hollinrake, for what he has done so far.

My Lords, I will ask the Minister a follow-up question to the question from the noble Lord, Lord Fox. What happened to the sub-postmasters and how long it has taken to deal with these issues is, of course, absolutely outrageous, but there are other scandals that we know about as well, such as infected blood, Hillsborough, Windrush and Grenfell. These too involve people who have been badly affected by what has happened to them and they have caused significant harm and distress to those individuals and also to their families. Can the Minister say what the Government are doing to ensure that, once we know a scandal has happened, we deal with it quickly and in a very timely fashion so that it does not take almost a generation?

I thank my noble friend for that question. We must recognise the common interest of people impacted by the Horizon scandal and those affected by, for example, the infected blood scandal and Hillsborough and other tragedies. It is important to recognise that each of those circumstances was different and unique and unprecedented; each case is a personal tragedy.

In the infected blood case, the Government have already made interim support payments of £100,000 to individuals and bereaved partners, and the cost of that will be £400 million in terms of interim compensation. That compares with a likely figure of £1 billion for the Horizon postal scandal. I cannot speak with any great authority on the wider picture, but it must surely be the case that, as the Government look at this case, there will need to be a wider conversation and look at the broader picture on all these issues.

My Lords, I accept that with this particular scandal the priorities should be the exoneration and compensation of those who have been so badly damaged by it, the exposure of the reality of the corruption that led to the scandal in the first place and accountability for those who have been acting so corruptly. However, at the heart of this, the biggest miscarriage of justice in terms of scale that this country has ever seen, there is another issue that needs immediate attention: a faulty legal presumption that requires immediate re-evaluation. In England and Wales, there is, as a matter of law, a presumption that computers are working properly, unless there is evidence to the contrary, and therefore that what they produce is reliable. If it were not for the group litigation, the fundamental unreliability of the software in the POL Horizon system would never have been revealed. That is because challenging that computers are not working properly is far outwith the resources of most people in this country and, unless they work together in this way, they have no chance of doing this in our courts. It is time now to re-evaluate this and replace this presumption with a requirement that those who rely on computer evidence should justify to the court that it is reliable and not the other way around. We could do that relatively quickly and easily, and the onus would then lie on the people who are relying on that evidence to show that it is reliable and that the computer is working properly. In the Horizon case, without perjury, nobody would have been able to do that.

The noble Lord highlights perhaps one of the most cynical aspects of this terrible case: each of the sub-postmasters was told that they were alone and that this was happening only to them. We have all seen the programme and we all know the people in our communities who do these vital jobs. They work alone in small shops in small towns and villages and do not necessarily have the support that they need. That was perhaps one of the most invidious parts of the drama series and, at the end of the day, perhaps the help given by one or two constituency MPs was to believe these folks and get them together, which resulted in the group of 555 coming together. It is very relevant to say, “Why does the little guy have to keep convincing the big guy? What is going on?” Again, I know that the Lord Chancellor and the Ministry of Justice are now very focused on this issue and that they will come out of this with some serious questions that need to be answered. That will be part of the follow-up to the Williams inquiry. Let us find out exactly what happened. Out of this, I think that some serious questions will be asked about future processes and that this House will come back to this issue more in the coming years.

My Lords, nothing that is done at this stage can even get close to putting right these terrible wrongs, which will be a dark stain on our polity for a long time. The whole House will welcome what is now being done, which is the best that can be done at this stage. I will focus on the issue of the company, Fujitsu. In 2010, we found that it was deeply entrenched across the whole of central government. Its performance in many of these contracts was woeful, and the procurement system regulations then in place made it impossible—although we tried—to prevent it getting further contracts. Does my noble friend agree that, if that company has any sense of honour, let alone a concern for its reputation, it should come forward very quickly, without waiting for the results of these inquiries, which we know will take some time, and make a big ex gratia payment towards the compensation that is rightly being paid?

I thank my noble friend for that. He speaks with great experience of the inner workings of Whitehall, obviously, and has seen the way that these anomalies arise. The public would be entitled to say, “Why has this company been so embedded for so long and made so much money out of the taxpayer?” So, with emotions running high at the moment, we understand the calls for compensation. It has been made very clear in the other House that the cost of this should not fall solely on the taxpayer. If there are other sources of compensation, there must be access. I must say that, if I were the chief executive of a company in this situation, I would be thinking about that matter very carefully.

My Lords, I am grateful for the Minister’s approach so far to this very difficult subject. He has spoken very clearly of exoneration and compensation, which it would seem could be achieved by primary legislation fairly swiftly. He is right to say that accountability may take longer, because that is about due process, investigations and, we hope, prosecutions and quite possibly restitution, including in relation to Fujitsu. In a previous answer, I believe he said that government involvement had started around 2021. What about the fact that Governments were represented on the Post Office board? What about the question of what these arm’s-length entities, including privatised entities such as Post Office Ltd, do to the concept of ministerial responsibility? What will we do about that precious constitutional principle going forward?

I thank the noble Baroness for that. This is another area that will demand further consideration. Within the system of government now, we have a lot of quangos, third-party agencies and off-balance-sheet activities. The question that must always arise is what the relationship is between those and the shareholders, who are effectively the taxpayers. What is the role of Ministers to sit in between them, and what is the accountability of Ministers to make those decisions? A large number of noble Lords in this House have been Ministers and understand how that works and that we have conservations with officials. But we also need to have a sniff test, do we not, about what sniffs right and what sniffs wrong. There is a requirement to look at this again, so as to not be in a position where we just always take what officials tell us, and a need to actually be a bit more canny about the questions we ask.

My Lords, the enormity of this seems so appalling that, even when the sentences have been overturned, the compensation paid, and the committee inquiry taken place and blame apportioned, we will need some great public, symbolic act to recognise that something terrible has gone wrong and that hundreds of people who were wrongly accused have now been clearly and publicly vindicated. Will the Minister think about the possibility of doing something, perhaps in Westminster Hall, on behalf of the state and in a public and symbolic way, to express the sorrow of the state and the clear, public vindication of these hundreds of people?

I thank the noble and right reverend Lord for that intervention; it is a very insightful comment. Ironically, when the management were asked in court what they felt one of their core duties was, they said it was to protect the reputation of the Post Office. But what of the reputation of the Post Office today? I would argue that, funnily enough, the reputation of the Post Office has in some ways gone up, in that people now understand the value of sub-postmasters. Are they not what the Post Office actually is? Those who have suffered reputational damage have been the management of the Post Office, and rightly so, but has not this sorry saga perhaps brought to our attention just how valued the sub-postmasters must be in our community? What the noble and right reverend Lord has called for is a demonstration of that. It is a very good idea, and one that I will take back to the department.

My Lords—

My Lords—

My Lords, it is the turn of the Liberal Democrat Benches.

My Lords, following on from what the Minister said, could he explain the role of the audit committees, at any level, and the National Audit Office? Where were they in this scandal? There are audit committees and they had a role to play. The elementary precaution used by all firms of accountants is that, when a new system is put in place, you run a parallel system for a few months to make sure there are no errors. Why was that not done?

The noble Lord is absolutely right to raise these points. This is what the Williams inquiry will be looking at in fine detail. My understanding of the situation is that there was no shortage of committees all over this terrible saga, but there was a shortage of good judgment, inquiring minds, sympathy and common sense. These questions will all be answered. They need to be run through the Williams committee, and we need to know the answers to all of these. I know that he will do his work in great detail.

My Lords, can I comment as follows? There was a most sad interview this morning on the “Today” programme; it was really upsetting, to say the least. On following up with Fujitsu, could I suggest that the Prime Minister ring the Prime Minister of Japan, who was elected to bring back the standing of Japan in world terms? In practice, trust and respect is a key factor to them. It is not impossible that, in the case of wanting that recognition, trust and respect, the Prime Minister of Japan would quietly ring the chairman of Fujitsu and that, in a charitable form, they could arrange something which would suit us. They would consider it generous while we would not. Nevertheless, it is something to try; it would just be a phone call.

I thank my noble friend for that idea, which is a good one. With his permission, I will take it back to the department.

My Lords, in the other place today, Minister Kevin Hollinrake said that engagement with the Scottish and Northern Ireland Administrations would take place. How will that happen in Northern Ireland whenever there are no political institutions up and running? Who will the Government actually engage with, since post offices are very much the financial hub, and have been over the last 20 years, particularly in rural communities?

I thank the noble Baroness for that point, which is well made. We have to work with the situation we find ourselves in, and this has to be moved along at great speed. I am happy to write, as I do not know the exact answer to that question in detail, but I do know that conversations and dialogue happen between the MoJ and those in both Scotland and Northern Ireland. I am happy to find out more about the precise mechanics of that.

My Lords, further to the question which was asked earlier this afternoon by a right reverend Prelate, the BBC is reporting that Paula Vennells was shortlisted to be the Bishop of London. The media are very much focused on her, but there was a board and there were successive chief executives, all of which seems to be being ignored. It is really important that accountability is clear. We cannot wait for the inquiry. Does my noble friend not think that something is desperately wrong with our procedures, and with the judicial system, when it takes 20 years for this to be established, and where the net beneficiaries have been the lawyers? They have earned millions and millions of pounds, while ordinary people have been bankrupted and unable to defend themselves. Does he accept that this requires, as has been pointed out, a root-and-branch assessment of how these systems operate and the arrangements with agencies, where Ministers—far be it for me to defend the leader of the Liberal Party —are held to account for bodies with which there are arm’s-length relationships and where they are unable to execute responsibility, although they are held accountable for it?

I thank my noble friend for that contribution. On the lawyers, that is certainly a point well made—it is quite extraordinary how much has been made out of this so far by the lawyers. That is why my colleague, Minister Hollinrake, has been so assiduous in coming up with a plan which allows for compensation to be paid immediately—whether that is the £75,000 minimum to the GLO group or the £600,000 for those who are having their convictions overturned—without the need to have any more legal input. That is a very important part of the process. If any claimant feels that they want to make a bigger claim than that, they will need to interact with lawyers again to do so; again, we have given a tariff and a certain cap, which will at least minimise that. On the wider point from my noble friend Lord Forsyth, I completely agree that this highlights serious flaws in the corporate governance of the Post Office, and in the role of the board and its interaction with government officials of whichever colour and creed. We need to have a serious look at this. Once we have gone through the Williams inquiry, I believe that this will be worthy of much further consideration in this House.

My Lords—

My Lords—

Can we let in the noble Baroness, Lady Fox, from the non-affiliated Benches, please?

My Lords, one of the reasons this has resonated so widely is not just because it was a brilliant drama but because so many ordinary people recognise what it feels like to be fighting the establishment and getting nowhere. We have all spent hours shouting at the phone on those helplines on the computer—that is in relation not just to HMRC but to the NHS and everything you deal with—but people were also treated as though they were criminals, not believed, and gaslit by these experts who know what they are talking about.

Anyway, there is an issue here. The whole establishment, not just the Post Office but the judiciary, seems to have a lot to answer for. I therefore ask, if the judges believed the computer, how we feel about the fact that the police national computer is maintained by Fujitsu. Britain’s criminal records database is run by Fujitsu. It has all the details of convictions, cautions, fingerprints, DNA data and—something I have been banging on about for a while—non-crime hate, when you have not committed a crime but you are on a database run by the police. Fujitsu has it. I do not feel safe in these circumstances, and I identify with the little man against the establishment.

I completely concur with the noble Baroness’s sentiments. Emotions run high at this moment, and quite rightly because we have seen a lot of very decent innocent people treated very badly over such a long period; it is quite extraordinary. We are now at a point where we are facing this issue. We are going to move fast to get compensation into place. Let us get the inquiry under way, and out of that will flow a lot of further debate.