That this House takes note of the progress of the Post Office Horizon compensation scheme and of the contribution of Fujitsu to the compensation of victims.
I begin by declaring an interest as a member of the Horizon Compensation Advisory Board. I am looking forward to the maiden speeches of the noble Baroness, Lady Elliott, and the noble Lord, Lord Barber, both good trade unionists who I have worked with and known for many years.
Along with my good friend—and I call him a good friend—the noble Lord, Lord Arbuthnot, I have been involved in the campaign for sub-postmasters for over 15 years. I hope that our efforts have made a little contribution to exposing this scandal. The main efforts that need to be recognised in this scandal are those of Alan Bates and the sub-postmasters. They have ensured that we have got to where we are today, when the truth is finally coming out about what went on around the Horizon scandal.
I first became involved with this cause in 2009, when I was Member of Parliament for North Durham. A constituent of mine, Tom Brown, came to see me. He was an upstanding, hard-working postmaster who had received awards from the Post Office for fighting off an armed robber at his post office. He was accused of stealing £84,000.
Tom had raised with the Post Office the issues around the Horizon system, but he was completely ignored until auditors arrived to close his post office down and was subsequently taken to court for stealing £84,000. In that two-year process, Tom was made bankrupt. ironically, on the morning of the case at Newcastle Crown Court, the Post Office said it had no evidence to put forward. It was too late for Tom by then: his life had been ruined. Tom gave evidence to the public inquiry but, sadly, passed away last year before its conclusion. He was one of too many who passed away, never to see the justice that they deserved.
The Post Office Horizon issue has been described as a scandal, but I argue that it is worse than that. It is the worst example of when the state, with all its powers, not only goes unchecked but leads to collusion. Moreover, the state was in a position where it can bury the truth, even at the expense of individuals who are hard-working, upright citizens going to prison.
Over the years, the noble Lord, Lord Arbuthnot, and I, along with other parliamentarians from both Houses who have been involved in this campaign, have been lied to. Has it been a lonely furrow to plough over those years? Yes, it has. Certainly, when you talk to the campaigners and the sub-postmasters, you find that they have felt frustrated over the years that they have been not only ignored but lied to as well.
Without Alan Bates and the campaigners—the 555—who took the case to court, I am not sure that the truth would have emerged. Even when the case took place in 2017, the Post Office and the state were still prepared to spend £100 million of taxpayers’ money to try to bury the truth to ensure that it did not come out. To the credit of the campaign, its financial backers and Lord Justice Fraser, they did get to the bottom of the case, but again, they had to settle because the Post Office and the state used a tsunami of cash to try to stop the process. The dam did burst in that case to make sure that evidence that had been hidden for many years but known to many of us who had been involved in the campaign saw the light of day. Remarkably, the ITV drama on the Post Office brought it to a wider audience. The subsequent public inquiry has shone an even deeper spotlight to reveal the truth, and I look forward to its findings. I pay tribute to Sir Wyn Williams and the staff of the inquiry for the work that they have done.
My Lords, I too declare my interests as a member of the Horizon Compensation Advisory Board and as chair of the advisory panel of Thales UK.
I congratulate my good friend, the noble Lord, Lord Beamish, on securing this debate. He has been with me every step of the way in his vigorous campaigning on behalf of the sub-postmasters. It is at least partly thanks to him that we are where we are now, and that we are getting somewhere. Discovering the Capture issue is thanks to him. We are getting somewhere, but we are not far enough along, and I will come to that.
I very much look forward to the maiden speeches of the noble Baroness, Lady Elliott, and the noble Lord, Lord Barber. What an excellent choice they have made in their topic for their maiden speeches. It is a hugely important topic, and your Lordships will all want to welcome them to this battle. There is no party politics in this, because all the political parties comprehensively failed the sub-postmasters—we are all to blame. We all need to work hard together to achieve an improvement in the position of the sub-postmasters and their redress, holding to account those who were responsible for this mess and establishing a better set of institutions to try to ensure that it does not happen again.
The debate is about compensation, specifically drawing attention to the role of Fujitsu. Before I come to that, there is one important matter that I ask the Government to consider. In doing so, I welcome the Minister back to her place—without a stick—and I hope that she is well on the way to recovery. The important matter is that the politicians failed in our initial attempts to get this matter sorted out through politics; I failed and even the noble Lord, Lord Beamish, failed. As he said, the only thing that got us to where we are today was Sir Alan Bates’s courageous group litigation, funded by litigation funders. Following the PACCAR judgment in the Supreme Court, it would probably be impossible today for Sir Alan to raise such litigation funding. A cross-party group of your Lordships’ House will meet the Attorney-General next week to discuss this, but I raise it now to flag up its importance and relevance.
My Lords, I look forward to the two maiden speeches.
I am a relative Johnny-come-lately to the story of this scandal. There are a number of people who deserve our thanks and regards: first, the sub-postmasters and their families, who have suffered terribly from the incompetence, arrogance and bullying of the Post Office. Sir Alan Bates, of course, stands out. The noble Lords, Lord Beamish and Lord Arbuthnot, have also been on the case for a long time and I thoroughly applaud their work. I thank the noble Lord, Lord Beamish, for instigating this debate. They both made excellent speeches.
ITV played a big role in reaching a wide and outraged audience with its admirable hit series “Mr Bates vs The Post Office”. There are lawyers, such as Neil Hudgell, battling for the postmasters. Among journalists, I must single out Nick Wallis. It was his BBC Radio 4 series five years ago that first alerted me, although he had been working on the issue for a decade previously, when he was a presenter on BBC Radio Surrey. An article on him three years ago described what happened:
“It was a tweet that any journalist might have ignored. It came … from a taxi owner asking if he could pitch for the local radio station’s taxi account … Davinder turned out to be the husband of Seema Misra who had been thrown into prison on her son’s 10th birthday while pregnant, for supposedly stealing £74,000 from the Post Office … Davinder insisted not only that his wife was innocent but that it was the Post Office computer in her sub-Post Office that was at fault”.
It was November 2010. The rest, as they say, is history; a very painful one.
Sir Alan Bates, brilliantly played by Toby Jones on TV, is of course the most famous of the wronged sub-postmasters. Lee Castleton is another well-known name. He recently tweeted:
“Why is it so difficult to be open, fair and quick. It is disgusting that Betty Brown at 92, is still waiting for the return of Her money. JUST PAY HER what she is owed”.
My Lords, it is an enormous privilege to rise to make my maiden speech today in this place. I want to start by thanking Black Rod, her staff, the doorkeepers, police, and all the staff of this House for their warm welcome and support in my first few weeks here, and particularly for their help towards my family and friends on the day of my introduction—there was rather a large number of them.
I would also like to thank my supporters, my noble friend Lady Armstrong of Hill Top, one of my closest friends in politics and life, whose advice and guidance over many decades has been and continues to be invaluable to me, and my noble friend Lady Smith of Basildon, who has given me time, advice and guidance over the last few weeks.
Today, I want to give some background as to who I am, where I come from, and what motivates me and the areas where I feel I have most to contribute in this place.
I was born in my parents’ home, a council house in the village of Whitburn, the place I live today—I have never lived more than two miles from it in my entire life. My roots are very strong. I am a very much a northern woman who will stand up for the north at every opportunity I can.
My dad Harold worked as a blacksmith’s striker at the local colliery, and my mother Laura looked after the family and did little cleaning jobs to make ends meet. In my experience, that is the hardest work anyone can do. She was a very strong northern woman and was an enormous influence on me.
My brother Dennis, almost 15 years older than me, was an electrician at the colliery, and my sister Joan, who is 10 years older than me, was still at school when I was born. It is no underestimation to say that I was a little bit of a surprise to my family when I arrived. I was delighted that Joan was able to attend my introduction with her husband Derek, as sadly, only Joan and I are left from that family group.
My Lords, it is a great privilege to be able to pay tribute to the noble Baroness, Lady Elliott, for her wonderfully warm and family-loving speech, and for naming her children and family in such an affectionate and supportive way.
She will not know it, but we are both Sunderland lovers. Maybe that is the reason I was selected to pay tribute to her wonderful and seriously, gratifyingly positive maiden speech. I am wearing the tie of Sunderland Football Club. She will not know, but I have attended the Stadium of Light on six occasions and the Academy of Light of four occasions, taken there by the owners of Sunderland in order to see the great playing craft of so many of the players, in particular Jermain Defoe, from whom I have a shirt with the number 14—my number—and the signatures of all of the players of Sunderland Football Club. I was delighted and honoured to attend so many times in the noble Baroness’s home town and constituency.
Many of the tributes that are owed to the noble Baroness include for her deep love as a governor of schools and her passionate campaigning on the issue of asthma, which affects so many, both ourselves and those we know. I know she will bring enormous expertise to this House and the punch that an elected Member who is now here in the upper House can bring from having heard the painful rhetoric of constituents, especially on the issue that we are discussing today.
One other thing unites us. In my research—which was very slim, because so much is wonderfully written about the noble Baroness, Lady Elliott—I discovered that we also share the fact that she voted against all Brexit measures in the House of Commons, and I voted against them all here in the House of Lords. We both realised what another tragedy of injustice was being imposed on us by the miscreant Government of the time. On that, her great policy wisdom is well noted and I am sure the whole House will look forward to her ongoing strength of position and commitment and welcome her to the House of Lords.
My Lords, I pay tribute to the noble Lord, Lord Beamish, not only for securing this debate but for all that he has done. I pay tribute to my noble friend Lord Arbuthnot. I guess that, in modern parlance, they are both superheroes.
This is not a matter of financial redress; it is, as we have heard, about the lives of real people who have suffered through the failures of a system that has wronged them for far too long. I wish to highlight one such person, whom I have mentioned many times in this House, albeit from the other side: Rita Threlfall, a 70 year-old woman who, alongside her family, has endured an unimaginable amount of stress, uncertainty and financial strain as a result of this scandal. Rita’s story is one of far too many, but I share it with noble Lords today because of the specific personal emotional toll it has had on her life.
Rita and her husband, Kevin, ran their business together in my hometown of Liverpool. I am northern too, but from the north-west, not the north-east. For many years, their post office was more than just a livelihood; it was their life, their future and their pension. This future was cruelly taken away from them. Rita’s claim for compensation was submitted two months ago, in January 2025. She was expecting an offer within the 40 working days stipulated, but that deadline is fast approaching—in fact, tomorrow marks the expiration of this deadline. To date, she has received no offer and has heard nothing further, aside from a request for additional information about her husband Kevin’s earnings—a query that has only added further stress to an already harrowing situation. Rita’s claim includes loss of earnings for her husband, as he worked in the post office alongside her, and she remains perplexed by the request. She paid her husband a salary for his work in the business, but the authorities continue to ask for further documentation—a process that Rita and Kevin have found incredibly painful.
I want to express my thanks to my noble friend Lord Beamish for initiating today’s debate and give my warm congratulations to my noble friend Lady Elliott on her excellent maiden speech.
I feel very privileged to join this House and acutely conscious of how much I have to learn of its conventions and procedures. I am fortunate to have the guidance and wisdom of my noble friends Lord Monks and Lady O’Grady, who both supported my introduction to the House. John has been a mentor and close friend of mine ever since I first walked through the doors of the TUC headquarters, Congress House, in 1975—quite a long time ago. Frances, who succeeded me in the position of TUC general secretary, has demonstrated ever since that her talent and integrity wholly justified my confidence that the TUC’s leadership would be in great hands on my departure. I am also delighted that another very close colleague, now my noble friend Lady Carberry, has also joined us in this House. She will give great service.
Ainsdale, now in my formal title, is an area in the town of Southport, which has suffered greatly in the wake of those terrible events some months ago. I applaud the spirit of the Southport people in their response to that outrage.
Throughout my childhood in Ainsdale, my dad worked as a bricklaying instructor in a local approved school. The term “approved school” was the language of the time; now I guess it would be called a young offender institution. We had a house in the grounds of the school; perhaps I am the first noble Lord to have been brought up in such an institution—or looking around all the Benches, perhaps not.
I sometimes saw my dad defuse a difficult situation, with angry young men about to kick off, by using patience, calmness and reason, and sometimes humour too. As I have discovered, both in the TUC and during my time as chair of ACAS, these can be important factors in the resolution of any difficult conflict.
My Lords, it is a real pleasure for me to follow that excellent and inspiring speech by my noble friend and fellow Lancastrian—we are doing the northern bit at the moment, so I will join in with that. As my noble friend Lord Barber said, he comes from Ainsdale, an area with famous golf courses, where I think it can be said he had a misspent youth on many occasions—he is a very good golfer when his new knee permits it, by the way.
My noble friend’s appointment to this House, as he said, represents a reunion for both of us, because we have been friends and colleagues for about 50 years, with 30 of those spent together at the TUC. We rarely fell out, except perhaps about football from time to time, with his love of Everton, which I never understood. I was extremely pleased to see him succeed me all those years ago as TUC general secretary and for him then to flourish in that role and win this wide regard and respect, which is reflected in the different things he has done in his career. His determination, calmness and courtesy have long been hallmarks of his style, and I am sure they will be widely perceived within this House when noble Lords get to know him a little better. The range of tough jobs that he has done, and the people who have turned to him for help in tricky situations, is very impressive. We are looking at a stellar career that spans the private, public and voluntary sectors. That first speech was excellent, and the House can look forward to many more from my noble friend, as we can from my noble friend Lady Elliott, who gave a very warm speech, which would have gone down well with even the non-Sunderland supporters.
I turn to the subject of the day. The Horizon scandal is perhaps the worst British scandal in my lifetime. Here we had a respected and prestigious public body persecuting many innocent victims in what, ultimately, was a futile attempt at a cover-up. It went on for years, and it still goes on. People have lost their livelihoods, their savings and, in some cases, their freedom and their lives with the pressure that they had been put under—and it was all down to a dodgy, faulty computer system and an unwillingness to admit that a big mistake was made.
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The Government have paid out £633 million to victims through the Horizon compensation scheme. We have four schemes: the Horizon shortfall scheme, the group litigation order scheme, the overturned convictions scheme, and the Horizon convictions redress scheme. If you were starting afresh, would you start with four schemes? No, you clearly would not, because the claimants have quite clearly found the way all four schemes have operated to be frustrating and bureaucratic.
The advisory board has sought to try to ensure that there is fairness across the four schemes, and that we have a system whereby individuals can get some independent legal advice and, at the end of the process, can have the process and their claims looked at independently from the Post Office. The victims quite rightly do not trust the Post Office. The scheme with which I have the most difficulty is the Horizon shortfall scheme, because it was run by the Post Office. There is quite clear evidence that there was an attempt to try to settle many claims as quickly as possible to ensure that the Post Office did not have to come to the Government for more money. The advisory board has recommended that there should be independent processes at the end for claimants to be able to have their cases reviewed, because there is clear evidence that there are individuals who have accepted settlements without legal advice that, I would argue, were under settled.
If noble Lords want to know why victims distrust the Post Office, I can tell them that there is potentially a fifth scheme that surrounds the Capture system, which pre-dated Horizon. It only came about because I found out about it by accident. I went to see a postmaster in Northumberland a couple of years ago, who said she had been a victim of the Horizon scheme, but when I looked at the dates I discovered that they pre-dated Horizon, which surprised me. When I went to the Post Office and the Government to say that this was surely a Horizon case, they said that it could not be because the dates were too early.
We then found out that there was a pre-runner of Horizon called Capture, which again has thrown up other issues, including more than 200 individuals who were either prosecuted or had their lives ruined. Because of that, the Government instituted an independent report—the Kroll report—and have agreed to compensate those individuals. That shows the culture there has been at the Post Office of not coming forward. You would have thought that, with all the publicity around Horizon, someone might have come forward and said, “Well, we might need to look at the earlier system”. Again, however, we had to drag out of the Post Office, kicking and screaming, any information that was needed.
This comes to broader point. As I said, would you start with four schemes in the complex system that we have? No, we would not. There is a need in government—and it might possibly come out of the inquiry—to set up a body to look at how we pay compensation to victims of misjustice: certainly, for example, those affected by the infected blood scandal. But this scandal was not the result of mistake or failure: this was conspiracy—a cover-up—involving government, Ministers, the Post Office and Fujitsu.
Fujitsu was the main contractor. In terms of that company, sub-postmasters were always told that this system was infallible, that it could not be accessed remotely, and that whatever was put in by the sub-postmaster was somehow their mistake and their fault. It was quite clear, however, that there could be remote access to it, and this was known. It is clear that that could happen from Lord Justice Fraser’s judgment in the sub-postmasters’ case. Again, we were given the impression that it was the perfect system but that judgment found that there were 29 bugs, some of which went unchecked for many years.
Was this known at the corporate level? Yes it was. For example, in 2001 Fujitsu paid the Post Office £150,000 for a data breach. However, it is worse than that, because Fujitsu not only covered up the fact that the system was full of bugs and could be remotely accessed but took an active part in the prosecution of sub-postmasters. It had, as part of its contract, a litigation and fraud support unit, which provided the Post Office with data to support prosecutions. This was known as ARQ data. Lo and behold, this ARQ data was never checked, so in the case that went forward not only did Fujitsu employees gave testimony against the sub-postmasters but the data they were given was not accurate or even checked. We know this because Anne Chambers, who was a Fujitsu employee, raised this at corporate level in 2006 and asked why this data was being given without any checks whatever. That, again, was raised and completely ignored by Fujitsu.
That begs the question: what was Fujitsu actually doing? We know now that all this was known. In his testimony to the public inquiry, Paul Patterson, the director of Fujitsu in the UK, admitted to all of this. Likewise, Rob Putland, who was the senior vice-president, admitted to it when he wrote to the BIS Select Committee of the House of Commons in 2020. All the information was there, so it raises the question: why were these red flags not raised within Fujitsu itself?
At the public inquiry and the Commons Select Committee, Mr Patterson said that he apologised to the sub-postmasters and that Fujitsu would make a contribution to compensate victims. As of today, no money has been paid by Fujitsu to victims—and this is a company that is still making multimillion-pound profits from government contracts. That information is available in Computer Weekly, where, last week, Karl Flinders had a very good article showing that Fujitsu will potentially make, over the next few years, over half a billion pounds in new contracts. It said that it was not going to bid for new contracts, but what it is doing is extending existing contracts. That is happening at the same time as the taxpayer is paying out nearly £600 million in compensation to victims, and many victims are still waiting for compensation.
Fujitsu is hiding behind the public inquiry. It knows the evidence that it has given to the public inquiry is there. Nothing will be revealed from a public inquiry’s findings that we do not already know. So I suggest that it should make an interim payment of at least £300 million now to cover the cost for victims. Some major changes are also needed within Fujitsu. When the process for bidding for new contracts starts, the Government should bar Fujitsu from taking part in any future contracts if major change has not taken place. That would be a tragedy for the 7,000 people in the UK who work for Fujitsu, nor would it be good for UK-Japanese relations, a point that the noble Lord, Lord Arbuthnot, and I raised a few weeks ago with Mr Suzuki, the Japanese ambassador to London. I understand that, in a few weeks’ time, the Secretary of State for Business and Trade will go to Japan, and I suggest that he should meet senior Fujitsu representatives to press the case for them to make proper compensation, even if only on an interim basis.
In conclusion, yes, this a scandal, but it is also something that we cannot allow to happen again. We need to put in place things that not only prevent it happening again but change the culture, both within the organisations and in how we address these issues. We need a new system independent of government—an ombudsman system—which does not then mean that we need to have a public inquiry every time. Clearly, we need to strengthen whistleblowing, and the Government need to look at the way in which non-executives and others are appointed to outside bodies which, clearly, do not raise any questions. Finally, Fujitsu needs to pay up. It needs to make sure that it will not keep taking money from the UK taxpayer while it makes no financial contribution to this scandal.
I finish with this point. Tom Brown, who gave evidence to the public inquiry, was asked what he wanted from the inquiry. He said that he wanted the truth. That is what we owe Tom and all the other victims of this scandal. I beg to move.
Returning to Fujitsu, I am grateful to Mr Stuart Goodwillie and Mr James Christie for their fascinating and helpful briefings online. Let us not forget what Fujitsu did. ICL, the company that produced Horizon and that was bought by Fujitsu, provided a computer program to the Post Office which it knew was seriously flawed. As Richard Christou of ICL told the public inquiry, Pathway, the ICL front company in the contract negotiation,
“was determined to win the tender, and decided to undertake as little negotiation as possible in order to better its chances of obtaining the award”.
Fujitsu had a duty under its contract to provide evidence for prosecutions that was admissible and accurate. It did help the Post Office prosecute the sub-postmasters, but with evidence that was false. Knowing of the flaws in the Horizon system, it told the courts that there were no such flaws.
Moreover, Fujitsu had a large operation altering the accounts of the sub-postmasters without the knowledge of the sub-postmasters. It told everyone that it could not alter those accounts, despite carrying out an extensive operation doing exactly that. So Fujitsu did much more than stand idly by while the sub-postmasters were maliciously prosecuted; it was an active, knowing and essential participant in the whole ghastly fraud. If it were not a company but an individual, it would be facing years, or possibly decades, in prison. Yet it is a company, and one on which the Government have become unacceptably dependent. Each year in which the Government extend some contract or other, saying that there is no alternative, they should ask themselves, “If this were Prisoner Smith in cell block J4, would we really be giving him a contract worth tens of millions of pounds?”
What is Fujitsu doing about this? What money has it offered? As we heard from the noble Lord, Lord Beamish: nothing. It has accepted its “moral obligation”, but the taxpayer is paying out hundreds of millions now. There needs to be an interim payment from Fujitsu now. The noble Lord, Lord Beamish, suggested £300 million; £700 million would be less than half the cost that the taxpayer is currently estimated to bear. If it does not do that, why should the Government offer it further extensions of its existing contracts, still less grant it new contracts? That is Fujitsu.
But what about the auditors, Ernst & Young? A couple of weeks ago, I told your Lordships that I asked the inquiry to include the auditors in its scope, but the inquiry chair decided that that would extend the length of the inquiry disproportionately. But here we have Ernst & Young certifying that the audited accounts represent a true and fair view of the Post Office’s financial state—missing a liability of £1.87 billion. What on earth were they doing? I will tell you what they were doing. In 2003-04, they decided to audit, out of a total of 12,000 Horizon branches, not 10% of them—1,200—which would have been respectable; not 1% of them—120—which would not have been respectable; but one. One branch. When the Post Office’s chief operating officer, David Miller, was asked in the public inquiry,
“do you consider it was a satisfactory way for the Board to satisfy itself of the accuracy of the company accounts?”,
he answered: “It was very limited”. One, out of 12,000 branches.
On 5 June last year, Alice Perkins told the public inquiry of a meeting she had with Mr Grant, the partner at Ernst & Young, when she became chair of the Post Office. He told her: “With Fujitsu”, the Post Office
“drove a very hard bargain on price but they took back on quality/assurance”.
So, he knew that the quality of what Fujitsu was providing was suspect. Where does that appear in the Post Office audited accounts? As the noble Lord, Lord Harris, would say: spoiler alert—it does not.
Mr Grant also told her:
“Horizon – is a real risk for us … Does it capture data accurately ... Cases of fraud—suspects suggest it’s a systems problem”.
In her evidence, Alice Perkins said:
“Horizon is a real risk for us”,
meaning that Horizon was a real risk not to the Post Office, but to Ernst & Young. That too does not appear in the audited accounts. As James Christie says on his website:
“The Horizon system has never featured as a risk in any annual report. It surfaced only indirectly in the 2019 report, but as a litigation risk, which was incorrectly thought to be mitigated by contesting the litigation that took place”.
Well, we know how that ended up.
“Even this risk had vanished in the 2020 report”.
In a management letter to the Post Office—I am grateful to the noble Lord, Lord Sikka, for drawing my attention to it—Ernst & Young wrote:
“We were unable to identify an internal control with the third-party service provider”—
that is, Fujitsu—
“to authorise fixes and maintenance changes prior to development for the in-scope applications”,
that is, Horizon. If there was no internal control, what were the external auditors doing about it? Nothing. How were the owners—the taxpayers—meant to know this was going on if the auditors were not telling them? How were the sub-postmasters, those who were being sent to prison, made bankrupt, having their lives ripped apart, meant to defend themselves?
If the public inquiry will not hold the auditors to account, it is a task that must fall, first, to the Financial Reporting Council and, ultimately, to the Government. The Government need to drive this. It should not be down to the advisory board—this part-time group—to be driving this forward. We need action now.
Someone replied:
“Still can’t help but feel they’re still putting 2 fingers up to us”.
The Financial Times reports that
“many victims are still locked in a glacial, bureaucratic process of offers and appeals that could end up back with the courts”.
Some 72% of the budget for redress has still not been paid. One recalls the adage, justice delayed is justice denied.
The worst problems are in the Horizon Shortfall Scheme—the HSS—which I will mainly speak about. Tony Downey is a former sub-postmaster caught up in this terrible injustice, together with his wife and business partner. He has been granted only 20% of his claim. Tony has written to Sir Wyn Williams, chairman of the Post Office Horizon inquiry, and is allowing me to quote from his letter:
“The Post Office agree we paid the shortfalls, they agree they made us both bankrupted with their action and they agree this made me sick and unable to work since, they agreed at the meeting that the forced sale of the property was related to the Horizon. However they will not pay me the lost income as in other schemes, they will not pay the bankruptcy or costs of my wife and business partner, they will not pay me the full amount of the head of claim for sickness, they will not pay for the loss of the property”,
which was, I think, the family home.
Tony Downey, Christopher Head OBE—another wronged postmaster—and journalist Nick Wallis have drawn attention to a curious feature of way the Horizon Shortfall Scheme is being administered by the Post Office that might help explain why claimant sub-postmasters with complex cases are receiving offers way below their claims. The HSS assessors seem to be—indeed are, and have said that they are—working to a set of guidelines different from the published principles and are refusing to share them with the claimants’ lawyers. One claimant has commented:
“We guess they include every get out clause possible”.
One of the claimant lawyers replied to Post Office lawyers as follows, and it bears quoting fully, which I have permission to do:
“The Post Office approach to HSS claims is on the basis of breach of contract and assessing damages had the contract been ‘validly terminated’. We fundamentally oppose that basis of calculation which is at odds with the Principles that are widely published in relation to the HSS, and therefore the narrow contractual approach taken by Post Office does not satisfy the tests presented in the Principles document. The document to which you”—
that is, a Post Office lawyer—
“refer appears to be fundamentally different to the widely published one and seems to be separate guidance used by the Panel and has never seen the light of day publicly, so how can we or a Postmaster be on an equal footing in this claims process, when you refuse to disclose guidelines used by the panel? This would not be an acceptable situation in any other claims or legal process in this country”.
As far as I can see, he is absolutely right that a narrow contractual approach, which effectively gives a sub-postmaster only redundancy money, is not at all the same as the Post Office’s published Horizon Shortfall Scheme Consequential Loss Principles and Guidance document, whereby:
“The object of the assessment will be … to put the postmaster into the position that the postmaster would have been in but for the Horizon Shortfall”.
For former sub-postmaster Tony Downey, this is the difference between getting redundancy money amounting to two years’ or so income and being fully compensated for inability to work since a nervous breakdown in 2007 after being suspended, audited twice, bullied to pay shortfalls in order to get reinstated, having to sell the business at a loss, both he and his wife having to declare bankruptcy, and losing their home. He says:
“We had gone from owning a mortgage free property now worth £900,000 with a successful business and savings to having nothing and the scheme is unable to put us anywhere near the position we should have been”.
Inquiry chairman Sir Wyn Williams wrote in his July 2023 first interim report on compensation:
“It would be tempting for some to be sceptical about whether”
full and fair compensation,
“can be achieved … a commitment to provide compensation which is full and fair is not the traditional stance taken by a defendant in our adversarial system of civil litigation”.
That was very prescient. What will the Government do to oblige the Post Office to follow the published principles on consequential loss, not revert to being a traditional adversarial defendant? Can the Minister ensure not only that the Post Office’s secret guidelines, which are not in accord with the published principles, are made available to all claimants and indeed to parliamentarians and everyone else, but that it stops using them?
The Business and Trade Select Committee reported on 1 January on redress for the Horizon scandal. The government response was not available yesterday or first thing this morning. I imagine the Minister can assure us that it is imminent; by my calculation, the deadline for the response is tomorrow at the latest. Your Lordships will probably all have read the committee’s recommendations, one of which was that the Post Office should be removed from administering any of the schemes. It says, and I strongly agree, that the Post Office acted as “judge, jury and executioner” when pursuing sub-postmasters and that now it
“should not be deciding on what financial redress is owed to victims of its own scandal”.
I do not have time to discuss the other recommendations from the committee, but I just point out that the present reality is that claimants not only have to fill out a complex form with no legal support but face a scenario of snakes and ladders. This is well-described in a letter that a former sub-postmaster, Christopher Head, wrote yesterday to inquiry chairman Sir Wyn Williams—he has made it public, so I can quote from it. He describes how a claimant faces
“the risk that should she pursue a claim above the Fixed Sum, she could be offered less and then have to enter the long drawn out dispute processes that could continue for years … There is also no guarantee she would get close to the fixed sum award let alone the sum claimed. All this must be done without any legal advice, unless the individual is willing to pay for their own representation, which is out of reach of most people”.
Mr Head rightly says:
“Claimants should be able to receive these awards”—
the fixed awards—
“in any of the schemes and then be invited to raise a further claim for the remainder of their claim should there be sufficient evidence to do so and a likely chance of success … without any risk”.
How does the Minister react to that suggestion, and can she tell us whether the department will take over the Post Office scheme?
I will conclude by quoting briefly from an interesting and heartfelt book by the former Prime Minister, the noble Baroness, Lady May, entitled The Abuse of Power. In her words, she,
“describes many examples of injustice against ordinary people perpetrated by the powerful and mighty”,
with
“often a sense that protection of the institution is more important than fairness, justice or seeking the truth”.
That is what we have seen with the Post Office. She concludes that
“we need to reconsider who we are as a country and the urgent need for those in authority to ensure that in all they do, they are putting the country and the people first”.
Growing up, the community in my village was a very tight one, and still is. Neighbours were like family, and everyone looked out for each other. Most people did not have a lot of money—most men worked either at the local pits or the shipyards—but everyone believed in hard work, taking care of your family and your neighbours and wanting the best for everyone, and they had enormous aspiration for their children, although they would not have described it as that.
My family were not political, although they were very interested in current affairs. We watched the news, read lots of newspapers and discussed the issues of the day. I got involved in politics during the year-long miners’ strike of 1984, when, whatever the merits or otherwise of that strike, as a young woman coming from generations of miners on both sides of my family I felt that the Government of the day was attacking my way of life and the community I came from. I could not stand back and let that happen; I had to take a stand and make my voice heard in trying to defend my community, so I joined the Labour Party. I did not know it at the time, but that decision was to influence the path my life took in a way I would never have imagined or even thought possible all those years ago.
I have had the privilege of working for my party as a regional organiser, for my trade union—the GMB—for a charity, and then I had the honour of being the Member of Parliament for the constituency of Sunderland Central for 14 years.
My family is at the centre of my life. I have four grown-up children: Rebecca, Miles, Georgia and Helena, all of whom attended my introduction, along with five of my eight grandchildren, as well as my wonderful husband Andrew. They are at the centre of everything I do, and it is fair to say that I could not do what I do without their love and support.
My community, my strong sense of working-class values, my family and my passion for the north are the things that drive me and make me want to make a difference and contribute to public life. Over the years, I have developed an interest and expertise in all things connected to digital, culture, media and sport, having had the privilege of serving on the Select Committee in the other place for nine years; and the Middle East, with my involvement for several years as the co-chair of the Britain-Palestine All-Party Parliamentary Group. I also have a passion for promoting the north of England, its potential and its continuing regeneration.
I was pleased that my noble friend Lord Beamish, someone I have worked with in different roles for more than 30 years—there is a theme here from the north of England, where we all know each other—moved this debate on the progress, or perhaps lack of progress, on the Post Office Horizon compensation scheme today. More than a decade ago, two constituents came to see me at a surgery about the Horizon scandal. It was one of those moments in my time as a Member of Parliament when I was absolutely flabbergasted at the horror of what I learned had happened to my constituents. The female constituent had an exemplary work life in banking before she decided to take on a sub-post office. The couple had lived in a comfortable detached house in a very nice part of Sunderland that they had worked hard all of their lives to buy. When the Horizon system showed they owed hundreds of thousands of pounds that was missing, they had to sell their home and use the proceeds of that sale and all of their savings to pay the money back to the Post Office, to avoid prosecution and most likely prison.
This was wrong. It should not have happened, but, sadly, their story, as some of the stories that have already been talked about today, is just one of hundreds of cases. The victims of the Horizon scandal have waited far too long to get meaningful compensation. As has been described, even for those who have had some compensation, it has not been full or adequate. The Horizon system was introduced in 1999; the problems were actually known about before that. It is now time for Fujitsu to play its part and step up to the plate to pay some compensation. I urge all of those involved in this to move as quickly as is practically possible and pay all the victims of this scandal the moneys they so deserve.
I look forward to participating and making informed contributions in the future in your Lordships’ House.
This debate is essentially about compensation matters. We tend to interpret compensation as meaning money. I pay tribute to the noble Lords, Lord Arbuthnot and Lord Beamish, for their arduous, persistent fight on behalf of those whom many of us only became intimately aware of because of Alan Bates and the ITV drama. It really hit us in the eyes when we watched it, let alone when we listened to the BBC’s own documentary. Through the drama and the documentary, we became aware of something that was happening below our noses, so close we should have smelled it earlier but we just did not. There was such clever scheming by the Post Office and Fujitsu.
I have been looking at this through a slightly different lens—a lens which many in this House will know matters to me enormously. The offences Act, passed last year, which essentially annulled the prosecutions of the postmasters, uses these words, already quoted:
“Some were convicted and imprisoned. Some were made bankrupt”.
Malicious allegations were made against them.
“Some lost their homes. some suffered mental or physical health problems … Some were harried as thieves by their local communities. Some suffered breakdowns in relationships with their partners, children or other families and friends. Several died by suicide”.
There is another actor in this horror, besides the Post Office and Fujitsu: the courts. I realise by flagging this that I am treading on very delicate territory, but there were 700 convictions in cases provided by the Post Office and a further 283 sub-postmasters were prosecuted by others, including the CPS, totalling just short of 1,000 prosecutions. I am not sure of the exact number who went to prison. Could the Minister tell the House in her reply how many went to prison as a result of this crass injustice?
It raises the very ugly case that potentially 1,000 courts heard 1,000 cases and thought it was okay. At what point did the justice system, the Ministry of Justice or the Law Society ask, “What the hell is going on?” Why is every court so disconnected from every other one? If judges did not ask, “What, another one? I’ve read about this, I saw this, there was a note about this”, or if clerks did not bring this to their attention, what is the role of judges? Judges are meant to be highly intelligent, impartial adjudicators of the law and its principles. Those principles include intelligent, evidence-based prosecutions, not just taking by swallowing what has been brought by an institute of the state—notably the Post Office—backed up by its deceitful accompanying company, Fujitsu, which simply wanted to bury the detail.
I will ask a difficult question of the Minister: was the wool pulled over the eyes of the judges? What assessment have the committee, the Government or the Ministry of Justice made of the wrongs done by the courts? I believe that it is a matter not just of what needs to be paid out in compensation—that is clearly the real cause of this debate, although it is somewhat flagging—but of from whom the apologies should come. I would like to see handwritten apologies from every judge to every prosecuted individual, especially those who went to prison, and face-to-face meetings that accept that there was deceit at multiple levels of this procedure. We will not have honest justice if there is no honest apology, recognition and accountability. That lies with the courts, as well as with the Criminal Cases Review Commission—which has failed in multiple cases—and the Crown Prosecution Service.
I realise that this is a sensitive thing to ask, because we have a tradition in Britain that we do not question judges. Following a question raised in the other place recently by the Prime Minister and the Leader of the Opposition about a deportation issue—and therefore an allocation of refugee status based on falsified information—immediately somebody representing the court stood up, because there was a criticism of a decision of the court, and said, “Don’t question our decisions”. But is that not exactly what this is about? How can there be a thousand cases with not a single judge saying, “Excuse me? Throw it out”? I am sufficiently aware of so many people’s cases that I know of some where the courts—the Old Bailey or the High Court—and the judge have decided on day 1 or day 2, or week 1, of a case that there is no substantial evidence from the prosecution. They concluded the case and released the individual. Why did that not happen here?
I am asking a sensitive and important question. I am asking the Minister—I realise this is not her area—to communicate to her colleagues in the Ministry of Justice that they ought to wake up to our so-called supremely effective independent judicial system and ask the hard questions about the intelligence and agility of the courts and judges to deal with cases of such manipulation.
As many noble Lords know, I spend a lot of time in prisons, and I was in a prison yesterday morning speaking with a man on a 32-year sentence. He has attempted on five occasions to have the Criminal Cases Review Commission assess his case based on falsified forensic data. It refuses to do so. The CCRC has just lost its chair; it has been a flappingly useless institution and needs to be completely renewed from top to bottom. It is another part of the system of injustice, emboldened by the state because we will not ask the hard questions.
Two years ago, we all heard the case of Andrew Malkinson. He was released finally, after 17 years, after a falsified rape case, in which he was innocent. He is still awaiting the compensation agreed by the High Court. As we think about how to improve the financial compensation due, which in my mind is Fujitsu’s bill and not the taxpayers’, we need to recognise that honour, dignity and respect for those falsely prosecuted—and especially those imprisoned and those who lost homes, property, savings and work—requires those who did that injustice to them to look them in the eyes and admit they were wrong. Only then can we restore transparency and honour to our justice system and bring dignity to the postmasters.
Rita has been waiting for 15 years since she was first wrongly convicted in 2010. Despite the repeated assurances that the claims process would be expedited, she remains in the dark about the timeline for resolution. For her, and countless others in a similar position, this has been a crippling experience. Her emotional and financial struggles have only deepened over the years. Rita became a pensioner four years ago, yet she is now living off a state pension which is simply not enough to cover her living expenses, let alone the debts she incurred in the loss of her business. Rita and her family are struggling to make ends meet. As a businesswoman, she had always planned that her business would provide financial security in her retirement. Since the scandal took it all away, she has been unable to invest in her pension or secure a proper future for herself and her husband. Although her two children are doing their best to support their parents, they are finding it increasingly difficult to keep up with the pressure of daily living costs.
Rita’s anxiety and stress levels have soared, while her weight has plummeted, as a result of this prolonged ordeal. Her health, physical and mental, has suffered immensely. During our conversation this week, she shared with me that she feels overwhelmed by the uncertainty of it all, constantly wondering how much longer she must wait and what the outcome will be when it finally arrives. The emotional toll is staggering. For years, she has lived in fear of her future, unable to plan for anything and uncertain about whether she will ever receive the compensation she so desperately needs and deserves.
When I talked to Rita earlier this week, her distress was palpable. She spoke about her 70th birthday celebration in January, an event that, for a moment, allowed her to reflect on happier times. Rita and Kevin had to leave their home in Liverpool due to their financial struggles, and they now live in Stoke-on-Trent. For the occasion of her 70th birthday, all her family, including the youngest member, a six month-old, gathered at the local cricket club to celebrate with her. It was a rare moment of joy amid long years of pain. Yet even in that moment of happiness, Rita could not escape the overwhelming sadness of what had been lost, including her proximity to her family, her post office, her livelihood, her future and her dignity—they have all been taken from her, and the compensation she so desperately needs is still pending.
As of now, Rita has received nothing since the interim payment in December 2022, which, as we know, did not begin to cover the damages caused by the closure of her business. Rita remains in limbo, waiting.
This is why I urge the Government to act swiftly and decisively. This is not about statistics or balance sheets; it is about real people, whose lives have been shattered. Behind every claim is a person like Rita, who has endured unimaginable hardship, financial ruin and emotional turmoil. Rita, like so many others, has suffered more than enough. She deserves justice. She deserves compensation and she deserves it now. Every day that passes without resolution prolongs the suffering for those who have already lost so much. We cannot and should not allow bureaucracy and delays to stand in the way of what is right.
Given Fujitsu’s acknowledged role and its stated moral obligation to contribute to compensation, can the Minister explain why the substantial contracts that have been talked of today remain in place? Why were many of them awarded after 2019? What assurances can the Government provide that no further public money will be awarded to Fujitsu unless it has fully met its financial obligations to the victims of this devastating miscarriage of justice? Can the Minister also confirm that employees and suppliers are paid monthly and regularly by Fujitsu, in stark contrast to Rita and her colleagues who, rather than being paid, are being humiliated?
The Government must provide clear and transparent communication to claimants about process, ensuring that they know what to expect and how long they will have to wait. I agree with the noble Lord, Lord Beamish, when he suggested £300 million from Fujitsu—I think that was upped by my noble friend Lord Arbuthnot. I argue that it should pay exactly as much as the taxpayer has. It is a lot of money, but it should be paid.
I would also like the Government to do more to support those who are struggling with the emotional and financial strain of this scandal and provide them with the tools and resources that they need to move their lives forward. As I said at the beginning, this is not just about money; it is about rebuilding lives that have been torn apart. At 70 years old, Rita should be enjoying retirement with her family, yet instead she finds herself battling anxiety, financial hardship and the lingering effects of a fight that she should never have had to endure. Her family is doing all it can, but why should it have to? Why should any victim of this scandal have to rely on loved ones to survive, when it was the failures of others that put them in this position?
The Government must step up with not just words and sympathy but concrete measures that provide real, immediate relief for the victims. Rita and countless others like her have been waiting far too long for justice. I stand here today not as a Member of this House but as a human being imploring the Government to take immediate action to right this wrong. We cannot continue to allow these victims to suffer. We must act and we must act now.
I have tried to learn from all my experiences as I have made my way through life. After leaving school, I served for a year as a volunteer teacher in Ghana through the VSO—Voluntary Service Overseas—programme. This began to open my eyes to the vast diversity of life experience across the planet we share. At the end of my degree course at City University, I spent a year as president of the student union, able to observe and play a part in the university’s most senior governance structures. A year followed working for an industrial training board before I saw an advert for a job at the TUC. The advert told very little about the vacancy to be filled. It was only after I reached the interview that I discovered they were looking particularly for someone to do research and briefing on industrial training policy. My experience at the ITB, I think, got me the job and I was there for the next 37 years—serendipity.
Today’s debate is an opportunity to highlight again a terrible injustice suffered by a blameless group of workers, inflicted by an irresponsible and overmighty employer which appeared to feel that it could act with impunity. Fair compensation is long overdue and this scandal, to my mind, reinforces the message that trade unions are as vitally needed today as ever to provide effective representation for people at work and to hold employers to account.
The half a century since my entry to the TUC has seen remarkable changes in the world of work and of trade unionism. The mid-1970s saw the agreement between the Labour Government of the day and the TUC of what was termed the “social contract”. That saw the level of inflation in the economy reduced from around 24% in 1975 to 8% by 1978. That was a staggering achievement that appears largely forgotten now as the “winter of discontent” followed the breakdown of that agreement. History, of course, is written by the victors. That was followed by a long period of the demonisation of trade unionism, even termed at one point as “the enemy within”, with workers at GCHQ—Government Communications Headquarters—even being told that being a union member was not consistent with loyalty to the nation.
The Labour Government of 1997 righted that wrong at GCHQ and made other progressive changes. Trade union recognition rights were underpinned by law. The minimum wage lifted living standards for the lowest paid. The UK rejoined the European mainstream on rights and protections for people at work by signing up to the European Social Chapter, from which the previous Government had opted the UK out. But despite those achievements, there are long-term trends that have still left working people relatively poorer. In simple terms, inequality has grown as the coverage of collective bargaining and effective workplace representation has been weakened. A rebalancing is long, long overdue.
Good employers have nothing to fear from this. The story of trade unionism is often told by reflecting on major disputes. I understand why the drama of such events appeals to news editors but for most trade unionists the real story is of agreements being made, with good employment relations being a crucial part of the mix in building competitive and successful organisations. Change is so much better managed with understanding and consent.
One letter I received as TUC general secretary reflected that reality in a graphic way. It came from 12 individuals who had together come through an educational programme established by their trade union under the TUC’s Unionlearn initiative, in a partnership between their employer and a local college, to deliver basic literacy and numeracy skills. They told me that the experience and skills gained had completely transformed their lives—to their benefit, of course, but also to the benefit of their employer; a win-win if ever there was one. Crucially, those individuals would never have had the confidence to get involved if the invitation had come just from their employer or the local college. It was only the support of the union that persuaded them to risk re-entering a classroom, in which they had always previously felt a failure. The letter to me, thanking trade unionism for making that difference, finished by saying that it was the first letter any of them had ever sent in their life. That was truly humbling. At its peak, Unionlearn was helping over a quarter of a million people a year back into learning, and I hope our new Government will restore the support that made that possible.
During my time at the TUC, I also served on the Court of Directors of the Bank of England under the dedicated leadership of the noble Lord, Lord King of Lothbury. That brought me up close to the global financial crisis of 2008-09, with all the terrifying risks to the fabric of our financial system.
Since leaving the TUC, I have been fortunate to serve on the boards of Transport for London and Openreach, and the Financial Services Culture Board, each with hugely important public interest missions, and from each of which I have learned a great deal. I was proud to chair ACAS for six years; it does such important work, often behind the scenes, in resolving so many difficult disputes. My time as a trustee of the Mountview Academy of Theatre Arts has also been a delight, dedicated as it is to opening up the hugely successful education and professional training it provides to young people from all backgrounds, so delivering opportunities to make the careers that their talent deserves.
Now, as I embark on this new chapter, I am sure that I will again have an opportunity to learn many new lessons from noble Lords and noble Baronesses in all parts of the House and from the dedicated staff, who have all given me such a warm and kind welcome, for which I thank them most sincerely. I look forward to this next phase of my lifelong learning journey.
As I said, it is not over yet. Compensation schemes are in place but are being criticised for being too slow and, depressingly, Fujitsu is still dragging its feet on paying up—honeyed words are not enough. The point being pursued by the noble Lord, Lord Arbuthnot, and others about the role of the auditors, Ernst & Young, in whitewashing the accounts of the Post Office reminded me of what happened in the wake of the Enron scandal—a scandal of a similar scale, in some respects—where it was the auditors who paid a very heavy price. Do noble Lords remember a firm called Arthur Andersen? Well, that was the end of it at that time. I am not saying that Ernst & Young is in that position, but it needs to come clean and make some contribution because, in my opinion, it shares the guilt for what has been going on.
Generally, I think we need to finish this saga and put it behind us. I want to ask the Minister a couple of things. Have the Government yet drawn any conclusions from the initial reaction to the Green Paper on the future of the Post Office and how this can be used to ensure that none of these terrible things that have been happening can happen again?
I recognise the Government’s contribution to delivering compensation. We all pay due tribute today to the doughty campaigners—Sir Alan Bates and his colleagues—as well as to our colleagues, such as the noble Lords Lord Beamish and Lord Arbuthnot, who brought all this to light. I add my tribute to them, as this House has done many times, for the steadfast and determined role they played in seeing those enormous wrongs righted.
Those wrongs were a product of the damaged culture in the Post Office, with its emphasis on being defensive, its opposition to anybody who looked like a whistleblower, and its feeling of being beleaguered—that it was the victim rather the one causing victims. That culture was deep-rooted. I am interested in what can be done to make sure that is completely eradicated, because many of the people are still there. I guess that they will remain there because, individually, they have not done any criminal wrong. It is the corporate story that is so bad. What can be done to make sure that the culture is repaired and changed? The Post Office used to be loved and respected for its competence and openness but, at the moment, it is reviled by a significant section of our community.
Finally, can the Minister tell us how many convictions have been quashed and how many have received their due compensation, including in relation to Capture, the preliminary scheme which was around earlier than the Horizon system? Let us see a determined effort to close this shameful chapter in the history of the Post Office. It is long overdue. As a nation, we must put it behind us.