The following Statement was made in the House of Commons on Wednesday 19 May.
“With permission, Madam Deputy Speaker, I would like to update the House on changes to the Post Office Horizon IT inquiry. Over a 20-year period the Post Office Horizon computerised accounting system recorded shortfalls in cash that were allegedly caused by sub-postmasters, leading to dismissals, recovery of losses and, in some instances, criminal prosecutions. I know that Members across the House are aware of the terrible impact that this has had on affected postmasters and their families. The life-altering implications of these accounting errors cannot be overstated.
The Post Office Horizon IT inquiry, led by Sir Wyn Williams, was launched in September 2020 as a major step towards righting the wrongs of the past. The inquiry was established on a non-statutory basis to enable the chair to work quickly to establish a clear account of the implementation and failings of the Horizon computer system over its lifetime.
On 27 April I made an Oral Statement to the House following the decision by the Court of Appeal on 23 April to quash the convictions of 39 postmasters who had been convicted for Horizon-related shortfalls. As I said then, the Government recognise the gravity of the court’s judgment and the scale of the miscarriage of justice that it makes clear.
Sir Wyn and I are both of the view that the context for the inquiry has changed in the light of the judgment by the Court of Appeal and that now is the right moment to convert the inquiry to a statutory footing. Therefore I can now inform the House that, with the agreement of the Prime Minister, I will convert the inquiry to a statutory footing on 1 June 2021. I have also agreed that Sir Wyn will now have more time to undertake his work. The inquiry is now expected to report in autumn 2022 rather than summer 2021.
Together, these changes will give Sir Wyn the powers and the time that he needs to conduct an in-depth analysis of the decision-making processes that led to the Horizon scandal. He will be able to compel organisations to provide documents and witnesses to give evidence, under oath if necessary. It is now for Sir Wyn to consider his next steps, and I expect that he will provide more information on his proposed approach soon. In the short term the inquiry will complete its planned engagements through May, but public hearings that had been expected to take place in June will be delayed.
I have always said that the inquiry should proceed quickly to get the answers that postmasters and their families are seeking. Sir Wyn has gathered a lot of evidence from key parties and engaged with many affected postmasters; I have therefore asked that he provide a progress update to his original timeline of summer 2021, to make public the progress to date and any initial findings. I hope that still more affected postmasters will choose to engage with Sir Wyn as he continues his work on a statutory footing.
The inquiry’s overarching aims—to ensure that the right lessons have been learned and to establish what must change—will remain. However, there will be some changes to the terms of reference in the light of the Court of Appeal judgment. I have today notified the House of the updated terms of reference in a Written Ministerial Statement.
I thank Sir Wyn for his quick progress on the inquiry to date and for taking the time with me in recent weeks to consider the next steps for it. I am pleased to confirm that he has agreed to remain as chair of the inquiry for the next phase.
Finally, I note that converting the inquiry to a statutory footing and proceeding over a longer period will of course have cost implications, but I assure colleagues across the House that they are being fully considered with my colleagues in HM Treasury.
The Horizon saga has wrecked lives and livelihoods. We cannot undo the damage that has been done, but we can establish what went wrong at the Post Office and ensure that nothing like it is ever allowed to happen again. The events surrounding the dispute have long been shrouded in darkness, and this Government are determined to bring them into the light. The landmark Court of Appeal judgment changed the context for the inquiry. Following it, the Government did not hesitate to act to give the inquiry more teeth and equip Sir Wyn with more powers. To affected postmasters and their families, my message is that we are listening and we will get to the bottom of this appalling affair. I commend this Statement to the House.”
My Lords, no one who knows this story can feel other than shame that a government-owned institution, the Post Office, oversaw—nay, facilitated—the biggest miscarriage of justice that we have seen, with nearly 1,000 false prosecutions as well as bankruptcies, prison and unemployment all flowing from the actions of Fujitsu and the Post Office, and indeed from the lack of action from the Post Office’s shareholder, the Government.
The Minister knows we are delighted that the inquiry will now be statutory—though somewhat bemused that it has taken a month for the Government to reach that conclusion—and that a progress report will be made public, but there remain other concerns. First, while we agree with the Statement that
“We cannot undo the damage”,
we can move faster and with generosity on the question of compensation. Perhaps the Minister can explain why the inquiry will not cover compensation, and assure us that speed will be of the essence in beginning to help those so badly affected by this sorry saga. Can he update the House on the appointment of a new Post Office director to handle compensation and ensure that this will not replicate the disgraceful Windrush scheme?
Secondly, there is the major issue of the lack of accountability of those who were deeply implicated in the lies and lack of openness that led to the prosecutions and the delay in dealing with the results. Michael Keegan was Fujitsu’s chief executive when the company was telling the Post Office that Horizon was fine and when its staff were even appearing in court as prosecution witnesses against the sub-postmasters. He does not appear to have suffered any penalty and indeed is now a Crown representative at the Cabinet Office, where he oversees the Government’s relationships with suppliers. Given that Fujitsu continues to work with the Post Office, a £42 million extension to the Horizon contract having been agreed with the Post Office last month, can the Minister assure the House that Mr Keegan would have had no role in any such decision?
My Lords, let us remind ourselves of the human scale of this outrage. Starting more than 20 years ago, the Post Office prosecuted nearly 1,000 sub- postmasters and sub-postmistresses based on incorrect information from a recently installed computer system. Some went to prison following convictions for false accounting and theft, many were financially ruined, and some have since died with the shame of this still hanging over them and their families.
As we know, a subset of those people were acquitted and, as we discussed around a month ago, the Government have asked Sir Wyn Williams to inquire into this episode. We are of course pleased that the lid is beginning to be lifted on some of these issues. Speaking on 28 April about suggestions that the inquiry was underpowered, the Minister was very clear:
“Given that all parties so far are committed to co-operating, we remain of the view that a non-statutory inquiry is the right approach.”
He added:
“However, if Sir Wyn does not get the co-operation he requires, then all options are on the table and we will not hesitate to act.”—[Official Report, 28/4/21; col. 2324.]
Today we are discussing a new Statement that says the context of the inquiry has changed, hence the move to a statutory basis, but it cites the successful appeal as that context. That is strange as the results of that appeal were available on 28 April. So what has actually changed? What has caused the department to change its mind? For example, has the co-operation of which the Minister spoke evaporated? If so, who is now no longer co-operating?
I do not think the noble Baroness, Lady Hayter, or I are surprised that this change has had to happen. Like her, we welcome it as a small step in the right direction, but I point out that on an already tight schedule this has not helped. On 28 April the Minister said he expected the report in the summer, and in your Lordships’ House the Minister was adamant that this deadline could be met. Now the inquiry report is delayed. What will take the extra time? What has caused that delay? Will the new deadline of the autumn be met?
I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Fox, for their comments. Let me say from the start that I completely share their outrage about this scandal, as I think they both know. It has been going on for many years, under many different Ministers and Governments, and we should all accept our share of the responsibility for the dreadful way these poor people were treated. Nobody who saw them emerging on to the steps of the High Court a few weeks ago could have failed to have been moved by what they had to say.
Turning to the many questions that the noble Lords asked, as I said, this Government deeply regret that this situation has occurred. Since it was launched in September 2020, the Post Office Horizon inquiry has made swift progress. The inquiry’s chairman, Sir Wyn Williams, and his team have heard from many affected postmasters and gathered evidence from key parties, including the Post Office, my department, UKGI and Fujitsu.
The noble Lord, Lord Fox, asked about the changes to the terms of reference. It is clearly critical that the inquiry is able to look at exactly what decisions were made and why, in relation to the Horizon prosecutions, so that lessons can be learned. The terms of reference have changed to clarify that the inquiry can investigate the Post Office’s decision-making in taking action against postmasters, including pursuing prosecutions and a fairly aggressive legal strategy, and in particular of course it can investigate the cases of those whose prosecutions have now been quashed.
The noble Baroness, Lady Hayter, asked about accountability. Let me be clear, for the avoidance of doubt, that the inquiry can make findings of fact and make recommendations. With regards to accountability, as noble Lords will understand, matters of criminal and civil law remain for the courts, as only the courts can make such judgments. However, they and other bodies can draw on the findings of the inquiry when considering these issues. It is therefore now for Sir Wyn to establish what happened, what went wrong and why it went wrong. We can then consider whether more needs to be done in the light of those findings.
We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.
My Lords, last week the Minister, Paul Scully, said:
“We want to ensure justice and fair compensation for all who have been affected”.—[Official Report, Commons, 19/5/21; col. 721.]
He did not limit that to those whose convictions had been overturned. Does my noble friend accept that this must mean reopening the settlement of the group litigation order? Please will he stop using the words “full and final settlement” to describe a settlement which was not just and not fair?
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We continue to worry about the role that Fujitsu played in covering up concerns about Horizon and in facilitating the blame-shifting to sub-postmasters and their subsequent prosecutions, actions for which the company appears not to have paid a penny in compensation. What discussions are taking place in that regard?
The Post Office, which now wants taxpayers to take on its liabilities over this issue, has still not explained why no one questioned how it was that a vast cohort of upright citizens—people selected and trusted to run sub-post offices and handle public money—all at the same moment became petty thieves, as if a dishonesty virus had suddenly taken hold. Did nobody notice? The management incompetence at the highest level, as senior directors watched unlikely criminals paraded in court, still beggars belief.
I turn to the Government, the Post Office’s only shareholder, which somehow failed to spot what journalists, the noble Lord, Lord Arbuthnot, and finally the court did: that the Post Office was abusing its power over postmasters, failing to question Fujitsu and prosecuting a swathe of unlikely thieves. Will the Minister acknowledge the Government’s failure of oversight and due diligence, with drastic consequences both for individuals and for taxpayers?
We welcome the fact that the inquiry will now be statutory, but my plea to the Minister is: will he ensure that in parallel to the inquiry the Government themselves take a close look at how they oversee not just the Post Office but all expenditure, personnel and IT decisions to ensure that there is sufficient curiosity, challenge, openness and honesty, so that taxpayers’ money and people’s lives are never again put at the risk of a saga like this one?
As the Statement suggested, the terms of reference for Sir Wyn have been amended. As we do not have the benefit of tracked changes, can the Minister please outline for the record and for your Lordships the principal changes in those terms of reference? If we look overall at the terms of reference, the overriding problem is there for all of us to see: six clauses, each set out with very passive language. “Assess”, “understand” and “acknowledge” are all good words, I will admit, but they are not an indicator that this inquiry has any way to identify culprits. They are not the words of a robust bringing to book. Even if he wanted to, Sir Wyn will not be able to go beyond those terms of reference as there is no wriggle room. If this is the only inquiry, I fear it is not going to be a satisfactory one.
For example, section B of the terms of reference uses the words
“to establish a clear account of…the implementation and failings of Horizon”
and the Post Office’s use of that information—the latter are my words, not those of the ToR. Given that this inquiry is essentially a fact-finding mission, what will the Government do with the facts when they get them? Further, it seems to be focused largely on the failure of the Horizon system and not that of Post Office management—and, as we know, this case was compounded by what appears to have been an intentional decision by the Post Office not to disclose material that undermined its case. So where in the terms of reference will this issue be tested and judged?
As in other cases, there are two levels of failure here. The first was an excess of trust in the system and technology; the second was the failure to deal with the consequences of this when the facts became apparent to some people within that organisation. This inquiry is set up to learn lessons from history but not to deal with the legacy of this past. With these terms of reference, I do not see how this inquiry will establish culpability from these facts, and how it will be the means to deliver resolution to the sub-postmasters and sub-postmistresses and their families over whom this case hangs. I do not see it as a route to compensating these people. So, while it is a step forward, I can understand why former sub-postmasters are demanding a judge-led inquiry into this scandal. I have a great deal of sympathy for their demand.
The noble Lord, Lord Fox, asked about the timeframe for the inquiry. The deadline for the final report has now been extended to autumn 2022, to take account of the new statutory nature of the inquiry, but we are expecting a progress update later this summer. The changes to the inquiry’s timeline mean that Sir Wyn will have more time to determine exactly what went wrong at the Post Office during this period and to make sure that a situation such as this cannot happen again.
The noble Lord, Lord Fox, and the noble Baroness, Lady Hayter, both raised the issue of compensation. I know that many postmasters, and Peers across this House, have called for further compensation for those who have been caught up in this situation. Those whose convictions have been quashed, with a settlement amounted in the group litigation, are of course outside the scope of the inquiry. But, as I said previously, the Government are keen to see that all sub-postmasters whose convictions are overturned are fairly compensated as quickly as possible. We will ensure that we work with the Post Office to make this happen as quickly as it is possible to organise.
The noble Baroness, Lady Hayter, referred to Fujitsu. She will be aware that two Fujitsu employees are still the subject of a police investigation. However, so far Fujitsu has co-operated fully with the terms of the inquiry. I confirm to the noble Lord, Lord Fox, that all actions of the Post Office, including its fairly aggressive legal strategy, can and will be examined under the terms of the inquiry.