Moved by
1: Clause 1, page 1, line 9, after “Service” insert “or the Department for Work and Pensions”
Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, I thank the Minister and his team for meeting me yesterday to discuss some of the issues relating to Amendment 1, which seeks to amend Clause 1 and quash convictions of postmasters secured by the Department for Work and Pensions. I will not hold up this Bill by pressing the amendment but would like to put some matters on the public record for consideration by the next Government.

Based upon some evidence and testimonies of individuals and, in the case of those who have passed away since convictions, information given to me by their families, I believe there is a strong case for an independent review of all the DWP convictions of postmasters. These convictions took place at a time when the government department and public bodies were insisting that their evidence was sound. The Minister has already said that the DWP cases were not influenced by Horizon. But my view is that, for any fraud to be discovered or prosecuted, there has to be some baseline which states the normal state of affairs. Was that normal state of affairs as per the data generated by the Horizon system?

After 20 years, the affected individuals and their families no longer have court transcripts or the bundles of evidence. Courts themselves do not have copies of the transcripts or the bundles of evidence. Lawyers acting for the parties do not have copies of the transcripts or the bundles of evidence. That makes it very difficult to know whether those prosecutions were fair or whether, in the heat of the moment and the prevailing climate that postmasters were guilty, certain kinds of assumptions were made. I am hoping that the DWP and the Ministry of Justice have copies of each of the cases and all the transcripts, and that they have reviewed or will review each case thoroughly. Without reviewing each case, it is hard to know whether any of the convictions were safe.

Some anecdotal evidence in family and professional letters suggests that convictions may not be safe. For example, there is a letter from the law firm Williamson & Soden, dated 18 April 2004, to a client, now deceased, whom I shall call Mr X out of respect for his family, who do not want him named. This letter says:

“I write to confirm the outcome of your trial at Wolverhampton Crown Court. As you are aware, having heard all the evidence, the Jury found you not guilty to all seventeen counts against you and you were finally discharged. You will be pleased to know that you cannot be re-charged for these offences and you are no longer subject to bail”.


Of course, it is not unusual for the courts to absolve individuals, but my point is that the case shows that the DWP’s construction of this case and evidence was obviously flawed. How many other cases were based on flawed evidence? That is the issue here.

In that case, the same person, now deceased, wrote a letter saying that

“completely unfounded allegations were brought against me by the DWP with scant regard for the evidence or facts available, and I find it incredible that the Senior Investigating Officer in this matter”—

I will call her TC as, again, I do not want to give the person’s name, although I mentioned it to the Minister—

“was willing to admit, in open court, that she has been neglectful in her duty in securing evidence, which could have possibly proved my innocence months ago”.

These allegations were made against a senior DWP investigating officer.

I have given the identity of this person to the Minister, but he said that DWP cannot find anyone with that name in its records, which inevitably raises further questions about how DWP can claim that its prosecutions were sound. Does this mean its files are deficient and it has not got the data? If Ms TC’s evidence was faulty in one case, how many other cases was she involved in? These are the kinds of questions I have. I urge the next Government to mount an independent investigation of DWP prosecutions of postmasters.

Finally, I thank the Minister for his courtesy, integrity and professionalism throughout this debate and on other occasions when we have crossed cocktail sticks across this Floor.

Lord Beith Portrait Lord Beith (LD)
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My Lords, we would not be considering an amendment like this on Report but for the foreshortening that the general election has imposed. But it is valuable that the point has been brought forward. A little earlier, the Minister gave us a pretty blood-curdling description of some of the offences that might have been covered or have secured convictions as a result of DWP prosecutions.

However, that should not frighten us off looking carefully at the point that bothers me: a person mixing up money, who is in a state of desperation because he or she is told that they owe £10,000 because of the Horizon system and who then commits an offence involving the DWP’s money and is prosecuted by the DWP. The Minister may be able to give me some assurance that this combination of offences, or this mixed offence, can be satisfactorily dealt with within the present terms of the legislation. He may have checked a number of cases already to see whether there are any examples where somebody has been driven to commit a relatively minor offence, prosecuted by DWP, because of the position they were in in relation to Horizon. Can he give us any helpful clarifying points on that?

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Lord Offord of Garvel Portrait The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)
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My Lords, I am grateful to the noble Lord, Lord Sikka, for the attention he has brought to convictions prosecuted by the Department for Work and Pensions. Amendment 1 would result in convictions for relevant offences in England and Wales that were prosecuted by the DWP being quashed at Royal Assent. I reiterate the Government’s view, which I set out in a certain amount of detail in Committee earlier in this Chamber, that the cases prosecuted by the DWP were of a very different nature from those prosecuted by the Post Office and the Crown Prosecution Service.

The Government’s view is therefore that it is right that they remain excluded from the scope of the Bill and that these convictions should not be quashed through this legislation. I thank the noble Lord, Lord Beith, for his question; I can assure him that DWP prosecutions had nothing to do with the Horizon system. There are no instances that we are aware of where someone committed an offence prosecuted by the DWP because they were accused of Horizon shortfalls. With that, I ask the noble Lord to withdraw his amendment.

Lord Sikka Portrait Lord Sikka (Lab)
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I beg leave to withdraw the amendment.

Amendment 1 withdrawn.
Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, I welcome this Bill, as it enables some postmasters wrongly convicted to secure some compensation and wipe the slate clean, though the scars of injustice will remain with them and their families for ever.

I will raise four broad areas of concern. First, as has been pointed out, Clause 1 quashes convictions prosecuted by the Post Office and the Crown Prosecution Service only. It does not quash the 61 cases prosecuted by the DWP against postmasters in England and Wales. The DWP was the state prosecutor of postmasters until the end of 2012, when its prosecutorial function was assigned to the CPS by the Director of Public Prosecutions. Can the Minister say whether any of the CPS prosecutions being quashed were initiated by the DWP?

The omission of the DWP prosecutions from the Bill is utterly unfair. Just like the Post Office and the CPS, the DWP used Horizon-generated data and faced lies and cover-ups from the Post Office. It has now been conclusively shown that the Post Office and the CPS convictions were unsafe because of unreliable evidence, lies and cover-ups. It is hard to see why the same data, evidence and channels of generating evidence are somehow considered reliable for prosecutions by the DWP.

The DWP convictions were mostly prosecuted between 2000 and 2006, when there was a clear conspiracy of silence and cover-up around the flaws in the Horizon system and when the Post Office concealed a lot of information. Since then, many of the Crown Court transcripts and bundles of evidence relating to those convictions have been destroyed. Therefore, the Government’s argument of investigating these on a case-by-case basis is pretty much impossible and unlikely to provide any fairness to those individuals.

The DWP position is stated in a letter signed by Mrs Alison Riley, a senior lawyer with the DWP legal advisers in the Government Legal Department, from 28 September 2023, addressed to Professor Christopher Hodges of the Horizon Compensation Advisory Board:

“I can say with some confidence that in the majority of cases we have found that those cases prosecuted by the DWP did not rely on evidence from the Horizon system but rather relied on physical evidence such as order books, vouchers and date stamps”.


Let us look at those words again. The letter used the phrase

“with some confidence”,

instead of “with absolute certainty” or “with 100% confidence”. The letter seems to suggest that there is some doubt. It also used the phrase

“in the majority of cases”.

Does that mean that there were cases where somebody was wrongly prosecuted by relying upon Horizon-generated data? Were there cases in which the DWP used Horizon-generated data to secure prosecutions? How many cases were there, which this letter is perhaps not identifying? I hope the Minister will be able to tell us.

Can the Minister say whether any convictions secured by the DWP have ever been quashed by the courts, at any time, from the year 2000 onwards? Has any DWP investigator, official or witness retracted evidence given on oath? If so, that makes all the convictions unsafe. Can the Minister categorically say that all 61 cases have been independently reviewed? Which documents were reviewed, when was this done and by whom? Were the victims invited to respond to the review? Has any post-conviction disclosure ever been made to postmasters who were previously prosecuted and convicted by proceedings brought by the DWP? Were they given the appropriate information? Against a wall of silence and lies by the Post Office, some people convicted by the DWP may even have been denied appeal, but the revelations of last three years surely change that. Can the Minister say how many of those prosecuted by the DWP have actually been denied appeal and are perhaps now deserving of it?

I am reminded of the maxim of the English jurist, William Blackstone:

“It is better that 10 guilty persons escape than that one innocent suffer”.


I therefore urge the Minister to amend the Bill and quash the convictions of those prosecuted by the DWP. If not, he should at the very least appoint an inquiry to examine the safety of the DWP convictions.

My second point is this. On 16 January, at Second Reading of the then Post Office (Horizon System) Compensation Bill in this House, I urged the Minister to remove the Post Office’s involvement in setting the terms of compensation and in administering any aspect of compensation schemes, as that would only multiply the pain for postmasters. I understand from some postmasters—one of whom I spoke with earlier today—that the Post Office is still involved with the group litigation order scheme. It is also involved with the Horizon shortfall scheme, at least where some 360 to 370 disputed cases are concerned. It is good to know that there is a panel of King’s Counsels, but the problem is that the Post Office set the terms of reference, the guidance and the principles of the scheme. No matter how independent the panel, it is duty bound to follow those guiding principles. The Post Office basically cannot be trusted, and its involvement is a source of discomfort. Can the Minister shed some light on why the Post Office is still involved in these schemes, and what is to be done to remove it from them?

Thirdly, the Horizon inquiry has provided strong evidence of wrongdoings which warrant criminal charges. However, whenever any question is asked, the Minister’s standard response is that we must wait until the end of the Horizon inquiry and the subsequent report before any action is taken. That position is deeply unsatisfactory. It is hard to know why prosecutions have not already begun on the basis of evidence which has already been provided to the inquiry. Any delay would mean that many would escape justice altogether. It is quite conceivable that, in time, many will simply say that they are fragile, too old and have selective amnesia so simply cannot remember.

Just last Friday, the inquiry took evidence from Mr Rod Ismay, who used the phrase “I do not know” 125 times and said “I cannot remember” at least 40 times. What will happen when these individuals are eventually charged, possibly in another five or six years? They will simply get away. I urge the Minister to begin some criminal inquiries and charges now and not wait until the end of the inquiry.

My final point is the observation that the root cause of the Post Office scandal is the power of giant corporations to bludgeon people into submission and silence, all with a view to boosting profits, executive salaries and improving the bottom line. That is evident in many other cases: for example, P&O Ferries knowingly flouted the law to sack workers; water, rail, and energy companies are all abusing people; there is Grenfell; there is the finance industry, a serial offender in mis-selling financial products; drug companies are overcharging the NHS; G4S and Serco, which is overcharging the Government for contracts. Yet we have not really seen any move from the Government to democratise corporations, to empower the people, and to hold this unaccountable power to account. Can the Minister explain when exactly we can expect some reversal and some checks on the corporate power? People at the moment are struggling—they cannot get legal aid to take anybody to court. Regulators are, basically, in bed with many of the companies, and they are promoting competitiveness rather than safeguarding the customer’s interests. Governments are shielding corporate misdeeds. In this House, I provided evidence of how the Government shielded and covered up HSBC’s money laundering and made sure that it did not really face the full consequences. Without empowering citizens and curbing corporate power, Post Office-type scandals will recur. Can the Minister explain to the House why, in 14 years, little or nothing has been done to call corporations to account?

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Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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My Lords, I will cross-check the record, but my understanding is that these 13 cases are recent and came to the Court of Appeal after the Hamilton judgment, so the courts were aware of the background in those cases.

The noble Lords, Lord Arbuthnot of Edrom, Lord Sikka and Lord McNicol, and the noble and learned Lord, Lord Falconer of Thoroton, questioned why this legislation does not include the cases prosecuted by the DWP, which we believe amount to 62. The noble Lord, Lord Sikka, asked whether any DWP-prosecuted cases were quashed; we are not aware of any convictions being quashed by the Court of Appeal. These cases, unlike many of the cases prosecuted by the Post Office or the CPS, involved wider corroborating evidence beyond that supplied by the faulty Horizon system, so are unlikely to be unsafe in the same way. The existing and established appeal processes remain available in relation to these cases.

I agree wholeheartedly with the noble Lords, Lord Sikka and Lord Holmes of Richmond, about the importance of delivering financial redress as quickly as possible. I am pleased to say that, as of 30 April, we have paid out more than £200 million in redress to over 2,800 claimants. Under the main Horizon shortfall scheme, 88% of claims have now been received and 72% paid out. We are going as fast as we can; we are reliant on the appeals coming forward and claimants making claims. We expect that, at the moment, many of those with overturned convictions are waiting for this Bill to pass and we expect their claims to come in more quickly following this legislation.

Financial redress is clearly not in scope of this legislation, but I hope it reassures noble Lords to know that, once the necessary legislation has been passed, we will provide a route to full, fair and rapid financial redress for quashed convictions. We will include information about redress in the notifications which we send to postmasters when their convictions are overturned. Our aim is that the redress process will follow seamlessly from the process of overturning convictions.

Lord Sikka Portrait Lord Sikka (Lab)
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Before we leave the issue of DWP convictions, can the Minister confirm or otherwise—he might wish to write—whether any DWP investigator, official or witness has at any point retracted evidence given under oath to any Crown Court?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I will need to write to the noble Lord on that point.

As my colleague in the other place, Minister Hollinrake, said, we want to minimise any pause between the Bill coming into effect and redress payments being made.

To be clear, the GLO compensation scheme is independent of the Post Office. As requested by postmasters in our consultation, it is run by the Department for Business and Trade. Claims which are not agreed will be assessed by a panel whose members are independent of government and the Post Office. Any errors in decisions from the independent panel can be taken to the reviewer of the GLO scheme, Sir Ross Cranston. The Government are funding postmasters with overturned convictions to receive independent legal advice on their claims and offers. Retired High Court judge Sir Gary Hickinbottom has been put in place to chair an independent panel to resolve disputes on pecuniary losses. Horizon shortfall scheme claims are assessed by an independent panel of experts who provide a recommendation to the Post Office. To date, there have not been any instances where the Post Office has offered a lower amount than the recommendation of the panel.

The noble Lord, Lord Sikka, and the noble Baroness, Lady Jones of Moulsecoomb, raised the accountability of Post Office executives. We await the outcome of the Wyn inquiry, which will provide clarity on this issue. Finding people guilty without looking at all the evidence is how we got into this mess in the first place. Postmasters were prosecuted without proper disclosure; we must not make the same mistake again in holding people accountable for this scandal, however tempting it might be. The public can be very reassured by the detailed investigation being conducted in public by Sir Wyn Williams. Each week reveals more shocking news, and I have no doubt that justice will be served by the inquiry.

A number of noble Lords have quite rightly mentioned Fujitsu. The noble Baroness, Lady Jones of Moulsecoomb, has raised Fujitsu and its role in the scandal a number of times in this Chamber. It is right that the company has voluntarily decided not to bid for future government contracts for the time being while the inquiry is ongoing, unless the Government ask it to. The Government also welcome Fujitsu acknowledging that it has a moral obligation to contribute to compensation. The Government are in active conversations with the company at a very senior level about this.

I thank the noble Lord, Lord Browne of Ladyton, who has consistently raised the concept of the interrogation of computer evidence used in prosecutions. The Government are committed to preventing any further miscarriages of justice, like the Horizon scandal. There has been a proliferation of digital material in modern criminal cases, particularly in cases such as fraud and serious sexual offending but also in lower-level high-volume offences such as drink-driving. For this reason, any hasty changes to the legal position risk serious and significant unintended consequences for the running of the criminal justice system. However, the Lord Chancellor is fully considering all options available, and more consideration can be given to this matter and reported to the House through this process.

I thank the noble Lords, Lord Browne of Ladyton and Lord Holmes of Richmond, and the noble and learned Lord, Lord Falconer of Thoroton, for their comments on the territorial extent of the Bill. We all wish to see justice being applied in all four parts of the United Kingdom. The other place has agreed to extend the Bill to Northern Ireland, in recognition of the unique challenges faced by the Northern Ireland Executive in bringing forward their own in a similar timeframe to the rest of the UK. Their legislative process is lengthy and difficult to expedite, and the legislation would have to compete with the many other priorities accumulated during the two-year suspension of the Assembly. The Government are also cognisant of the extent of cross-community support for the extension of the Bill to Northern Ireland.

The Government’s position on Scotland remains unchanged. Scotland does not face the same challenges in bringing forward legislation within its Parliament as Northern Ireland does. It is for the Scottish Government to bring forward their own proposals to address prosecutions, and for those to be scrutinised by the Scottish Parliament in line with the devolution settlement. I hope that reassures the noble and learned Lord, Lord Falconer of Thoroton, and the noble Lord, Lord Holmes of Richmond, that my officials have been supporting their counterparts in the Scottish Government to bring forward their own legislative proposals. I understand that they intend to do this shortly.

I turn to another of the very uncomfortable situations raised by the Horizon scandal, mentioned by the noble Lord, Lord Sahota, who spoke so powerfully about the racism experienced by victims of the Horizon scandal. I agree that this issue is very important. The Sir Wyn Williams inquiry has touched on this already in its oral evidence sessions. The Government are keen to hear anything that the inquiry concludes on this matter, including any recommendations for the future.

On the issue raised by the noble Baroness, Lady Brinton, in relation to Capture, the precursor computer system to Horizon, at this point we have not found sufficient evidence to conclude that Capture led to people being wrongly convicted. Capture was very different from Horizon: it was a stand-alone spreadsheet, not an integrated accounting system. There were bugs in it, but they were admitted to by the Post Office. It was not an interactive system that could be manipulated by a third-party source, as was the case with Horizon. It helped postmasters balance their accounts, rather than operating as a black box, reporting accounts across the network to Post Office headquarters. Given the limited information that we currently have about Capture and resulting convictions, there is not yet any evidence that any miscarriages of justice took place. It is therefore the Government’s position not to seek to overturn these convictions or to consider Capture cases within the Horizon system inquiry.

However, I would like to reassure the noble Baroness that we are looking into what can be done on Capture. As soon as the Government found out about issues with the Capture system, we asked the Post Office to investigate. We are in the process of appointing an independent forensic investigator to look into the Capture software and how the Post Office addressed concerns about it. Once the investigator has reported, we will return to the House to set out our plans, but we do not consider that this should hold up the more important matter before us, which is overturning the Horizon convictions.

On the post-legislative process, I thank the noble Lord, Lord Sandhurst, for his very useful contribution and his two points about creating a website for those who have been exonerated by this Bill. He has indicated that we do not have full contact details for all our claimants in this case. For reasons of confidentiality, it would not be right to create a public web page that would list the names of those exonerated. However, all those that are in scope will be written to on Royal Assent, and those that we have been able to identify in scope but have not been contacted can get in touch with the Government to have their cases looked into. We will ensure that GOV.UK is utilised to promote access to exoneration and financial redress. All guidance on the exoneration process and the financial redress scheme will be on GOV.UK.

I am grateful for the cross-party support shown towards this legislation and the valuable support of the Opposition Front Benches, represented by the noble Lord, Lord McNicol, and the noble Baroness, Lady Brinton.

In closing, the Government recognise the profound impacts that the Horizon scandal had on those who were falsely accused. I listened to the noble Lord, Lord McNicol, refer to individual cases, and we all know of examples in our local area where lives have been ruined, and each one is a very sad story on its own. Therefore, we legislate with that at the forefront of our minds, and the objective of this Bill is to exonerate those who were so unjustly convicted of crimes that they did not commit and provide fair redress as swiftly as possible. I beg to move.

National Minimum Wage Legislation

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Thursday 21st March 2024

(2 months, 3 weeks ago)

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Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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In the recent Supreme Court judgment on Uber, it was made clear that those who qualify as workers under existing employment law are entitled to core employment rights and that all gig economy businesses must ensure that they fulfil their legal responsibilities. We now have a situation in which the national minimum wage is two-thirds of hourly median pay, and under OECD rules that means it is no longer classified as low pay. We know that 5% of our workforce is on national minimum wage, which is a great success.

Lord Sikka Portrait Lord Sikka (Lab)
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Currys, EasyJet and Greggs are part of a parade of companies that never forget to pay bosses but somehow forget to pay the minimum wage to workers. Their memory can be improved by effective sanctions requiring that the fine for not paying the minimum wage must equal remuneration of the entire board, of which at least 50% must be paid personally by directors. When will the Minister introduce this sanction?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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One of the sanctions available to the Government is the naming and shaming scheme, which is very successful. We have a large number of companies which have been subject to that, and we have therefore increased greatly the number of companies complying as a result. When HMRC finds employers which breach this, it can impose a penalty of up to 200%; the penalties are severe for companies which do not comply.

Horizon Scandal: Psychological Support Services

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Monday 4th March 2024

(3 months, 1 week ago)

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Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I thank my noble friend. I once again pay tribute to his continual scrutiny of this matter, and his vital role on the advisory committee. Currently, the compensation is directed to each claimant—a postmaster or postmistress—but the whole point of having the advisory committee is to have live discussions on this. I encourage him, in that capacity, to keep those discussions going.

Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, last week I met several wronged sub-postmasters, most of whom were earning barely the minimum wage. They have been wronged by Ministers, senior civil servants, lawyers, Post Office directors and investigators, and executives at Fujitsu. Can the Minister explain what legal advice and financial help the Government have so far given, or will give, the wronged sub-postmasters to enable them to bring the culprits to justice?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I thank the noble Lord for that question. As I have said before from the Dispatch Box, there is help available as part of the compensation schemes for the claimants, to put their claims together and get access to lawyers and healthcare. As I said, 78% of claims have been settled. We are now dealing with the most difficult claims. In the meantime, there is a statutory inquiry going ahead, which will get to the bottom of this, and we will understand the full extent of how this sorry saga came about.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL]

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Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, I congratulate my noble friend Lord Woodley on this much-needed Bill, which will make the UK a better place for workers and businesses alike. As my noble friends Lord Woodley and Lord Hendy have explained, the Bill does not completely ban fire and rehire; it merely curbs the abuses and requires companies to properly consult employees on a statutory footing before any major restructuring that might lead to fire and rehire.

The Bill has reminded me of the words of a former US Republican President, who said:

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration”.


That President was Abraham Lincoln and his views are as relevant today as they were in 1861.

We all know that within our economic system there are antagonisms between labour and capital, but there is also a mutual dependence of the two. Workers’ rights are an indispensable part of wealth creation and building a sustainable economy. The Bill comes at a time when fire and rehire is being used as a bully-boy tactic to undermine workers’ pay and conditions across a number of industries.

A study by the Observer newspaper stated that 70% of employers using fire and rehire of staff on worse contracts maintained healthy profit margins and that, in most cases, also increased executive pay. British Gas used fire and rehire tactics to dismiss 500 engineers, but it has now reported a tenfold increase in profits in just one year. At Asda, some 7,000 workers are being impacted by fire and rehire as private equity owners seek to boost their returns.

We cannot build a sustainable economy by increasing worker insecurity. That has not been done anywhere, yet it is what the Government are trying to do here. Workers’ economic security is undermined wherever employers wield the capacity to demand, deny or discontinue work completely at will and with impunity. The Work Foundation estimates that in 2023, around 6.8 million workers—around 21% of them—were in severely insecure work, with wholesale and retail, agriculture, professional and scientific, and hospitality workers particularly badly affected. The Chartered Institute of Personnel and Development has reported that, since the pandemic, nearly one in 10 workers have been told to reapply for their jobs on worse terms and conditions or face the sack.

Women are 2.3 times more likely to be in insecure work than men. People from ethnic minorities, 18 to 25 year-olds and 1.45 million disabled workers are more likely to be in insecure work than any other sections of our population. Fire and rehire increases insecurity, anxiety and physical and mental health problems. Up to 300,000 people with mental health problems arising from their work situation lose their jobs each year. Around 51% of long-term sick leave is due to stress associated with work and insecurity. Since 2019, the total annual cost associated with poor mental health has increased by 25%. Employers are losing £56 billion a year because of the insecurities created for workers. Through this Bill, we can recover a part of that: it offers a road to economic recovery and improved labour supply.

A considerable body of scholarly research shows that improved worker rights and rewards provide a solid foundation for strong and stable economic growth by supporting demand and stabilising local currencies and financial systems. Better worker rights are essential for levelling up and result in higher productivity growth, thus leading to faster, stronger and sustainable economic growth. Improved worker rights result in a better distribution of income, both among workers and between workers and companies. In other words, better worker rights lead to a larger output that is more evenly distributed as well. As the benefits of faster growth are more evenly distributed, local demand tends to be stronger and more stable, preventing our town centres becoming economic deserts with swathes of empty shops.

In the face of fewer safeguards for workers, cuts in income reduce demand and Governments increasingly rely, as the current Government are doing, on a shrinking proportion of the population to reflate the economy. Households with unpredictable employment rights and loss of livelihoods resort to pawning things and borrowing money, which ultimately leads to lower spending, lower consumption, a higher risk of financial distress and higher risks to the financial system. We all know what happened before the 2008 banking crash; many people simply could not afford to pay their mortgages. That is one of the consequences.

In short, the Bill curbs the abuse of fire and rehire policies and facilitates economic benefits. I strongly urge all Members of this House to support it

Post Office: Executive Remuneration

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Tuesday 27th February 2024

(3 months, 2 weeks ago)

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Asked by
Lord Sikka Portrait Lord Sikka
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To ask His Majesty’s Government on which dates since 1999 they exercised their right as the sole share- holder of the Post Office to (1) approve, or (2) disapprove, the executive remuneration policies and amounts.

Lord Johnson of Lainston Portrait The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
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Under current arrangements, the Government, as shareholder, approve the targets underpinning executive performance pay. Targets are typically approved on an annual basis as these schemes are usually revised each year to ensure that targets are up to date. The Government also approve CEO and CFO remuneration, in principle before their formal appointment. For the CEO, this was provided in June 2019 and, for the CFO, in January 2015. Such approvals have historically been made in line with the Government’s guidance on senior pay in the public sector at the appropriate juncture.

Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, it is shameful that year after year, the Government approved remuneration of Post Office directors boosted by a higher bottom line number and inflated by theft from sub-postmasters. Why has none of that so far been clawed back, and why have the Government approved bonuses for Post Office directors for appearing at the Horizon inquiry?

Lord Johnson of Lainston Portrait Lord Johnson of Lainston (Con)
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I am very grateful to the noble Lord for raising this point. I think we all agree that this is an extremely distressing situation for the postmasters involved. A committee hearing is going on in the other place, which I believe we will discuss later this afternoon. I reassure all Members of this House that the Government never approved the bonuses for the section relating to co-operation with the Horizon inquiry. Frankly, the idea that you should reward executives for performing their duty is surprising, and we certainly did not confirm those bonuses. That is a very important point. The second important point to make is that the executives, as I understand it, have paid back the portion of the bonus relating to that, but that does not change the fact that we need to review how Post Office executive remuneration functions. There has been a number of different reviews of the governance of that, and the Government are taking significant note of them.

Post Office Governance and Horizon Compensation Schemes

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Wednesday 21st February 2024

(3 months, 3 weeks ago)

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Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I thank my noble friend Lord Arbuthnot. I will take the second one first: there are live conversations going on right now, at great speed, to finalise the legal process with the Ministry of Justice, which will result in the overturning of all the convictions in England and Wales by an Act of Parliament, excepting that there may be some small number of people who, in fact, have had legal or safe convictions, but they will be overturned—as we discussed before—because the greater good is to wipe the slate clean as quickly as possible. That will be coming to this House in short order, and I imagine there will be unanimous support for that.

As for the timing and the finance, the finance for this will come ultimately from the Treasury. The Treasury has been funding DBT, in order for it to fund the Post Office, and, in the course of last year, under the chairmanship of Henry Staunton, £253 million was paid by the Treasury, via DBT, to Post Office Ltd, of which £150 million was for the compensation schemes—and £160 million has now been paid—and the £103 million was for the replacement of the Horizon system. There are regular funding lines going to the Post Office via DBT.

This money has been ring-fenced and identified by the Government—it sits within the Treasury—but we have also had conversations in this House about the fact that there may be some other sources of compensation to be had from other places, and why it should not necessarily be just the taxpayer who picks up the bill for this when there are perhaps other stakeholders involved in this sorry saga who should pay their part. It may well be that that the taxpayer can be relieved of some of the £1 billion ring-fencing because it may be that we can get other sources, not least Fujitsu, to pay for that.

The commitment given by my department—we are working flat out on this—is to get 90% of the claims processed and settled within 40 working days. There is no going back from that; as we have said before, 78% of postmasters and postmistresses—a figure of 2,270—have been fully paid and settled. We are now at the sharp end of this process for those who were treated the most egregiously. Therefore, those cases are more complex, and perhaps need more time—not demanded by the Government—for the process of how they put their claim together. We have a situation where it is openly known that Mr Bates has submitted his claim and is not happy with the response: that is part of the process that we are in, and it will go on. We will move as quickly as we can to make sure that everyone is restored to the position that they should be in.

Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, I have a question about the undated letter from Sarah Munby to Mr Staunton that has been released. It asks him to focus on

“effective management of legal costs”.

Can the Minister explain what those legal costs are? What does that mean? Such a letter could not have been written without consultation with lots of colleagues as to what kind of terminology to use. Will the Minister ensure that all the back-up notes to this letter are put in the public domain?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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This is very straight- forward. If I am appointed as the new chairman of a company in this situation and, of my three priorities, the No. 1 is to manage a legal process to get compensation quickly to postmasters, I would expect to be told that formally by the Permanent Secretary and to be held accountable to manage those costs effectively. That does not mean to minimise or delay; it means to manage the process effectively to get compensation to the postmasters. What has been put into the public domain makes it very clear that there has been no dragging of feet and no instruction to the contrary on this matter.

As we have discussed many times in this Chamber, we now have a full statutory inquiry. The judge, Wyn Williams, will pick through this in fine detail. We are all very impatient and frustrated because we want the answer now, but we got into this mess because we jumped the gun before, and we are not going to do so again.

Post Office Horizon Scandal: Racism

Lord Sikka Excerpts
Monday 19th February 2024

(3 months, 3 weeks ago)

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Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I share the noble Lord’s frustration with this process. There was indeed offensive language used in the official documentation, which had not been updated since the 1980s and for which the Post Office has clearly apologised. As far as the culture in the Post Office is concerned, there is a rebuilding job required. The chairman has been removed and live conversations are going on right now to appoint a new chairman. My department is fully focused on rectifying this sorry situation.

Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, none of the racist terms in the report, codenamed Project May, could have been used without the approval of directors, all of whom were appointed by the Government. Rather than hiding behind the claim that the Horizon inquiry might look at it, the Minister needs to be accountable to Parliament. An inquiry is not a substitute for parliamentary accountability. So, can he tell us when he first became aware of these racist terms and why he has not already referred the Post Office to the Equality and Human Rights Commission for investigation?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I thank the noble Lord. He is referring to the historical document that was released under the Freedom of Information Act in 2023. It has clearly been identified to have offensive language in it, which had not been updated since the 1980s. There is an ongoing inquiry into this. We all want to know the answer. The reason we got into this position in the first place is that people were deemed guilty rather than innocent without due process. Let us not do the same thing again.

Registered Office Address (Rectification of Register) Regulations 2024

Lord Sikka Excerpts
Monday 19th February 2024

(3 months, 3 weeks ago)

Grand Committee
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Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, it is pleasure to follow the insights of the noble Lord, Lord Vaux. I will speak to the second SI, the Limited Liability Partnerships (Application of Company Law) Regulations 2024. I broadly welcome the thrust of the proposals but I have a number of questions; I hope that the Minister will be able to answer them.

First, the words “company law” appear in the statutory instrument, obviously, but can the Minister tell the Committee whether there is in the UK any central enforcer of company law—or for LLPs, for that matter? I have not been able to find one in all these years, so it would be helpful to know where the buck stops. Who, in the final analysis, is responsible for regulating these entities? This matters, especially when companies and LLPs engage in unlawful practices such as paying dividends without sufficient distributable reserves—something that damages the interests of creditors, including pension schemes with a deficit.

Let me go back a little while, because I have always been interested in this topic. In a Written Question on 14 September 2017, Kelvin Hopkins, the then Member of Parliament for Luton North, asked the Business Secretary

“what checks his Department carries out to ensure that dividends paid by companies do not exceed their distributable reserves”.

This was the reply, on 12 October 2017:

“The Department is not responsible for carrying out checks on dividends paid by companies to ensure that they do not exceed their distributable reserves”.


That is still the position. Nothing has changed. We still do not know who is responsible for looking at these things.

In recent years, companies such as Domino’s, Dunelm, Games Workshop and Hargreaves Lansdown have admitted to paying dividends that were, strictly speaking, unlawful; after a while, they noticed that they were unlawful. They therefore paid illegal dividends but, in the absence of an independent enforcer of company law, no one really examines such instances. The Business Department has long washed its hands of such matters. I hope that the Minister can tell us where the buck stops and which external agency is responsible for enforcing both company law and LLP law. That is my first question.

Secondly, LLP and company financial statements are prepared in accordance with what are sometimes called generally accepted accounting principles—or GAAP, although there are many variations on that—and are promulgated by the Financial Reporting Council in the form of accounting standards. They have an important bearing on whatever counts as an asset, a liability, income, an expense, wages, a tax, liquidity, accountability and much more. Ultimately, the rules or standards have a bearing on the distribution of income, wealth and risks.

In a democratic society, only Parliament has the social mandate to adjudicate on competing claims concerning the distribution of income and wealth. However, that authority has been subverted by the Government, and none of the accounting standards issued by the Financial Reporting Council is ever debated in Parliament. Why is that? Why has Parliament’s authority been subverted? I hope that the Minister can explain why the Government do not bring accounting standards to Parliament for approval because they affect the distribution of income and wealth and form the basis of taxation.

Thirdly, through the FRC, committees dominated by partners of LLPs make their own accounting and disclosure rules. They operate through a private company, which is named CCAB Ltd and is dominated by the accountancy bodies. No one in the Government has ever suggested that the hungry should set food standards, the homeless should set housing standards or the poor should set the minimum wage, but the partners of LLPs are allowed to make their own accounting rules without any kind of parliamentary oversight.

If noble Lords look at LLPs’ accounts, they will see that these LLP partners do not like transparency. For example, LLPs are not required to disclose their partners’ share of profits, which is the nearest equivalent to director remuneration in limited liability companies. We do not know their exact share of the profit, even though they may be enjoying government or other public contracts. Why is the partners’ share of profits not disclosed in LLPs’ financial statements, and why is setting the rules for LLP accounting and disclosure considered private? Surely it is not.

Lord Fox Portrait Lord Fox (LD)
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My Lords, as someone who has spent a lot of his professional life working on annual reports, I have often had questions about GAAP, but the Minister will be pleased to know that I will not ask them today.

The four SIs before us are to be welcomed. They are steps on the way from our discussions on both the last economic crime Bill and the one before that. We are moving forward, in a sense. I am glad that the noble Lord, Lord Vaux, introduced what I call the Knighton collection of companies that were registered to a terraced house in the Welsh borders, not far from where I live—as I believe does the noble Lord, Lord Bourne. I would like some reassurance that the statutory instrument on registered office addresses would deal with that.

As the noble Lord, Lord Vaux, eloquently set out, there are a lot of steps to go through to eliminate falsely registered companies. It comes back to the question of whether Companies House is capable of really handling this, ceasing to be a filing cabinet and starting to be an investigative organisation. To echo the point made by the noble Lord, Lord Vaux, it would be very helpful to have an update on how the huge cultural change that Companies House needs is going. Many of us were impressed by the team that we saw, but also a little frightened by the huge task that it has in front of it to make these SIs and the next 51—or however many there are—come to life.

I have some trepidation on the second of these SIs, on limited liability partnerships, because the noble Baroness, Lady McIntosh, seated opposite, is our Scottish legal expert. I wondered where Scottish partnerships come in, because the territorial extent of that statutory instrument is the whole UK. Where do Scottish partnerships sit within that?

The service address and principal office address regulations are useful and important too, but expose the central weakness that is still within our system. After all the work we did on the Bill, those with control still have the ability to hide that control. We welcome the Service Address (Rectification of Register) Regulations and the Principal Office Address (Rectification of Register) Regulations, but can the Minister set out, either now or in writing, how we are going to eliminate the cancer within this system of people obscuring the real ownership of assets to the authorities and wider society? With that, we welcome these four statutory instruments.

Post Office Ltd

Lord Sikka Excerpts
Tuesday 30th January 2024

(4 months, 2 weeks ago)

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Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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To clarify, the Post Office is constitutionally set up to be arm’s-length and will remain so. We are now talking to the Secretary of State about tightening the governance of that. The key position is the chair, who runs the board and is accountable to the shareholders. We will appoint an interim chair as soon as possible, with a view to getting a new person in post this year. That will coincide, I hope, with the inquiry coming through at the end of the year.

Lord Sikka Portrait Lord Sikka (Lab)
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On 22 January, I tabled a Written Question about possible conflicts of interest associated with the position of Henry Staunton, the former chairman of WH Smith, which operates Post Office franchises. I have yet to receive and Answer. Mr Staunton has now gone—nothing to do with me, I am sure. First, can the Minister publish the conflict-of-interest assessment made when Mr Staunton was first appointed as chair of the Post Office? Secondly, can the Minister explain how it is that Simon Jeffreys is a director of the Post Office and the Crown Prosecution Service? How did that happen?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I thank the noble Lord for those questions. The removal—the resignation by mutual consent—of the chairman, Mr Staunton, is clearly an ongoing HR issue and we have been clear that we are not going to comment on that in public. That will now take place and no compensation will be paid, but that is still in process in terms of taking action. As far as the rest of the board is concerned, we are happy with the three new non-executive directors who came in in 2023. We have two sub-postmaster representatives, and we are looking for a senior independent director, which will further strengthen the board.