Post Office and Horizon Software

Debate between Sharon Hodgson and Gill Furniss

Thursday 5th March 2020 Westminster Hall

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

It is a pleasure to serve under your chairpersonship, Mr McCabe. I thank the hon. Member for Telford (Lucy Allan) for securing this important debate.

This extremely serious matter has raised worrying questions about the management and governance structures of Post Office Ltd and the way in which the Government oversee it as a public body. I pay tribute to the many sub-postmasters who have endured the harsh realities of this national scandal. Among them is Alan Bates, who has spearheaded the litigation that ultimately saw sub-postmasters get some of the vindication they deserved. Like Mr Bates, I know that the successful litigation was the first step towards achieving justice. I also pay tribute to journalist Nick Wallis, who has followed the case from the beginning and has been a passionate champion for the sub-postmasters’ cause over many years.

This debate relates specifically to the review of criminal cases, so I am disappointed that the Ministry of Justice is not responding to it. Will the Minister explain why it is a BEIS representative who is responding, when the topic of the debate was intended to fall under the brief of the Ministry of Justice?

The wrongful conviction of sub-postmasters has had an impact on the lives of far too many individuals and their families. People have lost their livelihoods, had their businesses stolen from them and, in many cases, been ostracised from their communities. For those affected, that has been a living nightmare.

One young woman began her career as a sub-postmaster at the age of 18, but after prosecution and conviction she has faced unemployment and financial ruin at a time when her adult life and independence should have begun. Another sub-postmaster whose life was turned upside down was bankrupted by legal fees and shunned by the community he had so diligently served. His neighbours would not speak to him, and his daughter was spat at on the bus to school. In one of the most tragic examples, one sub-postmaster took their own life, such was the shame, anxiety and stress that the Post Office’s heavy-handed pursuit of them brought on. Sub-postmasters who were implicated in Horizon’s IT failures have been wrongly labelled as criminals, had their lives turned upside down and, in some cases, faced decades of debt and social disgrace.

On 11 December, while we were all busy with our election campaigns, the sub-postmasters’ fight for justice took a huge step forward. The Post Office agreed to pay a £58 million settlement to the 557 sub-postmasters who brought court action against it. Mr Justice Fraser noted in his ruling that the Post Office felt entitled to treat sub-postmasters

“in capricious or arbitrary ways which would not be unfamiliar to a mid-Victorian factory-owner.”

That falls far below the standards we would expect from one of Britain’s most recognisable and trusted institutions. Mr Justice Fraser also raised concerns about the structure of accountability within the Post Office, stating that it appeared

“to conduct itself as though it is answerable only to itself.”

That was evident in the way in which the Post Office handled its litigation; it was noted that the Post Office pursued the trial with the resources and effort of a blue-chip tech company.

It is worth remembering that litigation was brought to address the errors of a Government-owned company, which was ultimately found at fault for the vicious pursuit and prosecution of hundreds of sub-postmasters. The Post Office is a Government-owned company. A civil servant sits on the board and its only shareholder is the Secretary of State for Business, Energy and Industrial Strategy, so more should have been done to address the scandal before it was allowed to fester to this extent.

In the light of the number of wrongful convictions, a group expungement of the criminal records of those convicted seems the most suitable way forward. Unfortunately, the Post Office has resisted that idea and would prefer each sub-postmaster to bring their own legal action to overturn their conviction. That is completely outrageous. People who have lived for many years through the scandal and lost everything, including their savings and reputations, are now being asked to go back to court to give their own evidence, despite Mr Justice Fraser’s finding that the Horizon computer system by Fujitsu was at fault. The Post Office was alerted to those faults many years ago, so it should not have any illusions about the system’s effectiveness.

It is striking that the Post Office seems to have learned nothing from the unnecessary prosecutions of 557 hard-working sub-postmasters or from the huge amount of anger expressed by judges, parliamentarians and the public. Instead, it forges ahead as though it has done nothing wrong. I urge the Minister to work with colleagues in the Ministry of Justice to move towards overturning, quickly and fairly, the convictions of the sub-postmasters affected by Horizon.

Serious questions need to be answered about the relationship between the company and the Government. The Government have been content to parrot the Post Office’s line throughout the process, claiming that the December settlement was the end of the matter. Nothing could be further from the truth for the people who are still fighting for justice.

[Mrs Hodgson]

My hon. Friend, who chairs the all-party parliamentary group on post offices and has long been an advocate on this issue, is making a powerful case. Does she agree that, although the scandal is outrageous and should never have happened, the Government and Select Committee investigations need to follow the money? People lost their livelihoods to pay that money back, so where did it go? Where was the shortfall? Somewhere, there are bulks of money that obviously went to the Post Office, which should use it to pay the legal fees as part of the compensation.

[Gill Furniss]

My hon. Friend makes a key point. People have paid money, so where is it? That must be at the heart of any investigation.

Unfortunately, fundamental corporate change within the Post Office seems a long way off, given the close relationship between both current and previous Post Office officials and the Government. The Post Office is being allowed to mark its own homework, meaning that a culture of denial is likely to persist. Could the Minister explain why Paula Vennells, the former chief executive of the Post Office, whom Judge Fraser noted was practising

“the 21st-century equivalent of maintaining the earth is flat”,

serves in the Cabinet Office?

The management and governance of the Post Office were severely criticised by the judges, so I raised the issue with the previous Minister. Will the new Minister call for a full review of the governance and management and of the relationship between the two? Furthermore, will he look closely at the way in which the National Federation of Sub-Postmasters, which is fully paid and resourced by the Post Office, has acted throughout the affair?

It is important that the taxpayer is not left to foot the bill for mistakes made by management. In December 2019, BEIS paid the Post Office £50 million as a network subsidy payment to cover the operating costs for the network. Will the Minister assure us that not a penny of that public money will be used to fund the December 2019 settlement or any future litigation?

The consistent failings of the Post Office, spanning more than two decades, have caused immeasurable damage to hundreds of lives. Only now is the full picture beginning to emerge. I welcome the commitment from the Prime Minister for a full public inquiry into the issue. I have already written to ask him to confirm that that is the case, and to give me timescales. Unsurprisingly, I have not received a letter back to that effect.

The convictions we have discussed today, however, must be dealt with as a matter of urgency. The Post Office and the Government must wake up and use every influence to ensure that the seriousness of the situation is realised. I hope this debate is one step in helping to move this process along. We must secure an independent, judge-led inquiry to quash the convictions, to pay up what the convicted have lost and, most of all, to clear the names of those hard-working decent people.

Post Office Closures

Debate between Sharon Hodgson and Gill Furniss

Tuesday 25th April 2017 Westminster Hall

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

It is a pleasure to serve under your chairpersonship, Sir Edward. I congratulate the hon. Member for East Worthing and Shoreham (Tim Loughton) on securing this debate. I pay tribute to the Communication Workers Union, which helped us highlight these issues to the public and MPs.

The Post Office is a trusted national brand with a long history. It is instantly recognisable to people across the United Kingdom. It forms part of the everyday fabric of life, offering a wide range of products and services, but it also provides an anchor for communities, decent jobs and, importantly, access to services in rural or urban deprived areas. Instead of making the Post Office fit for purpose for the 21st century, the Government have let that well-loved and trusted institution fall by the wayside and contributed to its managed decline. The Government are intent on privatising our public services. They used to say that they would support a robust Post Office, which former Prime Minister David Cameron promised would be the front office for Government, but they have totally failed on that promise by overseeing a steadfast strategy of cuts to the service that have caused thousands of job losses as well as a decline in the services provided.

The Labour party has made it clear that it would halt further privatisation of the Post Office and instead invest the £80 million of public money that goes into it to ensure the long-term sustainability of branches and services. We will ensure that services are retained and promoted, click and collect facilities are expanded, and banking and financial services, which we know are vital to financially excluded people, are provided.

There were 62 closures and franchising programmes and 500 job losses from the Post Office’s cash handling section in 2016, and more than 2,000 jobs have been lost in total since 2016. On 10 January 2017, it was announced that a further 37 Crown post offices would go under the same franchising scheme, meaning that 300 experienced post office staff and some 127 financial specialist roles will be cut across the network.

Crown post offices typically are directly owned and run by the Post Office. They have directly employed staff and they are often located on prominent high streets. Although there are only 286 Crown branches, they bring in a significant amount—between 10% and 20%—of the Post Office’s overall revenue. Privatising Crown post offices and transferring them into shops such as WH Smith hugely compromises the services provided, causing overall consumer satisfaction to fall, longer waiting and servicing times and poorer access for disabled customers. There are 10% fewer counters per branch in WH Smith branches than in Crown post offices, and 17% fewer foreign currency and business banking positions. At least 30 postmasters have retail businesses in a Bargain Booze franchise.

Not all franchises have worse provision than before, but the overall trend is saddening. Recent independent research for the Government showed that the Post Office continues to deliver more than £4 billion in social value each year to people and businesses throughout the UK.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

My hon. Friend highlights research that proves that the service deteriorates when post offices move into WH Smith branches. When we add the fact that 40% of closures are in the most deprived urban communities, we can see that the most disadvantaged people in this country are in dire straits when it comes to having access to a good post office.

[Gill Furniss]

I completely agree. It is saddening that people in deprived areas get further and further away from accessing the financial services that are necessary to them.

The privatisation of Royal Mail was, quite simply, the transfer of large sums of public money to the already well-off. Since that privatisation, the Government have promised a transformative vision for the Post Office as

“a genuine Front Office for Government”,

and a significant expansion in its banking services, but neither of those promises have borne fruit. Post Office revenues from Government services have fallen by some 40%, and its income from financial services has risen by only 2%—it has not even kept up with inflation. The Government talk about cost-cutting measures, but £3.3 million was spent on refurbishing branches that were then franchised in 2016, at an average cost of £100,000 per branch.

I was pleased that the Government initiated a consultation about the Post Office last December. At that time, the CWU delivered 75,000 postcards signed by members of the public calling for the Post Office—the “People’s Post”—to be saved. Only weeks later, before a consultation response had even been produced, the Post Office announced 37 more Crown post office closures. In fact, nearly five months later, we still await the Government’s response.

The Government’s track record shows that they have been happy to cut public funding at any cost. They have shied away from communicating with the people affected. The Government’s response to the consultation that closed on 21 December has been delayed. Will the Minister tell us when she planned to publish that response? Why have financial services been cut instead of a promoted? Why have we not looked at the example of a Banque Postale in France, which has successfully provided income for the Government and, crucially, financial services for those who need them most? What contingency plans are there for franchises that are coming up for renewal and new franchises? The Association of Convenience Stores has major problems with its members who, due to the hike in business rates, may no longer wish to provide franchise services.