Lord Sikka (Lab)

My Lords, I thank the noble Lord, Lord Beamish, for securing this debate, and I congratulate the noble Lord, Lord Barber of Ainsdale, and the noble Baroness, Lady Elliott of Whitburn Bay, on their wonderful speeches. I look forward to working with them. The survivors of the Post Office scandal have already suffered enough, and the slowness and adversarial nature of the compensation schemes are simply adding another layer to the cruelty they have already suffered. I have a number of questions for the Minister. Can she explain why some claims are being minimised to as little as 5% when they have been fully prepared by financial assessors? Why are the claimants being asked repeatedly for more expert medical assessments? Why should Horizon shortfall scheme applicants have to wait for their first offer before qualifying for any legal help? Why is 92 year-old Betty Brown still waiting for compensation after the Minister, Gareth Thomas, pledged that he would find a solution six weeks ago? We are seeing scandals within scandals. There is the tragic case of Mrs Gowri Jayakanthan, who I met last December here at a seminar organised in the House. In 2005, under pressure from the Post Office, her husband committed suicide. No wrongdoing was subsequently established. In summer 2020, Mrs Jayakanthan applied for compensation under the Horizon shortfall scheme. In November 2023, her application was refused because the company through which her husband contracted for his post office had gone into liquidation, and in the Post Office’s view her losses did not fall within the terms of that scheme. I urge the Minister to meet Mrs Jayakanthan and examine that case in detail, because justice must be seen to be done. As has been mentioned, the cost of compensation must not fall solely on the public purse. What claims have been made against the directors’ and officers’ insurance taken out by the Post Office? Then there are questions about Fujitsu. It played an active part in the prosecution of innocent postmasters and perverted the course of justice, but it has not returned even a penny of the fees that it collected over the years from the Post Office. Even worse, the company is currently bidding for a new £370 million government contract and is confident that it will be able to renew its contract with HMRC, which was worth £240 million when last signed in 2020. Why does Fujitsu continue to be indulged and why, despite massive evidence, has it not been prosecuted for perverting the course of justice? Why has it not been forced to make any contribution? As has been said, it should really bear at least 50% of all the compensation that is to be paid. Have the Government had any conversations with Fujitsu about funding Lost Chances? That is a charity set up to assist children whose parents were impacted by the Post Office scandal. From a September 2024 report prepared by Kroll Associates, we know that Horizon’s predecessor, the Capture system, which operated from 1992 to 1999, was also flawed, and the Government are committed to redressing affected postmasters. The point here is that Ernst & Young was the external auditor of the Post Office from 1986 to 2018—the entire period of the Capture and Horizon scandals. Publicly available evidence shows that the firm knew the flaws. It could not have carried out effective evaluation of internal controls and satisfied itself that the Post Office kept proper accounting records, or that its directors were able to prepare true and fair statutory financial statements. Auditors did not qualify the Post Office accounts, which did not contain any provisions for contingent liabilities arising from wrongful prosecutions, which are now falling on the public purse. On 11 February 2025, in reply to a call from the noble Lord, Lord Arbuthnot, for an inquiry into the conduct of Ernst & Young, the noble Baroness, Lady Gustafsson, told the House “I look forward to ultimately hearing the outcome from the FRC”,—[Official Report, 11/2/25; col. 1105.] implying that the regulator is looking at it. Can the Minister tell the House whether the Government have formally asked the Financial Reporting Council to investigate accountants involved with the Post Office? When was that request made? What is the scope of that request? Ernst & Young was the auditor for the duration of the Capture and Horizon scandals; therefore, all those audits need to be re-examined by an inquiry. Have the Government asked the FRC to look at the conduct of Deloitte and PricewaterhouseCoopers as well? PwC succeeded Ernst & Young. I will now ask some questions about the 61 or more prosecutions of postmasters by the DWP for alleged frauds, none of which have been quashed. These prosecutions took place mostly between 2000 and 2006. The Government’s position is that these were not connected with the failings of the Horizon system. Well, they certainly took place when there was a conspiracy of silence and cover-up by the Post Office, the state, and government officials. To accuse someone of fraud there is a presupposition that the underlying accounting records are 100% correct. We know that Horizon, Capture and the manual accounting systems used before them were flawed. We know that sub-postmasters were given minimal accounting training. So, what did the DWP use as a benchmark to say that somebody committed fraud? How did it know that that benchmark was reliable? I have not seen any evidence to support that. The cases were handled by DWP solicitors, who would then instruct counsel to represent the DWP at court. Too many sub-postmasters, facing the full might of the state without any legal aid, were advised to plead guilty to a fraud they insist they never committed. Sadly, many have since passed away and their families have long sought to clear their name. Since the date of those DWP convictions, court transcripts and bundles of evidence relating to those convictions have been destroyed. The DWP has been unable to provide any court transcript to back up its insistence that its position was correct, so how sound could these convictions have been? We have to remember that before the 2019 High Court case of Alan Bates and Others v Post Office Ltd, the authorities insisted that the convictions were sound. The rest, as they say, is history. We need an independent inquiry. I pursued this with the Minister on 24 July. She replied: “On the individuals and the question of whether there should be an independent inquiry, we believe that the best way to deal with this issue now is through the current arrangements being set up, rather than by having another third party involved. I am sure that all these matters will be taken into account in the eventual recommendations”.—[Official Report, 24/7/25; col. 505.] The problem here is that Sir Wyn Williams did not consider the DWP prosecution of postmasters part of his remit. I am sure the Minister is committed to securing justice for all, and I encourage her to revisit this issue and commission an inquiry. We can only win justice, and that is highly desirable.