Post Office boss admits money from Horizon victims may have gone into executive pay
Money wrongfully taken from victims of the Horizon scandal may have gone into the pay of Post Office executives, MPs have been told.
Nick Read, chief executive of the Post Office, said the company has still “not got to the bottom of” what happened to the cash paid by sub-postmasters and mistresses in a bid to cover the false financial black holes created by the Horizon software.
He said it has been investigated two or three times by external auditors, but it is something “we have struggled to uncover” due to various issues, including a low quality of data.
As it happened:
MPs quiz Fujitsu – after admission of ‘bugs and errors’
However, he admitted it is a possibility the money taken from branch managers could have been part of “hefty numeration packages for executives”.
“It’s possible, absolutely it’s possible,” he said.
Mr Read said the information has been provided to the statutory inquiry into the Horizon scandal, which will look into the question of where the money went.
He appeared before MPs on the business committee alongside Paul Patterson, director of Europe’s Fujitsu Services Limited.
It follows renewed outrage over the issue after the airing of ITV drama Mr Bates Vs the Post Office, which documented the postmasters’ 20-year fight for justice.
Between 1999 and 2015, more than 700 Post Office branch managers were handed criminal convictions for theft and false accounting after discrepancies in Fujitsu’s Horizon system made it appear as though money was missing at their stores.
Some went to jail, many were financially ruined and the scandal has been linked to at least four suicides.
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Fujitsu: ‘We did have bugs in the system’
Firm ‘involved from start’ has compensation ‘obligation’
Mr Patterson told MPs he was sorry on behalf of his company – as he accepted it would have to pay into the redress scheme.
“Fujitsu would like to apologise for our part in this appalling miscarriage of justice,” Mr Patterson said.
“We were involved from the very start.
“We did have bugs and errors in the system and we did help the Post Office in their prosecutions of the sub-postmasters and for that we are truly sorry.”
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He said the company gave evidence which was used to send innocent people to prison, and while he did not know exactly when bosses first knew of issues related to Horizon, it had bugs at a “very early stage”.
He went on to say that the company has a “moral obligation” to contribute to the compensation scheme for those whose lives were ruined by the scandal.
He said that he has spoken to the company’s bosses in Japan and it expects to have a conversation with the government about how much it should pay.
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Investigators ‘offered bonuses’ to prosecute
Who are the key figures in the scandal?
The government has set aside £1 billion for Horizon victims and previously indicated it will pursue Fujitsu for the costs if the inquiry finds it is to blame.
Mr Patterson, who has been in his current role since 2019, said he did not know why the tech firm didn’t act when it knew there were glitches in the system.
“On a personal level I wish I did and following my employment in 2019, I’ve looked back on those situations for the company and from the evidence I’ve seen, I just don’t know.”
MPs ‘shocked’ by evidence
MPs at times appeared frustrated at the lack of answers from the two executives about who knew what and when.
Mr Read was unable to say when the Post Office knew that remote access to the Horizon software was possible.
The assertion that remote access to the Horizon terminals was impossible was central to the Post Office’s position that there had been no miscarriages of justice in the years it was prosecuting its staff.
It was only in 2017, during High Court proceedings brought by a group of more than 500 sub-postmasters, that bosses admitted it was possible – paving the way for convictions to be quashed.
Business and Trade Committee chairman Liam Byrne said he had been “fairly shocked” by the evidence.
‘The whole thing is madness’
The committee also heard from Alan Bates and other campaigners, who were played by well-known actors in the ITV drama about the scandal
They expressed frustration with the pace of the compensation scheme, saying it was “bogged down” by red tape and bureaucracy.
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The real Mr Bates speaks to MPs
Mr Bates said his own process, for what he called “financial redress”, had been beset by delays.
“I think it was 53 days before they asked three very simple questions,” he explained. “It’s madness, the whole thing is madness.
“And there’s no transparency behind it, which is even more frustrating. We do not know what’s happening to these cases once they disappear in there.”
Wrongfully convicted former sub-postmistress Jo Hamilton said it was “almost like you’re being retried … it just goes on and on and on”.
Business
Chancellor’s Mansion House speech vows to rip up red tape – saying post-financial crash rules went ‘too far’
Chancellor Rachel Reeves has criticised post-financial crash regulation, saying it has “gone too far” – setting a course for cutting red tape in her first speech to Britain’s most important gathering of financiers and business leaders.
Increased rules on lenders that followed the 2008 crisis have had “unintended consequences”, Ms Reeves will say in her Mansion House address to industry and the City of London’s lord mayor.
“The UK has been regulating for risk, but not regulating for growth,” she will say.
It cannot be taken for granted that the UK will remain a global financial centre, she is expected to add.
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It’s anticipated Ms Reeves will on Thursday announce “growth-focused remits” for financial regulators and next year publish the first strategy for financial services growth and competitiveness.
Rachel Reeves
Bank governor to point out ‘consequences’ of Brexit
Also at the Mansion House dinner the governor of the Bank of England Andrew Bailey will say the UK economy is bigger than we think because we’re not measuring it properly.
A new measure to be used by the Office for National Statistics (ONS) – which will include the value of data – will probably be “worth a per cent or two on GDP”. GDP is a key way of tracking economic growth and counts the value of everything produced.
Brexit has reduced the level of goods coming into the UK, Mr Bailey will also say, and the government must be alert to and welcome opportunities to rebuild relations.
Mr Bailey will caveat he takes no position on “Brexit per se” but does have to point out its consequences.
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Bailey: Inflation expected to rise
In what appears to be a reference to the debate around UK immigration policy, Mr Bailey will also say the UK’s ageing population means there are fewer workers, which should be included in the discussion.
The greying labour force “makes the productivity and investment issue all the more important”.
“I will also say this: when we think about broad policy on labour supply, the economic arguments must feature in the debate,” he’s due to add.
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The exact numbers of people at work are unknown in part due to fewer people answering the phone when the ONS call.
Mr Bailey described this as “a substantial problem”.
He will say: “I do struggle to explain when my fellow [central bank] governors ask me why the British are particularly bad at this. The Bank, alongside other users, including the Treasury, continue to engage with the ONS on efforts to tackle these problems and improve the quality of UK labour market data.”
Business
Reeves has welcome support from Bank’s governor as she goes for growth and seeks to woo City
When Gordon Brown delivered his first Mansion House speech as chancellor he caused a stir by doing so in a lounge suit, rather than the white tie and tails demanded by convention.
Some 27 years later Rachel Reeves is the first chancellor who would have not drawn a second glance had they addressed the City establishment in a dress.
As the first woman in the 800-year history of her office, Ms Reeves’s tenure will be littered with reminders of her significance, but few will be as symbolic as a dinner that is a fixture of the financial calendar.
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Her host at Mansion House, asset manager Alastair King, is the 694th man out of 696 Lord Mayors of London. The other guest speaker, Bank of England governor Andrew Bailey, leads an institution that is yet to be entrusted to a woman.
Ms Reeves’s speech indicates she wants to lean away from convention in policy as well as in person.
By committing to tilting financial regulation in favour of growth rather than risk aversion, she is going against the grain of the post-financial crash environment.
“This sector is the crown jewel in our economy,” she will tell her audience – many of whom will have been central players in the 2007-08 collapse.
Sending a message that they will be less tightly bound in future is not natural territory for a Labour chancellor.
Her motivation may be more practical than political. A tax-and-spend budget that hit business harder than forewarned has put her economic program on notice and she badly needs the growth elements to deliver.
Rachel Reeves on budget day. Pic: PA
Her plans to consolidate local authority pension schemes so they might match the investing power of their Canadian and Australian counterparts is part of the same theme.
Infrastructure investment is central to Reeves’s plan and these steps, universally welcomed, could unlock the private sector funding required to make it happen.
Bank governor frank on Brexit and growth
If the jury is out in a business financial community absorbing £25bn in tax rises, she has welcome support from Mr Bailey.
He is expected to deliver some home truths about the economic inheritance in plainer language than central bankers sometimes manage.
Britain’s growth potential, he says, “is not a good story”. He describes the labour market as “running against us” in the face of an ageing population.
With investment levels “particularly weak by G7 standards”, he will thank the chancellor for the pension reforms intended to unlock capital investment.
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Governor warns inflation expected to rise
He is frank about Brexit too, more so than the chancellor has dared.
While studiously offering no view on the central issue, Mr Bailey says leaving the EU had slowed the UK’s potential for growth, and that the government should “welcome opportunities to rebuild relations”.
There is a more coded warning too about the risks of protectionism, which is perhaps more likely with Donald Trump in the White House.
“Amid threats to economic security, let’s please remember the importance of openness,” the Bank governor will say.
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All that is welcome for Ms Reeves.
Already a groundbreaking chancellor, she is aiming for a political and economic legacy that extends beyond her gender and the dress code.
Water company United Utilities has reported hundreds of millions in profit as it seeks to further increase customer bills.
The utility serving seven million customers in the northwest of England recorded £335.7m in underlying operating profits for the first half of this year, up nearly 23% from £271.1m a year ago.
It comes as the firm has requested bills rise 32% to make them among the most expensive in England and Wales.
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The proposed average annual bill would increase to £584 by 2030 from the £443 typical yearly charge in the 2023/2024 financial year. Since April 2023 bills have been upped 6.4% and then 7.9%.
Bills hikes were behind the rise in revenue to more than £1.08bn from £975.4m in 2023.
Other ways of assessing profit were lower than the underlying operating sum. Profit before tax reached £140.6m while after tax profit topped £103.1m for the six months to the end of September 2024, both lower than a year earlier.
Boss’s pay
Bonus and benefits payments worth £1.416m were paid to two executives on top of £1.128m in base pay, according to analysis of company filings done by the Liberal Democrats.
It’s down compared with 2022/2023 when three executives were given £1.6m in base pay and £2.456m in bonuses and benefits.
Read more:
Water giant United Utilities strikes £1.8bn pension deal
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The environment
In a year of record sewage outflows into waterways the company was one of just three firms that met the Environment Agency’s top four-star performance ranking.
United Utilities in July came under investigation by water regulator Ofwat for not meeting its obligation to minimise pollution.
In response the company said at the time: “We understand and share people’s concerns about the health of the environment and the operation of wastewater systems, including combined sewer overflows.”
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