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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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
Vivergo: How US-UK trade deal could bring about collapse of huge renewable energy plant in Hull
The smell of yeast still hangs in the air at the Vivergo plant in Hull but the machines have fallen quiet.
More than 100 lorries usually pass through here each day, carrying 3,000 tonnes of wheat. It is milled, fermented and distilled. The final product is bioethanol, a renewable fuel that is then blended into E10 petrol.
This is a vast operation. It took several years to build, with considerable investment, but it is on the verge of closing down. Management and staff are holding out for a last-minute reprieve from the government but time is running out.
It’s been a turbulent journey. The plant was already being annihilated by US rivals, losing about £3m a month. Vivergo and Ensus, based in Teesside, blamed regulations that enable US companies to earn double subsidies.
They were pushing for regulatory change but then a killer blow: The US-UK trade deal, which allows 1.4 billion litres of American ethanol into the UK tariff-free (down from 19%).
“We’ve effectively given the whole of the UK market to the US producers,” said Ben Hackett, managing director at Vivergo.
“If we were to have the same support that the US industry has, if we could use genetically modified crops, we wouldn’t need that tariff. We would be able to compete. If we had the same energy costs. We wouldn’t need those tariffs.”
The government has the weekend to come up with a plan that could keep the business running. If it fails, Vivergo will begin issuing redundancy notices to its 160 staff.
Ben Hackett
It’s a devastating prospect for workers, many of them live in Hull and are nervous about alternative opportunities in the area.
Mike Walsh, a logistics manager who has been working at the plant for 14 years, said: “It’s not a great place to be at the moment. It’s a very well paid, very high-skilled role and they’ve (Vivergo) given everybody an opportunity in an area that doesn’t pay that well…. The jobs market isn’t as good as what people would like. So it does impact the local economy.”
He called on the government to “help us, save us, give this industry a future”.
His colleague Claire Wood, lead productions engineer, said: “I moved here after a career in oil and gas for 10 years, partly because I want to be part of the transition to renewable fuels. I can see so much potential here and it’s absolutely devastating to know that this place might be closed very, very shortly and that all that potential just goes away.”
Thousands more could be affected. Haulage companies may have to lay off truck drivers and farmers could also suffer a blow.
Vivergo makes bioethanol using wheat. That wheat is bought from farms from Yorkshire and Lincolnshire.
Claire Wood
The National Farmers Union has sounded the alarm, saying: “Biofuels are extremely important for the crops sector, and their domestic demand of up to two million tonnes can be very important to balance supply and demand and to produce up to one million tonnes of animal feed as a by-product.”
Another bioproduct is carbon dioxide. The gas can be captured and used to put the fizz in drinks or injected into packaging to preserve food.
If Vivergo and Ensus were to go, Britain would lose as much as 80% of its output of carbon dioxide. Supplies are already tight across Europe, meaning this decision could compound shortages across a range of sectors, from meat-packing to healthcare.
The industry is calling on the government to help. Vivergo says it needs temporary financial support but that the government must create a regulatory and commercial environment in which it can thrive.
It says rules that award double subsidies to companies that use waste product in their bioethanol must be changed. At present, these rules are being used by US companies that make ethanol from Uldr – a by-product of processing corn. They argue this is not a genuine waste product.
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Another option is to grow the market. Industry leaders are calling on ministers to increase the mandated renewable fuel content in petrol from 10% to 15% and for an expansion into aviation fuels. That would allow British companies to carve out a space.
The government has been locked in talks with the company since June.
It said: “We will continue to take proactive steps to address the long-standing challenges it faces and remain committed to a way forward that protects supply chains, jobs and livelihoods.”
However, the time for talking is almost over.
Mr Hackett said he had no idea how the government would respond but he was firm with his stance, saying: “In times of global uncertainty, losing that energy certainty and supply from the UK is a problem.
“I think what they’re missing out on is the future growth agenda. We’re the foundation on which the green industrial strategy can be built. We make bioethanol that today decarbonises transport. Tomorrow it will decarbonise marine. It will decarbonise aviation.”
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