Review ordered into another Post Office IT system amid claims of more wrongful convictions
The government has agreed to have an independent IT expert review of a Post Office software system predating Horizon, amid claims dozens more sub-postmasters may have been wrongly convicted.
The Capture software was rolled out across branches in the 1990s, years before the notorious Horizon system was introduced.
Post Office minister Kevin Hollinrake has met with a former sub-postmaster and a lawyer representing 35 people who believe they were wrongly accused of stealing.
It was agreed between MPs and the Post Office minister that an independent IT expert would assess evidence claiming to “prove” Capture software was prone to glitches.
The Capture IT system
Steve Marston, 68, believes he was wrongly convicted of theft and false accounting after errors caused by Capture accounting software.
Auditors found shortfalls of £79,000 at his branch in Greater Manchester in 1998. He subsequently pleaded guilty to theft and false accounting.
A predecessor to Horizon, the Capture software was developed by the Post Office and rolled out from 1992.
‘Extremely happy’
Mr Marston, representing numerous others claiming to be victims, met with Post Office Minister Kevin Hollinrake in Central London.
Postal services minister Kevin Hollinrake
He tearfully told Sky News after the meeting that he was “overwhelmed” and “extremely happy” with the way the meeting went.
He presented a copy of the original Capture software, also shown to Sky News, which Mr Marston describes as “definitive proof” of wrongful convictions.
Campaigners discovered floppy disks with the software on them, dating back to the 90s.
Mr Marston says they show that errors in the system could generate false shortfalls in accounts, and believes Capture evidence was used in his prosecution.
Steve Marston
A ‘significant meeting’
Neil Hudgell, who is representing 35 former sub-postmasters who used Capture, said it was a “significant meeting” with the Post Office minister.
“What we are going to do now, with the consent of the government and agreement of the Department for Business and Trade,” he said, “is run that past an independent person to stand up what we say is the case.
“It is a very similar pattern of IT glitches that predate the Horizon system by a number of years.”
Former sub-postmasters say that it appears errors occurred when upgrades were made to the software in the 90s.
Other factors such as power cuts are also thought to be another possible reason for faults.
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‘I was forced to sell my family home’
Steve Lewis lost his job in 2000, after raising concerns about shortfalls and Capture software glitches.
“I’ve always been looked on as being the man who robbed the post office,” he said. “I lost my post office, the commercial buildings that I had moved my office to, and was forced to sell my family home.”
Mr Lewis claims he was warned “not to be a troublemaker” and told the issues were only happening to him.
It wasn’t until he watched the ITV drama Mr Bates Vs The Post Office that he “realised” similarities between Horizon victims and himself such as “unexplained losses”.
Read more:
More than £1m claimed as ‘profit’ may have come from victims
Post Office hero Bates had seemingly been preparing for this day
Alan Bates (centre) speaking outside the High Court in 2019 and Toby Jones as Alan Bates in the ITV series
‘Mirror image of what Post Office did with Horizon’
Documents seen by Sky News also show that the Post Office knew Capture was prone to glitches which could cause accounting issues.
In January the government ordered the Post Office to investigate the claims related to Capture.
Labour MP Kevan Jones has taken up the cause and describes one case as being “a mirror image” of what “the Post Office did with Horizon victims”.
He continued: “Added to that, we’ve now got the original computer floppy disks where I think it proves that it does throw up shortfalls.
“I think that’s quite a compelling case for these cases to be looked at again and compensation awarded.”
‘We continue to investigate’
A Post Office spokesperson said: “We are in contact with Steve Marston and other past users of Capture and are grateful to them for all the information they have so far shared with us.
“We continue to actively investigate a number of lines of inquiry relating to Capture and throughout this we have regularly kept the Department for Business and Trade and Kevan Jones MP up to date with our findings.
“We have now shared a recommendation with the Department about what should happen next and hope to provide further information with past users of Capture as soon as we’re able to.”
A Department for Business and Trade spokesperson said: “As soon as these accusations came to light, we asked the Post Office to investigate the Capture system.
“We are now reviewing all the materials provided to us, including those from postmasters and Post Office, and we will set out next steps shortly.”
The acting chair of the Federal Deposit Insurance Corporation (FDIC), the regulatory body overseeing banks in the US, is reportedly considering guidance for tokenized deposit insurance and plans to launch an application process for stablecoins by year’s end.
Acting FDIC Chair Travis Hill, who has made bullish statements about tokenization in the past, told the Federal Reserve Bank of Philadelphia’s Fintech Conference on Thursday that the regulator will eventually release guidance around tokenized deposit insurance, according to reports.
The FDIC protects depositors in the event of a bank failure and insures money in accounts at banks that are insured by the regulator.
“My view for a long time has been that a deposit is a deposit. Moving a deposit from a traditional-finance world to a blockchain or distributed-ledger world shouldn’t change the legal nature of it,” Hill said, as reported by Bloomberg.
Strong interest in tokenization
Regulators and Wall Street have shown serious interest in the real-world asset (RWA) tokenization sector this year.
Excluding stablecoins, the total value of tokenized real-world assets surpassed $24 billion in the first half of the year, with private credit and US Treasurys making up the bulk of the market, according to a report by RedStone.
BlackRock, the world’s largest asset manager, is one of the most prominent players in the space and launched a tokenized money market fund called BUIDL in 2024.
Stablecoin application regime by the end of the year
At the same time, Hill reportedly announced the agency is also working on a regime for stablecoin issuance and expects to issue a proposal for an application process by the end of 2025 as part of its duties in crafting rules under the GENIUS Act, according to Law360.
Related: Tokenization demand is no longer tied to Bitcoin: Galaxy executive
He said it’s still too early to know how many institutions will be interested, but the FDIC staff is working on the standards around capital requirements, reserve requirements and risk management for FDIC-regulated stablecoin issuers.
Stablecoins have also been a high-growth area, with banks worldwide exploring this technology. The market capitalization of stablecoins is approximately $305 billion as of Friday, according to blockchain analytics platform DefiLlama.
Magazine: Can Robinhood or Kraken’s tokenized stocks ever be truly decentralized?
Sir Keir Starmer and Rachel Reeves have scrapped plans to break their manifesto pledge and raise income tax rates in a massive U-turn less than two weeks from the budget.
The decision, first reported in the Financial Times, comes after a bruising few days which has brought about a change of heart in Downing Street.
Read more: How No 10 plunged itself into crisis
I understand Downing Street has backed down amid fears about the backlash from disgruntled MPs and voters.
The Treasury and Number 10 declined to comment.
The decision is a massive about-turn. In a news conference last week, the chancellor appeared to pave the way for manifesto-breaking tax rises in the budget on 26 November.
She spoke of difficult choices and insisted she could neither increase borrowing nor cut spending in order to stabilise the economy, telling the public “everyone has to play their part”.
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‘Aren’t you making a mockery of voters?’
The decision to backtrack was communicated to the Office for Budget Responsibility on Wednesday in a submission of “major measures”, according to the Financial Times.
The chancellor will now have to fill an estimated £30bn black hole with a series of narrower tax-raising measures and is also expected to freeze income tax thresholds for another two years beyond 2028, which should raise about £8bn.
Tory shadow business secretary Andrew Griffith said: “We’ve had the longest ever run-up to a budget, damaging the economy with uncertainty, and yet – with just days to go – it is clear there is chaos in No 10 and No 11.”
How did we get here?
For weeks, the government has been working up options to break the manifesto pledge not to raise income tax, national insurance or VAT on working people.
I was told only this week the option being worked up was to do a combination of tax rises and action on the two-child benefit cap in order for the prime minister to be able to argue that in breaking his manifesto pledges, he is trying his hardest to protect the poorest in society and those “working people” he has spoken of so endlessly.
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Ed Conway on the chancellor’s options
But days ago, officials and ministers were working on a proposal to lift the basic rate of income tax – perhaps by 2p – and then simultaneously cut national insurance contributions for those on the basic rate of income tax (those who earn up to £50,000 a year).
That way the chancellor can raise several billion in tax from those with the “broadest shoulders” – higher-rate taxpayers and pensioners or landlords, while also trying to protect “working people” earning salaries under £50,000 a year.
The chancellor was also going to take action on the two-child benefit cap in response to growing demand from the party to take action on child poverty. It is unclear whether those plans will now be shelved given the U-turn on income tax.
A rough week for the PM
The change of plan comes after the prime minister found himself engulfed in a leadership crisis after his allies warned rivals that he would fight any attempted post-budget coup.
It triggered a briefing war between Wes Streeting and anonymous Starmer allies attacking the health secretary as the chief traitor.
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Wes Streeting: Faithful or traitor? Beth Rigby’s take
Read more: Is Starmer ‘in office but not in power’?
The prime minister has since apologised to Mr Streeting, who I am told does not want to press for sackings in No 10 in the wake of the briefings against him.
But the saga has further damaged Sir Keir and increased concerns among MPs about his suitability to lead Labour into the next general election.
Insiders clearly concluded that the ill mood in the party, coupled with the recent hits to the PM’s political capital, makes manifesto-breaking tax rises simply too risky right now.
But it also adds to a sense of chaos, given the chancellor publicly pitch-rolled tax rises in last week’s news conference.
The home secretary is set to unveil sweeping reforms to tackle illegal immigration, as she considers potential changes to human rights law.
Shabana Mahmood will announce on Monday a series of measures to make it easier to remove and deport illegal migrants, and reduce the “pull factors” that make the UK attractive to asylum seekers.
The Home Office said they would be the “most sweeping reforms to tackle illegal migration in modern times”.
She is said to believe that “excessive generosity and ease of remaining” in the UK, along with systemic barriers, has made deportations extremely difficult, The Times reported.
It is understood that many of the changes set to be proposed by the home secretary will be modelled on the Danish system, under which 95% of failed asylum seekers are deported.
Denmark has tighter rules on family reunions, and restricts some refugees to a temporary stay.
Read more: Could Danish model save Labour’s bacon?
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UK considers copying Denmark’s immigration system
Ms Mahmood is also mulling reforms to the European Convention on Human Rights and human rights law to “end the abuse of the system that leads to unjustified claims to delay or stop deportations”, a Home Office source said.
The overhaul of modern slavery laws will require migrants to make a claim that they have been a victim as soon as they arrive in the UK, rather than allowing them to raise it unexpectedly later on, which has resulted in delayed deportations, The Telegraph reported.
The number of offences qualifying foreign criminals for automatic removal is also set to be increased, the paper said.
And judges are expected to be required to prioritise public safety over claims from migrants that deporting them would breach their family rights or put them at risk of “inhuman” treatment if they were returned to their home country.
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Sky News witnesses people smuggling operation in Dunkirk
Deportations are up – but so are boat crossings
Ahead of next week’s announcements, the Home Office released new figures showing 48,560 people have been removed from the UK since Labour came to power.
The figure, which includes failed asylum seekers, foreign criminals and others with no right to be in the UK, is a 23% increase compared to the 16 months before last year’s election.
Read more politics news:
Under-fire Starmer aide won’t quit
Plans to raise income tax in budget ditched
Ms Mahmood said: “We’ve ramped up enforcement, deported foreign criminals from our streets, and saved taxpayers millions.
However, small boat crossings continue to rise – 39,075 people have made the journey so far this year, according to Home Office figures.
That is an increase of 19% on the same point in 2024 and up 43% on 2023, but remains 5% lower than the equivalent point in 2022, which remains the peak year for crossings.
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