Wednesday 12 October 2022
Business, Energy and Industrial Strategy
Post Office Historical Shortfall Scheme: Late Applicants
The Post Office Horizon IT scandal, which began over 20 years ago, has had a devastating impact on the lives of many postmasters. Starting in the late 1990s, the Post Office began installing Horizon accounting software, but faults in the software led to shortfalls in branches’ accounts. The Post Office demanded sub-postmasters cover the shortfalls, and in many cases wrongfully prosecuted them between 1999 and 2015 for false accounting or theft.
In May 2020, the Post Office launched the historical shortfall scheme, and applications were received over the following months of that year. The scheme was designed to compensate postmasters, without convictions, and outside of those who brought the group litigation order, for the financial shortfalls that they had to make up and the losses accrued as a result. The Government have supported the Post Office in wanting to put right these historical wrongs and are therefore providing financial support to ensure that those affected receive the compensation they deserve.
I am pleased to update the House on the positive progress that has been made to deliver compensation for those currently in the scheme. Since the Government’s last update to Parliament, a further 388 further postmasters have received a compensation offer. As of 30 September, in total 82%—1938—of eligible claimants have now received an offer, meaning that £52 million has now been offered. To date, 1,628 claimants have accepted their offers, and compensation payments totalling over £33 million have been made to them, helping to address the historical wrongs suffered by these claimants. It is the stated target of the Post Office to issue 95% of offers to existing claimants by the end of the calendar year. The Government’s ambition remains for the Post Office to have issued 100% of offers in this time.
In addition to those claimants who are currently part of the historical shortfall scheme, the Government are aware that there are individuals who, for a variety of reasons, were unable to apply for the scheme while it was open. Today, I can announce that the Government will extend their financial support to the Post Office so that it can accept eligible late applications into the historical shortfall scheme.
The Post Office will be writing out to all individuals who have contacted it about making a late application to the historical shortfall scheme to inform them of this.
The Government encourage any other individuals who may have been eligible to claim compensation under the historical shortfall scheme to contact the Post Office to discuss their position. Further details will be set out on the Post Office website.
These late claims will be managed through existing historical shortfall scheme processes, including an assessment by the independent advisory panel, to ensure claims are considered consistently with those already submitted.
Update on Recent Bank of England Asset Purchases
The Bank of England decided to carry out temporary purchases of long-dated UK Government bonds (gilts) from 28 September through the asset purchase facility (APF) on whatever scale is necessary to restore orderly conditions. These interventions will be strictly time limited, with auctions taking place until 14 October.
I have therefore authorised an increase in the total size of the APF by £100 billion. This will bring the maximum total size of the APF from £866 to £966 billion.
On 11 October, the Bank decided that that it will widen the scope of its daily gilt purchase operations to also include purchases of index-linked gilts. This was designed to act as a further backstop to restore orderly market conditions by temporarily absorbing selling of index-linked gilts in excess of market intermediation capacity, the purchasing of index-linked gilts was already covered by the existing indemnity for the APF.
The amendments to the APF that could affect the allocation of credit and pose risks to the Exchequer have been discussed with Treasury officials. The risk control framework for the APF previously agreed with the Treasury will remain in place, and HM Treasury will keep monitoring risks to public funds from the facility through regular risk oversight meetings and enhanced information sharing with the Bank.
The Government will continue to indemnify the Bank and the APF from any losses arising out of, or in connection with, the facility. If the liability is realised, provision for any payment will be sought through the normal supply procedure.
A full departmental minute has been laid in the House of Commons providing more detail on this contingent liability.
Foreign, Commonwealth and Development Office
Contingent Liability Notification: Ukraine Guarantees
Today, I have laid a departmental minute that describes two liabilities that the Foreign, Commonwealth and Development Office is undertaking to support the economic stability of Ukraine following Russia’s invasion in February 2022.
It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the statement, except in cases of special urgency.
This departmental minute sets out details of two new liabilities undertaken by the Foreign, Commonwealth and Development Office. The first is a guarantee to support lending by the European Bank for Reconstruction and Development to Ukrenergo, Ukraine’s state-owned and sole electricity transmission system operator. This guarantee has an expected maximum exposure of €54 million— £47 million. The second is a guarantee to support lending by the World Bank to the Government of Ukraine directly. This guarantee has an expected maximum exposure of €527 million—£460 million. The guarantees will be denominated in the currency Ukraine decides to borrow in. Due to the urgency of the situation in Ukraine and unexpected disruption to Parliament’s schedule in September, we notified the Public Accounts Committee instead of Parliament before signing the first of these two guarantees. We are now presenting a written ministerial statement and departmental minute to the House for information.
The FCDO is guaranteeing both principal and interest repayments on the EBRD and World Bank loans. A UK pay-out would be triggered if either Ukrenergo or the Government of Ukraine miss a repayment by 180 days.
The World Bank and EBRD are both well respected multilateral development banks that benefit from preferred creditor status. The UK is an active shareholder at both institutions.
The exact length of the liabilities is linked to the terms of the agreed financing between the World Bank, EBRD and the Government of Ukraine. The EBRD guarantee has a maturity of five years. The World Bank guarantee has a maturity of 18 years.
HM Treasury approved both of these guarantees and the expedited notification process. Chairs of the relevant parliamentary Committees did not raise any objections. If any Member of the House has questions, do get in touch.
A copy of the departmental minute has been placed in the Library.
Treaty on the Non-Proliferation of Nuclear Weapons Review Conference
The House may welcome an update regarding the 10th treaty on the non-proliferation of nuclear weapons review conference, which was held at the United Nations in New York from 1 to 26 August. The conference reviewed progress and sought to reach consensus on future actions under the treaty’s three pillars: disarmament, non-proliferation and peaceful uses of nuclear technology. While the conference was unable to achieve its overall goal of a consensus outcome document owing to Russian actions, it advanced discussion on each of the treaty’s three pillars, and agreed to establish a working group on further strengthening the review process of the treaty, open to all states parties.
We were deeply disappointed that, despite the progress made in many areas, Russia blocked the adoption of a consensus outcome document over references to Ukraine, in order to defend its unprovoked, illegal war on Ukraine. Russia’s betrayal of the security assurances it gave through the Budapest memorandum when Ukraine joined the treaty, and its responsibility for the unfolding situation at the Zaporizhzhia nuclear power plant, were both referenced obliquely in the President’s consolidated text. Russia’s aggression poses grave challenges to the international nuclear security architecture. The UK, and many other states, raised these concerns consistently throughout the conference, and the UK issued a joint statement with 56 countries explaining how Russia’s aggression and behaviour in Ukraine impacted the treaty.
The UK played an active role both in the preparation for the conference and at the conference itself. As part of its preparations, the UK published a revised national report setting out the action being taken to support the treaty and fulfil the UK’s commitments across all three pillars of the treaty. At the start of the conference, former Minister of State at the Foreign, Commonwealth and Development Office, Graham Stuart MP, set out the UK’s approach and progress against the treaty’s objectives, and led a side event on the UK’s national report. The UK’s positive agenda for the conference focused on our track record on disarmament, including reductions in stockpiles and delivery systems and thought-leadership on risk reduction, verification and transparency. The UK also highlighted our leadership in establishing the “Sustained Dialogue on Peaceful Uses”, a new effort to increase access to the benefits of peaceful nuclear technologies for development, including through meeting the UN sustainable development goals. We engaged constructively in the negotiations throughout, seeking to reach agreement and to make progress across all three pillars of the treaty.
The lack of a consensus outcome neither undermines the treaty nor changes states’ obligations. Of the nine previous review conferences, which have taken place almost every five years since the treaty came into force in 1970, only three have adopted a comprehensive final document by consensus. Throughout, the treaty has remained vitally important for the UK and for the international community as a whole, playing an unparalleled role in curtailing the nuclear arms race and keeping the world safe. The action plan adopted at the 2010 conference remains valid as a comprehensive road map for all states party to the treaty to follow to take forward action on disarmament, non-proliferation and peaceful use of nuclear technology, as do the consensus outcomes from 2000 and 1995. The UK will continue to work closely with our partners to strengthen the treaty and make progress against this roadmap, while also building on the successes of this conference.
In particular, we look forward to contributing to the working group on strengthening the review process and we will continue to work with Norway on our initiative to clarify and apply the principle of irreversibility. We will also be launching, with the United States and 30 other partners who have joined so far, the sustained dialogue on expanding access to the peaceful uses of nuclear technologies.
The UK’s commitment to the treaty and to fulfilling our obligations, including under article VI on disarmament, remains undiminished. As a nuclear weapon state that takes our responsibilities seriously and an original party to the treaty, the UK remains committed to creating the conditions for a world without nuclear weapons. We have approximately halved our nuclear stockpile since the cold war peak and we continue to drive research and discussion on risk reduction, verification and transparency. We remain committed to working internationally to reduce the risk of nuclear conflict and enhance mutual trust and security. The UK will continue to play its part in bringing about a safer world for all and achieving the long-term goal of a world without nuclear weapons.
The treaty is and will remain the fundamental cornerstone of the nuclear non-proliferation regime and is the irreplaceable foundation and framework for our common efforts on advancing nuclear disarmament and the peaceful uses of nuclear technology. The conference decided to hold the 11th review conference in 2026 in New York, with preparatory committees to take place in 2023 in Vienna, 2024 in Geneva and 2025 in New York. The UK will continue to work alongside the international community at all of these meetings to strengthen the regime and to promote international stability, peace and security and will keep Parliament updated.
Health and Social Care
Covid-19 Vaccine Supply
It is normal practice when a Government Department proposes to make a gift of a value exceeding £300,000, for the Department concerned to present to the House of Commons a minute giving particulars of the gift and explaining the circumstances; and to refrain from making the gift until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.
I am writing to inform you that while Parliament was in recess the Department of Health and Social Care has started to donate approximately 30,000 doses of surplus covid vaccines to Barbados and Antigua & Barbuda. The combined value of these donations exceeds £300,000 and the donations will be accounted for as gifts since both countries are not eligible for official development assistance (ODA).
I want to take this opportunity to explain that we proceeded with these donations as a matter of urgency. The doses were surplus to the requirements of our domestic vaccination programme and were requested urgently by the recipient countries, including to vaccinate children before schools returned during September. Donating these doses with maximum available shelf life meant that they could be used rather than expiring and having to be destroyed.
The Permanent Secretary of the Department of Health and Social Care has written to the Chairs of the Public Accounts Committee and the Health and Social Care Committee to notify them of these gifts. This statement provides retrospective notification to the House of Commons.
HM Treasury has approved the decision.
Criminal Legal Aid
Since I became Lord Chancellor, I have been keen to resolve the dispute with the Criminal Bar Association, in order get the criminal justice system working again. To that end, my officials and I have been holding constructive discussions on a package of proposals with the Bar Council and the CBA. This package was agreed as part of our overall response to the criminal legal aid independent review consultation.
I am pleased to announce that the CBA membership has now voted in favour of my offer on criminal legal aid, and has agreed to come back to work.
As a result, my Department laid a statutory instrument on 11 October which will mean the recent fee uplift for new cases claimable by litigators and advocates will also now apply to the vast majority of existing cases in the backlog where the main hearing takes place after the commencement of the instrument on 31 October 2022. This equates to an additional investment of £28 million in the fee scheme for advocates and £14 million in the fee scheme for litigators over the spending review period.
My Department will also make an additional £3 million of funding available for case preparation, such as written work and special preparation, as well as a further £4 million for defence barristers involved in pre-recorded cross-examinations, which are used to reduce the trauma of a trial for vulnerable victims and witnesses by early 2023.
The Ministry of Justice is proposing a further £5 million uplift per year for fees in the youth court, from the 2024-25 financial year, which is expected to particularly benefit both solicitors and some junior barristers.
A new criminal legal aid advisory board on criminal legal aid reform will also be created and hold its first meeting in October. This board will discuss the operation of the criminal legal aid system and make recommendations to the Lord Chancellor.
In addition to this, the Government will respond to the remaining elements of the above consultation by the end of November, including further reforms directed at solicitors. As was made clear by Lord Bellamy in his review, the profession of criminal legal aid solicitors requires immediate attention, and I am keen to work to provide further reforms and support.
I look forward to working constructively with criminal legal aid practitioners on criminal justice issues, including working to drive down court backlogs and resolve cases sooner.
After all, we share the same aim: putting the criminal justice system on a more sustainable footing for the future, to support victims and everyone who relies on our justice system.