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Witness Name: Gareth Thomas
Statement No.: WITN11490200
Dated: 9" December 2024
POST OFFICE HORIZON IT INQUIRY
SECOND WITNESS STATEMENT OF GARETH THOMAS MP
I, Gareth Thomas, will say as follows.
INTRODUCTION
1. I am the Labour and Co-operative Member of Parliament for Harrow West and
currently serve as Parliamentary Under-Secretary of State for Services, Small
Business and Exports in the Department for Business and Trade.
2. On 24 September 2024 I provided the Post Office Horizon IT Inquiry (the
"Inquiry") with a witness statement to assist with the matters set out in its Rule
9 request dated 23 July 2024 (WITN11490100). I subsequently gave oral
evidence to the Inquiry on 8 November 2024, as part of the Phase 7 hearings.
3. During my oral evidence, I was asked certain questions by Counsel to the Inquiry
(Sam Stevens) about matters relating to:
(i) I “capping” awards at £50,000 where postmasters reject the £75,000 fixed
sum offer (the “Fixed Sum Offer’) in the Horizon Shortfall Scheme (the
“HSS’);
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(ii) funding not being provided to applicants in the HSS to obtain legal advice
on the HSS Fixed Sum Offer; and
(iii) whether persons whose cautions are deleted pursuant section 5 of the Post
Office (Horizon Offences) Act 2024 (the “Act”) can apply for compensation
under the Horizon Convictions Redress Scheme (the “HCRS’).
4. As my memory of these issues was uncertain I offered to follow up on those
questions in writing, and following the hearing was asked to await a further Rule
9 request before doing so.
5. On 28 November 2024, I received a Rule 9 request from the Inquiry (the “Second
Rule 9 Request’), requesting a witness statement in relation to the above. I
make this second witness statement to assist the Inquiry with the matters raised
in that request. I have prepared it with the support of the Government Legal
Department and counsel. I have depended on others putting documents before
me to help me prepare this statement.
HSS FIXED SUM £50k POLICY
6. During my oral evidence, I was asked questions by Mr Stevens on the approval
I gave to the introduction of the HSS Fixed Sum Awards on 25 July 2024, which
included approving the policy of ‘Capping awards at £50k where postmasters
reject the Fixed Sum and are offered a lower amount, with no option to return to
the Fixed Sum’ (the “£50k Policy”): (Email from Secretary of State DBT to
Minister Thomas and Harry Fallowfield re: Ministerial Submission - Horizon
Shortfall Scheme - Fixed Sum Awards - Official Sensitive (BEIS0000888); Note
from Harry Fallowfield to Minster Thomas and Secretary of State re: For
Decision: Horizon Shortfall Scheme Fixed Sum Awards (BEIS0001228)).
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7. Mr Stevens’s questions and my responses are set out below (INQ00001204 8
November 2024, page 19 line 15 to page 20 line 9):
“Q. Now what were you told about b), capping awards at £50,000, where
postmasters reject the fixed sum and are offered a lower amount?
A. I might need to -- I apologise, Mr Stevens, I might need to write to the
Inquiry about this because we certainly looked at the question of capping
awards at 50k but, ultimately, if I'm remembering rightly, did not — did not
bring that in
Q. I mean, let's just explore it slightly. What it seems on its face is, whether
or not it was brought in, if a postmaster didn't accept the fixed award of
75,000, they went to an assessment, and the assessment was that the
loss was £65,000, on b) it looks like their award would have been capped
at 50,000. Is that your recollection of the policy proposal?
A. As I say, I think I'd just want to check that and write to the Inquiry and
write back to you.”
8. I have now had the opportunity to check and discuss the £50k Policy with relevant
Departmental officials.
Purpose of the £50k Policy
9. The purpose of the £50k Policy has never been to limit awards to a maximum of
£50,000 in circumstances where the Fixed Sum Offer was not accepted by an
applicant. To refer to it as a “cap” was therefore incorrect. Rather, the proposal
was for a £50k floor or “safety net”, meaning that if an applicant rejected the Fixed
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10.
11.
12.
13.
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Sum Offer, they would not be awarded a sum of less than £50,000 — even if their
claim were to be fully assessed at a value less than £50,000.
I therefore agree with Jonathan Reynolds's explanation that this was intended to
be a “security cap... a floor by which you will be aware if you're going through
that process that you don't risk, for instance, getting a sum of redress which is
considerably below the £75k.” (INQ00001205 11 November 2024, page 17, line
19-22)
In the Second Rule 9 Request, I am asked “What, if any, consideration was given
by you or within the Department to implementing a £50,000.00 cap that operated
in the following manner: if an applicant rejected a fixed sum offer of £75,000.00
and had compensation assessed at £65,000.00 under the HSS, the cap would
operate so as to limit their award to £50,000.00?”
To the best of my knowledge, no consideration was given to a “cap” of this type.
I certainly did not consider such a proposal.
Though the submission of 22 July 2024 referred to a “cap”, the proposal - which
the Secretary of State and I approved — was for a £50,000 floor. This is clear
from paragraph 6 of the submission, which explained:
“If the £75k remains available to those who pursue the full claims process, there
is a high risk that many more will choose this option leading to greater costs
and delays. We therefore recommend that claimants who reject the £75k should
not be able to return to it if, upon full assessment of their claim, they are
awarded a lower amount. Instead, we recommend that the award is capped at
£50k (or the value of the offer if it exceeds £50k), to ensure fairness and help
provide Value for Money (VfM) for taxpayers.”
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14.
15.
16.
17.
18.
19.
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It is unfortunate that the language in the submission is imprecise, using the word
“cap” when a “floor” is actually what was being proposed.
In the example given in the question in the Inquiry’s Second Rule 9 Request, the
applicant would (had the £50k Policy been put into effect) have been awarded
£65,000.
In the end, as I alluded to, we did not bring in the £50k Policy. I explain the
reasons below.
On 11 September 2024, my Private Office received an email from a Senior Policy
Advisor in the Department's Post Office Compensation Team (BEIS0001242)
which summarised and attached a ministerial advice/submission dated 11
September 2024: ‘FOR DECISION — HSS FIXED SUM INTERIM PAYMENTS’
(BEIS0001240) (“the September Submission”).
As set out in the September Submission and cover email, it was recommended
that I urgently agree ‘not to offer £50k interim payments to HSS claimants who
do not wish to accept the fixed sum award’ (BEIS0001242; BEIS0001240).
Despite the reference to “£50k interim payments” rather than a “£50k cap” (or
“£50k floor”), I understood this to be a reference to the £50k Policy which I had
approved in July — and that in effect, I was being asked to reverse the decision
to put in place the £50k Policy. Relevant Department officials have since
confirmed to me that this was indeed the purpose of the September Submission.
The recommendation to reverse my approval of the £50k Policy was primarily
based on officials’ understanding of the tax consequences of making £50k
interim payments (coupled with the availability of hardship payments), which they
discovered following my decision to put in place the £50k floor in July 2024. As
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explained in the September Submission, although the Fixed Sum Awards and
top-ups are exempt from tax, HMRC have advised that £50k interim payments
would be taxable.
20. I accepted this advice and, on 16 September 2024, decided to reverse my
decision to put in place the £50k Policy (BEIS0001241).
21. By this time in September 2024, the HSS policy area had been delegated to me
by the Secretary of State. As such, the Secretary of State did not need to make
a decision on the September Submission (BEIS0001241).
22. Asatthe date of this witness statement, there is no £50k Policy in place for those
individuals who do not accept the Fixed Sum Offer in the HSS.
23. However, I have now asked officials to look again, carefully, at whether a
protective £50,000 floor would necessarily create the taxation consequences
referred to in the September Submission, and to provide further advice on the
issue. I will update the Inquiry if I make any new decision to implement the £50k
Policy.
HSS LEGAL FUNDING
24. The Inquiry asked why it was decided that funding should not be provided to
applicants to the HSS to obtain legal advice on fixed offers of £75,000.
25. The fixed offer is significantly greater than the average offer of £52,000 made by
the HSS panel. As the Secretary of State explained in oral evidence to the Inquiry
(INQ00001205 page 23), the decision about whether to accept the £75,000 will
therefore be straightforward for most claimants. Rather than accepting the fixed
offer, any claimant who is unsure can choose to have their claim fully assessed.
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The Post Office will meet their reasonable legal costs in seeking legal advice to
assist their consideration of the initial offer resulting from that assessment, and if
necessary to challenge it.
26. The intervention was designed to deliver redress quickly for those with smaller
claims, delivering more money for postmasters and involving less expenditure on
operational and legal costs. It also accelerates redress for those with larger
claims by shortening the queue of cases.
HCRS COMPENSATION FOR DELETED CAUTIONS
27. In the Second Rule 9 Request, the Inquiry has asked whether persons whose
cautions are deleted pursuant to section 5 of the Post Office (Horizon Offences)
Act 2024 (“the 2024 Act”): (a) have been able to apply for compensation under
the HCRS since it was established; and (b) whether they can do now.
28. The HCRS is a scheme to provide redress for individuals whose Horizon
convictions were overturned pursuant to the 2024 Act. Those who are eligible
under the scheme have the option of accepting a £600,000 fixed sum award.
This is intended as a broad measure of the seriousness of a criminal conviction
for “relevant offences” under the 2024 Act.
29. The HCRS does not apply to individuals who did not have a Horizon conviction.
Cautions are not convictions, and individuals who were cautioned but not
convicted are not and have never been eligible for compensation under the
HORS.
30. The GLO and HSS schemes have been open since their inception to people with
cautions, even where those cautions have remained on the record. Anyone
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cautioned for a Horizon offence — whether or not that caution was deleted
pursuant to the 2024 Act — remains entitled to apply under these schemes. The
redress paid under these schemes takes account of the losses (including
distress, inconvenience and reputational damage) caused by a caution. Both
schemes also include the option of a £75,000 fixed sum award. I am informed
that, to date, fifteen people in the HSS and GLO schemes have received offers
of redress for cautions.
Statement of Truth
I believe the content of this statement to be true.
Dated: 09/12/2024
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Index to Second Witness Statement of Gareth Thomas
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No.
Document Description
URN
Control Number
First Witness Statement of Gareth Thomas MP
WITN11490100
WITN11490100
Email from Secretary of State DBT to Minister
Thomas and Harry Fallowfield re: Ministerial
Submission - Horizon Shortfall Scheme - Fixed Sum
Awards - Official Sensitive
BEIS0000888
BEIS0000888
Note from Harry Fallowfield to Minster Thomas and
Secretary of State re: For Decision: Horizon Shortfall
Scheme Fixed Sum Awards
BEIS0001228
BEIS0001228
Inquiry Phase 7 Oral Evidence of Gareth Thomas
MP
INQ00001204
INQ00001204
Inquiry Phase 7 Oral Evidence of Secretary of State,
Jonathan Reynolds MP
INQ00001205
INQ00001205
Email from Senior Policy Advisor to Minister Thomas
re: Ministerial Advice - Horizon Shortfall Scheme -
HSS Fixed Sum Interim Payments
BEIS0001242
BEIS0001242
Ministerial Submission from Harry Fallowfield to
Minister Thomas re: For Decision - HSS Fixed Sum
Interim Payments
BEISO001240
BEIS0001240
Emails between Secretary of State, Minister Thomas
and Harry Fallowfield re: Fixed Term Interim
Payments - Minister Response
BEIS0001241
BEISO001241
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