Business secretary calls for ‘very significant’ changes to Post Office’s business model – UK politics live

Sir Wyn Williams, the inquiry chair, ended the session with a question for Jonathan Reynolds, the business secretary. He said he had evidence from some witnesses saying the Post Office “cannot be rescued”.

Q: So why do you think it should be rescued.

Reynolds said he thought the public “still want a Post Office”. He went on:

They still want the service it provides. When I go into the post offices in my local community, they’re actually always pretty busy.

As I say, the regret is that I don’t think postmasters are earning appropriate remuneration from that level of business taking place.

When it comes to new initiatives like banking hubs, I think the Post Office has been, and in every case actually has been, the natural partner picked to run that in a local community.

So there was “fundamentally” a need for something like the Post Office, he said. He went on:

I think the big public policy questions – like the future of cash in our society, and the closure of high street banking in many communities – the Post Office is part of the answer to those other wider public policy concerns.

And I do foresee, potentially in future, services that aren’t currently delivered by the Post Office, or the Post Office being a potential vehicle for delivering them.

But I think the future is definitely one that has, to be frank, a significantly smaller centre, and is based much more around power, authority and governance being provided to postmasters on the frontline – really, a central organisation serving those people. I don’t think that’s been the relationship leading into this scandal in particular.

Reynolds said, when post office had to close, there was “genuine regret”.

So I feel both the public demand and the policy rationale is still there, and that underpins these conversations and work that we’re doing on what the future might look like.

Reynolds also told the inquiry that going ahead he would like to see “very significant” changes to the Post Office’s business model. He said:

I think the scale of this scandal cannot be separated out from the business model and the governance structure of the Post Office.

So we need, from the work that I lead as secretary of state and what this inquiry is seeking to do, to not just respond to the obvious injustice and the need for redress to follow that, but to understand why, as an institution, the Post Office has gone so wrong and what needs to change in future.

For instance, I believe that is everything from the internal governance structure of the Post Office, right down to the level of remuneration that postmasters receive.

I think despite the scale of this scandal, the Post Office is still an incredibly important institution in national life.

I think it still has an incredible role to play in communities.

I look at the business model of the Post Office, and I think even accounting for the changes in the core services that are provided … there’s still a whole range of services that are really important.

But I don’t think postmasters make sufficient remuneration from what the public want from the Post Office, and I think that’s going to require some very significant changes to the overall business model of the Post Office.

This is what Reynolds told the Post Office inquiry when he was asked if he would agree with Sir Alan Bates’ call for next March to be set as a deadline for the payment of compensation to post office operators due redress payments under the GLO (general litigation order) scheme. This scheme, for the 555 people who were part of the legal action led by Bates, is one of four Post Office redress schemes operating.

Asked about the March deadline, Reynolds said:

I’ve thought about this a great deal and obviously anything put forward by Sir Alan in particular is something I’ll consider to a significant degree.

The position I’m in is I’m trying to make sure people get redress for a horrendous scandal … at a minimum, I don’t want to do anything that makes that injustice even worse.

And the worry about a deadline – can you imagine a situation where, for whatever reason, a claim has not come in?

I think it will be unconscionable to say that that is not going to be considered.

But Reynolds also said that, if he thought setting a March deadline was “the only way to speed [claims] up”, it is something he would consider.

Julian Blake, counsel for the inquiry, has now finished his questions to Jonathan Reynolds.

As he was winding up, he asked Reynolds what his plans were for the future of the Post Office.

Reynolds said governance of the Post Office would have to change.

But he said that first the organisation had to resolve issues like funding. He said it would need to pay for a replacement to the Horizon system. The Post Office needed to be “sustainable”, he said.

But, beyond that, he said, he did not think anything should be “off the table”.

He said mutualisation was one idea that has been discussed. This would have “some particular advantages in terms of dealing with the specific breakdown of trust between different parts of the organisation”.

David Connett wrote this option up for the Observer last month.

Today the i has splashed on a report claiming Home Office insiders do not think the government’s plan to smash the people smuggling gangs organising small boat crossings will work. In her story Lizzie Dearden says:

Home Office officials do not believe Labour’s plan to “smash the gangs” will work as a way of bringing down illegal migration to the UK, i can reveal.

They say that civil servants in the department have been “underwhelmed” by the approach that was being outlined again this week by Sir Keir Starmer and Home Secretary Yvette Cooper.

The insiders say “nobody” understands how the much-vaunted Border Security Command – that the Government says will take the lead on combating people smugglers running small boats – will operate.

Asked about the report in an interview with LBC, John Healey, the defence secretary, insisted Labour’s policies would make a difference. Asked how they were different from what went before, he said:

It’s different because it is a force dedicated to smashing the gangs and reinforcing the borders. It’s different because it will have powers that have not been there before, powers that are more akin to anti-terror powers, because these are organised criminal international gangs.

And then the work with other countries at an international level that the prime minister is leading, is also a part of getting on top of this problem.

It won’t happen overnight. We’re in the middle of the worst year ever, for the level of small boat crossings.

But I’m confident that we will get on top of it, given time and given the determination the government’s got.

Jonathan Reynolds, the business secretary, has started giving evidence to the Post Office Horizon inquiry. There is a live feed here.

Reynolds’ written witness statement is here.

In it, Reynolds pays tribute to two Conservative former ministers for their work on the compensation schemes.

I would also like to mention that Paul Scully, as former Postal Minister, made a significant attempt to move the dial, and that the now shadow secretary of state, Kevin Hollinrake moved it on much further. I have every confidence that our new postal minister, Gareth Thomas, will continue to build on these foundations to deliver justice for postmasters as quickly as possible.

When I was the shadow secretary of state, I worked very closely with Kevin Hollinrake, who was the postal minister leading the work on behalf of the department – and we are able to have frank discussions in parliament with each other. This allowed us to ensure parliament could move quickly on this and enact the Post Office (Horizon System) Offences Act 2024 before the general election last year, which has significantly moved the dial in terms of providing redress. I am pleased to say that I played a significant role in ensuring the passing of the act through the house. I would very much like this good faith working relationship to continue – the Horizon scandal is widely recognised as an issue upon which MPs should work together on a cross-party basis, delivering justice for the subpostmasters.

And this is what John Healey, the defence secretary, said about Labour’s plans for defence spending.

• Healey said the government would set out a “pathway” to raising defence spending to 2.5% of GDP after the defence review concludes in the spring of next year. Asked to defend why it was taking so long, he told LBC:

It’s a question of how much you spend but how you spend it and how well you spend it. If I said today look, we’ll spend 2.5% on defence, your next and immediate question would be well, how will you spend it?

That’s the purpose of the defence review that we’ve already launched – that Keir Starmer launched within a fortnight of Labour coming [into government].

• He refused to commit the government reaching the 2.5% target before the next election. Asked on the Today programme if the target would be hit this parliament, he repeatedly sidestepped the question, just saying the pathway to 2.5% would be set out next year.

• He said Ben Wallace, the former Tory defence secretary, was wrong to claim the government is not really raising defence spending because it is just re-allocating Ukraine spending from Treasury reserve spending to the defence budget. When this was put to him, Healey told Today:

Ben Wallace is factually incorrect. The £2.9bn extra next year comes on top of the £3bn this year for Ukraine, and those figures are set out in black and white in the budget documents, and anyone can go and check them, including Ben Wallace if he wants to do that for himself.

In his interviews this morning John Healey, the defence secretary, was generally talking down the risk that Donald Trump’s re-election poses to Ukraine rather than talking it up. But perhaps his most accurate answer came when he we will just have to “wait and see” what happens. Here is a summary of the main lines from his interviews on this topic.

I don’t expect the US to turn away from Nato. They recognise the importance of the alliance. They recognise the importance of avoiding further conflict in Europe.

Healey said US support for Nato “goes back decades, and that has remained, including through the previous President Trump administration”. He also said Trump had “rightly” pushed for European nations to spend more on defence.

• Healey said he expected the US under Trump to stand by Ukraine for “as long as it takes to prevail”. Asked if Trump’s win made Ukraine less safe, he told Sky News:

No, I don’t. The US alongside the UK have been two of the leading countries that have been standing by Ukraine, supporting Ukraine, our determination to do so is just as strong.

As far as President Trump goes, he recognises that countries get security through strength, just as alliances like Nato do, and I expect the US to remain alongside allies like the UK, standing with Ukraine for as long as it takes to prevail over Putin’s invasion.

We’ll have to wait and see what President Trump really proposes … but if the reports of his call with [Vladimir] Putin last week are right then President Trump is exactly right to warn Putin against escalation of the conflict in Ukraine.

It’s Ukraine that gets to call when the talking starts. Our job is to support Ukraine, stand by them when they fight, stand by them if they decide to talk.

This could be ended today if Putin withdrew following his illegal invasion … that’s the way this conflict could be ended, and the importance for us for Europe and for the United States is that Putin in the long run does not prevail, because if he does prevail, he will not stop at Ukraine, and the cost to us all will be much greater in the future.

On Saturday the Guardian ran a story saying that officials in Kyiv are complaining in private about the UK’s refusal to supply them with more Storm Shadow missiles and saying the relationship with London has “got worse” since Labour took office.

On the Today programme John Healey, the defence secretary, claimed the report was “simply not correct”. Asked if the relationship had got worse, Healey replied:

That is simply not correct. We’ve stepped up with more military support. We’ve speeded up deliveries. We’re now spending more on military aid for Ukraine than ever before as a UK government.

I spoke at length to the defence minister in Ukraine yesterday. He certainly doesn’t see the UK support weakening, and he said the Ukrainians are confident in Britain’s continuing and steadfast support for their country.

Keir Starmer has met Michel Barnier, the French prime minister, in Paris this morning. They know each other well, from when Starmer was shadow Brexit secretary and Barnier was the EU’s chief Brexit negotiator, and Barner says he was “tres heureux” to meet his old interlocutor.

And here’s a translation (mostly from Google, but with my version of “vient de loin, a connu les épreuves”, because Google’s wasn’t very good.)

Very happy to see you again, @Keir_Starmer, in Paris this morning.

Franco-British friendship has come a long way, through thick and thin. It will be invaluable in facing the challenges that lie ahead.

Thank you, Mr. Prime Minister, @10DowningStreet, for being with the French people on this November 11.

(The tone of Barnier’s message may upset some Brexiters. They still regard him as the devil incarnate, and seeing him being so friendly about Starmer may revive their suspicions about the PM’s Europhilia.)

Good morning. Keir Starmer is in Paris this morning for talks with the French president, Emmanuel Macron. The prime minister is visiting to attend the French Armistice Day service, but the real interest will lie in what the leaders of Europe’s two biggest military powers have to say as they discuss the implications of Donald Trump’s victory in the US presidential election.

Here is Jessica Elgot’s overnight preview story.

John Healey, the defence secretary, has been doing a media round this morning. Quite what Trump will do about Ukraine – in fact, about anything – remains uncertain, but in the US it is being reported that Trump has spoken to Vladimir Putin, the Russian president, and urged him not to escalate the Russian offensive in Ukraine. In her story Maya Yang reports:

Donald Trump spoke on the phone with Vladimir Putin on Thursday and discussed the war in Ukraine, the Washington Post reported on Sunday, citing people familiar with the matter.

The US president-elect advised the Russian president not to escalate the war in Ukraine and reminded him of “Washington’s sizeable military presence in Europe”, the Post reported.

It added that Trump expressed interest in follow-up conversations on “the resolution of Ukraine’s war soon”.

During the election campaign, Trump said he would find a solution to end the war “within a day”, but did not explain how he would do so.

According to one former US official who was familiar with the call and spoke to the Washington Post, Trump likely does not want to begin his second presidential term with an escalation in the Ukraine war, “giving him incentive to want to keep the war from worsening”.

In an interview on the Today programme, Healey welcomed this report. Asked if Ukraine was losing the war, he replied:

Ukraine is certainly under pressure. Russia is certainly escalating, and President Trump has reportedly told Putin and warned him against further escalation. If he’s done that, he’s right to do so.

Russia is escalating with massing North Korean troops on their territory. It’s escalating with more than 2,000 one-way attack kamikaze drones aimed at Kyiv and the rest of the Ukrainian cities in the last month alone. And one person is responsible for that escalation, and that’s Putin.

I will post more from Healey’s interviews shortly.

Here is the agenda for the day.

Morning: Keir Starmer is meeting Emmanuel Macron, the French president, in Paris.

10am: Jonathan Reynolds, the business secretary, gives evidence to the Post Office Horizon inquiry. He will be followed by Kemi Badenoch, the Conservative leader, giving evidence in her capacity as Reynolds’ predecessor as business secretary. Her evidence may continue into the afternoon.

11.30am: Downing Street holds a lobby briefing.

2.30pm: Liz Kendall, the work and pensions secretary, takes questions in the Commons.

Afternoon: Starmer is expected to speak to journalists while flying from Paris to Baku, where he is attending the Cop29 summit.

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