Jenna Moon
Reporting from the inquiry

The future of the Post Office is the next line of inquiry for Jonathan Reynolds.

How could the Post Office change to avoid a repetition of the scandal, counsel to the inquiry Justin Blake asks.

Reiterating his earlier comments, Reynolds says that the governance of the Post Office has to change.

Changes should be made to how postmasters earn their money, and to the structure of the business model to make it more sustainable.

"Those issues have to be addressed before we look to what the future is", but a lack of trust in the institution needs to be addressed, Reynolds says.

"We have to ... make sure the position of the Post Office is a long term sustainable one".

Thomas Mackintosh
Reporting from the inquiry

Jonathan Reynolds tells the inquiry that 172 claims for financial redress have been received - and that the total number of "full and final settlements" stands at 36.

The business secretary says there is a "significant number of people who have not had those interim claims".

He says this is due to "problems with records" and as a result the government has asked people to contact the department directly.

Reynolds explains that "the Ministry of Justice (MoJ) which held the records for this group of cases was not in a place to speedily inform this cohort of people".

Jenna Moon
Reporting from the inquiry

We're moving now to the Post Office Horizon System Offences Act.

The business secretary is asked about his involvement in the legislation, which came into affect ahead of the election in July.

Reynolds says that there were issues in overturning convictions for wrongly accused postmasters. "A lot of those people had lost all faith in the justice system", he says.

He says the act is "really the only vehicle we had to deliver justice".

The act offers an opportunity for convictions to be overturned faster, Reynolds says. "I'm really aware that this whole issue is an example...of different bits of the state not accepting responsibility," he says.

Sir Wyn Williams pauses Jonathan Reynolds's evidence briefly as the inquiry stops for the Armistice Day minute's silence.

People in the inquiry room stand to observe the pause.

Julian Blake is continuing to ask Reynolds about details of the redress scheme.

He shows Reynolds a departmental email which recommends that from a public money perspective, people who reject the fixed £75,000 sum in favour of an individual assessment should then not be able to access the £75,000.

The amount should then be capped at £50,000, the email recommends.

Blake says this proposal has been criticised by some as putting pressure on claimants.

Reynolds says that the sum of £50,000 was decided so people can go down the route of individual assessment, without having a sense of jeopardy that pushed people to a course of action they didn't want to go down.

He says the £50,000 is a "security cap", so that the redress post assessment is not considerably below the initial £75,000.

The decision was made to give people a “genuine choice” of what is the fair course of redress for them, Reynolds says.

Image source, Post Office Inquiry

Thomas Mackintosh
Reporting from the inquiry

Inquiry chair Sir Wyn Williams has a second point which he says he wants to clear up with Jonathan Reynolds.

He asks about a scenario in which the fixed sum compensation of £75,000 is rejected by a claimant, who then goes down the full route of assessment.

"But long before he or she gets to full assessment he or she realise their claim may not be as valuable as first thought or they may be fed up," Sir Wyn says adding that "there is no getting off point".

"You can't change your mind long before any offer is made," asking Reynolds whether once the £75,000 offer is rejected, it is rejected "once and for all"?

Reynolds accepts this is the current position but insists they want to provide the correct redress to people "at a pace that they deserve it".

Jenna Moon
Reporting from the inquiry

The government is working towards an appeals mechanism for claimants, Reynolds says.

"Work is proceeding at pace" he says, but adds he isn't yet able to provide more information on the policy as it must be presented to parliament first.

Details should arrive around the beginning of next year, Reynolds says.

Jenna Moon
Reporting from the inquiry

Inquiry chair Sir Wyn Williams intervenes to ask Reynolds about the financial redress scheme for sub-postmasters.

He is querying the imposition of a "blanket" refusal on compensating claimants who accept legal advice on redress, as opposed to introducing "a more nuanced policy".

Reynolds says the governments view is that involving legal advice would slow down claims.

He says that claimants with complex cases would look at individual assessments with funded legal advice.

Thomas Mackintosh
Reporting from the inquiry

All eyes in the room are firmly on Jonathan Reynolds as he continues to take questions from inquiry counsel Julian Blake.

I have had a look around at some of the sub-postmasters in front of me. As Reynolds speaks, there is very little reaction as they process what he says about redress and cultural change of the Post Office.

Reynolds is pressed on extending the redress to family members.

He says it is something that his government department have been looking at - but any “significant extension” to eligible claimants would need agreement from the Treasury".

Jenna Moon
Reporting from the inquiry

We're now walking through evidence on the financial redress.

Claimants are able to access fixed compensation of £75,000, but can request an individual assessment if they do not feel the compensation is fair.

Evidence shows that the government policy proposed that affected postmasters should take the fixed amount as it would be more affordable for the government.

If postmasters rejected the claim, they would be at risk of losing the money.

Reynolds says the fixed sum was offered "in order to give people a route to redress as soon as possible".

Image source, Post Office Horizon IT Inquiry

Thomas Mackintosh
Reporting from the inquiry

Business Secretary Jonathan Reynolds is asked about whether he knows of any cost projections for the financial redress scheme for affected sub-postmasters.

"I haven't seen in any official advice received a specific sum of money," Reynolds answers.

He adds that part of the government's work "will be guided by the findings of this inquiry."

Jenna Moon
Reporting from the inquiry

Reynolds is questioned now about whether there have been disagreements or tensions between the business department and the Post Office around financial redress for sub-postmasters.

He says there have been no disagreements since he became business secretary.

He says he can "guarantee" that his government will be able to pay any redress to victims. This money has been allocated in the Labour Budget, Reynolds says.

"That can be absolutely guaranteed by myself, by the Treasury and the government," he adds.

Thomas Mackintosh
Reporting from the inquiry

Image source, Post Office Horizon IT Inquiry

Inquiry counsel Julian Blake says he will press Jonathan Reynolds on two issues.

First up: cultural change within the Post Office going forward.

"We need this inquiry to not just respond to the obvious injustice, but to understand why as an institution the Post Office has gone so wrong and what needs to change," Reynolds says.

The business secretary says he believes change is needed "right down to the internal governance of the Post Office" and the level of pay postmasters receive.

Reynolds accepts there will need to be "very significant changes overall to the business model of the post office".

He adds that "it is clear that the Post Office's corporate culture is at the root of this scandal, and I want to make sure the system works for sub-postmasters".

He says he has "discussed these issues with Sir Alan Bates".

Jenna Moon
Reporting from the inquiry

Julian Blake, counsel to the inquiry, begins by asking the business secretary about his role and what he oversees.

Reynolds agrees that his role as a secretary of state is to take accountability for what happens in the department.

He says that since the election, claims are being compensated at a faster rate.

"I do not believe that the increase in pace has been at the cost of fair and accurate compensation being made", he adds.

Image source, Post Office Horizon IT Inquiry

Jenna Moon
Reporting from the inquiry

Business Secretary Jonathan Reynolds has now arrived in the hearing room and the swearing in begins.

As a reminder, you can follow along by clicking watch live at the top of the page.

Thomas Mackintosh
Reporting from the inquiry

We have been moved into the room where the inquiry is happening - it has been steadily filling up in the last few minutes with lawyers, sub-postmasters and journalists.

On the TV screens in front of me I can see Business Secretary Jonathan Reynolds is up first to give evidence - we expect a 10:00 GMT start.

Then, the new Conservative leader Kemi Badenoch will be called followed by Paul Patterson, the boss of Fujitsu's European arm.

This will be the second time Patterson has been called to give evidence having previously appeared at the inquiry in January.

Remember: you can follow along with all the action by hitting watch live at the top of the page.

Tom Beal
BBC Investigations journalist

Image source, Reuters

Who will pay the huge cost of compensation for victims of the Post Office scandal?

We know Fujitsu will be contributing to some of the bill because it has admitted it has a "moral obligation" to do so.

The company has said it’ll pay money for redress after the public inquiry delivers its findings in 2025.

But details in a Freedom of Information request obtained by the BBC show that Kemi Badenoch - who was business secretary at the time - suggested a different approach.

She met with the head of Fujitsu's European arm, Paul Patterson, and the company’s global CEO in March this year to tell them that an “early gesture” of compensation would be “helpful”.

The business secretary proposed a visit to Japan to discuss what this would entail.

This visit, or indeed any further top level meetings on compensation, didn’t happen - the general election was announced and the change of government meant an end to Badenoch’s role.

An independent public statutory inquiry, it began in February 2021 with the aim of gathering a clear account of the failings of the Horizon IT system.

The faulty software was supplied to the Post Office by Fujitsu and introduced in 1999.

It was used for tasks like accounting and stocktaking. Within a year, sub-postmasters complained about bugs in the system after it falsely reported shortfalls – often for many thousands of pounds.

Between 1999 and 2015, the Post Office prosecuted hundreds of sub-postmasters and mistresses after the Horizon system made it look like money was missing.

There were more than 900 convictions linked to the scandal over 16 years.

The aim of the inquiry is to understand what went wrong, and what lessons can be learned.

There has been renewed focus on the scandal following the release of the ITV drama Mr Bates Vs The Post Office, released earlier this year.

Image source, EPA

Image source, PA Media

The first witness we'll hear from today, Business Secretary Jonathan Reynolds, has just arrived at Aldwych House.

As our business correspondent Emma Simpson said earlier, he's likely to face questions about how the Post Office is currently being run as well as problems linked to compensation for the victims of the Horizon IT scandal.

Also photographed arriving in Holborn is Nick Read, outgoing CEO of the Post Office, who regularly attends these hearings.

Image source, PA Media

According to the Department for Business and Trade, there have been 983 UK-wide conviction since the Horizon System was installed in 1999.

So far just 95 have had their convictions overturned.

The Criminal Cases Review Commission said the scandal was "the most widespread miscarriage of justice" it had seen.