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Rishi Sunak has announced new legislation to overturn the convictions of hundreds of sub-postmasters prosecuted by the Post Office in the Horizon IT scandal.

The UK prime minister told the House of Commons on Wednesday he wanted “justice and compensation” for the more than 700 people convicted between 2000 and 2014 of theft or false accounting using flawed data from Fujitsu’s Horizon software.

“I can announce we will introduce new primary legislation to make sure those convicted as a result of the Horizon scandal are swiftly exonerated and compensated,” Sunak said during prime minister’s questions.

He also pledged a “new upfront payment of £75,000” for some 555 sub-postmasters pursued in civil cases who brought a landmark case in 2019 that ruled they had been forced to make up account shortfalls that were based on faulty data.

“We will make sure the truth comes to light, rewrite the wrongs of the past,” he said, calling the scandal “one of the greatest miscarriages of justice in our nation’s history”.

Compensation of £600,000 had been offered to every sub-postmaster whose conviction for theft or false accounting was overturned. To date, only 93 convictions have been quashed.

The prime minister’s spokesperson said the government hoped to table legislation within weeks and exonerate sub-postmasters before the end of this year.

Kevin Hollinrake, Postal Office minister, told MPs that sub-postmasters would be required to sign an affidavit declaring their innocence before they were eligible for compensation.

He also said that Fujitsu, the company that provided the Horizon software, would be required to foot some of the bill for compensation if it was identified as “culpable” in the scandal by an ongoing public inquiry.

Government procurement records showed that even after Fujitsu’s software was found to be at fault in a landmark December 2019 Court of Appeal ruling, the company was involved in £4.9bn of solo and joint public sector contracts.

Fujitsu said this week it “apologised for its role in [the postmasters’] suffering” and was committed to supporting the public inquiry, but declined to comment further “out of respect for the inquiry process”.

Any exoneration will apply to convictions in England and Wales. Hollinrake said the government would engage with counterparts in Scotland and Northern Ireland on the matter.

The Horizon scandal has gained renewed attention in recent weeks after an ITV drama about the affair highlighted the campaigning of former sub-postmaster Alan Bates. Sunak’s spokesperson said the prime minister backed calls for Bates to be given a knighthood.

Esther McVey, the so-called “minister for common sense”, also called for Bates to be given the honour.

Bates had previously turned down the offer of an OBE, saying it would be wrong to take it while Paula Vennells, former Post Office chief executive, held on to her CBE. She has now agreed to hand the honour back.

Earlier in the Commons, Lee Anderson, deputy Tory chair, called on Liberal Democrat leader Sir Ed Davey to “clear off” and quit on account of his actions when he was postal affairs minister between 2010 and 2012.

Davey has come under fire for not doing more to hold the Post Office to account when sub-postmasters warned him about the wrongful prosecutions. He has said he had been misled by the Post Office.

The Post Office scandal has brewed for decades under the oversight of Conservative, Labour and Liberal Democrat ministers.

Highlighting that Davey has in the past called for the resignation of more than 30 other high-profile figures who have made mis-steps in their jobs, Anderson asked Sunak whether he agreed the Lib Dem leader “should take his own advice and start by clearing his desk, clearing his diary, and clear off?”

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