Awarding multi-million pound government contracts to a Japanese firm at the center of a Post Office IT scandal is “morally wrong”, the government has been told.

Critics in the House of Lords claimed it was “appalling”. Fujitsu continued to do lucrative work, including a £48 million deal to upgrade the Police National Computer (PNC), despite ​​its role in what has been described as the biggest miscarriage of justice in a British law court. history.

However, the ministers argued that “in principle there is no alternative”.

More than 700 deputy and sub-postmasters (SPMs) have been wrongly prosecuted for theft, fraud and false accounting over a faulty Horizon accounting system installed and maintained by the tech giant that had “errors, defects and errors”. from the beginning.

Many of them later had their convictions overturned.

Earlier this month, during an inquiry into the scandal led by retired High Court judge Sir Wynn Williams, Fujitsu’s legal representative apologized for the firm’s involvement in the “suffering of sub-postmasters”.

Raising the issue in Westminster, Liberal Democrat Baroness Ludford said: “Since 2013, the government has awarded Fujitsu contracts worth more than £3.5bn, including almost £500m this year, of which £48m sterling goes to the national police computer.

“Given that Fujitsu’s Horizon software was at the center of the Deputy Postmaster General scandal, why does the government believe that Fujitsu’s software has the necessary integrity for critical data at PNC?

“How reasonable is a business-as-usual approach to awarding contracts pending the completion of a formal postal investigation?”

“And finally, how does this government largesse give Fujitsu an incentive to contribute to the huge compensation costs for sub-postmasters, which are borne by the taxpayer?”

Responding, Home Secretary Lord Sharp of Epsom said: “The police’s national computer has been hosted on Fujitsu mainframe technology for over 30 years and the existing hardware technology leased from Fujitsu would not be viable for use after March 2022.

“It required an urgent replacement, so Fujitsu was chosen.

“Market engagement carried out in 2020 to look at Fujitsu’s hardware replacement and support options found no viable alternatives, which is why Fujitsu has been awarded this contract – which, I must also stress, will make up the difference between now and when the new the police national computer goes live. I could go on, but there was basically no alternative.”

Tory peer Lord Pollock said: “The words that come to mind are ‘scandalous’, ‘mistrial’, ‘broken lives’, ‘financially ruined families’ – and yet Fujitsu paid nothing.

“The conversation went on for quite a long time. I know there are lawsuits, but shouldn’t the government end any contracts with Fujitsu? It’s just morally wrong.”

Lord Sharp said: “He is right to point out that we are trying to get to the heart of the Horizon issue.

“That is why Sir Win Williams has been commissioned to carry out a statutory inquiry. Fujitsu is a major contributor and is cooperating fully. Liability depends on the evidence, so I think it right to let Sir Wynne hear it before making any judgments about the possible consequences.’

Addressing the PNC modernization deal, Lord Kennedy of Southwark said: “Has the Government considered public opinion in awarding such a vital contract to a company with such an appalling reputation?”

He added: “It’s appalling that this company could get close to another government contract.”

Lord Sharp said: “It was the only viable alternative. Other companies were invited, and for reasons most of which concerned the time it would take to implement the new systems, Fujitsu offered the only solution.

“Of course I agree with the public perception argument, but I don’t think we had an alternative.”