Let’s talk about Fujitsu. In particular, let’s ask why the Japanese multinational IT supplier has not been taken to court, or heavily fined, or barred from bidding for new public-sector contracts, for the faults of its Horizon sub-post-office system and the mishandling of pleas for help from hundreds of innocent sub-postmasters who were wrongfully convicted. Public reaction to the ITV drama Mr Bates vs the Post Office has provoked the former Post Office chief Paula Vennells to hand back her CBE, but whatever she did wrong, she wasn’t the root cause of the scandal. So let’s take a closer look at the maker of the kit that failed.

Fujitsu built Japan’s first computers in the mid-1950s. But the DNA of its UK operations makes it more than just another foreign tech supplier, to be compared with China’s sinister Huawei. In 1998 Fujitsu acquired a very British subsidiary, ICL, the ‘national champion’ for the computer sector formed by a multiple merger in 1968 (driven by Tony Benn as Labour’s minister of technology) to compete against IBM and Hewlett-Packard of the US. ICL’s components included the successors of two historic British computing pioneers of the 1950s, Ferranti and Leo. Fujitsu not only bought a business which, as the major domestic player, already held huge contracts with the Post Office and other arms of the state; it bought the entire history of British IT.

Hence the Horizon contract, recently extended, is a drop in the bucket of Fujitsu’s broader portfolio of government work – which extends across HMRC, the Home Office, the police national computer, the ‘Border Crossing’ watchlist and the Environment Agency’s flood warning network, as well as systems for the military and the Foreign, Commonwealth and Development Office (which we might guess includes MI6). One of 39 designated ‘strategic suppliers’, Fujitsu has its own ‘crown representative’ in the Cabinet Office, an official called Vincent Kelly, and is shown in a recent Tussell survey of ‘smart data on the government marketplace’ as having won 113 new contracts since 2018/19, long after Horizon broke, and earned £427 million in public sector revenues in 2022/23.

All this despite the ‘very grave concerns regarding veracity of evidence given by Fujitsu employees… about the known existence of [Horizon] bugs, errors and defects’, expressed by Mr Justice Fraser in a 2019 High Court ruling in the sub-postmasters’ favour. That judgment was a first milestone towards the complete exoneration which is now likely to be accelerated.

Mr Bates vs the Post Office includes a scene in which a sub-postmasters’ federation rep visits Fujitsu’s secure UK headquarters and comments on ‘all the James Bond stuff’ he sees. He wasn’t wrong: there’s a whiff of the deep state in the way Fujitsu has stayed in the shadows of this outrageous scandal. Time to shine a spotlight.

Red Sea black swan

One of the roles of this column is to watch out for black swans – unforeseen events with extreme consequences – but it’s rare to spot key indicator graphs actually shaped like long-necked waterfowl. I have to report that was the case this week for both the Shanghai Containerised Freight Index, clocking average shipping costs from China to Europe, and the wider Drewry’s World Container Index.

Both these indices showed a steady decline through 2023 until 19 November, when Yemen’s Iranian-backed Houthi rebels hijacked Galaxy Leader, a merchant vessel with ownership ties to Israel, in the Red Sea. Houthi activity has since intensified while Maersk, the Danish bellwether of global shipping trends, has diverted all its vessels away from Suez-Red Sea routes and around Africa’s Cape of Good Hope instead, adding ten days’ extra sailing to every voyage. In consequence, cost graphs have risen almost vertically in the past few days, by 60 per cent and more.

This is not a crisis on the scale of 2021, when the grounding of the Ever Given in the Suez Canal, combined with Covid disruptions in all the world’s major ports, caused container rates to multiply to tenfold peaks. But it’s a reminder that western societies need constant seaborne supplies of eastern goods, whether fuel, food or manufactures, that can be interrupted at any time by hostile actors in narrow straits.

 It’s also a reminder – though wholesale oil and gas prices stand lower than they were a couple of months ago – that the beast of inflation is by no means as downtrodden as Downing Street would like us to think. A sharp rise in shipping costs will make many supermarket items more expensive this season. And in a geopolitical arena as explosive as today’s Middle East, one black swan may be but an augur of much worse to come.

Loose bolts

Another graph that took unexpected shape this week – going upside-down swan, as it were – was the share price of Boeing, which on Monday opened 9 per cent down, wiping $13 billion off the aircraft manufacturing giant’s value, after a fridge-sized section of the fuselage of an Alaska Airlines Boeing 737 Max 9 aircraft blew out and landed in someone’s back yard in Portland, Oregon.

The history of the 737 Max has been deeply troubled, with crashes in Indonesia (2018) and Ethiopia (2019) accounting for 346 fatalities and recent reports of ‘loose bolts’ in aircraft doors. After the crashes, eventually blamed on a faulty flight control system, there were allegations supported by internal documents that executives were aware of a design flaw but allowed sales to push ahead in the heat of competition with Airbus’s A320 range. Now there’s a Chinese rival in the sky too, the Comac C919.

Never mind the share price; let’s hope, since so many of us fly in its planes from time to time, Boeing has learned always to put engineering safety ahead of symbolic American power.