Its a bad redirect.

For clarity, I'll describe the steps involved in as much detail as I can...

When you visit the site, you go from google.com/search to site.co.uk/.

When you arrive at site.co.uk/, you are redirected from site.co.uk/ to site.co.uk/index.html.

In Firefox and most versions of IE, when you click "Back" you are taken back to google.com/search, skipping site.co.uk/

In IE7, you are taken back to site.co.uk/.

In IE7, when site.co.uk/ loads, you are redirected to site.co.uk/index.html, which makes it appear that the back button is not functional.

Most likely, I think the site is using a meta redirect instead of a 301. The problem can be confirmed by comparing the browser's history in IE7 vs IE8 and Firefox. You will note there is an additional page listed in the history in IE7.

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