Official hearing page

9 October 2024 – Nicholas Read

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(10.03 am)

Sir Wyn Williams: Mr Beer, before we begin to hear evidence this morning, I have an announcement to make.

Ladies and gentleman, it is my sad duty to announce that Mrs Gillian Blakey, one of our Core Participants, passed away last week. Mrs Blakey had been the subpostmaster at Riby Post Office in Lincolnshire. During her period as a subpostmaster, data from the Horizon system suggested that there was a substantial shortfall at the branch, and the use of that data, in due course, led to Mrs Blakey’s husband, David, being prosecuted, and Mrs Blakey ceasing to be the subpostmaster. Mr Blakey’s conviction was quashed by the Court of Appeal Criminal Division in April 2001.

Both Mr and Mrs Blakey were claimants in the Group Litigation. My understanding is that Mrs Blakey had not received the additional compensation to which she was entitled under the GLO scheme. That must be a matter of great regret for all concerned.

On behalf of all of the members of the Inquiry Team, and on my own behalf, I extend my deepest sympathies this to all Mrs Blakey’s family and friends. I understand – and if any necessary formalities need to be undertaken, this will be done – that Mr Blakey will represent his wife’s interest as a Core Participant during the remainder of the Inquiry. Thank you.

Yes, Mr Beer.

Mr Beer: May I call Nick Read.

Sir Wyn Williams: Yes.

Nicholas Read

NICHOLAS JAMES READ (sworn).

Questioned by Mr Beer

Mr Beer: Good morning, Mr Read. As you know, my name is Jason Beer and I ask questions on behalf of the Inquiry. Can you give us your full name, please?

Nicholas Read: Nicholas James Read.

Mr Beer: You’ve made, kindly, four witness statements to the Inquiry. Can we start, please, by going through each of those. The first witness statement is dated 2 September 2024, it’s 132 pages long, excluding its appendix. Can we look at that, it’s WITN00760100. It’ll come up on the screen for you.

This is your first witness statement, 132 pages. If we go to page 132, please. Have you managed to track down the hard copy?

Nicholas Read: I’m just looking for it, actually. Bear with me a second. I’ve got it, yes.

Mr Beer: Ah, thank you. Is that your signature in the hard copy?

Nicholas Read: It is indeed.

Mr Beer: Are the contents of that true to the best of your knowledge and belief?

Nicholas Read: They are.

Mr Beer: Thank you very much. Your second witness statement dated 3 September, ie the next day, WITN00760200, at 26 pages, excluding the appendix. Again, if you can track that down, please.

Nicholas Read: I have, yes.

Mr Beer: Thank you. Page 26, is that your signature?

Nicholas Read: It is indeed.

Mr Beer: Are the contents of that true to the best of your knowledge and belief?

Nicholas Read: They are.

Mr Beer: Thank you. Your third witness statement, WITN00760300, 142 pages, excluding its appendix, dated 13 September, I think there are three corrections to make to this. If we can go to page 28, please, and look at paragraph 64, in the third line, it says:

“I was conscious there was a lot of activity that could be brought together to deal with the actions from [the Common Issues Judgment and the Horizon Issues Judgment]. This came together under the Improvement Delivery Group set up in February 2021 and which until October 2021 focused on the change delivery and tracking the actions.”

Should that read October 2022?

Nicholas Read: Yes, that’s correct.

Mr Beer: So cross out “2021” and insert “2022”?

Nicholas Read: Correct.

Mr Beer: Secondly, page 108, at paragraph 231, second line:

“We had incomplete HR records which, given this was a desktop exercise to review 700 colleagues …”

Should that read “1,700 colleagues”?

Nicholas Read: It should.

Mr Beer: So 1,700, rather than 700.

Then, thirdly, page 140, at paragraph 305, line 4:

“The working environment, being subject to public sector pay, inventive and settlement constraints …”

Should that read “incentive” rather than “inventive”?

Nicholas Read: That’s correct.

Mr Beer: Thank you. Can you go to page 142, please, in the hard copy?

Nicholas Read: Yes.

Mr Beer: Is that your signature?

Nicholas Read: It is indeed.

Mr Beer: With those three corrections brought into account, is the statement true to the best of your knowledge and belief?

Nicholas Read: It is.

Mr Beer: Thank you very much. That can be put to one side. Your fourth witness statement, WITN00760400. That’s dated 24 September and is seven pages, excluding its appendix. Can you turn up page 7, please.

Nicholas Read: Yes.

Mr Beer: Is that your signature?

Nicholas Read: It is indeed.

Mr Beer: Are the contents of that true to the best of your knowledge and belief?

Nicholas Read: Yes, they are.

Mr Beer: Thank you very much. Those witness statements, I think, can all be put to one side now in their hard copy.

Nicholas Read: Thank you.

Mr Beer: Before addressing your background, I just want to break down the two species of witness statements that we have just looked at and which, overall, I think, constitute some 307 pages of material, if my maths is right. Is it correct that the first, second and fourth witness statements are corporate witness statements made on behalf of Post Office Limited –

Nicholas Read: Yes, that’s correct.

Mr Beer: – whereas the third witness statement is a personal witness statement from you?

Nicholas Read: Absolutely right.

Mr Beer: Can you please explain in your own words the difference between them?

Nicholas Read: Not a great deal because, to be fair, I think my role as the CEO of the Post Office encompasses – is all encompassing, from a personal perspective, and such that the deviation of my own reflections reflect exactly what I believe has happened over the last five years.

So I don’t think it differs enormously. There are clearly elements within the questions that you asked me in the third statement that are more personal but I don’t think the deviation from the corporate witness statement to my personal witness statement is particularly different.

Mr Beer: So it isn’t the case, in relation to the first, second and fourth witness statement, that you are saying things that you do not personally agree with but you are saying them because, on behalf of the company, corporately, that is the company’s position?

Nicholas Read: Yes, that’s correct.

Mr Beer: Was there any difference in the process by which each of them came to be made, ie one subject to, for example, Board approval or a group of executives’ approval, whereas the third witness statement was your words and your words alone?

Nicholas Read: Yes, I think it would be fair to say that the corporate witness statements involved Subject Matter Experts from within the business supporting and helping me with some of the content. Clearly, from a personal witness perspective, they were my words.

Mr Beer: Thank you. In relation to your background, you are currently the Post Office’s Group Chief Executive Officer; is that correct?

Nicholas Read: That’s correct.

Mr Beer: You joined the Post Office in September 2019?

Nicholas Read: Yes.

Mr Beer: You announced on 18 September this year that you will be resigning from your position at the Post Office in March 2025; is that right?

Nicholas Read: That is correct.

Mr Beer: In relation to your previous career before the Post Office, can we look, please, at your third witness statement at page 3. WITN00760300. In paragraph 7, you set out chronologically your career for us, by setting out the jobs that you had before you joined the Post Office in paragraphs 7(a) to 7(j); is that right, if we just scroll down?

Nicholas Read: Yes, that’s correct.

Mr Beer: You tell us later in your witness statement that two of those roles amounted to large-scale leadership roles as a CEO of a challenged organisation and that, as a result, you had experience on joining the Post Office of crisis management and turnarounds; is that right?

Nicholas Read: That’s correct.

Mr Beer: One of those, I would guess, was the job at (i), the Chief Executive Officer of Nisa Retail; is that right?

Nicholas Read: Yes, that’s correct.

Mr Beer: Which was the other one?

Nicholas Read: The other one was the CEO of ExtraEnergie GmbH, which is at (j).

Mr Beer: Could you explain briefly your experience in those two organisations of stabilisation, modernisation and growth in a struggling and challenged or failing business?

Nicholas Read: Yes, I’ll start with (i), the Nisa Retail. I was recruited into this role to a very challenged business. It was suffering from breached banking governance, it had just recorded its first loss as an organisation, it had some serious governance issues associated with shadow directors and issues of Board colleagues, and it also overstated its income.

So it had four pretty fundamental issues at play and it was in a very highly competitive market, which was convenience retail.

My job was to come in and to stabilise the organisation, to get the business growing again, and to try and identify what the long-term future for Nisa Retail would be, and that was and ultimately became a sale to the Co-op organisation so it was a fairly classic turnaround of some quite substantive challenges.

Mr Beer: And ExtraEnergie?

Nicholas Read: ExtraEnergie, I was parachuted into ExtraEnergie to salvage an organisation that was suffering immense stress in the UK. It was a European energy business with a UK arm; this particular challenge was a service challenge and an IT challenge. Ultimately, after five months, it became apparent that it wasn’t salvageable and I had the difficult challenge of explaining to the owners of the business that, in my opinion, we should put the business into administration, which is what we did, which was extremely challenging for the 500 colleagues who worked in the UK, and, obviously, my job was to see that process through to its conclusion, and to regroup the organisation back to mainland Europe.

Mr Beer: Thank you. In your witness statement at paragraphs 10 to 25 you provide details of your role as the Chief Executive of the Post Office, the situation when you joined the Post Office and the process which led to your appointment.

If we can just look at a few paragraphs within that section, starting with paragraph 12 on page 6. You say:

“Before and during this interview process …”

This is the interview process for the role of CEO at Post Office:

“… I familiarised myself with Post Office and was therefore aware that the Post Office was facing litigation from Postmasters connected with allegations of historic bugs in the IT system and the requirement for postmasters to repay shortfalls. I did not at that stage have a detailed understanding of what the litigation involved, nor the postmasters’ allegations, and had not, before being appointed, read the Common Issues Judgment (as opposed to summaries). The job specification did not mention the litigation, and as far as I recall it was not mentioned during the interview process. The job specification did not state that Post Office needed to oversee a large scale and complex IT transformation project (ie replacing Horizon); again, as far as I [was aware], this also was not mentioned to me during the interview process. I had no indication that a significant part of my role would be a profound cultural change of the scale needed, dealing with the litigation or its implications, or in delivering a large-scale IT transformation: these issues were never presented to me as priorities during the interview process.”

Just stopping there, can we look, please, at the job specification at POL00448890. This is, I think, the job specification that you’re referring to; is that right?

Nicholas Read: Yes, that’s correct.

Mr Beer: We can see it’s a person (sic) specification for the CEO of Post Office Limited. Then, if we go over the page, it’s a seven-page document. It sets out the history of the Post Office on this page; its reach within the United Kingdom; in the paragraph at the bottom of the page there, its turnover. It sets out its products in four strategic business areas and then, over the page, it says – if we can just go over the page, thank you:

“Post Office [underneath the bullet points] has made strong process over the last five years in laying the foundations for longer-term success [modernising] 7,000 branches … 200,000 extra hours of opening … continual programme of investing in, and modernising, its branch network …”

Three lines from the bottom of that paragraph:

“Legacy systems and IT are being addressed and upgraded now that the separation from [RMG] is complete. This will deliver around 15 per cent reduction in annualised operating costs by March 2018.”

That’s obviously over a year before this –

Nicholas Read: Yes.

Mr Beer: – so that’s out of date information that has been cut into this document, presumably?

Nicholas Read: Yes.

Mr Beer: If we carry on looking down that page, we’ll see at the bottom the strategic priorities:

“With a stable network, and ongoing investment to modernise the network, improve convenience and service for the customer, the Post Office has identified the following five strategic priorities”, and they’re set out over the page.

It sets out on this page, page 3, the corporate history of the Post Office; scrolling down, the Executive Team; the Board; the role that the person to take the role of Chief Executive was to perform. Over the page, scrolling down, the “Candidate Profile”. Then over the page, scrolling down, that’s the end of the substance of the document and the rest of the two-page document contains biographies of members of the Board.

So it’s right, isn’t it, that that does not mention Horizon from start to finish?

Nicholas Read: That’s correct.

Mr Beer: It doesn’t mention, from start to finish, the move to NBIT, does it?

Nicholas Read: No, it doesn’t.

Mr Beer: A very large and exceptionally complicated IT transformation project?

Nicholas Read: That’s correct.

Mr Beer: It does not mention the litigation?

Nicholas Read: No, it doesn’t.

Mr Beer: Even though at this time – this will have been summer 2019 –

Nicholas Read: Yes.

Mr Beer: – the recruitment process was taking place – the Common Issues Judgment had been handed down already –

Nicholas Read: Yes, it had.

Mr Beer: – earlier that year?

Nicholas Read: Absolutely.

Mr Beer: That was rather a fundamental judgment for the Post Office?

Nicholas Read: I agree.

Mr Beer: The Horizon issues trial was just around the corner, was about to start?

Nicholas Read: Yes.

Mr Beer: Also a rather fundamental trial and, ultimately, judgment for the Post Office. So looking at it, the job specification does not properly address or describe the role that you were, in fact, needed to perform, does it?

Nicholas Read: No, it doesn’t.

Mr Beer: If we go back to your witness statement, please. Third witness statement at page 7, paragraph 13, the last three lines. You say:

“It is now clear to me that I did not have a proper appreciation at this time of the scope or magnitude of the injustice that Postmasters faced.”

Then at paragraph 16, scrolling down, you say:

“My understanding was that I was joining a business that was challenged. Its core product areas – cash and mails – were ‘sunset’ products, experiencing year on year declines in volume and revenue. There was a lack of operational rigour, overheads were too high and cost reduction needed to be driven harder.”

Reading on:

“I did understand to some degree that the relationship with Postmasters was strained, the litigation required resolution and a new partnership with Postmasters needed to be established. This felt like a turnaround situation and [you] felt [you] had the relevant experience to lead it.”

If we go forwards, please, to page 11 and paragraph 22, you say:

“In the first couple of weeks of being CEO I had only limited contact with the Post Office Legal team about the GLO … I did have contact with colleagues who were dealing with the operational changes that Post Office needed to put in place from the [Common Issues Judgment].”

Paragraph 23 on page 12, you say:

“[You] were keen to develop a purpose and vision for the Post Office and from the start was convinced that the postmasters had to be the central focus for that purpose.”

Then about eight lines in, you say:

“The findings from the litigation confirmed that was the right decision. [You] cannot recall exactly when [you] found out that Post Office privately prosecuted postmasters (and had stop [doing so] – although [you] know from having read the [Common Issues Judgment] that was mentioned there). Private prosecutions were presented to me as a historic issue that had ceased before 2015 and that I did not need to dig into the details of what had happened at Post Office in the past as this conduct had ended.”

Looking at that all together then, my questions: had you, in fact, known what was involved in the role, ie the things that you were not told, would you have applied for and accepted the role?

Nicholas Read: I think I was very well placed to tackle the issues that the job description described.

Mr Beer: I’m focusing on the things that weren’t in the job description.

Nicholas Read: Yes, I was going to come on to that. I think there’s no question that I didn’t have experience of managing a litigation, I didn’t have experience of running a compensation scheme or, indeed, of managing a public inquiry, and so the scale of those activities are quite profound and have been quite profound on my role for the last five years. Clearly, there won’t be many individuals who would have that mix of skills to run a retailer and to continue to maintain an organisation, such as the Post Office, serving customers, as well as running a public inquiry and a compensation scheme.

Would I have accepted the role? I still believe that I had the necessary skills to do it, it’s just that coming in to the job it was described in a very different way from what I obviously found in those first few months.

Mr Beer: Have you thought why that was –

Nicholas Read: Yes, I have.

Mr Beer: – why it was that the true position was not revealed to you, either before appointment or upon appointment?

Nicholas Read: I think I have thought about it, and I’ve thought about it quite a lot. I think there was an underestimation of the impact of the Common Issues Judgment on the business. I characterise it in my witness statement in two ways. First and foremost, there was a population who simply didn’t believe that they would lose the litigation and, as a consequence, there were not contingencies or plans in place for that eventuality, and so a degree of denial, I would argue.

And for the majority –

Mr Beer: But they’d already lost the Common Issues Judgment by the time –

Nicholas Read: They had.

Mr Beer: – you joined, that was some six months –

Nicholas Read: They had but there was a degree of denial, I think, is the point I was trying to make, in the sense that I don’t think people had come to terms with having lost the Common Issues Judgment, or indeed what the implications of losing it were. And I think, for the vast majority of the organisation, they believed they’d been doing a good job, what they’d been asked to do, and were getting on with it.

So there were two very distinct camps within the organisation: I think the majority of the organisation was just getting on with what they thought their job was; and I think the senior leadership were trying to come to terms with the fact that they had not anticipated losing the litigation. And so, therefore, they were part in denial and part in paralysis.

Mr Beer: Who briefed you when you were appointed CEO?

Nicholas Read: Who briefed me when I within the organisation?

Mr Beer: Yes.

Nicholas Read: As I say in my witness statement, I spent time obviously with the Chair, with Tim Parker, talking about the priorities. I met with all of the Group Executive before I joined, with the exception of one who was away on holiday. I met with UKGI and with DBT officials before I started – so this was throughout August 2019 – so I had a relatively broad understanding coming in on day one.

Amongst those briefings, I don’t – and I think as I say in my statement, I don’t think the scale or enormity of the scandal was brought to life for me because I don’t think there was a realisation or recognition at that stage within the business of what needed to be done or indeed what was likely to happen.

Mr Beer: Were you provided, in the course of those briefings, with a clear analysis of the extent of the Post Office’s failings in relation to past enforcement action taken against postmasters?

Nicholas Read: I’ll answer that in two ways. I think work had started to be done to understand the implications of the Common Issues Judgment, and that was work that was being led ostensibly by the legal function but also by the Operations and Retail teams.

In terms of broader prosecutorial implications, that wasn’t something that was necessarily explained in great deal to me when I joined in September 2019.

Mr Beer: Were you provided with a clear analysis of the findings of Mr Justice Fraser in the Common Issues Judgment?

Nicholas Read: Yes, I was. That piece of work had been done and I had a breakdown of, and summary of, the findings and the implications that we were – or what we were going to do as a consequence.

Mr Beer: So you were provided with an assessment of the work that was required to be done in order to react to the Common Issues Judgment and move forwards?

Nicholas Read: Work had started on the conformance plan. I think in one of my exhibits, I provide detail of what that work is, and work was beginning to be discussed at the Group Executive around what the implications more broadly looked like.

Mr Beer: As part of the briefings, was the issue of the conduct, competence and ethics of those within the Post Office that had conducted investigations and prosecutions against postmasters discussed?

Nicholas Read: No, it wasn’t. The focus of the briefings that I received were around conformance with the Common Issues Judgment. What were we going to do in terms of regaining trust and also the sort of specific themes that Fraser J had identified from a process and procedural and policy perspective.

Mr Beer: Did you receive any briefings in relation to the standard of conduct expected of either civil investigators or criminal investigators within the Post Office?

Nicholas Read: No, I didn’t.

Mr Beer: Therefore, I think it follows that no assessment of whether currently, upon joining, the Post Office’s investigators met those standards, either now or in the past?

Nicholas Read: I think, as I said in my witness statement, the way that it was articulated to me in September 2019 was very much prosecutorial activity had ceased in 2015. Indeed, it hadn’t been initiated since 2013. Nothing like this is happening or could happen, we need to look forward. That would be my summary of how it was positioned.

Mr Beer: But no analysis of the past, in terms of investigation and prosecutorial decision making?

Nicholas Read: No.

Mr Beer: You said that you had only limited contact with the Post Office Legal team about the GLO. Given the importance or significance of the GLO, why did you only have limited contact with the Legal Team?

Nicholas Read: I think it goes back to what I described at the start when I came into role, which was that the litigation and Common Issues Judgment wasn’t part of the initial briefings that I’d had in terms of – called out as something very specific. Those early weeks were about trying to get to know and understand the business more broadly, and so there were a multitude of different priorities that were required in those first four to six weeks, and I think I identified them in one of the exhibits that I provide, which breaks down pretty precisely what occurred in those four to six weeks in terms of the breadth of stakeholders and business understanding that was required.

But it was during that period that it became apparent that we could and we should be looking to settle with the GLO, and it was in October that those conversations started to occur.

Mr Beer: Who was it who presented private prosecutions to you as an historic issue?

Nicholas Read: The legal function and the General Counsel, in particular.

Mr Beer: If you can name –

Nicholas Read: Yes, at that stage, it was – Ben Foat was the General Counsel, he was leading on the work that we were doing in that space. I think –

Mr Beer: Can you give us a flavour? You tell us in your witness statement that you were told that “I did not need to dig into the details of what had happened at the Post Office in the past”. Can you give us some flavour of what Mr Foat was saying?

Nicholas Read: Yes, the reassurance that Mr Foat was trying to provide was that this was historic action and activity, as I say, that had ceased in 2015, had not been initiated until 2013. We were now in 2019, and this is activity that had ceased within the business.

Mr Beer: Was it Mr Foat who told you that you did not need to dig into the past?

Nicholas Read: Yes, that’s correct.

Mr Beer: Did you accept what he said?

Nicholas Read: Yes, I had no reason to believe, at that stage, that we should be looking – going back and looking pre-2015 and 2013. I think we were very, very focused on making sure we made the right changes to address the issues that emerged from the CIJ, as opposed to historically re-examining elements of prosecutorial activity.

Mr Beer: Thank you. If we can move forward to pages 13 and 14 of your witness statement, please.

Nicholas Read: I think I’ve just done what Karen did yesterday, I have a feeling. I’m not quite sure what that –

Sir Wyn Williams: So yesterday we needed to call on the assistance of our IT man and we all just sat here quietly, so let’s do that?

The Witness: So I’ll sit here quietly?

Sir Wyn Williams: Yes.

(Pause)

Mr Beer: Is the screen back on?

Nicholas Read: Yes.

Sir Wyn Williams: All right, let’s resume, then.

Mr Beer: I’ve been asked to ask you if you can move forwards a little bit and just keep your voice up so that the microphones catch you. Some people are finding it slightly difficult to –

Nicholas Read: Of course, is that better? Okay.

Mr Beer: We were looking at pages 13 and 14, and if we scroll down to paragraph 28, please, you describe, under this cross-heading, your first six months as CEO. If we just go over the page, please, you describe in this section, paragraphs 28 to 31, the provision of the Horizon Issues Judgment, under embargo at the end of November 2019 and its handing down in mid-December 2019, and you tell us that you do not recall there being serious concerns amongst Post Office’s senior leadership when this happened –

Nicholas Read: That’s correct.

Mr Beer: Does that mean in the Board or in the Executive, or both?

Nicholas Read: It means both, and I think the statement I made there, “no urgent calls or panicked discussions”, is exactly what I meant.

Mr Beer: Instead, the focus was on trading profits, reducing the Government subsidy and investment in the Post Office?

Nicholas Read: That’s correct.

Mr Beer: Looking back, would you agree that this description is of a leadership team in 2019 that was living in something of a dream world, given the content of the Horizon Issues Judgment?

Nicholas Read: I think it would be impossible not to conclude that.

Mr Beer: You describe the leadership team having pride in their work and their organisation, benign consultative and friendly communications amongst themselves, but essentially oblivious to the harm that their predecessors, and in some cases they, had inflicted?

Nicholas Read: Yes, that’s the point I was trying to make.

Mr Beer: There wasn’t really any appreciation, would this be right, of the seismic nature of both the Common Issues Judgment and the Horizon Issues Judgment taken together?

Nicholas Read: Agreed.

Mr Beer: Instead the concerns were essentially those that had occupied the Post Office for the past 20 years, namely: how do we achieve financial stability?

Nicholas Read: Yes, I’m not sure for the past 20 years but there was certainly a focus following Network Transformation and the desire to reduce the Government subsidy to drive trading profit, and to reduce cost, and that was very much the focus of the organisation.

Mr Beer: Why was it, in your assessment, that the senior leadership, including you, did not understand the true implications of the Common Issues Judgment and the Horizon Issues Judgment taken together?

Nicholas Read: I think we became more – it became more apparent and we became more aware, as the negotiation with the GLO took place through November and December. I think that was the trigger for me personally, given that I’d spent a number of days working with Alan Bates and with others on trying to get to a settlement. So I think it became, as November rolled into December, something that the organisation was getting to grips with. But I think it would also be fair to say that, prior to that, the business was very definitely focused on the objectives that were put in front of it by the shareholder, which was very much about reducing subsidy, about driving profit, and reducing the overall necessity for the Government to invest in Post Office.

Mr Beer: Were you amongst those that did not personally understand the seriousness of the judgments taken together, and their implications, including for criminal convictions?

Nicholas Read: I think I was, certainly in those first three months, faced with a number of issues, certainly trying to get to grips with a new organisation as a CEO, and determining what was important what wasn’t important, and what were priorities and what weren’t. I think, secondly, the negotiation and the settlement was a huge opportunity for me to get to grips with the implications of the HIJ and the CIJ but that was done – that was work that I did with the General Counsel, as opposed to the broader Group Executive and the Board. So I think there was more of a realisation, I think, from my perspective, simply because I was in the room and part of that team and, clearly, therefore, that wasn’t as widely felt across the organisation. It was from – as I say, from December onwards that we became much more aware of what the implications were.

Mr Beer: If we move forwards in your witness statement to page 80, please. You say, one line from the top in paragraph 144:

“I did not spend much time digging into the technical details of the [Horizon Issues Judgment], as I was more focused on the future, to achieve cultural change and drive modernisation and commercial improvement.”

Was that a common approach amongst the General Executive and the Board at that time, focus on the future, rather than the impact of the Horizon Issues Judgment on the past?

Nicholas Read: Yes, I think focusing on today’s Post Office for tomorrow was very much the objective of both the Board and the Group Executive back in 2019.

Mr Beer: Was that, what I’ve described as a “dream world”, reflected in your meeting with Tim Parker that you had in early September 2019?

Nicholas Read: Yes, I think the first meeting I had with Tim was to try and establish, as CEO to Chair, what the underlying priorities he had for me, and I think as I exhibited in my statement, the majority of that conversation was centred around the priorities that I described a little earlier. So I think that was fairly widely felt across the Board and obviously with Tim.

Mr Beer: I think you made some notes of that meeting, it was on 4 September 2019, on your mobile telephone after the meeting; is that right?

Nicholas Read: That’s correct.

Mr Beer: Essentially as an aide memoire –

Nicholas Read: Yes.

Mr Beer: – of what had happened. Then more recently, you cut those telephone notes into an email which you sent to your solicitor, which has been disclosed to us?

Nicholas Read: That’s correct.

Mr Beer: Can we look at those, please. POL00448897. We can ignore the stuff at the top because that’s the sending on to your solicitor, which explains how it got to us and then we can see this is an email sent to you in August this year. But, as you said, this is essentially you cutting from your mobile telephone into an email the content of the near contemporaneous note you made back on 4 September 2019?

Nicholas Read: That’s correct.

Mr Beer: I just want to ask you about one passage, please, which is I think the only reference to the litigation. If we scroll down, please. Thank you. Can you see, it’s now about halfway down the page, just beyond halfway, it says:

“Resolve the Post Office litigation situation quickly … and put it behind us and move on. Not the huge [public relations] risk that BEIS believe it to be.”

Firstly, who is that a note of speaking?

Nicholas Read: That’s the note of the comments that Tim made at the dinner, which, I think as you – all the notes are – it was his set of priorities for me and his commentary.

Mr Beer: Was this, in addition to him speaking, an agreed position between you and him?

Nicholas Read: Sorry, I don’t quite understand the question.

Mr Beer: Yes. Does this record what you agreed should occur, ie you should resolve the litigation quickly, put it behind you and move on?

Nicholas Read: These are the actions and priorities that he suggested that I would want to do and what he saw me doing.

Mr Beer: Was that therefore something that you thereafter carried into effect?

Nicholas Read: I guess this is the backdrop to the job that I was going to take on. I saw it as an important meeting because it was giving Tim the opportunity to give me his perspective – having been Chair for six years at this stage, it was an opportunity for Tim to give me his perspective on the business before I joined. So this was some 10 or 12 days before I actually started, and it was his opportunity to describe to me what he saw going on in the organisation and where he saw – where he thought I should spend my time.

So that was the contemporaneous notes that I took of that meeting, which was my recollection of how he described it to me.

Mr Beer: Can you help us, not all of us move in the circles of CEOs and chairmen: when a chairman says you’re to resolve the litigation quickly, put it behind us and move on, is that an instruction that you carry into effect or is it something which you think, “Well, the old man is just spouting, I’ll do what I want”?

Nicholas Read: No, I think, as I was brand new to the organisation, it was important for me to understand where he saw the priorities. I mean, looking at the list, there are, gosh, it looks like 12, 14, 16 issues that he has highlighted here.

Mr Beer: Yes.

Nicholas Read: And this is one of those, and, clearly, I would take this information with me as a sort of aide memoire as I go into the organisation. That was the purpose of the meeting. I wanted to check my understanding of what he had suggested with what I then found in those first four to six weeks within the organisation. That was the purpose, for me, of the meeting, rather than getting a set of instructions; I didn’t view this as a set of instructions.

Mr Beer: Did they come from the Board, instructions, rather than the Chairman speaking at a dinner?

Nicholas Read: Well, technically, the Chairman would give me a set of objectives formally, which is what he did on a yearly basis. This wasn’t that. This was a first meeting.

Mr Beer: Yes. It’s recorded that “Not the huge PR risk that BEIS believe it to be”; is that Mr Parker speaking too?

Nicholas Read: Yes, it is.

Mr Beer: So he was saying that the litigation was not the huge public relations risk to the Post Office that the Government believed it to be?

Nicholas Read: That’s correct.

Mr Beer: I think you, in due course, came to understand that what is suggested here – resolution of the litigation quickly, putting it behind you, and moving on – was wrong headed. There was no way that the GLO could be quickly resolved and put behind you, was there?

Nicholas Read: No.

Mr Beer: Interestingly, it seems that the Government knew that. Did you ever explore that view with the Government?

Nicholas Read: Yes, I go on to mention in my witness statement that there seemed to be two sort of schools. I think Greg Clark was the Secretary of State at the time. His view was very much around finding and seeking resolution with the postmasters and ensuring that there was redress, and that was the prevailing view, certainly, that I was given from officials, that Greg Clark had.

It seemed to be less the case amongst officials, but certainly from the politicians, if that makes sense.

Mr Beer: What do you mean, less the case amongst officials?

Nicholas Read: What do I mean by that? There wasn’t a determination to settle, necessarily, with the postmasters. I didn’t feel that in those opening months within the business and that seemed slightly at odds with the position that Greg Clark was adopting.

Mr Beer: Was there a view, within the Post Office, at this time, that the civil judgments did not really impact upon any past criminal proceedings?

Nicholas Read: Can you describe that a bit more: what do you mean by that?

Mr Beer: Yes. Was it the view, within either the General Executive or the Board or, in particular, the Legal function within the Post Office that the civil judgments, the Horizon Issues Judgment and the Common Issues Judgment, did not impact on past criminal proceedings?

Nicholas Read: Yes, I think that’s the case.

Mr Beer: Who was expressing that view?

Nicholas Read: I don’t think I can – it’s a sense. I mean, I’m not saying people were expressing that view explicitly. I think that’s just a sense that I took.

Sir Wyn Williams: By this time, over some years periodically, the Criminal Cases Review Commission had been corresponding with the Post Office.

Nicholas Read: Yes.

Sir Wyn Williams: Were you made aware of that in September/October 2019?

Nicholas Read: Yes, I would believe so. I’m trying to think explicitly how and by whom. I think as I say, at the start the level of briefing that I received was relatively perfunctory, as opposed to in-depth and critical, which I think is the point that you’re making. That was not the case.

Sir Wyn Williams: Well, I just wondered whether the significance of there being correspondence with the Criminal Cases Review Commission was explicitly, well, explained to you?

Nicholas Read: Not in September, no.

Sir Wyn Williams: Right. Fine.

Mr Beer: Subsequently?

Nicholas Read: Subsequently later but not in September. I think this is – this would have been post-litigation and it would have been well into 2020 before we had those conversations.

Mr Beer: Ultimately, the Court of Appeal Criminal Division essentially accepted and adopted the findings of the High Court that, throughout the relevant period, there were significant problems with Horizon, which problems gave rise to a material risk that an apparent shortfall in branch accounts did not, in fact, reflect missing cash or stock but had been caused by more than one bug, error or defect in Horizon, and that the Post Office knew that there were problems at that time with Horizon.

When was that first made clear to you, the connection between what had been found in the civil judgments and its impact upon criminal appeals?

Nicholas Read: Probably in September and October 2019, it became – well, no, maybe that’s not strictly true. I think it may have been as a consequence of the release of the HIJ findings in November. That, I think, triggered conversations about the robustness of Horizon and the implications for the Legacy and HNG-X versions of Horizon and the implications of potential bugs and what they may or may not have done. That was as a consequence of the judgment that was handed down in November.

Mr Beer: In relation to the differences of view between the politicians and the civil servants, can we look, please, at what you say on page 20 of your witness statement, at paragraph 44. You say:

“These variations in strategic focus were reflected in the Minister and Permanent Secretary. Greg Clark, the … Minister when I arrived, was clear that we should focus on postmasters and afford redress arising from the court judgment in 2019.”

That’s essentially what you said to us two or three minutes ago.

Nicholas Read: Yes.

Mr Beer: “He wanted to solve things for the postmasters and make sure that the injustices were genuinely settled. Alex Chisholm, BEIS Permanent Secretary, was more closely aligned with the Board priorities and was not pushing for a settlement and to some extent did not see the need to broker a new deal with postmasters. [He] wanted a short independent 4-month review so we could move on and I could focus on the day job of moving the Post Office forward. His view was more closely aligned with the Board around the need for speed towards financial sustainability. This left a somewhat unclear agreement as to which priorities took precedence.”

Firstly, what did you do in the face of an unclear picture from your shareholder?

Nicholas Read: Well, I – let me take a step back. I think – I met with Alex Chisholm and spoke to him specifically about the independent review, and I’m sure we’ll come on to talk about that in a second but the specifics, I think, in the point that I was trying to make here was that postmasters had been left behind in the pursuit of profit. That I was very clear about, in terms of what had happened in 2016 to 2019, with the drive for Network Transformation and commercial sustainability and reducing the subsidy.

In that drive, I believed that postmasters had been left behind and, by that, I mean the move from fixed fee payments to postmasters to variable payments to postmasters, to the level of support that was given to postmasters, was not where it needed to be and it was my intention to refocus the organisation around what I saw as the central core to the Post Office, which was the relationship between the postmaster and its local communities and that’s how we had to – and we had to focus upon it.

That was slightly at odds, I think, with where the officials were, which was very much around trying to ensure that we didn’t continue to spend money on the Post Office and that we could reduce, as I say, the subsidy and the like. And I think there was an attitude that was very much around trying to ring-fence and ensure that the Post Office was a stand alone business without really thinking through what the implications of that were for postmasters, a new deal, understanding how variable pay worked, what sort of support they would be provided with, and it was that juxtaposition that I was struggling to address.

Mr Beer: As well as the approach to be taken to the GLO, there was also the issue, is this right, of to what extent there should be an investigation or an Inquiry into the past?

Nicholas Read: Yes.

Mr Beer: Can we look, please, at pages 27 to 28 of your witness statement, paragraph 61, second line. You say:

“As mentioned, Permanent Secretary Alex Chisholm had initially wanted this just to be a review, not an inquiry and that it should be whilst independent, essentially internal and importantly be forward looking. That had been the plan from February 2020 when the Prime Minister announced the review would look at historical failings. Later in 2020 when the Minister announced the Inquiry, it was truly a pivotal moment for the organisation as a whole to fully grapple with the process that it needed to go through and the changes required.”

Paragraph 62:

“By summer it had developed into a judge-led independent inquiry which was only meant to last 4 months. This was reformulated into the Terms of Reference that currently apply in January 2021.”

So is it right that, in this earlier period, Mr Chisholm continued to think that the problems exposed by the Group Litigation could be addressed by a small, internal inquiry?

Nicholas Read: Yes, that’s precisely the point I was making.

Mr Beer: Was he of the view that we saw expressed in your note of your dinner with Mr Parker: that the Post Office had a significant PR disaster on its hands?

Nicholas Read: I can’t comment on what his view on that was.

Mr Beer: Did he ever explain to you whether a view of the extent of the wrongdoing had influenced his decision or suggestion that there should be a short, internal inquiry to essentially manage away the problem?

Nicholas Read: The conversations I had with Mr Chisholm on this particular topic, I had become very clear by early 2020 that there was a growing need and desire amongst those who had been impacted by the scandal to get to the truth, to understand what had happened, why it had happened and who was responsible, as opposed to the notion that we have an inquiry to make sure nothing like this could happen again.

I think this was – the point I’m trying to make here is that there was a clear distinction that – and the conversation I had with Mr Chisholm, was that closure would not be achieved if we simply looked forward to see what had been done by the Post Office to ensure nothing could happen again, rather than addressing what it was that the victims of the scandal particularly wanted, which was to understand why it had happened, who was responsible, and what was going to be done as a consequence of that.

It was that that I struggled with, and Mr Chisholm assured me that we would do a four-month forward-looking review to ensure that the Post Office was now in a position where nothing like this could happen again.

Mr Beer: Thank you. That can come down.

Can I turn to a different topic, namely the culture within the Post Office in your five years as CEO and, in particular, its attitude towards the guilt or innocence of subpostmasters.

As a general question, have you come across individuals within the organisation who adopt the view that some subpostmasters whose convictions have been quashed are nonetheless guilty?

Nicholas Read: I don’t think I could say specifically that that is the case but there will be a view that not every quashed conviction will be innocent postmasters. I think – and certainly, if I was to reflect, I think the majority of the organisation would agree that the action that has been taken is absolutely the right action and whether there are guilty postmasters who will be exonerated really is no longer an issue. That is not something that is of concern to people in the Post Office.

Mr Beer: Can we turn, please, to paragraph 27 of your first witness statement, please, which is on page 13. You say:

“Post Office is in many ways a different organisation to the Post Office of the past.”

Yes?

Nicholas Read: Yes.

Mr Beer: I am underlining the words “of the past” at the moment.

Nicholas Read: Yes.

Mr Beer: Then similarly, in this witness statement, at paragraph 174, which is on page 84, you say:

“Post Office recognises the need for fundamental cultural change. It recognises the presence of oppressive behaviour and intimidating actions in the past [and it’s those words that I’m underlining] which led to a lack of respect and trust between Post Office and its postmasters. It acknowledges that there has been a lack of effective leadership; a lack of effective training and support; and a lack of responsibility within the organisation. It accepts that it has work to do to restore trust with postmasters and with the public as a whole. Cultural changes in the Post Office are integral to the rebuilding of that trust.”

If those sentiments are correct, why is it that those who were involved in the investigation and prosecution – the wrongful prosecution – of subpostmasters are some of the same personnel who are involved in the handling of compensation claims under the Horizon Shortfall Scheme, which includes their attendance with subpostmasters at good-faith meetings?

Nicholas Read: I’ve been very clear that at no stage will we walk past allegations of wrongdoing in the organisation, and I’ve made that very clear publicly to all colleagues and to postmasters themselves. Where evidence of wrongdoing is brought to my attention or indeed to anybody else’s attention within the organisation, we will investigate and we will take action fully, and that’s very much what we will do.

With regard to the Remediation Unit, I am very clear that we have conducted a piece of work which you’ve heard a lot about at this Inquiry, which is referred to as the Past Roles piece of work, and once again, I am confident that there are not individuals involved in postmaster-facing activity that had roles in the past where allegations or anything of wrongdoing has been brought to my attention.

Mr Beer: When you say “there are not”, you mean as we sit here today?

Nicholas Read: Yes, we have –

Mr Beer: Can you say that there have not?

Nicholas Read: What, that have not been individuals in those units?

Mr Beer: Yes.

Nicholas Read: As you’ll be aware from the last couple of days, we have individuals who are under investigation specifically. I’m not convinced it would be appropriate to raise those –

Mr Beer: I’m not asking you to name them at all.

Nicholas Read: Thank you. So I guess the point I’m trying to make is that we’re not walking past these situations and we will address them where those allegations are made, and ensure that law enforcement and other activity takes place.

Mr Beer: But we’re five years on now from the Horizon Issues Judgment, aren’t we?

Nicholas Read: We are.

Mr Beer: So you can’t say that there have not been individuals who were involved in the improper investigation and the wrongful prosecution of postmasters who were involved in the handling of compensation scheme claims under in the HSS?

Nicholas Read: Involved – it depends what you mean by involved. I guess certainly from my perspective, when I look at the construct of the Remediation Unit and the work that we’ve done on Past Roles and on Project Phoenix, I would absolutely concede that that work has not gone quickly enough. I would absolutely concede that we needed to be more forthright, I think, in our actions. By that, I mean giving confidence to postmasters who were coming forward in the HSS scheme or involved in the HSS scheme that genuine independence and no sign of bias was taking place in the delivery of any form of compensation, and that is absolutely what we are doing and are determined to do.

Mr Beer: Have part of the investigations that have been conducted included the question of whether investigators were given bonuses related to the number of successful prosecutions they conducted and/or the recovery of money under the Proceeds of Crime Act?

Nicholas Read: I’m not aware that we’ve done a specific piece of work into that allegation but I may be mistaken. I don’t believe we have.

Mr Beer: Can we look, please, at POL00113304. This, before we get into the detail of it, is an email change that takes place between May and July 2021, started by a man called Gary Thomas, a former Post Office Investigator, addressed in the first instance to you, in which he is complaining about the Post Office’s ill treatment of its own investigators and security managers. If we can read it first as a whole and then I’ll ask some questions about it.

Nicholas Read: This is a standalone email, is it?

Mr Beer: No, we’ll look at the whole chain.

Nicholas Read: Oh, we’ll look at the chain.

Mr Beer: So if we go to page 5 to see where it picks up, please. If we just go up, please. Keep going. Essentially, he cuts into an email earlier emails that he suggests were sent. If we just go down to page 5, please.

This is seemingly an email addressed to you and he says he is writing in relation to all the Horizon system prosecutions that were conducted by Post Office against postmasters that have been successfully challenged and won in the High Court.

His question to you and the new Board is the actual effect this whole situation has had on himself and the other investigators employed by Post Office:

“We were informed by Post Office that the Horizon system was 100% correct and that the Horizon Data we obtained to provide evidence was all accurate and again 100% correct.”

If we skip that paragraph and then the next paragraph, pick up with “I took redundancy”, he says:

“I took redundancy from Post Office in 2017 after 32 years loyal and committed service and now have to live with all this every day as do my other Security colleagues I have recently spoken [to].”

Then this:

“We even had a proceeds of crime unit within the Post Office that ensured that some of these individuals lost their homes and families.”

Then this:

“In fact my yearly objectives that were bonus worthy at the time were based on numbers of successful prosecutions and recovery amounts of money to the business. I had some instances of these postmasters committing suicide, which now sits somewhat on my [I think that’s ‘conscience’] because of my employer. How do you think I deal with this and now actually sleep at night now knowing my actions that were backed and supported by my employer has affected the said postmasters …”

So a suggestion that yearly objectives of an investigator, which were bonus worthy, included the number of successful prosecutions and the recovery of money to the business. You see that?

Nicholas Read: Yes, I can see that.

Mr Beer: Then if we go up to page 4, please. If we scroll down, please. This was the reply, if we scroll down a little further. He’s actually cut off who the reply was from. This is said to be the Post Office’s reply.

“I am writing on behalf of Post Office to thank you and respond to your email to Nick Read dated 9 May …”

That’s where I got the first date from –

Nicholas Read: Yes.

Mr Beer: – May 2021:

“We are working hard to improve Post Office, address the past and fundamentally reform for the future by putting Postmasters at the heart of everything we do. Your email has drawn our attention to the prospect that Post Office employees may have been incentivised to bring successful prosecutions. We have not currently identified this to be the case, however, we have instructed our lawyers to find, recover and review relevant material as part of our Post Conviction Disclosure Exercise (‘PCDE’). It is the PCDE that has assisted those prosecuted by Post Office to have their convictions rightly overturned. The review of this material will allow Post Office to recognise and, if necessary, address this issue as part of our wider duty to those who were convicted …”

If we go to page 3, please. This is Mr Thomas’ reply. If we scroll down, please, and scroll down. We’re just missing the paragraph I’m looking for. If we scroll back up, please. Ah, stop.

In that fourth paragraph, beginning “I will advise”, he says:

“I will advise you now to save you more time that you will find nothing in any ‘PCDE’ about any incentives for prosecutions but if you still hold historical HR records on Individuals – Personal & Business Objectives each year then I can assure you you will see the targets for Prosecutions and Financial Recovery Targets. The recoveries, if not voluntary, were carried out under the Proceeds of Crime Act where I know the Security Team paid to train at least 3 or 4 of my colleagues to carry out such work. This meant if it was proven that the prosecuted postmaster was found guilty or admitted any guilt they could make serious recoveries over and above the amounts found to be missing under the Benefits of Crime Act, including some postmasters life savings and homes.”

Then page 2, please. Thank you. We now actually get an email from Stuart Lill, if we scroll down, please. You’ll see he signs that off.

If we go back up please. We’ll see that this isn’t a reply to Mr Thomas’ email; it’s distributed amongst those within the business, including people with whom we are familiar: Rodric Williams, Melanie Corfield and Nick Vamos. This is headed, “Former investigator email to Nick Read update”. Below is the response from –

Sorry, before I read it, are any of those people in the distribution list part of your General Executive correspondence team or anything similar, PA staff –

Nicholas Read: Yes.

Mr Beer: Can you identify that person?

Nicholas Read: Avene was my PA at the time.

Mr Beer: So you’re included on this distribution list by the inclusion of her as a recipient; is that right?

Nicholas Read: That’s not normally how it works. I would normally be put in the “To” or “CC” box if it was designed to come to me but it does seem strange that it’s been directed to her and not to me.

Mr Beer: So what would Ms Regan do if she received an email such as this?

Nicholas Read: Well, I sincerely hope she would share it with me.

Mr Beer: So this is essentially for your attention as a person to whom the email was addressed, albeit by a circuitous distribution route?

Nicholas Read: You would assume it was directed for me, yes. I’m not familiar with it –

Mr Beer: Anyway –

Nicholas Read: – but yeah.

Mr Beer: I interrupted myself. Below is the response from Gary Thomas who raised issues about the performance targets given to former Post Office Investigators and then he, Stuart, has included the email chain:

“This email is difficult to respond to for the following reasons.”

Then under 2:

“There is a new allegation that [Post Office] were benefiting more than they were entitled to from the ‘Benefits of Crime Act’ (presumably [the Proceeds of Crime Act]);

“3. It makes allegations as to the knowledge about Horizon’s failings by senior [Post Office] officials …

“Whilst Mr Thomas does not say it expressly in either of his emails, this appears to be an attempt to negotiate a payment by [Post Office], otherwise there is little need to raise or threaten speaking to a solicitor. Further allegations are made, although [Peters & Peters] will note that he has narrowed and clarified his previous point regarding objectives – this may be capable of narrowing the current proposed review.

“It seems to me that this email conversation needs to be closed down as [Post Office] are unlikely to be able to address the issues/allegations he makes either for proper, sensible legal reasons or because Mr Thomas appears to be using it as a forerunner to seek legal advice …

“… grateful for input …”

Then if we go to page 1, the same distribution list, I think, again, from Mr Lill:

“[Post Office] has no employment obligations to Mr Thomas …

“With regards to the whistleblowing policy, this can catch and so [Peters & Peters] will/are drafting a proposal regarding investigating and responding to it. This is in order to ensure that we uphold our own policy and we can demonstrate that we have dealt with the issue if it were to be raised at the Inquiry or elsewhere.

“… I have drafted the response … for consideration and comment.”

If we scroll down:

“Thank you for your email …”

Second paragraph:

“… reiterate its sincerest apologies for any negative attention you or your former colleagues have received as a result of your time at Post Office.”

Then this, which is the substance of the reply:

“It is not appropriate for Post Office to comment on the general matters you raise at this time. As you will be aware, Post Office is involved in ongoing legal proceedings and is actively supporting and contributing to the statutory Inquiry led by Sir Wyn Williams.

“You have stated that you will wait until Post Office has addressed your questions and points before seeking the advice of your solicitor. Whilst it is not clear which specific matters you are referring to or why it requires advice from a solicitor, it is … a matter for you …”

So that’s the chain of correspondence.

Given the addressee, your PA, Ms Regan, were you aware of this correspondence with Mr Thomas?

Nicholas Read: No, I have no recollection of this correspondence.

Mr Beer: Were you aware of the suggestion that it was said that Post Office Investigators and/or Security Managers had yearly bonus objectives based on the number of successful prosecutions that they undertook?

Nicholas Read: I think my understanding of that came from the Inquiry, as opposed to from individuals within the Post Office per se. I think it’s an allegation that’s certainly been made in this forum, as opposed to more broadly at the Post Office.

Mr Beer: What about the suggestion that there were yearly bonus objectives based on the amounts recovered for the Post Office?

Nicholas Read: I guess my immediate reaction to this is the lack of curiosity to understand whether that is the case. I –

Mr Beer: That’s where I’m heading, Mr Read.

Nicholas Read: Yeah, I’m surprised that the tone of the response is “Let’s just close this down”, as opposed to where is the curiosity that says that this is something that was going on? I think it would have been extremely illuminating, culturally, to understand if that had been the case.

Mr Beer: I think it follows that you weren’t aware of the suggestion that prosecution targets and financial recovery targets might be found in Post Office’s historical HR records under personal and business objectives?

Nicholas Read: No, I wasn’t and, as far as I’m aware, that hasn’t been explored. I may be mistaken but I don’t believe it to be the case.

Sir Wyn Williams: One of the parties receiving this email chain was Mr Declan Salter.

Nicholas Read: Yes.

Sir Wyn Williams: From memory, when I first became involved in this, he had an important position, did he not, in the Post Office?

Nicholas Read: Yes, he did.

Sir Wyn Williams: Can you make that public, please?

Nicholas Read: Yes, he did, sir. Declan Salter was in charge of the Inquiry Team and the Remediation Unit, which was combined at that early stage, so he came in to do that piece of work.

Mr Beer: We scroll back down, please, to the distribution list, at the top of page 2, he’s the first addressee. I think we know the functions that Mr Williams and Ms Corfield were performing at this time. Can you help us with Hannah Laming?

Nicholas Read: Again, no. I’m not familiar with Hannah Laming.

Mr Beer: The generic email address “flagcaseadvisor”. I think we’ve seen that before?

Nicholas Read: No, it’s not one that I’m familiar with.

Mr Beer: Thomas Jennings?

Nicholas Read: No, again, not a name I’m familiar with.

Mr Beer: Catherine Emanuel?

Nicholas Read: Yes, she is from Herbert Smith Freehills.

Mr Beer: Andrew Robinson?

Nicholas Read: No, I’m not familiar with that name.

Mr Beer: Tim Perkins?

Nicholas Read: Yes, Tim works in the organisation. Tim is currently the People Services Director.

Mr Beer: At this time in 2021?

Nicholas Read: I am guessing he was working for Declan but I could be mistaken. Alternatively, he may well, actually, on reflection, have worked in the Operations Team, Retail Operations.

Mr Beer: Eamon McCarthy-Keen?

Nicholas Read: No, that’s not a name I’m familiar with.

Mr Beer: Some of these people, including Ms Laming, for example, might be lawyers within, for example, Peters & Peters –

Nicholas Read: Right.

Mr Beer: – which may be why you’re not familiar with them. I think it follows, at least from this chain, that you didn’t reply, “Hold on, I disagree with the suggestion made by Stuart Lill that this conversation with Mr Thomas needs to be closed down”?

Nicholas Read: I’m not familiar – I’m not familiar with this exchange. It may be that I did see it but I don’t recall.

Mr Beer: Was this correspondence emblematic of a view within Post Office, even at July 2021, that people that raised issues as to the past and the past conduct of investigations and prosecutions ought to be closed down?

Nicholas Read: No, I don’t believe that to be the case.

Mr Beer: This is unusual, then; this goes against the grain?

Nicholas Read: Yes, I think that certainly by 2021, the Hamilton judgment would have been alive already by then. I think the business, by this stage, was coming to terms with the past. I don’t think that was something, as I mentioned at the start, that was necessarily the case in 2019/2020 but I think it clearly was coming to terms with the role of – that it had played in the past. So I am surprised, yes.

Mr Beer: Sir, I’m about to move within a topic to another subtopic. Might we take morning break until 11.50?

Sir Wyn Williams: Yes. Certainly.

Mr Beer: Thank you very much.

(11.35 am)

(A short break)

(11.52 am)

Mr Beer: Mr Read, can I continue to seek to explore the topic of Post Office’s attitude and approach to subpostmasters who have a shortfall alleged against them or a shortfall is detected, including those who, in the past, had been convicted of criminal offences on the basis of such shortfalls being alleged, and look at the issue of Mr Jacobs, Elliot Jacobs.

In your third witness statement – there’s no need to turn it up, it’s paragraphs 237 to 239 – you refer to the Post Office’s investigation concerning Elliot Jacobs, and I think this was known as Project Venus; is that right?

Nicholas Read: That’s correct.

Mr Beer: You tell us about a conversation on 10 January between Mr Staunton, Mr Jacobs and Mr Ismail, when they raise concerns about the Post Office’s treatment of subpostmasters.

Nicholas Read: Yes.

Mr Beer: We’re going to look at that in a moment.

Can I look at something that happened before then in November 2023. POL00448693. This is an email to you from Mr Staunton of 25 November 2023, and I think it’s just to you. He says:

“Nick,

“I drove home yesterday and had to deal with a number of calls from both Saf and Elliot.”

So that’s Saf Ismail and Elliot Jacobs:

“I will not repeat some of their comments but I am annoyed that this has blown up. They think that Ben is stirring this thing up even though it has been investigated …”

Just stopping there, the thing that’s being spoken about here, would you agree, is the investigation into an alleged shortfall at Mr Jacobs’ branch?

Nicholas Read: That’s correct.

Mr Beer: “… found the differences to be de minimis and well within differences that may arise on a trading account running to under £1 million per annum. It has been looked at by a subcommittee of Lorna and Amanda.

“There were comments about the ‘old [Post Office]’, things have not changed that much, [Post Office] management think all [postmasters] are crooks etc, their personal integrity is being questioned etc, etc. I suggested they talk to Tom regarding the proposed note in the ARA (of which they are unaware) who helped in his replies for which I am grateful. Kathryn says she only found out about this a day ago but then thought she would ‘brief’ all the Directors a day later – without the full facts. Anyway I have suggested we hold off until you and I chat.

“I needed to spend hours yesterday on this like a hole in the head. What is behind this? Am I missing something”, et cetera.

The suggestion, seemingly made by Messrs Ismail and Jacobs, about the “old Post Office” and Post Office Management currently thinking that postmasters are “all crooks”, is that a view that has been expressed by them to you?

Nicholas Read: I don’t think before or around the time of this email, I think that’s something that has happened subsequently, I think both of them gave evidence to that effect: that they had raised that in a Board conversation, I recall.

Mr Beer: How did you react to those suggestions that were being made in this email to you? Essentially, if I summarise, the two Postmaster Non-Executive Directors were suggesting to the Chairman that Post Office Management think that all postmasters are crooks.

Nicholas Read: I think I’d probably try and separate two elements to this email. I think (1) is the potential investigation into Saf and Elliot and (2) is this notion that all management think they’re crooks. I certainly don’t think all management are of that opinion, in fact I absolutely don’t think that at all.

On the topic of this particular situation, and I think it’s perhaps quite important to talk a little bit more about the context of this investigation, if that’s okay, the allegations that were sort of put to me around Elliot Jacobs’ situation, in terms of his liability to the business, was something that I passed to the Company Secretary and the Chairman – which is why Henry Staunton is obviously discussing it now – for them to decide what the best course of action should be, and that, I think, is important context, as a Board Director himself, Elliot, it was important that the Chairman was overseeing this activity.

I think it’s fair to say that the approach was heavy-handed, I think I would say that, to Project Venus. I think it was –

Mr Beer: Sorry, to stop you there, I think the suggestion was that over a six to ten-year period the suggestion was some £15,000 of debt had been built up on a business that was trading at about £1 million a year and that’s why it was thought to be de minimis; is that right?

Nicholas Read: Not quite. I think the liabilities were 198,000, to my recollection. The settlement, which ultimately was done by – or agreed with Mel Park and her team in the operations, was that identifying loss, for want of a better word, that should be repaid, was some 16,000 as is mentioned here. So I think it’s slightly nuanced, in the sense that there was a larger shortfall that was on the account but, actually, once investigations had been done, once the teams had worked, once the operational team had worked with Elliot and his teams, we concluded that, actually, the shortfall was around 16,000. So yes.

Mr Beer: I mean, if we just look over the page to see an email addressed to Ben Foat and Kathryn Sheratt from Mr Staunton, he summarises it in the second paragraph, second sentence:

“A lengthy investigation found that Elliot owed under £15,000 built up over 6 to 10 years. Bearing in mind that about £1 million a year is transacted … they believe that the amount is de minimis.”

Why do you say that the investigation into this postmaster NED was heavy-handed?

Nicholas Read: I think certainly looking at the approach that was recommended and suggested, which was originally to do unannounced visits to Elliot’s branches, I think you will have seen emails to that effect, in order to try and establish what the current loss was, was an extraordinary – an extraordinary recommendation by the team.

I think, as Elliot has rightly pointed out, a more sensible and more balanced approach would have been to employ members of the Operations Team to look into it in a joint way with Elliot and that, I think, would have been a more effective and more efficient way of doing it.

The reason I say it’s heavy-handed is that, clearly, there was an issue with how this was going to be recorded in the report and accounts. Clearly, there was an issue with the volume and alleged volume of shortfall, and I think it would be fair to say the sort of over-enthusiastic investigative approach was heavy-handed and that there were other ways that this could have been addressed.

Mr Beer: Going back to page 1, please. Second sentence in first paragraph:

“They [that’s Messrs Ismail and Jacobs] think that Ben [that’s Mr Foat] is stirring things up even though it has been investigated”, et cetera.

What did you understand to be the suggestion against Mr Foat?

Nicholas Read: I think – I mean, I think this goes back to the fact that the Investigation Team sits within Ben Foat’s area of responsibility. They work to him, as the General Counsel, and I think, therefore, by association, they were assuming that was the determinant of the investigation, the manner of the investigation and the activity that occurred as a consequence.

Sir Wyn Williams: I’m sorry, I’m a bit unsure that you’re actually addressing the point that Mr Beer is trying to get at. Can I just remind you that the evidence, I think, from both Mr Staunton and Mr Elliot (sic) was that the investigation had taken place in April, then there’d been what Mr Elliot (sic) described as a series of meetings, which were “business meetings” which resolved the issue.

Nicholas Read: Yes.

Sir Wyn Williams: His complaint thereafter, as I’d understood it, to the Inquiry, was that the Investigative Department and Mr Foat in particular had taken a long time to actually formally close the investigation.

Now, it seems to me that this all happening in November 2023 is some kind of complaint about Mr Foat still pursuing an investigation, if you see what I mean. Or that’s how it reads if you put it into the context that I’ve just described, which I think is an accurate summary of Mr Elliot (sic) and Mr Staunton’s evidence.

Nicholas Read: It is.

Sir Wyn Williams: So do you know what was going on in November 2023, which caused this to resurrect itself, so to speak?

Nicholas Read: So not specifically. I’m assuming, because Kathryn Sheratt was engaged in this process, it had to do with what director liabilities to the company were going to be put into the report and accounts, and if the investigation hadn’t been formally closed down, which by the sounds of things it hadn’t, in terms of specifically, that was the – giving rise to some concern. I think you’re quite right that a seven-month investigation into some alleged shortfalls seems an inordinate length of time and I think that’s absolutely the case, and I think that – well, I know that the Investigations Team would recognise that that was the case.

So, yes, I think there is some disappointment, certainly on behalf of Elliot, and I heard what he said two weeks ago, that the Retail Team were business-like and confident in the way that they engaged with him to resolve the issue, and it would have been far easier to have done it that way than to have had something more formal than what is obviously – or obviously took place.

Mr Beer: Can we move forwards, please, to January 2024 – this was in November 2023 – again, in relation to views expressed by your Subpostmaster Non-Executive Directors. By looking at POL00448302. If we can look at page 4, please. This is a note sent by Mr Staunton to himself by way of contemporaneous note of a conversation that he had four days previously on 10 January 2014. The note is dated 14 January 2014. I’ll read it:

“Saf said the views expressed by Richard Taylor, and previously by management and even members of the Board, still persisted – that those [postmasters] who had not come forward to be exonerated were ‘guilty as charged’. It is a view deep in the culture of the organisation ([including] at board level) including that postmasters are not to be trusted. SOMETHING NEEDS TO BE DONE.”

“Martin Roberts and certain members of his team were singled out. There has been no feedback on the investigation into Mr Roberts ([including] for inappropriate behaviour and lack of integrity). He was responsible for the postage stamps debacle where changes were made to accounts by his team just like Fujitsu. If Elliot had not been on ARC the controls would not have been strengthened. Roberts and his team do not want any extension to their terms of office as they believe new [postmasters] would not have the experience to challenge them.”

Scroll down:

“Equally Saf and Elliot are FED UP WITH THE AMOUNT OF POWER WIELDED BY FOAT. He and other members of the senior team act as if [POSTMASTERS] ARE GUILTY UNTIL PROVED INNOCENT (‘as per my experience’ they both said). ‘No one believes us’ is a constant refrain from [Postmasters]. WHILST FOAT IS AT THE HELM NOTHING WILL CHANGE. we must also part company with all those investigators who behaved so terribly with [postmasters]. What on earth is happening if Steve Bradshaw is still with us – his performance at the Inquiry was a disgrace and reflected terribly on Post Office. Foat uses his leadership of the Inquiry Team as an instrument of his power – it all has to stop. The [postmaster] ‘is not the enemy’. ‘Only [postmasters] can solve this’ and tell us how to change. JB is an ex-policeman. His behaviour has been unacceptable and he needs to move on to prove we have changed.”

Then skipping a paragraph.

“There are some 48 people involved in investigations. There are over 40 just like Bradshaw. These people need to go. Project Phoenix was allowed by Foat to go into the long grass. Bradshaw went into one of Saf’s stores some years go and immediately said ‘we are closing you down’. [Postmasters] tell him not much has changed since. There is a complete lack of respect for [postmasters] and that has to change.”

If we just scroll to the bottom, I don’t think there is anything else that’s relevant. He ends with this:

“A lot in this note to consider and take forward with the Board.”

The reference to 40 people who are just like Mr Bradshaw, investigators, have you ever referred to such people as the “untouchables”?

Nicholas Read: No I haven’t.

Mr Beer: Mr Staunton – no need to turn it up – WITN11410100, at paragraph 107 and on 1 October, when he gave evidence to us, page 109, line 7, states that you used the term to him, both privately and in a meeting; is he incorrect?

Nicholas Read: He is incorrect.

Mr Beer: Mr Ismail says that you used the term “untouchables” to refer to some individuals within Post Office in two contexts: in a private NED-only meeting and in a Board meeting; is he incorrect?

Nicholas Read: He is.

Mr Beer: Mr Jacobs said that you used the term in the context of a NED-only meeting; is he incorrect?

Nicholas Read: Yes, he is.

Mr Beer: Are you familiar with the term?

Nicholas Read: Well, I’ve obviously seen a lot of it in the media, seen a lot of it in the press. Obviously, it has occurred in this forum as well. I think there’s a lot of conflation between what has been described. There’s this notion that there are 40 untouchables who are Investigators from the past. That is not an expression that is used in the organisation. That is not an expression that is familiar to the organisation.

I also discovered, two weeks ago, as part of the disclosure exercise, that there was an investigation conducted by Andrew Darfoor into the comments that I made at the Select Committee, and this was obviously one of the areas of investigation and, as I discovered two weeks ago, I was unfamiliar that an investigation had been conducted, but it was and it was found that that was not the case, that this is not an expression that is used more widely in the organisation, that this is not an expression that I have used, 40 Investigators, or 40 untouchables. So I can say with some confidence that this idea of 40 untouchables is not something that is widely used in the organisation.

Mr Beer: In any event, given that Phase 4 of the Inquiry was ongoing at the time of the conversation that this note refers to in January 2024, were you concerned by these reports from Mr Ismail and Mr Elliot (sic)?

Nicholas Read: As in the commentary that he’s written here? Of course. Very, very concerned.

Mr Beer: What action did you take?

Nicholas Read: This obviously occurred at the time that the pineapple email was in circulation. I think you’ll be familiar with how that occurred. Just to sort of take you back to the mechanics of this, this was an email that emerged, I think, on a Sunday night, inadvertently sent to me by Henry Staunton. I sent it on inadvertently, given that there was no identification in the subject matter box of the email or, indeed, any confidentiality associated with it, inadvertently sent it on to colleagues in order to help me write a response to the Voice of the Postmaster Group, which is what Henry had asked me to do.

Mr Beer: We’re just going to come to that in a moment.

Nicholas Read: Oh, okay.

Mr Beer: But just on the “I inadvertently disclosed to colleagues”, you disclosed it on to Mr Roberts and Mr Foat –

Nicholas Read: That’s correct, yes.

Mr Beer: – who were the targets of the allegations.

Nicholas Read: That is correct, yes. At 8.00 the following morning, I dropped an email to Saf and Elliot saying I was very sorry that the situation had occurred, it had been completely inadvertent in terms of a mistake on my part and that I’d be happy to speak with him. I recommended that we have a Teams call, the three of us in that email. Saf was unable to join it so I therefore had a call with Elliot to apologise, and I didn’t have a chance to speak to Saf until the following week, which is when we had a Board meeting, and so it did go unanswered.

Mr Beer: As to the substance of what was said, rather than that difficult handling issue that followed, what did you do?

Nicholas Read: I spoke with both Mr Roberts and with Mr Foat, about the allegations that had been made. Clearly, it was quite a difficult conversation because, clearly, it had been released to them both and they were angry and upset about the fact that they had – this had come to light and, more importantly, they were angry and upset that Saf and Elliot had that view of them. So it was a difficult conversation.

But, again, certainly from my perspective, the challenge, I think, for Ben in particular, was the management of the Investigations Unit and how we were deploying it, and I think it is important to make a very clear distinction between investigations work at the Post Office now and how they worked historically. If you’d like me to just describe that –

Mr Beer: I think we’ll come on to that in probably a passage in this afternoon’s questioning.

Nicholas Read: Okay.

Mr Beer: But this suggested that Mr Foat had allowed Project Phoenix to “go into the long grass”. What was done as a result of that suggestion?

Nicholas Read: Just going on to Project Phoenix very explicitly, this is a source of some frustration in the sense that we haven’t moved quickly enough, and I know that the Inquiry has seen emails to that effect. I certainly have been and was keener that we were more forthright in terms of how we addressed individuals who would be in a potential position of postmaster-facing activity, either those who were involved specifically, or those who weren’t.

But Project Phoenix, just to remind everybody, is formed of two very, very distinct parts. The first part is it’s individuals who were named during the Human Impact Hearings, and it’s also individuals who may have been involved in activity that resulted in the prosecution of postmasters; and, secondly, it was as a consequence of the restorative justice meetings that myself and Simon Recaldin, and subsequently others, have taken part in over the last 18 months or so.

The combination of which is we obviously heard about individuals during those restorative justice meetings, and clearly needed to investigate the allegations that had been made to us by the victims, and that’s clearly what Project Phoenix is about. There are 47 particular case studies that have emerged through the Human Impact Hearings and through the restorative justice meetings, and we have distilled those down to six individuals, three of whom have been – three of whom have no case to answer. The allegations, we haven’t found corroborating evidence for.

We’ve looked through, I believe, 130,000 different documents. We’ve interviewed many of the people who I spoke to at the restorative justice meeting and, indeed, who were at the Human Impact Hearings, to see if we can find and understand what occurred. Three individuals, however, are now under further investigation, both by the Post Office and by external agencies.

So would it have been, and do I wish that we could have moved more quickly with Project Phoenix? Yes, I do. So I have sympathy with Elliot and Saf’s view. I think –

Mr Beer: What was the cause of the pace –

Nicholas Read: Primarily because we needed to speak to individuals who had been involved – who had made these allegations, I think and then obviously trying to find corroborating evidence and, as you’ve heard in this Inquiry, that’s not often easy at Post Office, to get the right data and the right disclosure and the right information to help us understand precisely what had happened. That could be recordings, that could be records of interviews, there’s a number of different things that we looked to do but it was frustrating. Yes.

Mr Beer: Just stopping you there, just to make sure I haven’t misunderstood your answer.

Nicholas Read: Yes.

Mr Beer: You said a couple of times that you looked for corroborating evidence, which may have a special magic for some lawyers. In order to find a case to answer, are you saying that there had to be something additional to that which the postmaster said, ie some independent evidence coming from somebody other than the postmaster?

Nicholas Read: Well, I think the recordings, as an example, and the records of the meetings, would be obviously areas that we would be looking at to try and understand whether or not the allegations that had been made, you know, could stand up.

Mr Beer: So you weren’t literally meaning corroborating evidence?

Nicholas Read: No, what I meant was supporting evidence I guess, fully investigating each of the allegations that had arisen, and that, as I say, involved specifically speaking with those victims who had come forward and I am certainly of the opinion that that took quite a long time to organise, quite a lot of time to bring together, but too slow. And I think perhaps, if I took a step back, I would say that the Investigations Unit specifically is pretty overwhelmed with activity at the moment, and that may well have been a reason why the pace was slower than we would have hoped.

Mr Beer: Can we turn to what we just discussed, then, namely the handling of the email, by looking at POL00448564. And turn to page 3, please.

We should briefly just look at page 4, just so we can see what was included, and just the bottom of page 3. Thank you.

An email to Mr Staunton copied to Mr Ismail and Mr Jacobs, containing a suggested email to the Board, and then the suggested email includes in its second paragraph:

“… please see attached a file note I prepared following my conversation with Saf and Elliot on Sunday …”

That’s their file note we just looked at, yes?

Nicholas Read: Understood, yes.

Mr Beer: If we then go to page 3, please. Mr Staunton, by these emails, essentially provided that Project Pineapple note to you on 17 January; is that right?

Nicholas Read: Yes, that’s correct.

Mr Beer: Then if we go to page 2, please, and scroll down, please. This is the email that you were referring to, I think, a moment ago, Mr Read – is that right –

Nicholas Read: Yes, that’s correct.

Mr Beer: – where you send the chain on, including the filenote –

Nicholas Read: That is correct.

Mr Beer: – to Martin Roberts and Ben Foat, saying:

“… can you produce a suitable response for Henry.

“You will be aware of my views from discussions we have had …

“I assume there are GFA restrictions too?”

What does that refer to?

Nicholas Read: The grant funding agreement with the NFSP.

Mr Beer: If we scroll up, please. Stop there. This Mr Foat’s reply, second paragraph:

“The Project Pineapple email contained very serious allegations of which I have not been made aware. Given the circumstances, I would be conflicted.”

Scroll up, please. Mr Roberts’ reply:

“Having read [the email] below I am in the same place not knowing what Project Pineapple is and having never been made aware of the allegations made against me and my team.

“I … feel conflicted …”

You tell us in your witness statement, the crossreference is paragraph 243, as you’ve done today, that you forwarded this chain inadvertently to Messrs Foat and Roberts; is that right?

Nicholas Read: That’s correct.

Mr Beer: You say that you didn’t open the attachment at the point at which you had sent it on; is that right?

Nicholas Read: Yes.

Mr Beer: That the email chain was not marked private and confidential –

Nicholas Read: Yes, that’s correct.

Mr Beer: – and that you didn’t pick up from the subject line “Future of Post Office branches”, what it in fact was about?

Nicholas Read: That’s correct.

Mr Beer: Did those things contribute to your inadvertence?

Nicholas Read: Yes, they did.

Mr Beer: Later that day on the 18th, Messrs Ismail and Jacobs emailed you expressing their concerns, they having learnt that you had provided the Project Pineapple note to the individuals named in the complaint. Can we look at that, please. POL00448383. Can we start, please, at page 2. Mr Ismail’s email to you later that day, it’s 10.00 at night, copied to Mr Jacobs and Mr Staunton:

“… writing to address a deeply concerning and distressing matter that has … come to my attention … there was a confidential meeting between myself, Elliot, and the Chairman, where we discussed our observations and concerns regarding the operations of the Post Office and our ongoing cultural issues. Regrettably, it has come to my knowledge that the notes of the meeting, which were intended to be kept in strict confidence, have been circulated to the individuals who were the subject of our discussion.

“The implications of this breach of confidentiality are far reaching and have placed me in an extremely compromising position. It has not only damaged the relationships between myself and those individuals (Head of Legal and Head of Postmasters) but will have eroded trust and will create an atmosphere of tension and hostility and I worry about serious repercussions for me as a postmaster as both these individuals are ‘untouchable’ as you have said.

“I am deeply troubled by how this breach occurred, what measures were in place to prevent such a mishap from happening.

“Please see below my concerns which outline the gravity of the situation. I request that you thoroughly investigate how [the] breach of confidentiality occurred and address the following:

“Was the breach as a result of negligence or a lack of judgement on your part?

“How can a mistake of this magnitude happen within the organisation, especially when dealing with sensitive matters and with all the current spotlight on us?

“By exposing me to such a compromising and jeopardising position, how do you expect me to continue working effectively with the individuals involved?”

Then to page 1, please. Mr Jacobs still later on the same day, 11.58 at night, two minutes to midnight, “I strongly echo Saf’s views on this,” he said in an email to you. The same distribution list:

“The release of the confidential briefing note to the very people we have highlighted in the document is a horrendous breach of trust.

“My only desire on this Board as a Postmaster NED has been to ensure the organisation does the right thing and my actions have always sought to protect the organisation from both internal and external risks.

“Your description of these three men, (JB …)”

That’s Mr Bartlett – is that right –

Nicholas Read: Yes.

Mr Beer: – who is Director of Investigations and Assurance –

Nicholas Read: That’s correct.

Mr Beer: – so the old Investigations Division –

Nicholas Read: The new Investigations Division, yes.

Mr Beer: – Mr Foat, General Counsel –

Nicholas Read: Yes.

Mr Beer: – and Martin Roberts, Chief Group Retail Officer, correct?

Nicholas Read: Yes, that’s correct.

Mr Beer: “… as ‘untouchable’ in our call earlier today was worrying enough (especially in the light of our grave concerns as to their ability and the power they wield without any real oversight) but is made worse by them now being told of our view of them. Only one Board meeting ago these people came to the Board to request authority to recommendation police investigations into postmasters without Board oversight or approval – and thought nothing of it! To be so staggeringly out of step with reality of the world Post Office occupies today is beyond belief.”

You’ll see that both emails refer to you referring to the three men or some of them in a call that day as “untouchable”; did you do so?

Nicholas Read: My recollection of this is being very, very clear that no one in the business is untouchable. I don’t know if I used the word “untouchable” but no one is above the law, and that is really important. The point that I was making to them, and it wasn’t specifically about Martin Roberts, them, or indeed JB, was that we are trying to bring a sense of transparency to the organisation, and nobody is above the law. And that is the point that I’m trying to make.

The sort of secondary observation, as a consequence of this, is that my position, in terms of formally addressing the Investigations Team, at that current time was difficult. I was under investigation myself, by this – the oversight was being provided by the Investigations Team, and the point that I was making was that, until such time as that had concluded, it would be difficult for me to ensure that we were getting the right – that we were getting the right kind of oversight from Ben and JB in terms of the investigations that they were adopting.

Mr Beer: To move the matter on, what then happened, is this right, is that Mr Foat and Mr Roberts, for their part required written apologies to be provided by the two Postmaster Non-Executive Directors, Mr Jacobs and Mr Ismail?

Nicholas Read: Yes.

Mr Beer: If we look at those, please, POL00448577.

This, at the top of the page, is Mr Foat’s email to Ms McEwan and others, including you and, in his second paragraph, Mr Foat says:

“As a minimum, Elliot Jacobs should go on record and in writing to confirm the apology he provided to me about the assertions that were made to me in the Pineapple file note. Comments attributed to him have been published in the media and he has remained silent when he is well aware that those comments contain factual inaccuracies and even a basic lack of understanding of Post Office’s organisational structure.”

So far as Mr Roberts is concerned, POL00448514, page 2, please. This is Mr Roberts’ email to Mr Jacobs and Mr Ismail, third paragraph:

“I would now ask that you please put in writing the apology and retract all the allegations and statements presented in the email that I was copied in on.”

Then page 1, please. A joint reply, essentially:

“As promised, Saf and I sat down and talked with Martin after the Board meeting yesterday. An honest and open discussion was had we believe we had put the matter to bed.

“This evening, we have received the email below … asking us to retract the statements made in the document.

“Whilst we have both made clear the tone and the way it was delivered was unacceptable and should never have been circulated; the content is not something we feel is incorrect with regard to the Retail Team leadership and performance.

“… our position remains that these are both important and urgent issues that must be addressed, not ignored – regardless of how they have come into his mailbox.”

Scroll down, please. Yes, we needn’t look at the remainder. What discussions, if any, did you have with Mr Roberts and Mr Foat on Project Pineapple?

Nicholas Read: I spoke with both of them and Martin Roberts, in particular, said that he felt he’d had a fulsome apology in conversation with Saf and Elliot, and this email would suggest slightly different: that they were obviously apologetic that Martin got to hear about the information in this particular way but that, actually, they stood by what was said, and I think there was some disagreement, I think. Well, misinterpretation perhaps is a better way to describe it. I think Martin felt that he had a fulsome apology from them and so that was very unfortunate for sure.

Mr Beer: What about the substance of the issues that these two Subpostmaster Non-Executive Directors were raising: how was that addressed; was it addressed?

Nicholas Read: Be more sort of specific, as in the sort of six allegations they have made? Well, you’ve heard me talk about the specifics around – the specifics around the investigation into past roles and – my memory has gone, sorry. What was I going to say?

Mr Beer: Do you want to look at the list?

Nicholas Read: Yes, that would be helpful. Thank you.

Mr Beer: Scroll down, please?

Nicholas Read: Yeah, Phoenix, sorry. Absolutely. The issue around the replacement plan. We were very clear that the two Postmaster NEDs were the first that had been on the Board in the Post Office’s history, and we wanted to work with them to ensure that really clear lessons were learnt, and I know that the Retail Team did that and subsequently did that. They took the Postmaster NED comments about induction, about recruitment, about what the next phase should look like. But we had been clear that – and they were under no illusions that the term was a single term, in terms of their three years on the Board, and that they would naturally roll off. I don’t think we had been explicit about that but I think that was the intent. So they had good input into that process.

The stamps issue was well spotted by Elliot and we jumped on that straight away. Within 24 hours that process had ceased, so I’m comfortable that we took the right action on that.

Martin Roberts was investigated and looked into and there were no complaints that were upheld in that regard.

I know, having spoken to Tracy Marshall and, indeed, to the Postmaster Engagement Director, who is a current serving postmaster, that they would absolutely refute that. They feel that they’ve had good engagement with the Non-Executive Directors, and this notion of path clearing – and I think this has come up a number of times, Henry Staunton mentioned it – and I think it’s important that we understand precisely what this is because I don’t think it’s been well articulated.

Path clearing is an event that is going to occur when the organisation rolls off the Horizon platform and moves on to the NBIT platform.

What will be required to happen is that, in all 11,500 branches, there will need to be a full cash and stock audit in order for the migration from one system to another. We have no real understanding about what the implications for that will be and, indeed, whether or not there are going to be large surpluses or indeed large gaps in terms of the stock and the cash that is held in each individual branch. We really don’t know that.

We are flagging it as a challenge and we will need to think very carefully when we get to that point in two years’ time how we manage that particular problem. It’s a known challenge and I think the way it’s been discussed in the Board – in the Inquiry is that somehow we’re going to address this in the next few months. It simply isn’t the case. We’ve got lots of thinking to do around this. It’s a known problem.

So I hope I’ve tried to bring some colour to the – in the issues here. This, you know, is a very important and big deal. I am very sad that the situation occurred. I think the events that have subsequently happened have not been helpful, either to the Postmaster Non-Executive Directors, and/or indeed to the members of the Group Executive who were quoted, and I think in terms of the confidence that it’s given to the rest of the postmaster organisation about what goes on at the top of the organisation, and you can see that playing out in people’s confidence in the colleague survey results for ‘24, which happened a few weeks after this event.

So it’s not a happy period in the Post Office’s history and I don’t think it’s something that anybody is particularly proud of amongst the leadership team.

Mr Beer: Would you describe what we read as the normal operation of a Board and General Executive of a large corporation undertaking complex issues or a sign to the outside world, who have been given a glimpse into it, of the dysfunctional operation of that company at Board and General Executive level?

Nicholas Read: I think all businesses, all complex businesses, have spats and issues that emerge at Group Executive and Board level, certainly in my experience. I think it’s deeply unfortunate that this is a public spat, for want of a better word, and I think it’s fairly unedifying for the Post Office but I don’t think it’s necessarily reflective of anything more fundamental than that and I think it is something that happens in large, complex organisations.

Mr Beer: Are you saying this is the kind of spat that goes on regularly at Board and General Executive level, the public just don’t get to see it?

Nicholas Read: No, I don’t think I said that. I think this occurs and, as I say, in large organisations and complex organisations, people fall out, mistakes get made, issues emerge. I don’t think I would necessarily say there is a corollary that this therefore means that it’s utterly dysfunctional.

Mr Beer: So to try to pin you down more precisely, take out the word “regularly”, these are the kind of exchanges and these are the type of relationships that one could reasonably expect to see in a well-functioning organisation?

Nicholas Read: No, I don’t think that’s the case. I think the business was under enormous amounts of pressure. I think that has been well articulated by many of my colleagues who have been at the Inquiry over the last couple of weeks. I think, when a business is experiencing the level of Parliamentary, media and Inquiry scrutiny that it is under at the moment, it isn’t entirely surprising that issues that may be easily and more readily resolved, suddenly take a life of their own, and I think that’s certainly the case with this particular issue, and there are others as well.

Mr Beer: Can we move forward with the issue of the Project Phoenix and Past Roles Project –

Nicholas Read: Yes.

Mr Beer: – and the interaction between the two, by looking in February 2024 at the minutes of a POL SEG and General Executive tactical meeting. POL00458674. Thank you. Can you just explain briefly what the SEG/GE Tactical meeting is or was?

Nicholas Read: Yes, I can. Yes. Every Wednesday we have a Strategic Executive Group meeting. That is – the names of the individuals are, I think, those who are present, and you can see from the apologies who constitutes the Strategic Executive Group and, just for sort of clarity, the Group Executive was replaced by this new group called the Strategic Executive Group in January 2024.

Mr Beer: You’re named, amongst others, as being present and, if we scroll down to item 4, please, which is over the page, I’m sorry, “The Project Phoenix/Past Roles Verbal Update”, “Key points of note”, Nicola Marriott: can you explain the function that Nicola Marriott performed at this time?

Nicholas Read: Yes, I can. She is the number 2 to Karen McEwan in the People department.

Mr Beer: “… noted the distinction between Project Phoenix (where allegations of wrongdoing were concerned) and Past Roles Review, when no such allegations were made …”

Firstly, is that a distinction that you recognise?

Nicholas Read: Yes, it is.

Mr Beer: “… and where the review was focused on determining any conflicts or potential conflicts as between certain previous and current roles.”

So the latter, the Past Roles Review, concerns a past role and a present role which presents a conflict or potential conflict, even absent an allegation of wrongdoing.

Nicholas Read: That’s correct.

Mr Beer: “[Ms Marriott] noted the latest position in relation to Past Roles … where 35 colleagues had been deemed to be RED.”

Firstly, what is involved in being “deemed to be RED”?

Nicholas Read: Right. I think that figure is now 27 but, again, it’s exactly as you depicted, which is that – and I’ll provide some context to the Past Roles work, which is effectively an assessment of the 1,700 individuals in our organisation who have been with the Post Office for ten or more years, and this was the start of a desktop exercise to see if we could identify were there individuals who were involved in activities that were associated with this Inquiry and with the scandal, and found themselves in roles where they could be potentially conflicted because they would be involved in activities that were informed with redress or indeed with other postmasters themselves.

Mr Beer: Just stopping there, can you be more specific –

Nicholas Read: Yes, I can.

Mr Beer: – to the current role, which gives rise to a potential or actual conflict?

Nicholas Read: Yes, we specifically prioritised the Remediation Unit and the Inquiry teams, simply because of the nature of the work that they were doing, which is obviously administering operationally redress and/or supporting this Inquiry, in a specific way. So I asked for the work to – for the 1,700 to focus most specifically on those individuals who are involved with redress or the Inquiry, and then trying to identify whether there were individuals who might have, in the past, been involved in activity that is covered by this Inquiry: investigations, audit and work associated with prosecutions as well.

And, if there were – and there’s no allegation at this stage that those individuals have done anything wrong – if they were, we wanted to make sure that we identified who they were, and what roles they were doing today, and whether or not the roles that they were doing today in some way could be conflicted or indeed could postmasters who are involved in redress or receiving redress be in some way intimidated or indeed affected by the fact that these individuals were administering the redress or indeed supporting the Inquiry.

That was the genesis of the work.

Mr Beer: So why were these 35 individuals given a red rating?

Nicholas Read: Specifically, I can’t go through all of them but it would be, as I said, it would be those roles – presumably retail facing roles historically, that they may have been involved in, and now they are involved in some form of activity associated with redress in the case of these individuals.

Mr Beer: So in the Remediation Unit?

Nicholas Read: In the Remediation Unit.

Mr Beer: The Inquiry Team?

Nicholas Read: None in the Inquiry Team, as I understand it, but these were specifically associated with the Remediation Unit, and those roles would have been shortfall analysis, they would not have been decision-making roles, in the sense of deciding or determining what an offer may or may not be from a compensation perspective. However, we wanted to be really confident that anybody coming forward to the Remediation Unit had the confidence that they were talking and speaking with people that were unbiased in any shape or form. So it was for the individual’s protection as well as specifically for the postmaster’s protection.

Mr Beer: We it might be suggested that this work in February 2024 was a little after the horse had bolted?

Nicholas Read: Yes, it’s slower than we would have wanted and I think, as you’ll see from the correspondence – and indeed as this Inquiry has seen over the last couple of weeks – there is no question that this piece of work was slower. However, we can now – I can now confirm with some confidence that there should be no conflict arising from individuals working within the RU team when it comes to redress.

Mr Beer: Are any of the 35 red-rated individuals the same 40-plus Investigators that were mentioned in the Project Pineapple note; are we referring to the same cohort?

Nicholas Read: Yes, I mean, I think we should be clear, this cohort that’s 40 “untouchables” or 40 Investigators, is not a cohort that I recognise. So I don’t think the two are the same.

Mr Beer: How many of the 35 red-rated individuals are currently within the Assurance & Complex Investigations Team?

Nicholas Read: I don’t have the detail for that, but my understanding is the A&CI team, which constitutes about 17 individuals, is brand new. It was established in 2022, it was made up of individuals who have come in to the organisation externally, and so there is no crossover, as I understand it.

Mr Beer: The note continues:

“4 RED-rated colleagues were deemed to be high risk …”

Why was that?

Nicholas Read: They will have been individuals who will have been involved in audit or investigative work, historically. Again, not necessarily an allegation of wrongdoing but clearly, from our perspective, it was important that we identified who these individuals were and that they weren’t involved in activity supporting redress.

Mr Beer: So it was more to do with what they did previously, rather than the function they were now performing, that made them high risk?

Nicholas Read: Yes.

Mr Beer: “… 2 had been through the panel review, with recommendations to redeploy and the other 2 were due to go to the panel soon, where recommendations for redeployment were also the expected outcome.”

You are recorded as asking how it was that the Remediation Unit had 35 red-rated colleagues. Not an unreasonable question: you were concerned –

Nicholas Read: Yes.

Mr Beer: – why is our Remediation Unit staffed with 35 people –

Nicholas Read: Correct.

Mr Beer: – that occupied roles that brought them into conflict or potential conflict with the task that they were then undertaking?

Nicholas Read: That’s exactly the question I was asking.

Mr Beer: The answer, from Ms Marriott, was that:

“… resourcing decisions at the time had likely been based on a need for requisite knowledge …”

Did you understand that to mean that we needed past Investigators, Contract Managers and the like, audit functionaries, involved because the very complaints that were being made now concerned the same activities?

Nicholas Read: Less so that. I think it was more the fact that the technical nature of shortfall analysis and disclosure was – these were individuals and experts who were better at doing it than anybody else, was the way that it was described to me.

Mr Beer: She continued:

“… the lens being applied now had not been envisaged, but arguably it should have been.”

This was just after Mr Bates vs The Post Office, I think, wasn’t it?

Nicholas Read: Yes, it would have been, yes.

Mr Beer: Did that affect the lens?

Nicholas Read: No, I don’t think so. I think her point is well made. I mean, I think it was a concern that this hadn’t been considered at the outset.

Mr Beer: “That said, [she] emphasised her earlier point, that the individuals had not been implicated in any wrongdoing, then or now.

“On Project Phoenix, there were 6 people against whom there had been specific allegations of wrongdoing.”

Over the page.

“[Post Office] had been engaging postmasters and legal representatives to determine the facts and the basis for any disciplinary/misconduct steps as proved necessary.

“[Ms Marriott] noted the prospect that no findings of misconduct would be made and the difficult position this would present – where there were competing dependencies and interests including the expectations and conviction of those who had made the allegations, the proceedings of [this Inquiry] and the individuals themselves who deserved fair treatment if they had done nothing wrong.”

“GE”, is that the meeting?

Nicholas Read: GE is the Group Executive, yes.

Mr Beer: Rather than a reference to an individual?

Nicholas Read: Yes.

Mr Beer: “… noted that there were also wider historic organisational and cultural issues being brought to the fore which would also likely be subject to close external scrutiny.

“… another lens to be applied beyond any allegations of a historical nature, should be how individuals presented themselves at the Inquiry, though it noted the difficulties and dependencies in this regard too.

“… agreed that the panel recommendations should go on to [others] to make any final decisions on the outcome …”

What does “there were wider historic organisational and cultural issues being brought to the fore” mean?

Nicholas Read: I’m not sure I entirely know. No, I’m not sure specifically what that refers to.

Mr Beer: In which case, Mr Read, that will be my final question before lunch.

Sir Wyn Williams: Just so that I can be clear in my mind, the six people that are referred to on the previous page, you have told us are now three with no case to answer.

Nicholas Read: Yes.

Sir Wyn Williams: I think it was Ms McEwan, although it could have been Ms Scarrabelotti, told us that a decision about the other three is imminent.

Nicholas Read: That’s correct, sir.

Sir Wyn Williams: Fine, yes. Thank you.

Mr Beer: Can we say 2.00, please?

Sir Wyn Williams: Yes.

Mr Beer: Thank you.

(12.57 pm)

(The Short Adjournment)

(2.00 pm)

Mr Beer: Thank you.

Good afternoon, Mr Read.

You will remember that before lunch I asked you some questions about an exchange of emails between May 2021 and July 2021 involving a man called Gary Thomas, a former Post Office Investigator –

Nicholas Read: Yes.

Mr Beer: – and the suggestion made by him that there existed in his time a bonus scheme that was related to the volume of successful prosecutions and/or the volume of recovery –

Nicholas Read: Yes.

Mr Beer: – under the Proceeds of Crime Act?

Nicholas Read: I do.

Mr Beer: You noted that the correspondence had, in the final analysis, been sent to your personal assistant but you had not much recollection about it?

Nicholas Read: That’s correct.

Mr Beer: I have had helpfully drawn to my attention a document that maybe rounds this issue off a little. Can we look at that, please. POL00142412. If we go to the last page, please, which is page 7, you will see this is a note from Peters & Peters Solicitors of 24 August 2022. If we go back to the first page, in the tramlines at the top, it’s a disclosure note in relation to, amongst other things, number (2), “A Review of Bonus/ Incentivisation schemes”.

It seems that it was addressed to defendants or putative defendants, and perhaps the CCRC, because in paragraph 1 it’s noted that:

“In accordance with its ongoing disclosure obligations … the Respondent [that’s Post Office] is continuing to review material not previously considered for disclosure …”

Then paragraph 2, “This note is intended to address three matters”, the second of which was:

“A [Post Office] review of bonus/incentivisation schemes relating to [Post Office] employees involved in the investigation and prosecution of criminal offences.”

If we go to the part of the note that concerns that, that’s on page 3, paragraph 13. It says:

“[Post Office] has conducted a review of material relating to the bonus/incentivisation scheme that applied to employees involved in criminal investigations and prosecutions … in order to determine whether it operated so as to incentivise or encourage improper conduct capable of leading to unfairness in those prosecutions …”

If we scroll down, please, it says Post Office is providing the note to disclose the fact of the review to allow appellants to make representations in relation to the review, the relevance of the review or the facts of any particular appeal.”

“Scope and ambit”, if we go over the page, please.

I should have looked at the footnote at the foot of the page:

“The Review was conducted by Peters & Peters as part of the Post Conviction Disclosure Exercise …”

If we carry on, please. “Scope and ambit”. 17,000 documents, this included, where available, HR files relating to individual members of the criminal law and security teams.

Some interviews were conducted, paragraph 17, with current and former Post Office Security Managers.

Then the note splits out its conclusions into findings relating to the Security Team and then, subsequently, findings relating to the Criminal Law Team. I’ll just look at those relating to the Security Team, which is what Mr Thomas was a member of:

“The [Post Office] Security Team operated a bonus/ incentivisation scheme during the period between [1999] and 2013 …

“The scheme included, among others, objectives relating to the recovery of [Post Office] losses through criminal confiscation or compensation proceedings, or by repayment direct to [Post Office] during the course of an investigation or prosecution.

“The recovery of [Post Office] losses, typically expressed as a percentage of losses caused by fraud activity, was a recorded team objective within the [Post Office] Security Team. The achievement of this would account for a proportion, albeit a small one, of the total bonus awarded to members of the [Post Office] Security Team that were entitled to receive bonuses. These objectives were concerned solely with team outcomes, not individual performance.”

Then paragraph 21:

“The level of bonuses … would depend principally upon the individual’s Performance Development Review score at an annual appraisal.”

Paragraph 22:

“The Review identified no evidence that the bonus/ incentivisation scheme applicable to the [Post Office] Security Team was based on the numbers of prosecutions, convictions or recommendations … Peters & Peters collected bonus data and conducted an exercise to identify whether there was any correlation between the number of convictions and level of bonus … No such correlation was found …”

Number 24 notes that:

“… charging decisions were taken by lawyers … not by investigators …”

The Inquiry has heard a lot of evidence on these issues, I should say, as to the accuracy of what is said here.

Nicholas Read: Yes.

Mr Beer: Over the page, it goes on to the criminal law team.

So, essentially, it seems that there was a bonus/ incentivisation scheme –

Nicholas Read: Yes.

Mr Beer: – that was linked to recovery of funds but not the number of prosecutions?

Nicholas Read: Yes, that would be my interpretation as well.

Mr Beer: Of course, in order for there to be a recovery of funds there needed to be a successful prosecution to start with?

Nicholas Read: Yes.

Mr Beer: Were you involved in this in any way; did you have any knowledge of this exercise to investigate the extent to which there was a bonus or incentivisation scheme?

Nicholas Read: No, I don’t recall it, actually. Not something I do recall.

Mr Beer: Looking at it, it seems that part of what Mr Thomas said would broadly align with what the review found?

Nicholas Read: Yes.

Mr Beer: But part of it would not, in that there wasn’t a metric relating to the number of successful prosecutions but there was in relation to recoveries?

Nicholas Read: That’s what I would interpret too.

Mr Beer: Thank you. Thank you, that can come down.

Can I turn to or continue with the topic of the interaction between those that have been implicated in the wrongs of the past and the payment of compensation.

Nicholas Read: Yes.

Mr Beer: Would you agree, as a general rule, that, if one perpetrates a wrong, you should promptly admit the wrong and seek to rectify the problem that you have caused?

Nicholas Read: Yes, I would.

Mr Beer: Would you agree that it has been established that the Post Office devastated the lives of subpostmasters and the lives of their families through the use of criminal investigations, criminal prosecutions and civil claims?

Nicholas Read: Yes, I would.

Mr Beer: That those wrongs took many years to surface?

Nicholas Read: Agreed.

Mr Beer: Would you agree that when acting as a private prosecutor, a public corporation, the Post Office utilised its status and history to silence its opponents?

Nicholas Read: Yes, I would.

Mr Beer: Would you agree that it’s been established that the Post Office denied postmasters disclosure that would have enabled them, firstly, to contest the charges that were wrongly laid at their door but, secondly, to seek to remove unjust convictions that had been wrongly obtained against them?

Nicholas Read: Yes, I would.

Mr Beer: Is that why, in light of those recognitions, you say that Post Office should not have been involved in dealing with compensation for those wrongs?

Nicholas Read: Yes, it is.

Mr Beer: Why was Post Office involved in the administration of compensation for dealing with those wrongs?

Nicholas Read: Ostensibly because the shareholder, the Government, wanted us to experience some of the discomfort that had been caused by the Post Office and, therefore, be involved in the redress. My personal view, and one that I’ve expressed consistently since this decision was made by the shareholder, was that it seems astonishing to me that an organisation that has been involved in the investigation and the prosecution of postmasters in this light should be involved in redress. It should be done independently and I’ve been consistent with that view, well, for three or four years now.

Mr Beer: I’ve heard the analogy suggested it’s like putting a burglar in charge of deciding whether to give stolen goods back. That may be strong language.

Nicholas Read: Yes, I think that’s strong language but, notwithstanding your analogy, I do think that the confidence of the process and the independence of the process would have been enhanced if the Post Office had been ring-fenced and removed from this – or not even considered, as opposed to removed.

Mr Beer: You essentially explained it on the basis that the Government said that the Post Office needed to feel some of the pain?

Nicholas Read: Yes.

Mr Beer: Was that phrase used?

Nicholas Read: I looked at my contemporaneous notes and I think I may well have disclosed something to this effect: that the way it was portrayed to me was that Treasury were of the opinion that the chaos – I think was the word that was used – had been caused by the Post Office. There was a desire for the Post Office to experience some of the discomfort that had been caused. You could understand why that might be the case but I just think it’s missing the point completely.

Mr Beer: Given your understanding that it was, in principle, morally wrong for the Post Office to act as the custodian or the decision maker in the provision of a large range of compensation, wasn’t it doubly important to ensure that those that were entrusted with that function within the Post Office had no connection with the past?

Nicholas Read: Yes, I think that is the case. I mean, I would describe it that structurally we have a problem here, the cause is wrong and everything that has flowed from that cause has been problematic for us. The building in of independence has been critical to the schemes that are operated by the Post Office, and that has had varying degrees of success, I would argue.

Mr Beer: The fact of the matter is that those that have been involved, or are implicated in the events of the past, have nonetheless had a role in making decisions as to compensation?

Nicholas Read: I don’t think making decisions; I think, going back to the conversation we had before lunch, I was clear about the number of “reds”, as they were described, and we were very clear that we had ensured that any “reds”, in inverted commas, were not involved in decision making associated with either offers or anything of that nature. They may well have been involved in the shortfall analysis, they may well have been involved in disclosure exercises but not involved in decision making associated with compensation.

Mr Beer: To take an example, Mr Rodric Williams was an important figure in the Post Office’s Steering Committee that drove the defence of the Post Office in the Group Litigation –

Nicholas Read: Yes.

Mr Beer: – and he went on to work on the Shortfalls Remuneration Committee?

Nicholas Read: That may well be true. I couldn’t confirm that.

Mr Beer: If it is true, and I suggest it is –

Nicholas Read: Right –

Mr Beer: Do you see the problem?

Nicholas Read: I do see your problem and Mr Williams is not involved in that activity any more.

Mr Beer: Did it cross the mind of the Board or the General Executive that the continuing – and I think you’ve described it as “inexcusable delay” in the delivery of compensation might be that the wrong people were involved in the provision of it?

Nicholas Read: I don’t think expressly like that. I think, when we’ve looked at disclosure as being a sort of core reason for the delay in compensation or one of the core reasons for the delay in compensation, I think there have been other technical reasons and technical drivers, rather than some of the individuals that you’re alluding to.

Mr Beer: Can I turn to the Central Investigations Unit, as it was initially called.

Nicholas Read: Yes.

Mr Beer: Just by way of background, can you help by confirming the following: the Central Investigations Unit, or the CIU, was established in the Post Office in February 2022 –

Nicholas Read: Correct.

Mr Beer: – and that was established as the Post Office’s central investigation function?

Nicholas Read: Yes.

Mr Beer: It’s now known as the Assurance & Complex Investigations Team, A&CI.

Nicholas Read: That’s correct.

Mr Beer: Can you help by confirming that the establishment of the CIU in February ‘22 followed a review undertaken by KPMG between June and August 2021?

Nicholas Read: Yes, Project Birch, I think.

Mr Beer: Project Birch, the KPMG report, was, would you agree, heavily critical of the approach within Post Office to investigations at that time?

Nicholas Read: Yes.

Mr Beer: The report for the transcript – no need to turn it up – is POL00423697. Can you help by confirming that a number of GE papers were produced following the Project Birch report and decisions taken by the GE on the approach to investigations?

Nicholas Read: Yes, that’s correct.

Mr Beer: They were put before the Board – if we can look at that, please – on 27 September 2022. POL00448320. So this is essentially a paper to the Board as a result of prior decision making by the GE, sponsored by Mr Foat, for a meeting on 27 September 2022. If we go to paragraph 2.4, please:

“It is our recommendation that the minimum remit … is Option 4 [that need not concern us]. This would allow [Post Office] to act in determining facts relating to situations ranging from allegations of theft or fraud by postmasters and/or their staff using/misusing [Post Office] systems or functions where either or both [Post Office] and the postmaster are victims, through to misconduct or process failings in [Post Office] and the subsidiaries. The Horizon issue identified a failure to investigate …”

I think that means the Horizon Issues Judgment:

“… identified a failure to investigate beyond the postmaster in determining culpability. Best practice (and in some situations, law) requires all reasonable lines of inquiry to be followed, whether they point away or towards the considered investigative hypothesis as it is the truth that is sought, not that a case is to be made against a selected individual. By investigating wider than the Postmasters, for example their staff where relevant, we demonstrate that [Post Office] has learnt from the past and would seek to determine actual culpability, if any, which is treating the postmasters fairly. Allegations of misconduct by postmasters would be explicitly included in the proposed remit.”

Then if we go to page 6, please. If we scroll up, please, this sets out the proposed operating model and the interaction of the CIU with external agencies in particular the police.

Nicholas Read: Yeah.

Mr Beer: “As a Government organisation, Post Office is viewed by [law enforcement agencies] differently from a privately owned company. It is unfortunately fact that LEAs deprioritise most reports of crime made by government-linked organisations if made in the traditional interest in way.

“4.2. Suspected offences with an element of criminal dishonesty would form the vast majority, if not all, of our criminal investigations and potential referrals.

“4.3. It is proposed …”

Then a summary of this, would this be fair: that the CIU would conduct an internal investigation but with the intention of reporting any alleged criminality to the police?

Nicholas Read: We touched on this topic yesterday and, as you say, this is a proposal to the Board. I think maybe if I could take a step back and just describe what the activities of the CIU are today and what it does, it might shed some light on where we’re going with the CIU more broadly.

There are four or five very specific activities that the A&CI are involved in. First and foremost, it’s the whistleblowing and there’s a ring-fence team that look after whistleblowing and Speak Up. It is independent and that’s what it does.

The second element is that it investigates those the issues of more than £100,000 potential loss in – within the sort of Post Office environment. That could be branches or anywhere else. It obviously is the single point of contact for liaising with LEAs and it’s important, we felt, to have a single place to do that, and it acts in two other ways: it looks into and governs the activity of the senior leadership group and the Board, if there are investigations of conduct into those individuals; and finally, it provides some assurance for the organisation in terms of the way it conducts its investigations.

I think the genesis of this work, in terms of Project Birch, was particularly the fact that there were disparate groups across the organisation who were doing various levels of investigation for various reasons with inconsistent levels of training and support.

So the important element here, I think, is that the evolution of this issue is that the A&CI team interplay with law enforcement agencies when there are organised crime and larger issues associated with fraud or money laundering, or the like, as opposed to the inference that the A&CI would be doing individual investigations into specific post offices, discrepancies or losses.

They have to be of a size greater than £100,000 for this team to be involved in any of that kind of activity. I don’t know if that helps.

Mr Beer: That sets out the position now.

Nicholas Read: Yes.

Mr Beer: I want to explore in slightly more detail what was proposed, and then what happened.

Nicholas Read: Right.

Mr Beer: If we go over the page, please, if we scroll down – and over the page, keep scrolling, and again. I think that’s probably the end.

Was the KPMG Project Birch report circulated to the Board?

Nicholas Read: I don’t know. I don’t believe so. I think it was in draft form, so I’m not sure that it went to the Board.

Mr Beer: Was the Project Birch report circulated to the General Executive?

Nicholas Read: Yes, I believe so.

Mr Beer: Did you see it?

Nicholas Read: Yes, I believe I did.

Mr Beer: Do you agree with the criticisms in it of the Post Office’s then approach –

Nicholas Read: Yes, I mean, I –

Mr Beer: – to investigations?

Nicholas Read: My recollection of that was that they were inconsistent, that they were conducted across the business without levels of assurance and control and, more importantly, they were conducted potentially by Area Managers, people who weren’t qualified to investigate, and part of the recommendation was that we needed to bring this together to drive some consistency, and that is what has happened as a consequence of Project Birch.

Mr Beer: Do you know why the Project Birch report may have not gone before the Board?

Nicholas Read: No, I don’t actually, no.

Mr Beer: When the Board was asked to approve this new approach to investigations, were any questions raised by the Board as to the approach that was then being taken to investigations?

Nicholas Read: I don’t recall specifically, I’m afraid.

Mr Beer: Can you recall whether questions were raised, designed to question assumptions about culpability or assumptions made on the way to substantiating losses?

Nicholas Read: No, I don’t recall.

Mr Beer: The CIU team, I think, became properly operational in January 2023 –

Nicholas Read: Yes.

Mr Beer: – and Mr Bartlett, John Bartlett, was appointed –

Nicholas Read: That’s correct.

Mr Beer: – in February 2023 to head it, I think.

Nicholas Read: Yes.

Mr Beer: Now, the Inquiry – and I’m not going to go into the detail – has heard evidence from Mr Jacobs on his experience of investigation by this CIU team. Has what Mr Jacobs has said to the Board given the Board any pause for thought as to the way in which the CIU were conducting its investigations?

Nicholas Read: I think it will have given the Board some concern. I think the Project Pineapple – well, Project Venus experience, as I mentioned before the break, the words I used were “heavy-handed”. I think there is certainly a level of reflection associated with that. What we do know is that the A&CI team is stretched and it is involved in too many investigations. That may well be a cultural reflection on the nervousness and broader nervousness in the business that currently pervades as a consequence, as we discussed before, of the Inquiry and the scrutiny that is occurring.

I think there is a potential lack of judgement at times and I think that is something that we are, as a Board, conscious of. But, at the same time, as we discussed yesterday, the Board is particularly aware that there is no presumption of guilt when it comes to loss recovery, when it comes to investigating discrepancies, when it comes to looking at issues associated with Horizon down in branches and, most importantly, that that activity, in terms of working with the postmasters, is conducted by the Retail Team and not by this specialist team.

This specialist team is ostensibly there to work with law enforcement agencies when organised crime is identified, and vice versa, when we identify it as well. As opposed to the – I think the impression that is being given is that this team is involved in the day-to-day activity associated with branches. That isn’t the case at all.

Mr Beer: Given that at the time that the Board was asked to approve the new approach to investigations set out in that noting paper, the Common Issues Judgment the Horizon Issues Judgment, and the Court of Appeal Criminal Division’s decision in Hamilton had all been handed down, decided –

Nicholas Read: Yes.

Mr Beer: – were then well established, how did the Board or did the Board satisfy itself as to the steps that were to be taken by the CIU to substantiate, in the words of the paper, losses in branches before proceeding to act upon them?

Nicholas Read: Well, I think the Board made it very clear that, if what you’re suggesting is that, if we are to work with any law enforcement agencies around potential losses, then clearly the Board needs to be involved in making those decisions, which is where it is – which is what the position it has today. So if we are to work with LEAs in any sense of the word, it needs to be something that is sanctioned by the Board.

But broadly, where LEAs ask for information, where they ask for cooperation, we should and will provide it.

Mr Beer: I was looking at it the other way round?

Nicholas Read: Right.

Mr Beer: The paper envisages an investigation by the CIU in which a loss will be “substantiated”. I’m asking whether any particular attention was paid by the Board to that issue. How is a “loss” – in inverted commas – substantiated?

Nicholas Read: No, I don’t think the Board specifically got into that level of detail.

Mr Beer: What about the General Executive, this being an issue of controversy –

Nicholas Read: Yes.

Mr Beer: – the substantiation of whether a loss had in fact occurred at all and, if so, who had caused it?

Nicholas Read: I don’t think the Group Executive got into that extent. This would be something that the Retail Committee would be more focused on than A&CI, particularly, as I’ve mentioned before, when it comes to identification of discrepancies, when it comes to mismatches, when it comes to transaction issues, that is something that will be specifically in the domain of the Retail Team.

Mr Beer: I think having sat in this room, you will have heard the evidence produced by YouGov concerning the levels of satisfaction and dissatisfaction with the operation of the Horizon system currently, and the extent to which faults within it seemed to cause unexplained losses. Can we look at that, please, by way of context to the questions that I’m going to ask?

The “Executive Summary” will suffice, so EXPG0000007, page 4, please. I’m going to whiz through this because we’ve heard the evidence already.

Nicholas Read: Yes.

Mr Beer: But it’s important context to the questions about enforcement action. In summary, the survey on subpostmasters, the SPM survey, found that nearly half of the SPMs surveyed were dissatisfied with how the Horizon IT system currently operates, compared to 25 per cent who were satisfied, and 25 per cent were very dissatisfied. So 75 per cent were dissatisfied or very dissatisfied.

42 per cent were dissatisfied with the training that they had received, compared to 25 per cent who were satisfied.

70 per cent said that they suffered from screen freezes.

68 per cent suffered from loss of connection.

57 per cent said that they had experienced unexplained discrepancies.

19 per cent said that they had recorded unexplained transactions.

14 per cent experienced missing transactions.

10 per cent complained of double entry of transactions.

65 per cent of the subpostmasters surveyed experienced those issues at least once a month.

In relation to the contract provision, 15 per cent – only 15 per cent – said that they had received a full copy of their contract – scrolling down – since the Common Issues Judgment in March 2019.

55 per cent felt that the terms of their contract were unfair; 32 per cent very unfair.

Then to page 5, 48 per cent of subpostmasters felt dissatisfied with their role; 31 per cent felt satisfied.

72 per cent felt undervalued.

60 per cent disagreed with the proposition that the Post Office Board listened to their views.

74 per cent disagreed that the Post Office understand the concerns of subpostmasters.

52 per cent did not think that the Post Office was a good place to work.

55 per cent thought that the Post Office had not learned the lessons from the past.

If we go on to page 28, please, at paragraph 4.5, in relation to shortfalls, around 7 in 10, 69 per cent of subpostmasters, reported they’d experienced an unexplained discrepancy on Horizon since January 2020.

Those that had been working between six and ten years were most likely to have reported this experience, up at 83 per cent; at 21 years least likely at 61 per cent.

Of the subpostmasters surveyed who reported experiencing an unexplained discrepancy since January 2020, 1 in 3 had done so as frequently as a few times a month, 17 per cent; or once a month, 18 per cent; 25 per cent who had experienced an unexplained discrepancy said they had done so a couple of times a year; 8 per cent, once a year; 9 per cent, less than once a year. That’s all represented in figure 15.

The vast majority, 89 per cent of subpostmasters surveyed who reported experiencing an unexplained discrepancy since January 2020 said that a typical discrepancy was less than £1,000; 50 per cent, who said less than £200; 39 per cent between £200 and £999; 8 per cent reported a typical discrepancy was between £1,000 and £9,999.

That’s all reported in figure 16, if we scroll down.

All subpostmasters surveyed who experienced a discrepancy reported these were shortfalls, 98 per cent; a third had surpluses with subpostmasters able to have experienced both.

Over the page, please, when asked how discrepancies were typically resolved, it was most common for subpostmasters to report using their branch’s money or to have resolved it themselves, 74 per cent; more likely among those who had been a subpostmaster for 11 to 20 years up at 82 per cent.

Then there’s a quote from one subpostmaster:

“The … system is still flawed at month end we have seen a discrepancy where a cheque had been shown to be cashed on our system which created a shortfall, we do not cash cheques as a local branch and this put us in a discrepancy when we went to [the Business Support Centre] they didn’t resolve the issue properly and we took on the loss personally.”

Figure 17, if we scroll down, shows how discrepancies have generally been resolved: 74 per cent resolved by the postmasters themselves or using the branch’s own money.

So the questions arising from that, Mr Read: these statistically significant results that concern issues with the frequency, volume and amount of discrepancy transactions make dismal reading, don’t they?

Nicholas Read: They’re very disappointing and surprising.

Mr Beer: Would you agree that they mean that the obligation in the contract upon Post Office to maintain oversight and investigate any apparent shortfalls or alleged shortfalls, and whether or not there was indeed any shortfall at all, is failing?

Nicholas Read: I think where we – where the “Review or Dispute” button is used, where the Branch Support Centre is engaged, where the Branch Support and Reconciliation Team are involved, we have good metrics to support that progress is being made in terms of how we engage with postmasters, how we worked with postmasters, to identify issues, and how that worked.

So the reason I say surprising is that the internal statistics don’t necessarily mirror these particular results. So that’s why it’s disappointing and that’s why we need to dig into it further and try and understand some of the underlying issues.

I’m conscious that I think it was only 14 per cent of the postmaster population responded to the survey, despite the fact that we wrote to them in hard copy, sent them emails. It’s more an issue of engagement, which I think is the one that we are challenged by. What we noticed is that where we reach postmasters from an engagement and from an awareness and from a – yeah, from an engagement perspective, we’re getting better results. I think it’s noticeable that those who have been postmasters for less than two years, for those who have been involved in some of our forums, some of our support groups, some of the way that we are changing internally, have reported better results.

There’s no question, though, that these are disappointing. We’ve got more to do and I think, despite the changes we’ve made to the Branch Assurance Team, despite the changes we’ve made to the Network Support and Reconciliation Team, despite the teams that now go out and help individual postmasters specifically with discrepancies or issues that emerge in branches, where we can try and resolve, we’re not getting the same level of traction, even though we are communicating and engaging with postmasters in a very different way.

When discrepancies or problems emerge with Horizon, we are utterly transparent when that happens. We use our Branch Hub tool. We use our Memo View tool. We engage with postmasters. But we’re obviously not getting through to everybody, and you obviously experienced as well in your survey, that we have more to do to try and win the trust and win the confidence of postmasters. Because these results certainly don’t suggest that we are making the progress that we would like to have made.

Mr Beer: I’ve got to ask you bluntly: how is it possible that, in late 2024, the same issues with shortfalls are occurring with postmasters paying them off themselves?

Nicholas Read: I just don’t know why the postmasters feel the need to do that. We have been absolutely explicit when we’ve investigated shortfalls that, where it cannot established how and why that shortfall has occurred, we are not imposing upon postmasters to pay off or pay it themselves with their own money. We’ve been very, very clear with that, maybe we’re not getting that message clearly through. But there is no enforcement by the Post Office in that situation at all, and it’s important that we convey that.

So that’s the engagement piece that I’ve spoken to the team about over the last three weeks, since this survey was delivered, and I know that the acting CEO is working with the Retail Team to try and get under the skin of what it is that is – and why it is that we’re not engaging in the way that postmasters can understand. Because, clearly, as I say, this is a disappointing set of scores.

Mr Beer: Has it occurred to the Board or the General Executive that there may be a connection between the fact that a very low percentage of subpostmasters report having received the new contracts, 15 per cent, and the fact that many postmasters, and notably more of the longer-term ones, are still paying off shortfalls from Horizon system errors, ie the changes that have been wrought under the contract, have not –

Nicholas Read: Haven’t got through.

Mr Beer: Haven’t got through because they haven’t been given the contracts?

Nicholas Read: I don’t think that’s necessarily the case. I think the restatement exercise was back in 2019, which is when we restated contractually to reflect the changes in the CIJ, was very quickly and comprehensively done.

This suggests to me this is more about engagement as opposed to contractual. This is about behaviours and this is about the Post Office today not getting its message through about how we want to help and support postmasters to improve their operational performance and more importantly to ensure that discrepancies don’t occur.

Now we know that there are anything up to 10,000 transaction corrections in any given month, which, if you think about 11,500 branches, is approximately one, transaction correction per month. So you know that with the vast amount of cash and the vast amount of stamps that we are moving between branches and the centre, you know, problems do occur.

But the fundamental issue from our perspective is we are standing by with the Branch Support Centre, with our reconciliation support team to help the postmasters get to the bottom, and the presumption of guilt is no longer applied. This is absolutely about presumption of innocence and making sure that we understand the issue, and then we can communicate the problem more broadly to our postmasters as well.

Mr Beer: If it’s right that only 15 per cent of postmasters have access to the new contract, then only 15 per cent of them would be aware of the new post-Common Issues Judgment terms.

Nicholas Read: No, I don’t believe so. We communicated the restatement exercise to all postmasters. So if that needs to be re-engineered then we need to do more to do so. I don’t personally believe that it’s a contractual issue that is affecting the way that we are engaging with postmasters. I don’t think it’s about contract. I think it’s about behaviour, and we’ve clearly got more to do.

Mr Beer: When a postmaster pays off a shortfall, is the cause of the shortfall investigated?

Nicholas Read: We only invite postmasters to pay for shortfalls when there is an agreement between the Post Office and that individual. If they believe that there is no causality associated with either error or carelessness on behalf of the postmaster themselves, they press the review and Dispute button and we go into a deeper investigation. But if, at the conclusion of that, we can’t find any agreed cause between the two parties, we do not enforce the postmaster to make good that loss.

Sir Wyn Williams: I follow that and I’ve understood that to be the position as you say it should be in practice. But taking this survey at face value, there are still, in numerical terms, perhaps hundreds of people who, when faced with a shortfall, simply pay it back.

Nicholas Read: I know.

Sir Wyn Williams: Right? Now, I think that’s what Mr Beer may just have been asking you about. In those circumstances, presumably nothing happens?

Nicholas Read: Well, we don’t know.

Sir Wyn Williams: You don’t know.

Nicholas Read: Yes.

Sir Wyn Williams: The money goes to the Post Office and that’s the end of it.

Nicholas Read: Well, we don’t know, sir –

Sir Wyn Williams: Who has done it?

Nicholas Read: – who is paying money and that is troubling.

Sir Wyn Williams: Right yes, okay.

Mr Beer: That can come down, thank you.

Does Post Office conduct surveys of this kind in relation to the extent to which postmasters experience Horizon issues that lead to shortfalls in branches?

Nicholas Read: We do two things. We do two surveys a month – sorry, two surveys a year with the postmasters, a pulse survey in the autumn and then a full survey in January, February, March, where we ask the postmasters about the issues that are affecting them, and so that we can – we do it consistently every year so we can build up a trend of what is going on. But we also have a number of different –

Mr Beer: Just before you move on from that answer, I was asking specifically about issues with surveys asking the types of questions that YouGov put to the full cohort of subpostmasters.

Nicholas Read: Yes, is the short answer to that question, perhaps not to the same extent and exactly the same wording, but we do ask about the issues that they are facing, and we do ask about Horizon and we do ask about, you know, problems that are associated with it, whether or not we’re communicating discrepancies appropriately, whether or not we’re communicating issues separately, how best to do that, which vehicles and which tools do postmasters like to be communicated through and with, whether that’s Area Managers, whether that’s through Branch Hub, whether that’s through communication directly to the counter itself. So, yes, is the short answer; we do do that.

Mr Beer: You said in an answer a couple of answers back that only 14 per cent of the total subpostmaster cohort replied to this part of the survey.

Nicholas Read: I think that’s correct, yes.

Mr Beer: Did you mean, by that answer, to say that reliance should not be placed on the result?

Nicholas Read: No, I – what I meant was we didn’t engage – we didn’t manage to engage everybody to take part and so, therefore, I think it’s not unreasonable to ask the question, you know, people who want to engage with the survey will have an issue that is on their minds. I’m just questioning whether the other 85 per cent had an issue.

Mr Beer: As the Chairman has said, the 1,000 or so that did respond to this part of the survey, a very significant proportion of them, hundreds, 74 per cent, said that they were paying back shortfalls themselves. That, in and of itself, irrespective of the cohort –

Nicholas Read: Is troubling.

Mr Beer: – that did reply, is a significant number of postmasters?

Nicholas Read: It is troubling, yes.

Mr Beer: In your witness statements, you don’t appear to discuss in any detail the Post Office’s continuing investigations and enforcement actions against subpostmasters and, in particular, the mechanisms for obtaining data from Horizon. Was there a reason for that or was it just because of the questions that you were asked?

Nicholas Read: I think it was the questions I was asked, yes.

Mr Beer: Okay. Can we look at some material relating to that, please. BEIS0000789. This a quarterly shareholder meeting. Can you just explain briefly, if you could, what the quarterly shareholder meetings consist of?

Nicholas Read: Yes, certainly, it’s a three-way meeting, effectively, between DBT officials, UKGI officials and Post Office senior leaders, non – in the main, non-Board members, with the exception of the Chair. And we agree – it’s a quarterly meeting and it’s held for a couple of hours every quarter. There’s an agenda that is agreed by DBT and the Post Office.

Mr Beer: If we just scroll down we’ll get a greater idea of those that are present. Thank you. We’ll see that you were present at this one. If we just scroll up, we can get the date: 10 January 2023. Can we go to page 4, please, “Issues of note as required, including interaction with policy guidance”, and the third bullet point, “AC” – I’ve forgotten who that was.

Nicholas Read: Alisdair Cameron.

Mr Beer: Thank you:

“… mentioned they are seeing a rapid increase in losses including shortfalls of cash in branches. [Post Office] need to conduct a proper investigation and demonstrate whether the postmasters are accountable. However, it is difficult to conduct a proper investigation based on the Horizon data, and also [Post Office] are not in a position to ask for the relevant money back in the current climate. It was noted as not a good time to prosecute postmasters due to the current historical cases, but this is seeing a rapid rise in losses for [the Post Office]. MR’s team …”

That’s Mr Roberts?

Nicholas Read: That’s correct.

Mr Beer: “… are working on putting a new system in place.

“[Mr Roberts] noted a helpful summary from [Mr Cameron] and added that in particular the view and dispute buttons on the system are causing problems. Getting in contact with postmasters was highlighted as difficult, and they’re not always available … [Post Office] noted they can do more in engagement with postmasters. It is on the agenda for the next … Board meeting.

“[Mr Cameron] raised that there are other solutions rather than going to the police. If postmasters are responsible and don’t pay money back, there is an option to take it off their remuneration. Any solutions as to how any shortfalls that postmasters are accountable for can be recouped from postmasters, aside from remuneration, were noted as preferable.”

Then:

“[Post Office said] – In cases where there is fraud, these could be tested in a civil jurisdiction. A paper on this was noted as being worked on currently and would be raised to [the Government] in due course.”

“TC”, I think that’s Tom Cooper, the UKGI Director and also the Shareholder NED; is that right?

Nicholas Read: That’s correct.

Mr Beer: “… noted there would be problems if money was deducted from postmaster remuneration without an investigation.

“[Mr Cameron] confirmed no one is suggesting this. Noted a key issue is that the investigations are not currently being conducted in the most suitable way. [Mr Roberts’] solution is forensic process.

“[Post Office] noted that where full investigations are done quite often POL does get the repayment. The issue is the investigation has to be good enough and that it is independent … the problem is that the data is not sufficient to do an investigation in many cases.”

Then you are recorded as noting:

“NR noted that ultimately those who steal from [Post Office] will be prosecuted.”

So the questions arising from what was said by the various parties at this meeting, did you agree with Mr Cameron that it was “difficult to conduct a proper investigation on the basis of the Horizon data”?

Nicholas Read: No, I don’t think that’s necessarily the case. I think what he was alluding to was getting data from Fujitsu. I think that’s what he’s implying.

Mr Beer: It’s not what’s recorded as having been said – “It’s difficult to conduct a proper investigation based on the Horizon data”.

Nicholas Read: Yeah.

Mr Beer: The passage that’s highlighted in the second bullet point down. Do you know why –

Nicholas Read: I’m sorry, I’m pausing because I’m just not sure whether or not he was in a position to make that comment, as in factually whether or not that was something he was particularly aware of. I think we are confident today that we have a mechanism for properly investigating discrepancies so –

Mr Beer: I’m going to come on to that. This is January 2023 –

Nicholas Read: Yeah.

Mr Beer: – and the CFO is saying it’s difficult to conduct a proper investigation based on Horizon data. What’s changed?

Nicholas Read: I think, you know, certainly from the maturity of the teams that we’ve now got in terms of the way that we have organised our Retail Teams to investigate, we are much more confident in the way we can go about an investigation and identifying, you know, where there are shortfalls and where there are discrepancies. So I think we have matured as an organisation in terms of how we work with postmasters to identify what has gone wrong. I still think we have more to do, invariably we have more to do, but I think it has to be recognised that this was not done properly and it has not been done properly for many, many years and that’s half of the issue, so building a them that knows how to properly interrogate and investigate Horizon data to come up with an appropriate route through is something that we are developing and learning and have been for the last four or five years. It’s clearly the whole CIJ/HIJ findings, whether we just were not doing this properly. So we’re making progress with this.

Mr Beer: The third bullet point from the bottom ends in the last line as saying:

“… the problem is that the data is not sufficient to do an investigation in many cases.”

Why was it the Post Office’s position that the data is not sufficient to do an investigation in many cases?

Nicholas Read: I’m not sure of the genesis of that particular statement.

Mr Beer: It seems to accord with what Mr Cameron had been saying in the second bullet point from the top?

Nicholas Read: Yeah, possibly. Possibly.

Mr Beer: They seem to be the same thing, don’t they: why was Government being told it’s difficult to do a proper investigation, based on Horizon data?

Nicholas Read: I think what we saw at this particular time was an escalation in potential liabilities as a consequence of – well, losses were starting to grow in the network and, not unsurprisingly, the shareholder were asking why were losses growing in the network, and I think this was the conversation that arose as a consequence of that. I think that was the primary.

Mr Beer: The answer seems to be that it’s difficult to conduct a proper investigation based on Horizon and the data from Horizon is not sufficient to do an investigation in many cases, and I’m asking, was that true and, if so, why?

Nicholas Read: I have to say, that’s not necessarily my sort of my conclusion. I think with a growing number of – with a growing number of losses, we were trying to scratch our heads as to why this was occurring.

Mr Beer: That’s a slightly different issue. I’m asking about why Government was told, in answer to its reasonable question, “Why are losses growing?”, that’s it’s difficult to conduct a proper investigation and the data isn’t sufficient to do so.

Nicholas Read: It’s not my understanding, certainly now, that that is an issue for us.

Mr Beer: What new system was Mr Roberts putting in place?

Nicholas Read: We do a number of things. We set up two particular schemes, I guess. We’ve been out to do operational – effectively operational training, so we’re going out to individual branches and doing operational visits to those branches and we’ve also introduced an operational incentive for postmasters that is designed to encourage them to follow the operational procedures for daily, weekly and month-end transaction – month-end reconciliations.

We’ve seen quite a significant increase since we have gone out with effectively a carrot option, to try and encourage postmasters to follow the procedures correctly, which is what is happening.

So we went out and trained, effectively, all branches individually, through our Area Managers and our branch training teams, introducing them to and reminding them of how procedures should be conducted, what the mechanisms were for reconciliation, what the mechanisms were for daily, weekly and monthly cash-end – end of days, for want of a better word and, having done that, we then established a system whereby we are incentivising all branches on a monthly basis to fulfil the process according to the operational manual guidelines which is obviously something that hasn’t happened.

I think it probably plays to the comment about training at the start of the survey, that we have more to do in terms of training, particularly some of our older postmasters and some of those with longer service, who perhaps didn’t get the original training. I think there is a lesson in here that says we will need to go out in a more structured way to look at the older postmasters, serving postmasters.

It was quite clear from this survey that those who were more recently involved in the – recently joined the Post Office have had better onboarding and better training and better support.

Mr Beer: What was the outcome of the paper relating to testing fraud cases in a civil jurisdiction?

Nicholas Read: I don’t know the answer to that.

Mr Beer: Is that something that is currently a planned route within Post Office for addressing alleged shortfalls?

Nicholas Read: I don’t have detail on that, I’m afraid.

Mr Beer: So you’re not aware of any plan –

Nicholas Read: No.

Mr Beer: – to use the civil courts –

Nicholas Read: No.

Mr Beer: – as a means of testing cases of alleged fraud?

Nicholas Read: Not that I’m aware of, no.

Mr Beer: Thank you.

Sir Wyn Williams: So is it reasonable for me to infer that, as of January 2023, that was thought of as a possibility but it, in the end, turned out not to be –

Nicholas Read: That would be the –

Sir Wyn Williams: – since we’re now in October ‘24?

Nicholas Read: That would be the case, sir.

Sir Wyn Williams: Right.

Mr Beer: Mr Cameron is recorded as saying that investigations were not being conducted in the most suitable way.

Do you know how investigations were not being conducted in the most suitable way at this time?

Nicholas Read: No, I’m surprised that Al had a view on that, to be honest. My understanding of what is going on with the Retail Team and how they are approaching the operational effectiveness of our branches, the way they do – as I said, the way they do training and support, and I use the word “support” advisedly, is markedly improved. And we can see that in the internal surveys that we’ve done, with people who have experienced problems and issues and have got in contact with the Branch Support Centre and/or with the Branch Assurance Team or the review and dispute.

Mr Beer: Would you agree that an important, indeed essential, partner in any investigation into an alleged shortfall is Fujitsu?

Nicholas Read: Yes, I would.

Mr Beer: In paragraph 135(c), I wonder whether we could turn that up, which is page 73 of your third witness statement, page 73, and if we scroll down, please, and again. You say:

“From Fujitsu’s perspective, I think they are suspicious of Post Office and my feeling is that they consider some members of our Board are ‘anti-Fujitsu’. Fujitsu recently sent Post Office correspondence raising concerns that they were being asked to give expert opinion in prosecutions against postmasters, amongst other matters – that was not the case, and we reassured Fujitsu that Post Office would never again prosecute Postmasters, but we would comply with requests for assistance from the police or CPS if asked which may necessitate assistance from Fujitsu.”

Then you give a reference to five lots of correspondence:

“Again, I think that the correspondence was borne out of a suspicion and distrust within the relationship. It is also worth noting that Post Office has negotiated with Fujitsu a standstill agreement in respect of [any] potential legal claims it may have against them, until the end of the Inquiry.”

I think the correspondence that you’re referring to there took place primarily between April and July this year; is that right?

Nicholas Read: That’s correct.

Mr Beer: It related to a criminal investigation being undertaken by the City of London Police –

Nicholas Read: That’s correct.

Mr Beer: – in which the Post Office had asked the City of London Police to seek a witness statement from Fujitsu in relation to an investigation into a subpostmaster; is that right?

Nicholas Read: That’s correct.

Mr Beer: Post Office separately asked Fujitsu to provide that witness statement?

Nicholas Read: Yes.

Mr Beer: Thank you. Can we look at some of this correspondence, the early parts of which you’re not involved in but the latter parts of which, you are.

FUJ00243203. Can we start, please, with page 3, an email from Simon Oldnall, the Horizon IT Director, to Daniel Walton, who is the Head of the Post Office Account – is that right –

Nicholas Read: That’s correct.

Mr Beer: – within Fujitsu?

Nicholas Read: Yes, he is.

Mr Beer: “Dan

“I understand from John that there have been some challenges with supporting an ongoing Police investigation that involves a large sum of money.

“I obviously understand broader context, but wanted to reassure that [Post Office] is supporting the police investigation and offering any and all assistance we can. Can I ask that you help with any conversations that City of London Police need to have with Fujitsu …”

Then onto page 2, please, if we scroll up please, a reply from Mr Walton back to Simon Oldnall, again copied to John Bartlett, who was the John referred to in the first email:

“Thank you for your message …

“As this is a legal matter, [Fujitsu] Legal are communicating with the City of London Police.

“I am not involved in the discussions, and in any event, [Fujitsu] considers it to be inappropriate for Post Office and [Fujitsu] to be discussing a police investigation.”

Then page 1, please. And then scroll up. Mr Bartlett joins the conversation on 19th April this year. With Christian Spelzini added in:

“One of my team has gone back to City of London Police to see how the contract you referenced below was progressing as we have an open and objective engagement with [City of London Police] on this matter.

“[City of London Police] has informed us that they have not had any additional information nor contact with Fujitsu after the single, exploratory and inconclusive conversation. They left that conversation with the feeling that they were indirectly being told that the Horizon system was unreliable and so the case could not progress. We really need to explore this as this is not the nuanced impression Simon Oldnall has given me.

“As the potential victim in this case [the Post Office] would be grateful if you can provide me with contact details for either the equivalent person in Fujitsu … to my role … or an appropriate person in your UK legal team. I will then pass those details on to [City of London Police] who are looking to have a trilateral conversation …

“It is impossible to over state how important this is: I need to advise both the police and [the Post Office] as to the evidentially-established reliability (or not) of data that is being used every day in establishing outcomes with postmasters and, potentially, to be presented to the criminal justice system by the police and the three public prosecuting agencies. The non-provision of relevant witness statements from [Post Office] and Fujitsu will rightly be interpreted by the police and prosecutors as [Post Office] and Fujitsu not having faith in the reliability of the data with the obvious outcome resulting.”

So that’s, it seems, where the matter ended on 19 April. I think the next step in the chronology is a letter from Mr Patterson to you, raising concerns in relation to Mr Bartlett’s email of 19 April. Is that the first that you became aware of it: the Patterson letter?

Nicholas Read: Yes.

Mr Beer: Can we look at the Patterson letter, then. FUJ00243199. This is a letter with which you’ll be familiar, partly because it’s been shown in the Inquiry before and partly because you replied to it.

Nicholas Read: Yes.

Mr Beer: He writes to you raising concerns about Mr Bartlett’s email and essentially makes it clear, is this right, that Fujitsu wouldn’t support the pursuit of any enforcement action, criminal or civil, against subpostmasters, at least by the Post Office?

Nicholas Read: Yes.

Mr Beer: So if we just look at what’s said, he is writing in paragraph 1 to raise serious concerns which indicate the Post Office continues to pursue enforcement action against postmasters and that it expects Fujitsu to support such actions. Then this:

“To be clear, [Fujitsu] will not support the Post Office to act against postmasters.”

Just stopping there, did you, and do you, understand that broad statement to encompass all and any action taken against postmasters, whether by the police or by the Post Office?

Nicholas Read: That was my inference, yes.

Mr Beer: The letter continues, however:

“We will not provide support for any enforcement actions taken by the Post Office against postmasters, whether civil or criminal, for alleged shortfalls, fraud or false accounting.”

That may be a slightly narrower statement –

Nicholas Read: It is, yes.

Mr Beer: – limited only to Post Office action against postmasters?

Nicholas Read: I would agree with that.

Mr Beer: Okay. He continues:

“In particular:

“(i) Criminal investigations:

“We have become aware of a recent investigation by the [City police]. The approach of [Fujitsu] is to cooperate with the police and any other third party exercising independent investigative, prosecutorial, regulatory or judicial powers.

“However, we are concerned by the behaviour of the Post Office investigation […] on this matter. That team maintains an approach of Post Office as ‘victim’ and requires [Fujitsu] to provide a witness statement as to the reliability of Horizon data stating that without such [a] statement the case will not progress.”

I think that is a fair summary of the Bartlett email, isn’t it.

Nicholas Read: That is, yes.

Mr Beer: “For the Investigations Team to act in this manner seems to disregard the serious criticisms raised in multiple judicial findings and indeed, exhibits a lack of respect to the ongoing Inquiry.

“Pursuit of Shortfalls from postmasters:

“… Post Office may be continuing to pursue postmasters for shortfalls in their accounts using Horizon data. We would have expected that the Post Office has changed its behaviour in light of the criticisms and is appropriately circumspect with respect to any enforcement actions. It should not be relying on Horizon data as the basis for such shortfall enforcement.”

How did you react to that –

Nicholas Read: Badly.

Mr Beer: – quite strong statement?

Nicholas Read: Badly.

Mr Beer: Why did you react badly to it?

Nicholas Read: Because it’s not true, we aren’t pursuing postmasters for shortfalls, and I think the overall tone of the letter was incendiary and provocative, and that was certainly the reaction that it had in me.

Mr Beer: “Postmaster Redress:

“[Fujitsu] recognises that it holds Horizon related information that may assist postmasters and Post Office workers to appeal convictions or seek appropriate redress including compensation. [Fujitsu] has and will continue to provide Horizon information”, essentially to that end.

“[He has] asked Dan Walton to work with your team to ensure this change is implemented, documented and reported immediately.

“Based on what I have heard and seen in the Inquiry, there is a significant behavioural and cultural aspect to the Horizon scandal. As leaders of our respective organisations, I believe we are both committed to learn the lessons necessary so that this appalling scandal can never be allowed to happen again.”

Just shortly before the break, can I, for myself, ask some broad questions?

Nicholas Read: Yes.

Mr Beer: Given the history of the Horizon scandal, do you consider that it is appropriate that the Post Office continues its investigative function?

Nicholas Read: Yes, I think we still need to have an Investigations Team.

Mr Beer: Should the Post Office Investigation Team still be carrying out recorded interviews?

Nicholas Read: Perhaps not in the way that we are doing at the moment but, if they are for the purposes of sharing that information, then fine. But in terms of the – I think the inference is that these are almost sort of police orientated interviewing, then no.

Sir Wyn Williams: In other words, there should not be an investigation by the Post Office which includes, in effect, an interview under caution?

Nicholas Read: Correct.

Mr Beer: The name of these things has been changed, as “assurance visits”?

Nicholas Read: Branch assurance visits. They are very, very materially different. The only thing that a branch assurance visit does is count cash and count stock. It doesn’t investigate. Investigations are done by a completely different team. So we are very clear that there is a separation of accountability here. The Branch Assurance Team does stock checks, for all intents and purposes, cash and stamps. The Branch Support and Reconciliation Team will help investigate what the issue is with those particular – in those particular circumstances.

Mr Beer: This statement refers, in that second paragraph on the page we’re looking at, to a change being implemented; can you see that?

Nicholas Read: Yes, I can, yes.

Mr Beer: What change did you understand was to be implemented: from what and to what?

Nicholas Read: I’m not entirely sure what change was being implemented. We’d been extremely clear and I was, certainly when I replied to Fujitsu, that we aren’t prosecuting, which is the major sort of consequence of this particular letter, but that we did expect them to support the police and the law enforcement agencies. I think when I take a step back, I would say we pay hundreds of millions of pounds to Fujitsu to manage our transactions, of which we do some 7 million transactions every single day. They manage our stock, they manage our cash, they manage postmaster remuneration, they manage the transactions of our third parties in and out of our system.

I think it’s entirely reasonable to rely on their integrity and the integrity of the system, given what we pay and what we get from them.

Mr Beer: With that answer, can we take a break? We will return after the break with, I think, some email traffic that suggests that Fujitsu would provide a witness statement to the police.

Sir Wyn Williams: Right. Thank you.

Mr Beer: Thank you.

Sir Wyn Williams: What time shall we resume, Mr Beer?

Mr Beer: 3.35, please, sir. Thank you.

(3.19 pm)

(A short break)

(3.37 pm)

Mr Beer: Thank you, Mr Read.

Can we just go back, please, to FUJ00243203.

Do you remember, this was the exchange of emails that you weren’t copied into, which you said you didn’t know about, before you came to receive the letter of 17 May?

You’ll see that this finishes with Mr Bartlett’s email of 19 April 2024, the “Good morning Dan” email, which we looked at.

Can we look now, please, at FUJ00243158, and go to page 2 and scroll down. There’s in fact an extension to this email chain, again, emails that you didn’t see, but I’ll draw it to your attention. So you’ll see that this is the “Good morning Dan” email.

Nicholas Read: Yes.

Mr Beer: If we scroll up to the bottom of page 1, you will see, at the bottom of page 1, Chris Breen, thank you. We can see a reply by Mr Breen to John Bartlett’s email:

“Dear Mr Bartlett …”

So this is Fujitsu to Post Office:

“I have been passed your message by the team within [Fujitsu] that looks after the delivery of contractual services to Post Office in relation to the Horizon system.

“I am a solicitor in Fujitsu’s Legal Team. Please refer any further correspondence to me rather than Mr Walton.

“I note your comments about [Fujitsu’s] engagement with City of London Police, which are not accepted.”

Then over the page.

“It is not appropriate for [Fujitsu] to discuss with [Post Office] the nature and substance of its cooperation with an ongoing police investigation.

“[Fujitsu] will continue to cooperate with the Police in relation to its ongoing investigation (or indeed any other) and it will not discuss the nature and substance of this engagement with others, unless the police directs this to happen.”

Then top of page 1, please, a reply by Mr Bartlett to that email:

“We have had a call with [City of London Police] following your email below and they will be in touch to arrange the taking of a witness statement or statements. We would be grateful for Fujitsu to extend any and all assistance to the [City of London Police] to aid their objective understanding and assessment as to the reliability of the Horizon system and the admissibility of evidence produced from it … to the investigation they are conducting following [the Post Office] making a crime report to them as a potential victim.”

So taking the matter further than the exchange of correspondence that we ended up on 19 April.

Nicholas Read: Yes.

Mr Beer: Some further correspondence suggesting that there would be contact between the City of London Police and Fujitsu about the possibility of providing a witness statement or statements.

We then come to the letter to you of 17 May. If we just go back to that, please. FUJ00243199, the Patterson letter, as I’ve called it. We read through that from start to finish –

Nicholas Read: Yes.

Mr Beer: – including your reflections on some of it. Was this correspondence taken by you to the Board?

Nicholas Read: I shared it with Ben Tidswell and the shareholder representative, I think.

Mr Beer: What about to the Board more generally?

Nicholas Read: No, I don’t think it went to the Board.

Mr Beer: Why was that?

Nicholas Read: No particular reason. I think we’ve heard a lot about information that goes up to the Board and information that doesn’t go up to the Board. There wasn’t a specific issue. I wanted to be certain that the Acting Chair at the time and the shareholder representative were aware, and that was as far as it went.

Mr Beer: Was this not significant information capable of impacting upon the integrity of the business or at least a critical relationship for the business?

Nicholas Read: I didn’t really read it that way, no.

Mr Beer: You were, I think, frustrated or worse with what your partner was saying to you?

Nicholas Read: Yes, I was frustrated. Did that mean that I needed to alert the Board to it? No, I don’t think so. I think, as I said in my witness statement, it’s not an easy relationship with Fujitsu for a multitude of reasons. I think we all recognise and accept that. But, ultimately, my relationship with Paul Patterson is perfectly serviceable and transactional. I found this particular exchange a surprise and I think, to be fair to Paul, he reached out and tried to see if we could resolve it, and I know Owen took him up on that. So, you know, I think we moved on.

Mr Beer: Didn’t the position as described by Mr Patterson have a considerable impact on the ability of Post Office to pursue or to report alleged crimes against the business?

Nicholas Read: Yes, I mean I think the fact that my interpretation was that they were unwilling to stand by the integrity of their system and indeed unwilling, as I interpreted it, to engage with the law enforcement agencies, I was surprised. But, you know, having seen now some of the emails that I wasn’t copied into, that’s not the completely clear picture, I suppose. I think that they are saying that they will be willing to do that, which I think was encouraging.

Mr Beer: If we scroll down in the letter, please, and under “Pursuit of shortfalls”:

“It seems that the Post Office may be continuing to pursue postmasters for shortfalls …”

Then at the end of the paragraph:

“It [Post Office] should not be relying on Horizon data as the basis for such shortfall enforcement.”

Does the Post Office continue to rely on Horizon data to pursue shortfalls from subpostmasters?

Nicholas Read: No, it doesn’t.

Mr Beer: What about the experience of Mr Jacobs, which rather suggests that it does?

Nicholas Read: No, I think the situation with Mr Jacobs was exactly as we discussed and described before, which is we worked with – well, once Mr Jacobs had started working with the Retail Team, as indeed any postmaster would, who had a shortfall, or a discrepancy, we all worked together with the individual to see if we can resolve the situation. And I think, as Mr Jacobs pointed out very clearly, once that process began with the Retail Team, he was very happy with the way that they engaged with him and the way that they supported and helped him to get a resolution to his problem.

Sir Wyn Williams: I understood that, that it had all worked out in a business-like way, once that two-way conversation had occurred. But it surely must be the case that the starting point was the data provided by Horizon, otherwise there would have been nothing to discuss? I’m not saying that in any critical sense.

Nicholas Read: No, no.

Sir Wyn Williams: I’m just trying to analyse what occurred.

Nicholas Read: No, I think that’s fair. I think if you recall with Mr Jacobs’ situation, some of the potential liabilities went back a number of years, and so, therefore, it was difficult to establish quite precisely what had occurred, which is why we came to a situation where it was only possible to identify £16,000 worth of losses that he and we could naturally identify as being a problem.

Sir Wyn Williams: I suppose it’s a good a time as any to not ask you a question but just make a statement, which is unusual for me.

But I am a little bemused about all of this debate about the reliability or otherwise of the current version of Horizon. Very early on in my role as Chair of this Inquiry, I said that the judgments of Mr Justice Fraser and of the Court of Appeal were, as far as I was concerned, sacrosanct and not to be contradicted. Well, unless I’m misreading it, one of the conclusions that Mr Justice Fraser reached was that the version of Horizon which was actually in use at the time of the trial – and I have forgotten his precise words, but this is my interpretation of it – was reasonably fit for purpose.

I simply say that because we are having a great deal of debate about current Horizon, which, at the moment, doesn’t seem to me to fit with one of the central conclusions of Mr Justice Fraser’s judgment in the Horizon Issues trial, and so I want to know where I’m going, having opened that up for you to all think about.

Mr Beer: Yes, if I can be forgiven for offering –

Sir Wyn Williams: An instant riposte? Yes.

Mr Beer: An instant riposte.

He says, that is Sir Peter Fraser, a number of things about current Horizon as at 2019, as disclosed by the expert evidence, including that it is “relatively robust”, in inverted commas, with –

Sir Wyn Williams: Well, these terms are no doubt wonderful for debate but the general tenor of what he was finding was as I’ve indicated. Now, I’m making no statement other than that I have said that I regard what he said as sacrosanct, insofar as it can be reasonably interpreted, and yet, inevitably, as it seems to me, there are streams and forces which are pushing me in a direction away from that on that one issue. So I just wanted everybody to remember what I’ve said and what he said.

Mr Beer: Yes.

You’ve told us that this wasn’t taken to the Board, this correspondence but you, in fact, yourself replied; is that right?

Nicholas Read: That’s correct.

Mr Beer: Can we look at the reply, please. FUJ00243201. This is, I think, your reply of 30 May: top right, yes?

Nicholas Read: Yes, that’s correct.

Mr Beer: You say that Mr Patterson makes number of concerning statements about postmaster enforcement:

“… we share a commitment to learn lessons from the … scandal and to ensure that the appalling treatment of postmasters, and the miscarriages of justice that occurred, could never happen again.”

Scrolling down:

“[Post Office] has invested significant time and resource effecting cultural and procedural change across the business, taking on board the court’s findings and ensuring that our postmasters’ interests are central to everything we do.”

Then “Criminal investigations”:

“I can reassure you that the Post Office is not now – and will not be in the future – undertaking any prosecutions against postmasters or any third parties as the prosecuting body.”

Then over the page:

“Post Office’s requests to use Horizon data may be for any number of day-to-day business reasons, including supporting postmasters in their branches … in respect of enforcement, [the] requests only relate to cases where our teams are supporting criminal investigations or prosecutions pursued by independent third parties, such as the police or [the CPS]. These independent investigations may be initiated by (i) a third party, (ii) by postmasters … or indeed by a member of the public … or (iii) by Post Office.”

Just stopping there, that doesn’t bring into account the use by Post Office of Horizon data in its own investigations, does it?

Nicholas Read: No.

Mr Beer: “In response to this specific case you raised, potential criminal activities were identified in the branch and Post Office therefore reported the matter to the police. We have assisted with the police’s investigation, including providing supporting data from the Horizon system.

“Naturally, it is vital to the police’s investigation that it can rely on the Horizon data it has received. I am happy you have confirmed in your letter that [Fujitsu] will cooperate with the police when it is exercising its independent investigative powers as this case would require a statement from [Fujitsu]. It is a matter for the police and [Fujitsu] to determine the necessary content of the statement.”

Then in relation to his second point:

“… civil recovery of losses was stopped by Post Office in 2018 so Horizon data is not currently being used for civil recoveries from postmasters.”

Does that remain the case now?

Nicholas Read: Yes, it does.

Mr Beer: Thank you:

“However, Post Office does rely on Horizon data for a range of key day-to-day … activities, including supporting its postmasters with resolving discrepancies on their accounts.”

Then you set out how that happens. Over the page, please, “Postmaster redress”:

“The reliability of Horizon data is central to the compensation and redress schemes … I welcome your confirmations that [Fujitsu] will provide Post Office with information to achieve redress at no charge, and provide a credit note for any prior charges which have been raised.”

Following this correspondence, this exchange of correspondence with Fujitsu, what was your view as to how any shortfall or discrepancy, based on Horizon data, could fairly be pursued by the business?

Nicholas Read: What do you mean by that particularly?

Mr Beer: It’s a deliberately broad question.

Nicholas Read: Right.

Mr Beer: You’ve had an exchange of correspondence where Mr Patterson has said, essentially, out of two of the three activities that he mentions, Fujitsu will not assist the Post Office in pursuing criminal proceedings or civil recovery, at the same time has said that they will assist the police –

Nicholas Read: Yes.

Mr Beer: – or other third party law enforcement agency?

Nicholas Read: (The witness nodded)

Mr Beer: You have replied, not addressing some of those points head on –

Nicholas Read: Mm-hm.

Mr Beer: – but explaining some assuring activity, or reassuring activity, that the Post Office has undertaken in relation to the first two categories.

Nicholas Read: Yeah.

Mr Beer: Where did it, in your view, sit; what was the position; what could be done by Post Office after this exchange of correspondence?

Nicholas Read: It’s a good question, I think there are couple of things. One, I think we covered some common ground where law enforcement agencies and the Post Office and Fujitsu would work together when there were organised or large-scale fraud or issues. I think, with the sort of specificity, your point is well made, which is, if the police are able to rely on the data, then presumably the data is accurate and that would be where I am, certainly.

When it comes to the maturity of the organisation and to whether or not it is going to pursue civil actions against postmasters, I think, as I said at the very start of the day, I don’t think the business has yet earned the right or the trust to do such things. I think we’re still learning and developing how to help postmasters, both in terms of the quality of the support we provide, and the quality of the training we provide.

So I think there is still more to be done, whilst, at the same time, you know, we have to get ourselves to a place where I think both postmasters and Post Office feel confident that we have done everything we can to ensure that the system and the training and the support is appropriate, and that’s obviously what we’re currently doing.

Mr Beer: Mr Patterson replied. Can we look at FUJ00243204. On 8 July 2024, replying to your letter of 30 May 2024, he explains at the end of his first paragraph that his previous correspondence was seeking to bring to your attention concerning conduct exhibited by members of the Post Office. He says:

“In simple terms, the Post Office is requesting that [Fujitsu] give expert opinion … to be used in criminal proceedings against postmasters and Post Office workers.”

He says that:

“… you rightly note that the content of any witness statement is a matter between the police and [Fujitsu]. [He] considers it necessary to address this issue with you because the request was made by Post Office and [he considers] the request to be entirely inappropriate, particularly in the light of the evidence being uncovered [in this] Inquiry.”

He encloses with this letter an email chain, this is the email chain we’ve looked at before the break –

Nicholas Read: Yes.

Mr Beer: – which contains emails from a senior member of the Post Office’s Investigations Team, Bartlett to Walton:

“Mr Bartlett continues the prior narrative of seeing the Post Office as the ‘victim’ and requests a witness statement to address ‘the reliability of the Horizon system and the admissibility of evidence produced from it’ … and suggests that a failure to do this would ‘rightly be interpreted by the police and prosecutors as [Post Office] and Fujitsu not having faith in the reliability of the data …’”

He says:

“A witness statement from [Fujitsu] attesting to the reliability of the system and of data from it in criminal proceedings would amount to expert opinion evidence. [Fujitsu] is incapable of providing expert opinion evidence as it is neither independent nor has it sufficient information to provide such an opinion.

“As the Post Office is well aware, there have been, and there continue to be, bugs, errors and defects in the Horizon system. [Fujitsu] currently has, and previously had, access to branch transaction records. Your letter … acknowledges the existence of other matters … which could have operated to create innocent discrepancies in branch accounts including ‘… miskeys, or omissions when remitting cash or stamp stock based on Horizon data …’ by end users.

“… the Horizon system is reliant on the delivery of services by Post Office and third parties retained by the Post Office. Therefore, records generated in relation to its operation are not exclusively retained by [Fujitsu]. The Post Office has appointed other suppliers to manage aspects of the system such as the network and end user computing towers. Further, the Post Office has insourced various services previously provided by [Fujitsu] and other suppliers engaged by the Post Office, including the Helpdesk and integration services.”

Then over the page.

“[Fujitsu] considers that all of the matters mentioned above would need to be investigated carefully but the Post Office and the police, with the assistance of an independent technical IT expert, and possibly also a forensic accounting expert, to ascertain proper explanations for branch account discrepancies … only after such an investigation has been undertaken could a meaningful expert witness statement be made in … criminal proceedings which addresses the reliability of the Horizon system. [Fujitsu] cannot provide such a statement.”

So, just stopping there, leaving aside the meeting that took place on 18 July, what did you understand Fujitsu’s position to be by this time, 8 July?

Nicholas Read: Yeah, I think we’re going round the houses a little, would be my observation. I think, taking a step back, my expectation was that there would be one, two, three maybe incidents/events of this sort of magnitude that would require the police to engage with Fujitsu on very specific issues, and I don’t think a sort of blanket expert statement was necessarily what we were trying to achieve; we were trying to achieve a situation where Fujitsu would cooperate with law enforcement agencies.

Mr Beer: Just stopping there, I’m sorry to interrupt an answer which I’m conscious I’m doing –

Nicholas Read: Yes.

Mr Beer: – you said that there would be one, two or three, or maybe, I think, four occasions, on which – is that because –

Nicholas Read: Because of the –

Mr Beer: Why is that?

Nicholas Read: Because of the scale of what we’re discussing here is – and I think I said at the very start of the day, our expectation is that where there is organised crime, where there is fraud, where there is money laundering, issues of that nature reported either by the Post Office or by the branch or by postmasters, they would be very, very small in number, and my expectation would be that Fujitsu would be willing to engage with the police on whatever it was that they needed. So I think there’s a degree of cross purposes, in terms of some of the engagement, and I suspect that Fujitsu felt that they were being directed, to a degree, by John Bartlett in terms of what they should or shouldn’t do, and I think it’s very much up to the police and FSL to decide what it is that is required or needed in whatever particular circumstance occurs.

So I think there was a degree of cross purposes, in terms of the engagement.

Mr Beer: Even allowing for that, what did you understand Fujitsu’s position to be, at this point in time?

Nicholas Read: That they would engage with the police but they wouldn’t give a specific expert witness, and my understanding was that they would obviously engage with them, but they would engage with the police rather than Post Office engaging with the police and engaging with FSL.

Mr Beer: Thank you.

The meeting occurred on 18 July 2024 at Wood Street. Can we look, please, at FUJ00243206. This is Mr Patterson’s own note of the meeting. It opened with Owen explaining the absence of you, who was 100 per cent focused on this. The COO joined the meeting, as he will continue in post.

Then rolling down the page, please, about the fifth paragraph on this page:

“To be clear Fujitsu will not provide expert witness statements and will only work when requested [by] the police …”

Was that conclusion one that was fed back to you?

Nicholas Read: Yes, it was.

Mr Beer: Then, if we carry on scrolling down, please, over the page: that’s the end. That appears to be the only part that concerns provision of evidence –

Nicholas Read: Yes.

Mr Beer: – is that right?

Nicholas Read: I think so.

Mr Beer: Can you recall what else was fed back to you as a result of that meeting?

Nicholas Read: I spoke with Owen about the meeting, he said it was very cordial. He said it was – that Paul was very reasonable in terms of the issues that were at play, that, actually, it moved fairly quickly on to the concept of an extension, rather than being inclusively focused on Fujitsu’s position with providing expert witness statements/requests from the police.

Mr Beer: Then I think Mr Woodley wrote to Mr Patterson, essentially in response to Mr Patterson’s letter of 8 July –

Nicholas Read: Yes.

Mr Beer: – and following this meeting?

Nicholas Read: That’s right.

Mr Beer: FUJ00243209. Scrolling down, paragraph 1 refers to the Patterson letter, number 2, and the meeting. There’s a statement from Mr Woodley, as acting CEO, of shared commitments. He says that he was concerned by some of the points raised in the letter of 8 July. There was some misunderstanding, having talked them through.

Scrolling down, under “Expert evidence”:

“Your letter said that Post Office was requesting that Fujitsu give expert evidence … That was not the case. As you rightly say, [Fujitsu] is not able to provide expert opinion evidence as it is not sufficiently independent for any statements that it may provide to be deemed expert evidence by the Crown Prosecution Service. Post Office is aware of that and has not/would not request that [Fujitsu] provides expert opinion evidence.”

So there seems to be a meeting of minds there?

Nicholas Read: Yes.

Mr Beer: Over the page:

“[The Investigations Team] has been supporting a police investigation into a significant financial crime identified in one of our branches … data from the Horizon system has been shared with the police by Post Office. The police have raised questions regarding the data and [the system], and the [Investigations Team] referred the police to [Fujitsu] – as [the] provider of the system … The feedback they [the police] received in April 2024 was that the police had only been able to have one conversation with [Fujitsu] at that time and that the investigation officer’s impression from that conversation was that they were indirectly being told by [Fujitsu] that the Horizon system was unreliable. As a result, the police told the [Investigations Team] the investigation could not progress.”

As a result, Mr Bartlett sent the email of 19 April. He was not asking Fujitsu to act as an independent expert witness. He asked that Fujitsu engage with the police and provide a statement regarding the reliability of data. Fujitsu has confirmed that it will further engage with the police on this matter.

So that seems to remove, would you agree, some of the confusion, as it’s been put, or misunderstanding.

Nicholas Read: Yes, I think so.

Mr Beer: “(2) Criminal investigations and prosecutions.”

There is essentially a restatement of what was said in an earlier letter under 1, 2 and 3. If we go over the page, please:

“To get the right checks and balances in any of these investigation processes, data will be required from [Horizon] along with analysis of any known bugs, defects or errors … Thank you for confirming that such data will be provided …

“We discussed that Post Office had used the word ‘victim’ in correspondence with [Fujitsu] … while this may be a legally and factually accurate description, it does not reflect the change in Post Office’s attitude towards postmasters.”

Then (3), shortfalls:

“Thank you for confirming that [Fujitsu] will continue to deliver its contractual obligations including reporting promptly and transparently on branch impacting incidents.”

Next paragraph:

“While Post Office does not currently take civil recoveries action to recover established losses … this may be necessary in future to establish a fair, transparent and consistent approach … this would only be undertaken in future with the wide endorsement of the Postmaster community and robust independent assurance.”

I think you’ve told us today that that is not presently contemplated; is that right?

Nicholas Read: That’s correct.

Mr Beer: He welcomes the commitment that Fujitsu will work collaboratively with the Post Office over the coming months.

Then lastly in this chain, FUJ00243211, Mr Patterson’s reply to Mr Woodley:

“It is unfortunate that Nick was not able to attend the meeting … The original purpose of writing to Nick was to escalate, CEO to CEO, the concerns relating to certain behaviours within the Post Office … the Post Office continues to have significant cultural issues, sees itself as a ‘victim’ with the enforcement and prosecution of postmasters considered as a business as usual activity of a commercial retail company … Fujitsu finds the language and the suggested behaviour unacceptable from Post Office’s investigators.

“I do not intend to engage further with the Post Office on the matters I raised …

“You will recall, I have stated publicly Fujitsu does not wish to extent the contract with Post Office and your letter has reinforced the challenges we have as an organisation with continuing to do business with the Post Office.”

Just stopping there, where did this leave investigations that were ongoing?

Nicholas Read: I haven’t had an update. I’m not fully aware of what the next stage was, whether Owen responded to Paul or, indeed, what the situation is with their support of the police. That hasn’t been fed back to me.

Mr Beer: What’s the current state of play, therefore, in relation to obtaining evidence from Fujitsu in support of either investigations or in support of investigations or prosecutions being conducted by third-party LEAs?

Nicholas Read: Again, as I say, I haven’t had an update since this letter, so I can’t give you that answer, I’m afraid.

Mr Beer: Was any of this correspondence taken back to the Board?

Nicholas Read: Again, I’m not aware of whether it was or not, I’m afraid.

Mr Beer: By you?

Nicholas Read: Well, it wasn’t by me, no, because – obviously as I’ve stepped back because I’ve been working on this matter. This would be, obviously, an activity for the Acting CEO.

Mr Beer: Was the Board, to your knowledge, aware of Post Office’s involvement in the City of London Police investigation?

Nicholas Read: I think, as we said at the very beginning, my involvement was certainly to bring the Acting Chair and the shareholder representative into the loop. I am unaware of whether or not this was shared with the Board in July or, indeed, in September.

Mr Beer: Are you able to say whether the Post Office’s current investigative function is fully compliant with all relevant legal standards?

Nicholas Read: As far as I’m aware, yes.

Mr Beer: What’s the current position, therefore, in relation to obtaining evidence from Fujitsu?

Nicholas Read: As I say, I haven’t had an update since this exchange. So I’m – going back to what it said earlier in the email, I’m assuming that they are continuing to cooperate with the police as they said they would.

Mr Beer: Can we look, please, at a separate train of correspondence starting with FUJ00243191, starting with page 3, please. If we just pan out a little bit, please, and scroll down. Thank you.

It’s an email from a Detective Constable Edwards in Lancashire Constabulary’s Economic Crime Unit. If we just look up, please, to the bottom of the next page, it’s addressed to Mr Morley, who we will in due course see is in the A&CI team?

Nicholas Read: That’s correct.

Mr Beer: “Good afternoon Andrew.”

So this June 2024.

“… could I ask that you/your Legal Team provide the following:

“1) Documentary evidence which will confirm/verify that more robust [I think that’s ‘the more robust’] Horizon [Online] was installed on the systems at [Blank] post office from 2021. I appreciate your letter confirms the same, but is there any documentary evidence/records which show it was installed.

“2) As the letter suggests are you able to get the ball rolling to prepare and provide a formal statement/ report in an evidential format which shows why you believe the Horizon system in place at [that post office] was reporting correctly – the CPS will inevitably want the same.”

Then scrolling up, please, reply from Mr Morley, a Senior Investigations Manager in the A&CI team:

“While I work through the information required can I request that in response to item 1 and 2 below that you obtain a statement from Chris Breen who is the Legal Manager – Litigation Europe for Fujitsu …”

Then some details are provided:

“As you may be aware Fujitsu are the company that supply the Horizon software and are therefore best placed to address the points you raise.”

So this is the A&CI team directing the police to Fujitsu asking for a statement as to Horizon’s robustness and whether the system installed at this branch, in I think it was 2020 or 2021, was the HNG-A system.

Then scrolling up, please, you will see an email to Fujitsu, to Mr Breen, so the detective constable followed the suggestion made by the A&CI team. You’ll see what is said in the first two paragraphs, which are sort of introductory:

“Are you able to assist by providing a written statement dealing with points 1 and 2 … below?”

So it seems that Fujitsu is receiving requests for witness statements, or at least a witness statement from another police force, whilst the exchange was going on between those higher up the organisation –

Nicholas Read: Mm.

Mr Beer: – both in Fujitsu and Post Office.

Nicholas Read: Mm-hm.

Mr Beer: Did you become aware of this operation, which was called Operation Jetfire?

Nicholas Read: No, I’m not familiar with it.

Mr Beer: Were you aware of any investigation like this being undertaken?

Nicholas Read: No, as I say, I wasn’t aware of this investigation.

Mr Beer: You said earlier, and it’s reflected in some of the written evidence, that a Board approval was required?

Nicholas Read: Yes.

Mr Beer: Board approval for what?

Nicholas Read: Sharing information – well, bringing to the table information associated with interaction with law enforcement agencies on specific issues.

Mr Beer: If we just scroll up, please, you’ll see this is the 24 July 2024, whilst the correspondence between you and Mr Patterson and then Mr Woodley and Mr Patterson is ongoing.

What steps were taken to ensure that those in the A&CI team understood the nature of the relationship and the limits of the relationship as between Post Office and Fujitsu on the provision of Horizon evidence?

Nicholas Read: Personally, I haven’t been involved in that activity, but I am – I would be – it would be obvious to ask the General Counsel who looks after that particular function to bring that to life, but I am not aware of what kind of briefing they will have received.

Mr Beer: Can we look, please, at FUJ00243192. This is a letter to that detective constable, who on this version has been redacted, I think:

“Post Office Legal have reviewed the reasoning for not progressing … to a charging decision.”

Scrolling down:

“… not for Post Office to influence the independence of the situation … however the reasoning around the credibility of the Horizon system seems to be a significant factor …”

Just for context, this was a letter saying “We’re going to NFA”, take no further action:

“[Post Office] have been asked to address three questions in respect of the decision to [take] No Further Action … [Post Office] hopes that the information provided below … is sufficient to assist with the review of that decision.”

Then the three questions:

“… new Horizon is much more reliable than the old system

“evidence that a Court has ruled so …

“new system was installed and in place at the [Blank] post office from 2021 onwards.”

Then, over the page, question (c) is answered:

“[The] branch was operating the HNG-A version of Horizon.”

Then questions (a) and (b) – this letter goes on for many pages, setting out extracts from the Horizon Issues Judgment of Mr Justice Fraser –

Nicholas Read: Right.

Mr Beer: – in answer to the question: which legal case establishes or proves that the current Horizon system is reliable? You see that?

Is this is an approach that you, as Chief Executive, knew was being taken, ie leaning on the Horizon Issues Judgment?

Nicholas Read: I was unaware of that. I am unaware of this level of engagement, candidly.

Mr Beer: I’m not going to spend time now going through all of the passages in this letter; it’s there for the Chairman and to others read. You can see –

Sir Wyn Williams: Are you going to cause me to resile from or amend what I said earlier?

Mr Beer: Well, I knew this was coming, sir.

You can see some passages which are, in my words, lent on. Extracts from, for example, paragraph 964 of the Horizon Issues Judgment and the relevant passages are in bold, findings in relation to Legacy Horizon from 2000 to 2010, and then of Online from 2010 to 2018 are not findings on the Horizon system, as it exists at the date of the judgment. They cannot be routinely applied to the way HNG-A operates, as at December 2019:

“It is agreed by the experts that the Horizon System in its HNG-A form is now relatively robust.”

Hence my answer to the point raised earlier.

Then carrying on over the page –

Sir Wyn Williams: I can’t help it. I love phrases like “relatively robust”. You could argue about them until 2030.

Mr Beer: Yes, there’s another variant on that theme, and it’s in bold, three lines in, where Mr Justice Fraser says:

“HNG-A is a different matter, and the experts are agreed that it is far more robust than Horizon in earlier times.”

Then another variant on that theme, paragraph 969, again in bold, Mr Justice Fraser said in relation to HNG-A:

“… the experts agree is a better system than either of the other two iterations of Horizon.”

Then carrying on, Mr Justice Fraser’s finding at paragraph 974 and 975 is set out:

“… I have found that the system as it is in 2019 is far more robust than it was prior to 2017.”

Then the letter leans on some explanatory notes to the exoneration bill, essentially.

Were you aware of this approach that was being taken –

Nicholas Read: No, I wasn’t.

Mr Beer: – ie picking out some extracts from Mr Justice Fraser’s judgment as evidence of –

Nicholas Read: I wasn’t –

Mr Beer: – of the current reliability of Horizon?

Nicholas Read: No.

Mr Beer: Was that a Board-sanctioned approach?

Nicholas Read: Not that I’m aware of.

Mr Beer: Was it a General Executive sanctioned approach?

Nicholas Read: Not that I’m aware of.

Mr Beer: I think it therefore follows that you didn’t investigate or cause to be investigated the extent to which extracts from a judgment in civil proceedings could be used as evidence in criminal proceedings –

Nicholas Read: No.

Mr Beer: – to prove the reliable of the system?

Nicholas Read: No.

Mr Beer: Thank you.

Sir, that’s the end of that topic and the end of my questions for today.

Sir Wyn Williams: All right.

Mr Beer: Can we reconvene at 10.00 tomorrow, please, unless you have any questions.

Sir Wyn Williams: No, I have no questions.

Mr Beer: I could sense one brewing.

Sir Wyn Williams: No, no, no, it’s not a question. I was simply going to say that perhaps I should amend my statement to say that Mr Justice Fraser’s judgment will be sacrosanct once I decide what it means. Thank you.

(4.25 pm)

(The hearing adjourned until 10.00 am the following day)