11 October 2024 – Nicholas Read
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(10.00 am)
Nicholas Read
NICHOLAS JAMES READ (continued).
Questioned by Mr Beer (continued)
Mr Beer: Good morning, sir. Can you see and hear us?
Sir Wyn Williams: Yes, thank you very much.
Mr Beer: Thank you.
Good morning, Mr Read.
Nicholas Read: Good morning.
Mr Beer: Can I once again turn to the topic of whether the Post Office did not wish to have ownership of, or administer, any of the redress schemes. You remember we discussed this on Day 1, and we addressed it again on Day 2 of your evidence. I’d like you to consider, if we may, an additional piece of evidence in the light of the answers you gave. Can we see, please, WITN00200300.
You’ll see that this is a witness statement of Thomas Cooper, who you’ll know.
Nicholas Read: Indeed.
Mr Beer: By way of reminder for others, he was the UKGI Non-Executive Director on the Post Office Board for five years – is that right –
Nicholas Read: Yes, that’s correct.
Mr Beer: – between March 2018 until May 2023, when he was replaced by Lorna Gratton?
Nicholas Read: That’s correct.
Mr Beer: He gave evidence, by way of reminder for the transcript, in Phases 5 and 6 of the Inquiry, on 10 June 2024.
Nicholas Read: Yes, that’s correct.
Mr Beer: This is a subsequent witness statement of his addressing some Phase 7 issues. Can we look, please, at page 11, under the heading “Operational resourcing”, and this is part of his statement which addresses the governance and resourcing of the HSS. He says:
“During this phase, there were discussions at the Board about how [the Post Office] would operationally resource the compensation workstreams.
“In Spring 2020, the Shareholder Team contributed to those discussions by providing advice to the Department concerning the separation of historical liabilities and compensation matters arising from the GLO from the ‘business as usual’ commercial operations of the Company. One option that was suggested was to transfer the management of [Post Office’s] compensation-related liabilities into a newly created separate company owned wholly by [His Majesty’s Government]. This would have enabled [the Post Office] to focus on the strategic and operational issues it faced, whilst in parallel having a dedicated resource set up to deliver compensation to victims of the Horizon scandal. The alternative to this proposal was the establishment of a unit within [the Post Office] to handle all compensation related matters.”
Paragraph 30:
“UKGI’s advice was discussed with [Post Office] and [His Majesty’s Treasury] as well as the Department. [Herbert Smith Freehills] assisted [the Post Office] in preparing its own paper on the topic, which was discussed at the Board. The idea of separating the compensation workstreams from [Post Office] received little or no support. The Board determined that [the Post Office] would take responsibility for the compensation workstreams itself rather than pass it to [His Majesty’s Government]. It was decided that an internal unit would be set up within [the Post Office], the Historical Matter Business Unit, now known as the Remediation Unit. That was set up in July 2020 and had a remit to deliver the legal and compensation workstreams flowing from the GLO proceedings.”
Just to complete this:
“Having reflected on this decision and reviewed the advice that UKGI provided, as well as the Board paper, one thing that is conspicuously missing from both documents is the claimants’ perspective. Claimants were not approached to give their view at the time and, in hindsight, the lack of trust that claimants had in [Post Office] should have been included as a factor in support of separation. We now know that trust remains a major issue for claimants, one example of which is the GLO claimants’ refusal to have the GLO scheme administered by [the Post Office]. Given that, as of today, significant elements of the compensation being delivered to [subpostmasters] are being administered by the Department, as well as the very significant strain that compensation has placed on [the Post Office’s] management which has lacked the bandwidth to handle the multiple, complex issues in front of it, I believe that, with the benefit of hindsight, the option of separating the compensation from [Post Office] should have been considered more seriously. However, at the time, following the successful settlement of the GLO and the participation of the GLO claimants in the design of HSS, there was a perception at [the Post Office] that a degree of trust in [Post Office] had been restored. It is possible, therefore, that even if UKGI’s advice and the Board paper had identified the issue of trust and captured it fully, the decision made may well have been the same in any event.”
Just going back to paragraph 30, please.
In the third line, Mr Cooper says that:
“The idea of separating compensation workstreams from [Post Office] received little or no support. The Board determined that [the Post Office] would take responsibility for the compensation workstreams itself, rather than pass it to [His Majesty’s Government].”
Is that correct?
Nicholas Read: I think recollections do differ. I am very clear that I have contemporaneous notes from May, June and July where the notion –
Mr Beer: Sorry, that’s 2020?
Nicholas Read: Yeah – where the notion of a good bank and a bad bank was put forward by myself and Carla Stent and Carla Stent was the Chair of the Audit and Risk Committee, and we were quite vociferous about the necessity to separate good bank from bad bank, by which I mean how could we ring-fence the different elements of these particular schemes?
So I don’t support the notion that it received little interest or little support from the Board. I think the Board were very aware of the amount of work that would be required, let alone the level of trust that needed to be established. So I have a different view and a different recollection.
Mr Beer: Given that, in any event, there appears not to have been agreement with Government that Post Office should not participate in or administer the compensation schemes, wouldn’t that, therefore, present the ideal opportunity to tell the Inquiry, when it was considering that issue, Post Office’s view?
Nicholas Read: Quite possibly. As I mentioned yesterday and I think, indeed, as we discussed on Wednesday, this was very clearly an instruction from the UKGI. It wasn’t a “Shall we decide how to do this, what is the best way?” So I’m very clear on that.
Mr Beer: When you say it was an instruction from UKGI, the instruction was to what effect?
Nicholas Read: To the effect that we would manage the compensation schemes.
Mr Beer: So it’s almost precisely the opposite of what Mr Cooper says?
Nicholas Read: Yes, I – as I say, I’m very clear that this was something that wasn’t a choice for the Board. The Board didn’t have a choice about whether or not it would administer compensation schemes.
Mr Beer: Again, given that that was, on your account, a significant difference with Government, why wasn’t that ventilated or submitted to Sir Wyn in any of the hearings that we had?
Nicholas Read: It’s a good question. I can’t answer that.
Mr Beer: Thank you. That can come down.
Can we just briefly address a couple of issues on Postmaster NEDs. We’ve done this a couple of times already, a couple of points to clear up. You tell us in your first witness statement – there’s no need to turn it up, it’s paragraph 94 – that they were not provided all papers that went to the Board because of conflicts or a conflict; is that right?
Nicholas Read: Yes, that’s correct.
Mr Beer: What was the conflict that the provision of papers to the Postmaster NEDs – that would have arisen?
Nicholas Read: I think, very specifically, we were conscious that Postmaster NEDs were, first and foremost, postmasters in their own right and, therefore, by definition, there were commercial sensitivities that may or may not have determined a particular cause of action. We were making decisions with banks, with Royal Mail Group, with travel businesses, with our online business and, clearly, postmasters would have been privy to particular information that might have had a commercial sensitivity that might well have impacted decision making that they could have been involved in, as in on their own accounts, and I think it wouldn’t be unreasonable to expect, given the duality of their role as both a postmaster and an entrepreneur running their own business, as well as determining and deciding what the direction of travel for the Post Office is, that they would be privy to certain information that might have put them in an advantageous place, or indeed in conflict with the organisation.
Mr Beer: Was a similar approach taken to the UKGI NED because they had a duality of role, didn’t they?
Nicholas Read: Yes, they did but they don’t have a financial interest, per se in the operation of their post offices, as the postmasters themselves do.
Mr Beer: No, they have a different dual role?
Nicholas Read: Yes, they have a different role, clearly.
Mr Beer: Was information and papers kept from them?
Nicholas Read: Well, I’d probably put it in a slightly different way. I’m – as we saw, I think it was yesterday, we saw, indeed in Project Pineapple, information that was shared with the Non-Executive Directors by Henry, was not shared with myself and Lorna. So there was a very evident illustration of that point. I, for instance, don’t get the documents that go to RemCo because, clearly, there would be potentially a conflict for me, in that documentation. So I don’t think it’s wholly unusual to identify conflicts where people may or may not have interests in the workings of the organisation. So I didn’t see that as a particular issue.
Mr Beer: How did it affect, if any, their role, the Postmaster NEDs’ role on the Board, by the non-provision of papers and information?
Nicholas Read: Difficult for me to answer that, in the sense that you would have to ask Elliot and Saf what they felt that they were being excluded from. My sense is that it was very little and very limited in terms of what they were excluded from. If I think back over the last three years, where we have been in a Board meeting where either they’ve had to excuse themselves or leave the room because of conflict, I genuinely wouldn’t be able to identify any specific issue – any specific time.
Mr Beer: You tell us in the same statement, it’s paragraph 98, that both the current Postmaster NEDs were consulted on how to approach the next round of NED recruitment and, based on their input, the criteria for the role has been “rebalanced and made more objective and clearer”. What was unbalanced and/or unobjective about the previous criteria?
Nicholas Read: I think what we’ve learnt, sort of specifically, in terms of the first term that the Postmaster Non-Executive Directors have done, is that there are ways to improve both the process of recruitment, both the expectations of the role, both the level of training and support that we can provide. So there were a range of different issues that we wanted to improve and it was those that we discussed with Saf and with Elliot: how does the selection process work; what are the expectations of the role?
So, for instance, we’ve talked quite extensively here about the commitment that the Non-Executive Directors, the NEDs, have made. So I don’t think it was anything particularly specific. It was about – it was about refining and getting their view on how the job and how the role could be done better, and I think that’s what we’ve taken forward.
Mr Beer: Both of them – I’ll give the crossreferences, no need to display: Mr Jacobs WITN11180100, at paragraph 14, and Mr Ismail, WITN11170100 at paragraph 150 – say in their written evidence, and they’ve repeated it in their oral evidence, that the amended criteria mean that they have not been shortlisted for reappointment when they applied to stand again. Is that right: the change in criteria meant that they were not shortlisted when they applied to stand again?
Nicholas Read: I wasn’t aware that it was a change in criteria that stopped them from being shortlisted. I haven’t seen the analysis of all the participants who have come forward to put their names forward. That’s obviously something that’s managed and run by the Company Secretary and the Nominations Committee will be the individuals that determine what the criteria is for the selection process. So that’s obviously not a committee that I sit on.
Mr Beer: Mr Ismail says in his statement, same reference, paragraph 150:
“I believe the timing and criteria were engineered to exclude me and Mr Jacobs because we are too challenging, too inquisitive and ask too many awkward questions.”
Is that right?
Nicholas Read: I don’t believe that’s right.
Mr Beer: They gave interviews to the press; that’s right, isn’t it? I think you refer to one of the articles based on what they had said in your witness statement, a Times article in February 2024?
Nicholas Read: I think that was an article that you presented to me, as opposed to my presenting to you, if you see what I mean.
Mr Beer: Yes.
Nicholas Read: I responded to it, yes.
Mr Beer: Yes. So what would you say to the suggestion that they were “too challenging, too inquisitive and asked too many awkward questions”?
Nicholas Read: I would say that was their job. I made it very clear yesterday that I championed Postmaster Non-Executives to be on the Board for exactly that reason: I knew they would bring a tactical focus and an operational focus and an understanding of what was going on in the business at the time. It would be uncomfortable at times and I was very aware that that would be the case. I had experienced it at Nisa, I knew what I was letting myself in for and I think, certainly, my own expectation was that it would bring the Board closer to postmaster issues and it would bring the Board closer to what is going on from a trading perspective, as well as from a cultural perspective, in the organisation, and that was an important way of trying to rebuild trust.
That was the ultimate aim of the objective, as well as getting their unique experiences of being a postmaster in the organisation around the boardroom table.
Mr Beer: What would you say to the suggestion that Post Office did not listen to the Postmaster Non-Executive Directors, marginalised them after it had appointed them, they got frustrated and went to the press, and Post Office, therefore, made it difficult for them to effectively stand for re-election by amending the criteria?
Nicholas Read: I disagree with that. I absolutely refute that allegation.
Mr Beer: I think it’s right that exit interviews were conducted with Non-Executive Directors; is that right?
Nicholas Read: That’s correct.
Mr Beer: Can we look, please, at POL00448681. “NED Exit Interviews – Written Summary”, conducted by Ernst & Young, EY?
Nicholas Read: Yes, that’s correct.
Mr Beer: If we go, please, to page 5, I just want to look at some of the things that were suggested. Top line:
“I have found it a challenge being on the [Post Office] Board – it can feel like a puppet Board where we don’t have real decision making powers while actually having a lot of responsibility.”
Then further down, just under the line, in answer to the question “What are the issues facing [Post Office] that will likely consume the time of incoming NEDs?” Answer:
“That they will be coming into a Board that is actually not that influential as a whole, that it really has no authority, it just rubber stamps decisions made elsewhere.”
Then over the page to page 6, please. Just at the bottom on the page that’s being displayed at the moment, two paragraphs up:
“The GE use the Board to rubber stamp things but don’t involve the Board as they might. I am not sure we are respected or valued, we are all vested.
“There isn’t the level of trust in the GE nor are we trusted by them – this has resulted in a lack of commitment to minuted actions.”
Those comments – and I realised that I’m selecting –
Nicholas Read: Yes.
Mr Beer: – from a large number – come during your tenure as Chief Executive, doesn’t it?
Nicholas Read: Yes, that’s correct, although, I think Carla Stent in particular, her tenure was six years, so it –
Mr Beer: So it was partially pre-dated?
Nicholas Read: Indeed.
Mr Beer: Do you accept the description of the role and function of the Group Executive?
Nicholas Read: No, I don’t think so. We have a – this has been discussed, I think, quite extensively by other colleagues – the range of information that comes to the Board and the issues that the Board has had to grapple with over the last four or five years has been quite unique, in the sense that there are just a range of priorities that are very difficult to distinguish between. And so it has been difficult to get that level of genuine decision making, I think would probably be the best way to describe it.
The sort of broader challenge, I think, is around the effectiveness and independence of the Board and whether or not they have the levers and the power to make the decisions that Post Office needs.
I think that is the underlying theme that is being expressed here, certainly in the first two or three bullet points that you were making, and there is a challenge around that, and that is when you read the context of the entire feedback, that is the underlying theme of why, I think, individuals have found that they would only stay for one term on the Board: because they felt – I think it’s in the first bullet that you made – that they have an enormous amount of responsibility and accountability, but they have very limited and little decision-making powers, primarily because those decisions are either made by the shareholder/UKGI or they are difficult to influence.
Mr Beer: So what is described by these exiting NEDs is not your experience at all of the Board?
Nicholas Read: Which particular bit?
Mr Beer: Well, the three that I’ve read to you.
Nicholas Read: I –
Mr Beer: It’s a puppet Board, we don’t have any real decision-making power; the Board isn’t influential as a whole, it rubber stamps decisions in fact made by the GE; and the Board rubber stamps things for which it isn’t respected or valued?
Nicholas Read: No, I don’t think I would agree with that. I think the first two points you make are actually more references to the influence and shape of the Board with regard to the shareholder, as opposed to with regard to the Group Executive. It has been very tough, I think, for the Board and the Group Executive, certainly at this particular juncture but I don’t think that is something that is widely experienced, in terms of the Group Executive just expecting the Board to rubber stamp issues. I think it’s more the volume of work that the Board was having to deal with that meant they couldn’t give the level of attention to the specific issues and topics that were being brought forward.
And, secondly, I think the nature of the business, and I say this in my original witness statement, my first witness statement, is that for the five years certainly that I have been in the business, it has been in crisis, and so many of the decisions that have come to the Board have been tactical, short-term and reactive, as opposed to long-term strategic, which you would expect from a business that was perhaps under the – less under the strain that the organisation has been for the last five years.
Mr Beer: I think you’ve had your attention drawn to an email exchange between Lorna Gratton and Rachel Scarrabelotti in October 2023 – I’m not going to display it unless it’s necessary, in the interests of time – about the SID appointment where she, Lorna Gratton, expressed the view that it would be beneficial to appoint a woman to give balance to the Post Office Board. Do you recall?
Nicholas Read: Yes, I do recall that. I thought – I think – this is the exchange where Lorna wanted, and I shared this view, that we have an external SID appointed to the Board –
Mr Beer: Did you agree that the Board lacked balance and therefore needed balance brought to it by the appointment of a woman SID, a female SID?
Nicholas Read: Yes, I think so. So Lisa and Carla and Zarin all left within the space of four months, and I think the Board would have benefited from an additional female, perhaps a SID as well.
Mr Beer: Other people have raised concerns about your treatment of women, and I must give you opportunity to respond to the allegations that have been made. I am not going to display them in the interests of time and, instead, summarise them for you, Mr Read:
Firstly, Mr Staunton claiming in March 2024 that you had overseen a culture of misogyny.
Mr Staunton saying that he was aware during his time at the Post Office of a “high level of unhappiness amongst a number of the company’s senior women”, a pattern developing where senior women were not supported in challenging roles.
Ms Davies telling him that she had raised the issue of the psychological safety of women in the organisation directly with you but you were not prepared to take any action.
Mr Staunton noting that Ms Davies was the fifth Chief People Officer during your tenure, which gave him concern about your ability to retain female talent, she having expressed concerns over a “job for the boys” mentality within your team.
Ms Davies’ Speak Up report of September 2023, which included allegations against you, which was subsequently independently investigated by Marianne Tutin of Devereux Chambers.
Firstly, did you become aware of concerns regarding your views and approach to women in senior roles in Post Office?
Nicholas Read: Did I become aware?
Mr Beer: Yes.
Nicholas Read: In what – well, I became aware when Ms Davies, having left the organisation in June 2023, in September 2023, elected bring a series of grievances against me and against Henry Staunton and against the Post Office more generally, having not had her job role and her probation period converted into a permanent role. And so, having left the organisation in June, it was then some two and a half months later that she made a series of allegations against me and – including Henry.
Mr Beer: Was that the first time that you became aware of concerns regarding views and approach towards women in Post Office?
Nicholas Read: It was the first time that I was aware that allegations had been suggested that I was fostering a culture of misogyny or anything along those lines.
Mr Beer: When you joined the Post Office, were you concerned about any lack of diversity amongst the Senior Executive Team or the Board?
Nicholas Read: Not at the Board. I think we were a diverse and functioning Board. I think it was relatively well known that the Group Executive was male dominated, certainly, and we were keen to set ourselves some targets for the Senior Leadership Group and also for the Group Executive to introduce some diversity to that, to both of those two forums.
Mr Beer: You tell us in your witness statement – no need to turn it up, it’s the second witness statement, page 17, paragraph 49 – that a survey conducted by Post Office showed that:
“The proportion of women experiencing comments that felt offensive, embarrassing or hurtful was greater than men and that that rose consistently and significantly with seniority.”
Following the results of that survey, what steps were taken, if any, to address it?
Nicholas Read: We had an action plan, three things emerged, I think from that, in particular, if it’s the one that I recall. The first one was that disabled colleagues within the business were suggesting that they didn’t have the opportunity to get on in the same way and weren’t supported in the way that some of their abled colleagues were. We had an issue – a cultural issue in that some of our cultural minority colleagues felt that they were not getting the level of promotion that they wanted and warranted. And then the third piece, which quite rightly you highlight, which was very, very disappointing and surprising to a degree, was that senior women within the organisation had experienced more unwanted comments than their male counterparts.
And so we established those three as the core equity, diversity and inclusion elements to our strategy and we advised the organisation that that is where we were going to spend our time. We have recruited a new capability and inclusion director, and also a new equity, diversity and inclusion director, to spearhead the strategy, our EDI strategy, that we want to develop.
So we are very conscious of that feedback and have been very transparent in the fact that this is something we will be addressing over the next few months.
Mr Beer: One miscellaneous topic, before I ask my final questions to you. Can we look, please, at POL00448381. This is a letter you’ll be familiar with: it’s your letter to the Lord Chancellor, 9 January 2024. You’re familiar with this?
Nicholas Read: I am indeed, that’s right.
Mr Beer: I’m therefore going to skip over the first three paragraphs, if we scroll down, please. That refers to some work that’s been done by external legal advisers, which had identified 30 potential appellants, to whom POL would write, because it would be highly likely that POL would concede their appeals in the Court of Appeal. The letter continues:
“A natural corollary of that exercise has been to identify those cases in which, on the information available to us and following the judgment in Hamilton, we would be bound to oppose an appeal. Typically, these cases involve convictions obtained by reliance on evidence unrelated to the Horizon computer system. The number of such cases is very much more significant, at 369, with a further 11 still under review. There are another 132 in which we cannot determine the sufficiency of evidence without more information. This clearly raises acute political, judicial and communications challenges against the very significant public and Parliamentary pressure for some form of acceleration or bypassing of the normal appeals process.”
Was this essentially you, on behalf of the Post Office, saying to the Government that it should not legislate, in an exoneration bill or similar, because of an assessment by Post Office that the vast majority of convicted subpostmasters were, on its assessment, unlikely to have their convictions quashed in a court?
Nicholas Read: No, I was making no value judgement, as I said in the fifth paragraph, about what this meant or what you could interpret from it. I was extremely conscious that we discussed with the Advisory Board through the previous autumn, actually in the summer, the real challenge that we had, in light of Hamilton, of encouraging postmaster victims to come forward.
We discussed a range of different ways to try and achieve this, and it was really to highlight that we felt we had an obligation – I was advised that we had an obligation to let the Lord Chancellor become aware of the fact that we’d done this work and that we had shared it with the Advisory Board, that we recognised that there were challenges and, you know, clearly it was important that we made ourselves, Peters & Peters, Simon Baker, Jacqueline Carey – the KCs that had conducted the work on our behalf – made them aware of what we had done and the challenges that we’d experienced.
Mr Beer: You tell us that the Board held over 60 meetings regarding the Post Office’s responses to the CCRC and criminal appeals, just in the period 2021 and 2022. Has the Post Office similarly engaged with or held meetings in respect of its response to the Scottish Criminal Cases Review Commission and the Procurator Fiscal Service in Scotland?
Nicholas Read: No, we haven’t.
Mr Beer: Why is that?
Nicholas Read: I think, when we first met in 2021 and went through a series of Board meetings to look at individual cases, we hadn’t established our Remediation Committee, which is the subcommittee of the Board that now oversees remediation matters, and my understanding is that the Remediation Committee are overseeing those matters as opposed to the full Board.
Mr Beer: In May 2024, the Lord Advocate made a statement to the Scottish Parliament that, due to its conduct, the Post Office was no longer trusted in Scotland and, as such, had been stripped of its role as a Specialist Reporting Agency in Scotland. What was the Post Office’s response to that?
Nicholas Read: I’m not sure we had a formal response, per se, at the Board and I don’t recall that happening. I think we had and have been very clear that we will not be conducting any form of prosecution, so I don’t think it was of enormous surprise that that was the decision that was made. But it wasn’t a formal discussion, certainly at the Board. It may well have been something that was considered at the Remediation Committee.
Mr Beer: Has the Post Office carried out any formal review of its previous performance in the role of a Specialist Reporting Agency in Scotland?
Nicholas Read: Not that I’m aware of.
Mr Beer: Lastly on this topic, can we turn up POL00448701. If we just look at the last page, please, this is a letter from Mr Vamos, Partner and Head of Business Crime, if we scroll down. We can see it’s sent for and on behalf of Peters & Peters Solicitors. If we just go back to the first page, please, this was a letter that I think was displayed on the Post Office’s website?
Nicholas Read: Yes, I understand that, yes.
Mr Beer: Do you know how that came about?
Nicholas Read: How it was put on the website? No, I don’t but I’ve learnt during the course of this Inquiry that that was the case.
Mr Beer: Then it was taken down?
Nicholas Read: Quite possibly, yes.
Mr Beer: Yes, do you know –
Nicholas Read: I don’t know –
Mr Beer: – anything about why it was put on the Post Office’s website and then it was taken down?
Nicholas Read: I don’t. No, I can’t give you that.
Mr Beer: Do you know who instructed Mr Vamos, if anyone, to write this?
Nicholas Read: No, I understand it was unsolicited, as in it came to us unsolicited.
Mr Beer: So it’s a Post Office criminal lawyer –
Nicholas Read: Yes.
Mr Beer: – ie somebody instructed, expert in the criminal law, writing to their client uninvited –
Nicholas Read: Yes.
Mr Beer: – unsolicited –
Nicholas Read: Yes.
Mr Beer: – or uninstructed –
Nicholas Read: Yes.
Mr Beer: – to do that, is your understanding?
Nicholas Read: That’s my understanding.
Mr Beer: But then it’s put on the Post Office’s website?
Nicholas Read: So I’ve now subsequently discovered, yes.
Mr Beer: In the third paragraph, the third on the page here, the second substantive paragraph, Mr Vamos says:
“In reality, it is highly likely that the vast majority of people who have not yet appealed were, in fact, guilty as charged and were safely convicted.”
By posting this on the Post Office website, did the Post Office ally itself to that view?
Nicholas Read: I don’t know the detail of how and why it was posted to the website. I think there is a question that we’ve got to ask ourselves as to the governance of what it is we put on our website and how it – how material goes onto the website. I think that’s something that we’ve got to review.
Mr Beer: Was that the view within the General Executive?
Nicholas Read: No, I don’t believe that is the case.
Mr Beer: So looking at the matter generally and standing back, do you know how it is that Post Office’s principal criminal lawyer wrote an unsolicited opinion for the Post Office, which said that the vast majority of people who haven’t appealed were guilty as charged and safely convicted, and the Post Office publishes that?
Nicholas Read: It looks pretty appalling.
Mr Beer: I’m just asking: do you know how it happened?
Nicholas Read: No, I don’t. I don’t know the genesis, as you say, of the letter itself or indeed how it then – and who determined that it would be put onto the website.
Sir Wyn Williams: It’s addressed to “Dear all”; who are the “all” there, Mr Read?
Nicholas Read: I don’t know, sir. I don’t know who “all” is, I’m not clear if this was a communication that went more broadly to other all people, I’m not certain.
Sir Wyn Williams: Normally, if it’s sent electronically, we get a kind of list of recipients on email, don’t we? Unless I’m wrong, I don’t think the Inquiry knows to whom it was actually sent.
Nicholas Read: We can obviously find out who that is and obviously help the Inquiry, if that would make sense.
Sir Wyn Williams: Thank you.
Mr Beer: Lastly, you have heard, I think, a series of witnesses in the Inquiry within this phase suggest that your own personal grievances about your own remuneration became too significant a feature in your tenure and interfered with your ability to carry out your role.
Nicholas Read: Yes, I’ve heard that.
Mr Beer: Are they right?
Nicholas Read: No, I don’t believe that to be the case. However, I am very aware that the furore around my pay and remuneration – and I’m not in any way deaf to that – looks very poor in light of many of the victims who are still waiting for their compensation, and I very much regret that the furore that has exploded as a consequence of that has been a distraction for everybody.
Mr Beer: To be clear, I’m not asking you questions about whether you thought you were underpaid or not and nor am I asking you questions about your reflections on how it looks that you were complaining repeatedly about your pay, your salary and your remuneration package as a whole. I’m asking you: did your repeated grievances and complaints about remuneration become too significant a feature of your tenure and interfere with your ability to carry out your role?
Nicholas Read: No, I don’t believe that to be the case.
Mr Beer: And why?
Nicholas Read: I was frustrated at times but I don’t believe that it was a distraction. I don’t – I’m sure if you discuss with other colleagues, they would certainly corroborate the fact that it’s not something that I was perpetually discussing. There’s no question that two of the individuals who have made these allegations have left the organisation under somewhat of a cloud, and so I can understand that that may well be the driver behind why they have made these comments.
Mr Beer: To be clear, it’s not simply Ms Davies or Mr Staunton, I think the two people you’re referring to –
Nicholas Read: Yes.
Mr Beer: – there are contemporaneous materials with you making complaints, saying, for example, “Am I prepared to make a drama out of this? Yes, I am. I’m prepared to submit a formal grievance. I’m prepared to make a claim for destructive dismissal. My patience has expired”, and the like?
Nicholas Read: I was frustrated. I was frustrated, Mr Beer, yes, I can confirm that’s the case. But I think many CEOs and many individuals operating in – potentially in a role that, as I described on Wednesday, bears no relation to the one that I was recruited to do, and the complexity and the leadership challenges associated with that role, three years in, clearly was something that was frustrating me, and I vented that frustration.
Mr Beer: You sought legal advice on your position?
Nicholas Read: Support – well, no, it wasn’t specifically legal advice. I did obviously – I discussed it with other colleagues and friends – not colleagues within the business but other colleagues.
Mr Beer: You sought PR advice?
Nicholas Read: As I say, with other colleagues and friends.
Mr Beer: I’m not going to go to the text messages that you exchanged with Ms Davies but in one of them you said, “I’ve gained advice on my legal position and PR advice on how I intend to handle this”.
Did you threaten to resign as CEO unless you were given higher remuneration?
Nicholas Read: No, as I say, I was very frustrated at that particular time but I’m still very much in role now. So I didn’t offer my resignation or tender my resignation, or anything of that nature.
Mr Beer: Mr Read, those are my questions. Thank you very much for answering them.
Sir, we’ve now got questions from four Core Participants, starting with Mr Stein for about an hour, then Mr Moloney for about 45 minutes, then questions by Ms Allan for about ten minutes and then questions on behalf of the NFSP for about 15 minutes.
So over to Mr Stein, for about an hour.
Sir Wyn Williams: When you say for about an hour, we’ve been going about three-quarters of an hour, so that would be a fairly long session. Can we just confirm that the transcriber is happy with that or will Mr Stein need to take a break at some point?
Mr Beer: I have already spoken to Mr Stein about it and said that he should take a break at 11.30 or about 11.30 when a convenient moment arises so that the shorthand writer gets her usual break.
Sir Wyn Williams: Fine. Thank you.
Mr Stein: Sir, I can confirm I have spoken to Mr Jacobs, who will remind me to take that break at around that time in about 25 minutes.
Sir Wyn Williams: Thank you.
Questioned by Mr Stein
Mr Stein: Mr Read, I think you’re aware that I represent a large group of subpostmasters. I just want to break that down so you’ve got an understanding of who it is that’s within that group.
The large group that I represent, includes people from the GLO claimants at the High Court. It includes people that have been convicted of offences by the Post Office, or thereafter, once the Post Office stopped prosecuting people itself. It includes people that were branch managers, such as Peter Holmes, deceased, represented by Marion Holmes, who appears in this Inquiry and sits beside me today. It includes people who were working in branches, Ms Falcon, who was one of the last people convicted using Horizon data, who was an employed people within a branch. It includes people like Dr Linnell, a forensic accountant who, in fact, was not a subpostmaster or working in a branch but has devoted a considerable amount of her time and her partner’s time in supporting postmasters.
And it includes importantly the families of those people, who, although we don’t, in a legal sense represent, we support and we try and we speak to whenever we can.
This is a large group of people, a broad church of people; do you understand that?
Nicholas Read: I understand.
Mr Stein: The final small group of people we represent are current postmasters.
So that is the direction of travel that we take, in relation to the questions I am asking you today, Mr Read.
Mr Read, shortfall money: where has the money gone, Mr Read?
Nicholas Read: As you’ve heard in this Inquiry on a number of occasions, there have been external forensic accountants looking at this particular problem, trying to assess what it is that has gone and where it has gone to. The current piece of work on this topic has identified a figure somewhere in the region of £36 million between 1999 and 2015.
The work itself was conducted mainly on an assessment of the HSS and the OC schemes, in terms of who has projected what by way of losses. The challenge, of course, is that monies that have been repaid into or through suspense accounts, and the like, could easily have been customer money, client money, as opposed to necessarily specifically Post Office money, and so the proportion that goes straight to the bottom line, for want of a better word, within the Post Office, can be quite obscured.
I guess what I’m trying to say is we think we have got a figure of somewhere in the region of £36 million spread across those years. I don’t think it is as definitive as we would like it to be. I think the fact that it is known as Project Boland within the Post Office, I think KPMG were the last forensic accountants to look at this problem.
You’ll be fully aware that data going back a number of years is extremely difficult in the Post Office to identify very often, and that is our best endeavour, in terms of where we’ve got to. As I understand, it is going to be reviewed again but it is a frustration and I appreciate it’s a frustration. We’ve the talked about this topic at the Inquiry on a number of occasions.
Mr Stein: You’re right, Mr Read. I’ve raised this time and time again –
Nicholas Read: Indeed.
Mr Stein: – witness after witness. I asked Mr Cameron on 17 May 2024 the very question I asked you: where has the money gone?
Nicholas Read: Yes.
Mr Stein: I got told by Mr Cameron, after a number of other questions, “Well, I think, you know, ask Nick Read. He’s the CEO”. He said, “I mean, I’m not saying that he’s the one who’s going to do the work but he’s the one that can marshal the resources and make it a priority and ascertain if it is possible at this time of day”, he said, “to go back as far to 2005 or indeed before”.
So these efforts to track down this money that Sir Anthony Hooper, Sir Alan Bates, Kay Linnell – Dr Linnell – Second Sight, have been going on about for so many years over the decades, when did they first achieve a priority within the Post Office?
Nicholas Read: Trying to identify where the funds were, this project has been running for some time and Mr Cameron is very aware of it as well, under his tenure as the CFO, clearly it fell within his remit. We reignited those in light of the conversation that you had with Alisdair in May and that’s why the Project Boland has been reignited.
We’ve been immensely frustrated. We’ve all been frustrated that there isn’t a simple answer to this question. It’s an extremely complex issue because, clearly by definition, people have paid in losses themselves and have not alerted the Post Office. We don’t have the level of data that goes back or the accuracy of the data that goes back and, as everybody is fully aware, that is a great frustration and, as I say, this is predominantly based upon what victims of the scandal have told us through the HSS, and indeed through the OC, and our attempt to try and understand from that mechanism. It isn’t satisfactory.
Mr Stein: Mr Read, the shortfalls and the paying off of shortfalls continues. You know that the YouGov report that was commissioned by the Inquiry has received consultation responses, demonstrating that people are still paying off shortfalls; do you understand that?
Nicholas Read: It’s very frustrating that people feel –
Mr Stein: Do you understand that, Mr Read? It’s not about your frustration. Do you know that to yourself?
Nicholas Read: I’m aware that people are paying for shortfalls. We’ve made it very clear that the Review and Dispute button and the Branch Support Centre will help individuals to understand where discrepancies have occurred and, as I said yesterday on a number of occasions, we are not forcing individuals. There is a presumption of innocence and it’s really important that that message lands.
We have struggled to engage more broadly and communicate more broadly with many postmasters, as we discussed yesterday, going through the YouGov survey. But I’m very, very clear, and you can hear it from me in this forum, that we are not enforcing people to make good losses. We are suggesting that, where there is an issue that they do not understand, we help them to try and understand and, if we can’t understand, then we move on.
Mr Stein: Currently, when a subpostmaster pays off a shortfall, is it investigated? Now, be careful about the answer to this. There’s the Dispute button, yes?
Nicholas Read: There is a Review and Dispute button.
Mr Stein: Right, if somebody presses the Dispute button, or Review and Dispute button, then it seems that the current policies mean there is an investigation; do you agree?
Nicholas Read: When you press the Review and Dispute button, it goes through to the Branch Support Centre and we try and work out with the postmaster what is the issue.
Mr Stein: Right, so the answer is actually yes, you could have done that with a “Yes”.
Okay, next one. When a subpostmaster calls the helpline and says, “Look, I’m having a problem with the account, I’m trying to balance, and there seems to be a discrepancy”, is that investigated? Yes, or no, if you can please, Mr Read?
Nicholas Read: Yes, it is.
Mr Stein: Right. Let’s look at the other type of shortfall, then. So where someone does not press the Review and Dispute button, where someone does not phone the helpline, for whatever reason, is that investigated? So a shortfall that is paid off by a subpostmaster which is not the subject of pressing the button and not the subject of calling the helpline, is that investigated?
Nicholas Read: If it isn’t brought to the attention of the Branch Support Centre then it won’t be investigated because we would be unaware of what had occurred –
Mr Stein: Now –
Nicholas Read: – unless I’m misunderstanding you.
Mr Stein: – a system within a branch –
Forgive me, Mr Read, you finish.
Nicholas Read: Unless I’m misunderstanding you, we would have to have the discrepancy or the loss brought to our attention for us to be able to investigate it. If people are still paying in because they have done a branch – done an end of day, end of week, or a trading period reconciliation and found that they’ve got cash and stock that doesn’t match what’s on the Horizon, and they determine that they want to pay that money in, then it’s very difficult, I think, as my understanding goes, for the Post Office to be aware of that particular situation.
Mr Stein: When individuals within a branch account find they have a shortfall, they’re doing so based upon the data that they have, which is also on the Horizon system; do you agree?
Nicholas Read: Yes, that’s correct.
Mr Stein: Right. So is it possible for the Post Office to start looking at shortfalls that occur within branches that are then paid off? What I mean is this: individuals who are currently paying off discrepancies that they find, that you know about through the YouGov report, at least, that is still happening. Why doesn’t the Post Office actually start to analyse the shortfalls that are occurring on their accounts?
Nicholas Read: Well, we have a discrepancy report and shortfall report. Every single investigation that now occurs into a shortfall and/or a discrepancy is recorded. So we have an impact – a branch impact – sort of, programme, I think it’s called BIP, which identifies all the shortfalls and identifies all the discrepancies, so that that database is available for anybody in the Branch Support Centre or anybody in the Support and Reconciliation Centre to look into to see if there is a commonality or a theme.
And what we do is obviously we look at the range of discrepancies that occur, and we start to address them by theme, so that those that are occurring more regularly – and we discussed this yesterday, in terms of moving keys or the like – we address.
Mr Stein: Let’s go back a couple of minutes into your evidence. You agree that if the situation is that someone within a branch pays off a shortfall that they don’t bring to the attention of the wider Post Office, maybe because they’re afraid to do so, maybe it’s because the history of this very scandal has affected them so that they don’t feel they can, or maybe it is because it’s a smallish amount of money and they just want to keep trading without interruption, maybe for any one of those reasons that they don’t bring it that way to the attention of the Post Office, the Post Office could be monitoring this but isn’t; do you agree?
Nicholas Read: No, I don’t. I don’t really understand your point because we’re very clear that, if you have a discrepancy and you don’t understand the genesis of that discrepancy, then you must ring the Branch Support Centre, you must press the Review and Dispute button and we will help to understand why that is the case.
I’m very clear that it’s a presumption of innocence here and we will get on and support people and we are doing considerably different work to understand the root cause of the issues and make sure we fix them, so I –
Mr Stein: Mr Read that’s –
Nicholas Read: Maybe we’re at different – at cross purposes here.
Mr Stein: No, I don’t think we are, Mr Read. That’s the corporate message you’re spouting. The corporate message is, “We’re trying to change, we’re trying to be different from what we used to be, we’re trying not to browbeat the subpostmasters, we’re hoping we are not prosecuting anybody”; those are the messages you’re essentially trying to get out, okay? But it is clear from the YouGov report that particularly long-term subpostmasters are still paying off shortfalls. You know that, don’t you, Mr Read?
Nicholas Read: I would be very concerned if people were paying off shortfalls that they felt were not as a consequence of an action that may have taken –
Mr Stein: What do you mean concerned, Mr Read? That is essentially what the YouGov report has identified: that people are still paying off shortfalls themselves. It’s not just a concern: this is happening. Do you dispute that, Mr Read?
Nicholas Read: No, I don’t dispute it.
Mr Stein: Right.
Nicholas Read: They need to, as I’ve mentioned before, get in touch with the Branch Support Centre if they believe that the discrepancies that are being generated in branch bear no relation to activity that they have been deployed in.
Mr Stein: Look at it from the subpostmaster point of view.
Nicholas Read: Yes.
Mr Stein: I’ll turn at the end of my questions to what has happened through your visits as part of reparations, as part of meeting people that have been affected by the scandal. You I know have gone on those visits and you have done that and you have shown empathy, yes?
Nicholas Read: Yes.
Mr Stein: And they have affected you –
Nicholas Read: Very much so –
Mr Stein: – we can see that.
Nicholas Read: – yes.
Mr Stein: You know that the long history of this scandal –
Nicholas Read: Yes.
Mr Stein: – has affected people working in brands currently, yes?
Nicholas Read: I agree.
Mr Stein: You’re essentially saying, “We’re trying to change and we’re trying to get that information across”?
Nicholas Read: Yes.
Mr Stein: You understand that the YouGov report is highlighting the fact that people are still paying off using their own money –
Nicholas Read: I do.
Mr Stein: – and perhaps there’s a trend towards it being the longer-term subpostmasters?
Nicholas Read: I think that’s fair.
Mr Stein: So you understand that the message that you’ve been trying to get across, perhaps it’s not been received, perhaps it’s not even welcome, that the message is a difficult one to get across?
Nicholas Read: Yes, and that was very much what I said yesterday: that we are struggling to engage with the longer-term postmasters, for the reasons that I think that you have articulated very clearly.
Mr Stein: Mr Read, how much longer have you got at the Post Office?
Nicholas Read: To the end of March.
Mr Stein: End of March. It’s clear, I think you’ll agree, that there’s work to be done in this area of shortfalls?
Nicholas Read: I would agree with that.
Mr Stein: Will you rededicate your remaining period of time, not exclusively, but at least a part of it, to working on the shortfalls, to making sure that people know and understand that they don’t have to pay it off, that there is a way of sorting it out without having to use their own money; will you do that?
Nicholas Read: I will certainly do that. More importantly, and I think what, even more importantly is, we’re just not reaching some of the postmasters who have had long service within the Post Office, for perhaps some of the reasons you’ve described, which is the level of trauma and the level of mistrust. That is of great concern to me and that is something that we need to address.
Mr Stein: I’m going to turn to a document that is called one of the Postmaster Support Policies, of which there are many, and it’s the Postmaster Account Support document, POL00448000. Now, Mr Read, you may have some familiarity with these documents. On the original they’re bright red, as they come on to the screen they appear to be rather dark –
Nicholas Read: Right.
Mr Stein: – and we can see this one is version 4.0. In fact, there’s a slightly later version but they don’t appear to differ. This one is postmaster support policy, Postmaster Account support. Can we go, please, to page 8 of this document.
Sir, for your assistance, these are documents from this year, 2024.
Sir Wyn Williams: Yes.
Mr Stein: If you scroll down to on that page, I think the title is “The risk”, which is paragraph 2.5. If we read through that:
“Post Office can recover losses from a postmaster when such losses are caused through negligence, carelessness or error and Post Office has carried out a reasonable and fair investigation, as set out in the Postmaster Accounting Dispute Resolution policy, as to the cause and reason for the loss and whether it was properly attributed to the postmaster. Postmasters are also responsible for losses caused by their assistants.”
Let’s start with the last sentence. That seems to be an echo of the past, with postmasters being asked to account for the losses caused by their assistants; is that quite right?
Nicholas Read: I think it needs further clarity, in terms of what does that specifically mean. I think what we – my interpretation of this is that the postmaster must be responsible, obviously, for the assistant, the level of training, the level of responsibility and the conduct of the individual. I think the inference here is not quite appropriate.
Mr Stein: No.
Nicholas Read: It needs tightening.
Mr Stein: It needs a bit of work, you might say, Mr Read. The starting point of this part at 2.5 is:
“Post Office can recover losses from a postmaster, when such losses are caused through negligence, carelessness or error …”
So the system is still saying to subpostmasters that what can happen is that we may pursue you for losses. The tenor of your evidence yesterday was that perhaps we don’t do that. What do you think about this policy?
Nicholas Read: Well, I think, as we said yesterday, one of the first things that we need to do is make sure that negligence, careless and/or error is described very clearly as in what does it mean? So, as an example, negligence might be leaving the safe door open during the middle of trading in a busy branch. As an example, that could be considered or deemed negligent.
But I think it needs a lot more clarity in terms of what is it that these statements actually mean, and how and who is interpreting them, and what are the implications of those interpretations? So I think – I think – or I’d agree with you, in that sense, that there’s more work to be done.
Mr Stein: I asked a whole series of questions this morning about shortfalls and people paying them off, what may be the cause of it. It’s this type of messaging which says that “We may still go after you”, that still exists this year within the Post Office. It doesn’t exactly help, does it, Mr Read?
Nicholas Read: The tone is inappropriate.
Mr Stein: I’ll go to a different document, please. This is a document which is another Postmaster Support Policy.
Sir, there are quite a few of these.
This one is “Contract termination”, and the reference is POL00448206.
Sir Wyn Williams: Are all these documents 2024, Mr Stein?
Mr Stein: They are, sir. I can show the dates on these things.
Sir Wyn Williams: No, I will assume they are all 2024 unless you tell me otherwise.
Mr Stein: That’s right, sir. You might at some stage ask the Inquiry Team for copies of these but they are changing so frequently, to be fair to the Post Office, that it’s difficult to identify the ones. The ones that I’ve got, in fact, are slightly later ones than the ones that I can find on Relativity.
The Witness: Just for a point of help, the Postmaster Support Policies, I think there are 12 in total, they go through a yearly cycle of review and revision. The Risk and Compliance Committee and the Board committee, which is the ARC committee, which is – upon which actually postmasters sit, so Postmaster Non-Executives sits on that committee, in terms of Elliot Jacobs in particular –
Mr Stein: Can we go to paragraph 4.5, please. I’m conscious, Mr Read, obviously of time. That’s all.
Nicholas Read: Okay.
Mr Stein: It should come up as “Repudiatory breach” – right okay, 4.5, “Immediate termination”. In fact, on the document I’ve got, which is slightly later it’s called “Repudiatory breach”, okay. So 4.5, “Immediate termination”:
“Post Office may only terminate a contract immediately without notice where …”
Then 4.6, and then further down, please. So 4.6, so this is about immediate termination, okay, and these are the sorts of breaches that can cause immediate termination. 4.6, fifth bullet point down:
“Where discrepancies of a significant value have been caused by the negligence, carelessness or error of the postmaster, resulting in a loss to Post Office, and which have been fully investigated by Post Office.”
Okay?
Mr Read, my suggestion is that if we follow through the documents that are in existence, that are live today, that essentially the same message is going out, even to the point of essentially saying, “You might be sacked without notice”?
Nicholas Read: Well, I think a couple of points on that. What I’m very, very clear about is there is no – and there is no termination without the Dispute Resolution Committee, which – upon which sit two ex-postmasters, one of which is the Chair of that committee, that oversees whether or not we can dismiss or can close down an individual post office or postmaster. So we’ve been very explicit that we do have an independent postmaster or ex-postmaster who sits on that committee.
Mr Stein: Your understanding, though, from my questions, is, I believe, that you accept that there’s work that needs to be done, the tenor of these documents is still saying, essentially, “We may go after you if we find that there are losses to the Post Office through Horizon shortfalls”. That’s still a message that’s out there, Mr Read. Do you accept that this needs, perhaps, at the very least, a bit of rework?
Nicholas Read: I think there is some rework that needs to be done. We can agree on that, Mr Stein.
Mr Stein: We know that, in relation to shortfalls, and I quote here from the statement of Melanie Park – for those that wish to make a note, it’s paragraph 97, page 46 of her statement. Her statement for anyone’s notetaking purposes is WITN11600100. I do not need to go to the document.
Ms Park, who will be giving later in this Inquiry, says:
“However a branch is prevented from completing the trading period end process and moving into the subsequent trading period if it has not actioned all transaction corrections, either by accepting them or using the R&D function in Horizon and/or has a balance remaining in the local suspense account.”
Now, as I understand it, what Ms Park is going to be telling us, therefore, is that unless you sort out the shortfalls, you can’t keep on going.
Nicholas Read: No, she’s not going to tell you that.
Mr Stein: Okay. We’ll ask her those questions.
Nicholas Read: Yes, you can.
Mr Stein: All right. One of the contractual requirements – and if we need to, we can go to it in the policy documents – is that the branches, the subpostmasters, comply with visits from the Branch Assurance Team?
Nicholas Read: That’s correct.
Mr Stein: Ms Park says about that, paragraph 55 this time:
“I would also like to make clear that no member of any team that might ultimately investigate a discrepancy arising from a Branch Assurance Visit will be present during the Branch Assurance Visit.”
Okay?
Nicholas Read: Mm.
Mr Stein: Shall I repeat that?
Nicholas Read: Yes, please.
Mr Stein: I rather mangled it. She’s saying this:
“I would also like to make clear that no member of any team that might ultimately investigate a discrepancy arising from a Branch Assurance Visit will be present during the Branch Assurance Visit.”
Of course?
Nicholas Read: That’s correct.
Mr Stein: So she’s talking about, essentially, separation of teams?
Nicholas Read: She is.
Mr Stein: So let’s add this all up together. We’ve got subpostmasters who are subject to a contractual requirement to cooperate with visits from the Branch Assurance Team, yes?
Nicholas Read: That’s correct.
Mr Stein: The Branch Assurance Team may refer matters to an Investigation Team within the Post Office?
Nicholas Read: Yes, to the Branch Support and Reconciliation Team.
Mr Stein: Mr Beer yesterday asked a number of questions about the contract and about whether the terms used within that contract, “Investigation Teams”, was appropriate, and you said yesterday, again, that needs work; you agree and you recall that?
Nicholas Read: I do recall that, yes.
Mr Stein: Then we have the policies that we’ve been looking at today that again need work, which appear to be saying, “Look”, to the subpostmasters, “we may still go after you for losses”, yes?
Nicholas Read: (The witness nodded)
Mr Stein: Again, all needs work?
Nicholas Read: Yes, we’ve got more to do. There’s always work to be done.
Mr Stein: From the subpostmaster point of view, it might be said that whatever you call the Branch Assurance Team, you could call them the “Butterfly Club”, Mr Read, it would still be seen as being part of an investigation by the Post Office into shortfalls that may lead to their contract being terminated. That is the message that comes across if you look at the system, Mr Read, and that’s the message which I think you’re saying you don’t in fact want to come across to subpostmasters?
Nicholas Read: I certainly don’t want that message to come across to subpostmasters. I’m also very clear that the Branch Assurance Team do one thing and one thing only: and that’s basically a stock check. They will count the stock and they will count the funds. They won’t do anything else. They won’t investigate anything. They have no accountabilities, they have no job role associated with anything other than a cash and stock check. If we haven’t made that clear for folk then we need to be much clearer in doing so.
The other point, I think, that is important to make is the presumption of innocence still pervades, and that is really very important. We are here to try and resolve discrepancies, not to insist upon people making them up, if they believe that not to be the case.
And you touched on the importance of not being able to trade or move into the next trading period. If the Review and Dispute button is pressed, if there’s any disagreement or misalignment associated with a discrepancy, then it gets placed into, effectively, a local suspense account, and you move on, and you trade, and you trade the following week, and you trade the following week after that. And we will then try and resolve what the issue is and, if we can’t resolve it, then we have a dispute process that we can go through. But we are not at any stage forcing people to make good losses that they do not agree with.
Now, we may well have more to do in terms of our engagement and communication, we’ve talked about that, and I would agree that we still have pockets of postmasters who are deeply, deeply troubled by what has occurred historically and we need to address that.
Mr Stein: “Pockets” may be a slight understatement, Mr Read. Looking at the figures you get through the YouGov report, you’ve got significant numbers of people that are still doing this, they may be doing it in £10, £20, £50 or £100 but they’re still doing it –
Nicholas Read: (The witness nodded)
Mr Stein: – and those £10, £20, £50 adds up to millions, as you accept, over the years?
Nicholas Read: Absolutely, it does.
Mr Stein: Your figure of 36 million is growing, Mr Read.
Now, my time has been set. I’ve asked Mr Jacobs to give me a note to say it is break time and it now is break time.
Nicholas Read: Okay.
Mr Stein: Fifteen minutes, please, sir.
Sir Wyn Williams: All right, certainly. So we resume at 11.30, yes?
Mr Stein: Thank you, sir.
Sir Wyn Williams: Fine.
(11.16 am)
(A short break)
(11.31 am)
Mr Beer: I think Mr Stein will notice that the Chairman has reappeared.
Mr Stein: I thank Mr Beer for pointing that out.
Mr Read, the background to this Inquiry, the background to the scandal, it’s all been about the withholding by the Post Office of information that would have assisted subpostmasters, that would have assisted people that were being investigated, that would have assisted people that were going through the criminal courts or the civil courts or through audits, that’s the background; do you understand that –
Nicholas Read: Yes, of course.
Mr Stein: – from – if I call them the Fraser judgments –
Nicholas Read: Yes.
Mr Stein: – I hope Lord Justice Fraser will forgive me.
Nicholas Read: Yes.
Mr Stein: Have you ever kept back information that would assist in the investigation of matters, either through the criminal courts or through audits?
Nicholas Read: No.
Mr Stein: No? Because you no doubt understand the ramifications of doing such?
Nicholas Read: That’s correct.
Mr Stein: Yet we know that Mr Patterson wrote a letter. Mr Patterson, I think, who is the European Director of Fujitsu, worldwide company, wrote a letter on 17 May this year saying that Fujitsu will not support any pursuit of any enforcement action, civil or criminal, against subpostmasters. It was a pretty clear letter, finishing with the line:
“It should not be relying on Horizon data as the basis for such shortfall enforcement.”
Okay?
Now, you went through this correspondence with Mr Beer, and I won’t redo that. So we know that there was further communication between yourself and Mr Patterson, all right. We know that Mr Railton gave evidence and says that he’s going to take up this particular cudgel or this particular stream of correspondence with Mr Patterson and he’s going to attempt to deal with it as well, all right?
Nicholas Read: (The witness nodded)
Mr Stein: Okay. You’ll recall that yesterday Mr Beer was asking you questions about a meeting of the SEG, that’s the Strategic Executive Group. That was a meeting on Wednesday, 26 June 2024, starting at 11.00 am, and it was a discussion document put forward by Ms Gray and Mr Bartlett, which was disclosure to support police investigations.
Nicholas Read: Yes.
Mr Stein: Do you recall that?
Nicholas Read: I do recall that.
Mr Stein: Now, let’s ask the specific question: had you, by 26 June 2024, disclosed to Ms Gray and Mr Bartlett the correspondence that you received from Mr Patterson on 17 May 2024?
Nicholas Read: Yes, she was aware of it, yes.
Mr Stein: Had it gone to the Board?
Nicholas Read: I said yesterday, it was discussed with Mr Tidswell, who was the Acting Chair at the time, and with Lorna Gratton, who was – as you know, is the shareholder representative. I don’t think the full Board had seen it. It was, as I say at the time, it was correspondence between two CEOs, as opposed to a board level decision.
Mr Stein: Now, Mr Railton gave evidence saying that he had seen this correspondence as part of his pack, his evidence pack, before giving evidence. He clearly hadn’t seen this document and this correspondence that you’d had with Mr Patterson at Fujitsu. How come the new Chair of Post Office hadn’t been told about the correspondence with Mr Patterson where the Fujitsu company supporting, creating, essentially, and running the Horizon system is saying, “Don’t use our data”? How come that hadn’t got to Mr Railton?
Nicholas Read: I don’t think we saw the engagement with Mr Patterson in quite the same way as you have, and I think the point that I was trying to explain to Mr Beer and to Sir Wyn was that this was more of a spat than anything else. I don’t believe that it was the degree that you’re suggesting here and now. I think we were quite affronted, obviously, by the communication that we received from Mr Patterson, and that was something that Owen Woodley and Neil Brocklehurst have continued to take on over the summer.
Mr Stein: That’s not actually the answer to my question. How come Mr Railton hadn’t seen the document until he had it from the Inquiry in his evidence pack before he gave evidence?
Nicholas Read: I don’t know.
Mr Stein: Because Mr Railton’s evidence, by that point, is that he’s coming in, he’s suggesting that there’s going to be a turnaround of this particular ship and it’s going to be to rework the entire Post Office in relation to the questions that concern subpostmasters, a good phrase he used, he’s going to reverse the polarity –
Nicholas Read: Yes.
Mr Stein: – of the Post Office, so it’s subpostmaster centric rather than the other way round, rather than executive centric, is the way I understand it. He’s also looking into the question of the Horizon system and whether NBIT should go ahead, whether it should be replaced. It seems that it should have been information that should have gone to Mr Railton, and you don’t know how it was missed?
Nicholas Read: Quite possibly.
Mr Stein: Now, you’ve explained in one of your answers just given that, well, you thought this was a bit of a spat, that was your word, a spat between, and you go on to say, however it came about, maybe between two CEOs. Did you, regarding that correspondence, take advice from a criminal lawyer?
Nicholas Read: I took advice from my General Counsel, and –
Mr Stein: That’s not the answer to my question, unless General Counsel turns out to be a criminal lawyer.
Nicholas Read: It could possibly be that her training is in criminal law, I’m not sure.
Mr Stein: Right. Did you purposefully decide, “Well, this is something that has a relevance to investigations, this is something that may be important to what’s going on with the police”, which you’re learning about through the SEG meeting on 26 June?
Nicholas Read: Mm.
Mr Stein: Did you decide, “I’d better run this by a criminal lawyer”?
Nicholas Read: No, I didn’t decide that at all. I decided that I would take the guidance of my Interim Chair, who is a lawyer, and also the General Counsel and the shareholder representative, and describe what it was that I was communicating with Mr Patterson because –
Mr Stein: Did you take advice on this document from Ms Gallafent, King’s Counsel? I don’t ask for what the content of that advice was, I ask you whether you went to her, Ms Gallafent; Nicola Greany, King’s Counsel; Simon Baker, King’s Counsel. They are all King’s Counsel instructed by the Post Office and dealing with different aspects of this Inquiry. Did you go to them and say, “I’ve had this letter from Mr Patterson at Fujitsu, it concerns me about disclosure, what should we do with it”, or something similar?
Nicholas Read: I don’t know whether the email trails have been disclosed in their entirety, but they may well have been and, therefore, what guidance that General Counsel took, I can’t tell you that.
Mr Stein: When you get to the June meeting, the June meeting which is the SEG meeting, which is a meeting that is discussing the question of disclosure to support police investigations, when a document has been put forward in relation to that, did you or anyone around you, say to themselves, “We’d better have a word with those police investigations and make sure that they’re aware of this correspondence”?
Nicholas Read: No, I don’t believe we did that. I think.
Mr Stein: I go back to my question. Have you been involved in the withholding of information that may be relevant to investigations that are ongoing?
Nicholas Read: No, I haven’t.
Mr Stein: Well, it seems that the answer is a “Yes, Mr Stein, I have”.
Nicholas Read: Well, I don’t believe that to be the case, Mr Stein.
Mr Stein: Now, there are things called entrustment requirements that are set by the Government in relation to the operation of the Post Office, you agree?
Nicholas Read: Services of general economic interest.
Mr Stein: So the Post Office has a wider community service aspect that is the subject of extra funding from Government?
Nicholas Read: Very much so.
Mr Stein: Just describing one of those, by way of example: nationally, 99 per cent of the UK population to be within 3 miles and 90 per cent of the population to be within 1 mile of their nearest post office outlet. Yes?
Nicholas Read: That sounds correct.
Mr Stein: So using those as my example in relation to the requirements set, we know there is, if you like, this outreach by the Post Office that is directed into communities, whereby it might not be economically sensible to open up a post office if you want to make money.
Nicholas Read: That’s correct.
Mr Stein: The Government provides, essentially, compensation, which I think is the word used, to the Post Office, to allow the support for such branches; do you agree?
Nicholas Read: The expression I used was “subsidy”.
Mr Stein: Fine. Now, in your statement, you refer to a review by the Government to undertake a review of its policy for the Post Office, and you refer to a letter from Mr Kwarteng, a Member of Parliament – I can’t remember whether he’s still elected or not – who was then the Secretary of State for BEIS, dated 11 March 2022. Can we go to that letter, please, it is POL00448435.
Thank you. We see the date of this letter. We see who it is from, Secretary of State for Business, as it was then called, and we see the recipients, it’s you and Mr Parker, the date is 11 March ‘22. Now, some of this letter, in fact, confirms the commitment to the requirements, essentially that the Government is asking the Post Office to continue to commit to those requirements, all right?
Nicholas Read: To the SGEIs, yes.
Mr Stein: I’m very grateful. So the particular part I’d like to refer to, then, is not so much that, but at the bottom of page 2 and top of page 3, please. Thank you. Keeping in our minds the date 11 March 2022, we’ve got this, “Future policy framework for the Post Office”:
“Finally, I recognise the need to consider the policy framework in the context of the changes to the wider environment and the new challenges you face, on top of Covid-19, and ongoing work to resolve historical matters. It is crucial we develop a sustainable, long-term approach for the network, and I look forward to working with you on this review.”
Okay?
Nicholas Read: Yes.
Mr Stein: Now, that appears to be, from what I understand, the review you’re referring to in your statement, which was requested by the Post Office.
Nicholas Read: Looks like it, yes.
Mr Stein: Yes, it does. We’re now getting close to the end of 2024 and we learn from Mr Railton that the Post Office is, in fact, saying to the Government, “Look, Government, Post Office needs your long-term commitment for long-term support. It needs money to be able to provide a new system, IT system, to continue operation”. That’s happening now. That seems to be all Mr Railton is saying since he’s come in.
Why has it taken so long, Mr Read, for anyone to think about the result of this sort of review back in ‘22; why has it taken so long, Mr Read?
Nicholas Read: I’m not entirely sure I’m clear with your point. The Government’s policy review is for the Government to initiate. We pushed the Government in ‘21 to initiate this policy review on the back of a strategic review that we did ourselves in 2019/2020. So I’m not entirely clear on your point other than, as I made the point yesterday, the policy team within the Department has been very focused on compensation. I think it would be fair to say that their resources have been split between doing compensation and initiating a policy review. I’m as frustrated as anyone that we don’t have a policy review from the Government that we can build around and –
Mr Stein: Mr Read, you may get the direction of my travel wrong. It’s not an attack upon the Post Office necessarily.
Why has it taken so long for the Government to actually start thinking about the strategic direction o Post Office, in terms of the way that Mr Railton was talking about, the funding commitment, the long-term funding commitment; why has it taken Government so long to wake up?
Nicholas Read: I think you’ll need to address those questions to Government.
Mr Stein: Mr Read, you have been in post now for five years?
Nicholas Read: Yes.
Mr Stein: Tell us what you think has been happening with Government. Why has there been a Government failure to essentially support the subpostmasters to make sure that they understand that there is a long-term life for the Post Office; why didn’t you sell it that off to Amazon, as Sir Alan suggests?
Nicholas Read: I think, looking back to the comments that Henry Staunton made when he was in front of this Inquiry, there was – and there was a determination to get through to the election and then, from the election, to reset the Post Office. And I think that was certainly the direction of travel that was indicated by the Permanent Secretary 18 months ago. So I think that is probably the underlying driver behind this.
I am very confident that Mr Railton’s enthusiasm and sense of purpose is going to drive the Government hard on this, and he made that point very clearly earlier in the week, and I fully expect that the Government will obviously get hold of the Strategic Review and I hope that they will dovetail that in, as we discussed yesterday, to their own policy review and that we come up with a sustainable strategy, long-term sustainable strategy, for the Post Office.
Mr Railton implied on Tuesday that that would be in the next two or three weeks, that the Department would respond to that and I look forward to –
Mr Stein: You see that evidence from Mr Railton was remarkably tight to the timing of his evidence and indeed yours. So it seems that just before he was giving evidence that something was done. Was it a letter that was sent to Government saying that we need a commitment from Government to fuller funding? Who compiled the document that was sent to Government: was it another organisation; was it the Post Office working with another organisation; where did this impetus come from, just before giving evidence by Mr Railton?
Nicholas Read: Mr Railton has been very clear that the terms of taking on the chairmanship of the Post Office was that we would do a strategic review. He was very clear about that and that was part and parcel with his signing up to be Interim Chairman. As a consequence of that commitment from the Government, he engaged with Teneo to do a full Strategic Review of the organisation, they said it would take four months. The conclusion of that four months is literally about now, so the timing is not unique, in that sense. It’s exactly what was laid out in the Teneo work that started back in June.
Mr Stein: So the timing and the question of the timing relates to Mr Railton’s appointment?
Nicholas Read: Correct.
Mr Stein: Since he’s come in, he’s provided that extra impetus, essentially to rattle the Government cage, to say what’s going on for the future of the Post Office?
Nicholas Read: Yes.
Mr Stein: What you can’t say is why it’s taken so long for the Government to actually come up with anything itself to guarantee the long-term work of the Post Office; you don’t know the answer to that?
Nicholas Read: Well, as I say, I think the policy team has been very focused on driving compensation and that is why they have not taken the policy review forward in the way that I’d articulated yesterday and the day before, which was the first time we would have had a policy review since 2010.
Mr Stein: Right. Well, we’ve got some Government witnesses coming along, and past ministers –
Nicholas Read: Indeed.
Mr Stein: – so I look forward to asking them questions about that.
Now, we’ve had various references to strategic plans, we’ve had various references to Chief People Officers and to reviews that relate to outside organisations drafting up something that comes back with corporate speak saying that everyone needs to be nice to each other and everyone needs to remember that there are other people working in a collegiate way within the organisation.
Now, I don’t in any way seek to undermine the value of such documents. It is important that people working within an organisation do, in fact, respect each other and do trust each other, these are fundamental to any organisation. But one of the matters that was marked out, and I asked questions of Ms McEwan about these documents, they don’t mention subpostmasters. There were two documents I asked her about, the People Plan and then the Behaviours Plan, clearly directed at internal employees.
How come under your watch, Mr Read, that there’d been the production of these sorts of documents that don’t refer to subpostmasters in the way that frankly you would expect after all of this scandal; how come, Mr Read?
Nicholas Read: I think, as Ms McEwan referenced, you were talking specifically about behaviours and about the importance of how the Post Office internally transformed its behaviours, and I think that was – and remains – a very valid and important part of the work that we need to do to develop our ways of working and to develop our behaviours. The explicit reference or explicit inclusion of the postmasters, I can understand the concern – if that’s the right word – of you and your clients. The objective of the People Plan, the Strategic People Plan, was very much to shift the culture internally, such that it was supporting postmasters.
It isn’t our place to – and certainly isn’t my place – to instruct postmasters on how we behave. I think it is our place to communicate to postmasters what we’re trying to achieve and that’s what we will be doing through our behaviours documents and through our ways of working documents.
Mr Stein: I have asked you questions about shortfalls, about the policy questions.
Nicholas Read: Yes.
Mr Stein: You agree that they need review.
Nicholas Read: (The witness nodded)
Mr Stein: I’m now asking you questions about these sorts of people plans and the fact that they miss out references to subpostmasters.
Nicholas Read: (The witness nodded)
Mr Stein: There still appears to be a trend within the Post Office to miss out subpostmasters as being a group that the Post Office is, in fact, dedicated towards. Will you again, in the remaining months of your period of time at the Post Office, review these sorts of documents, ask the people within the Post Office “Why aren’t we referring to subpostmasters where we should be?” Again, will you deal with that?
Nicholas Read: I will.
Mr Stein: Thank you.
Now, Mr Railton’s evidence was something that was set out so that we understand and we await the result of the review and the discussions with Government, whereby there’s going to be this recommitment, rededication of the Post Office towards subpostmasters. We have messages from people we represent who are current subpostmasters to say that they’re not feeling the love, Mr Read. Let me read one:
“As a person who is still working behind the Post Office Counter, acting postmaster at the same branch, that broke me as an individual. We have had no sight of any increase but only decrease to say that if we do not meet certain targets on services we will lose them. That’s all we’ve had. I’d be extremely concerned of what the Post Office has to offer in this new strategy [the one that’s being discussed with Mr Railton], as I’m sure it’s any going to be in benefit for Post Office Limited and the staff that actually work for Post Office, rather than people on the actual ground who earn them the money and pay their wages while we get the crumbs.”
The message goes on to say:
“I’d definitely push for this plan to have been seen before Government agree, as these people are only pencil pushers sitting behind a desk with a massive income. They have no idea of the struggles we have on the ground.”
So people in branches are not feeling the love, Mr Read.
There are still plans – as we learnt from the current Chair of the NFSP, the West Linton branch – to close these Hard to Place branches.
Surely, if there is this root and branch review that is ongoing to discuss the future of the Post Office, with a change of polarity for the Post Office to recentre itself towards subpostmasters, surely all of these closures, these branch closures, should stop? Surely there should be a moratorium on actions taken in relation to subpostmasters? Draw a line, Mr Read, to say, “If we’re going to be changing, let’s make sure that the subpostmasters understand there’s going to be a change”; what do you think, Mr Read?
Nicholas Read: Well, I think Mr Railton made it very clear yesterday – sorry, on Tuesday – that at the core of the Strategic Review is the relationship with postmasters but a new deal, I think, was the expression he used, for postmasters, and a new deal is absolutely central to moving forward. We’ve talked about that over the last three days.
I don’t recognise your closing of branches notion. It’s not something that we have been doing recently, so I don’t follow that particular train of thought. We’re not seeing churn numbers as dramatic as might be implied and, indeed, the stability of the network and the desire of people to open branches is frankly, given the last nine months, surprisingly robust.
Notwithstanding what you’re saying, Nigel’s commitment to a new deal for postmasters, his words, polarity, I think we’ve tried, and this is the next phase of that. We have been engaging, and I know that Nigel made that point with the NFSP and with the Voice of the Postmaster, and with other postmaster groups, to discuss the issues that they think need to be addressed, so that we can bring those into our Strategic Review and that’s absolutely what has been done and is ongoing.
Mr Stein: Mr Read, what it appears to be is that there is a considerable and too far distance between the office of the CEO, probably the Board as well, and the individual subpostmasters working perhaps in small branches in small or low density population areas. That’s what it appears to be, that this message that you keep on wanting to say – I understand why and must get out – it is not getting out. We’ve seen that from the YouGov report, we see it from such correspondence.
You need to close that distance. You need to make to sure that the communication is effective; do you accept that?
Nicholas Read: Well, as I said, we do need to get closer to it.
Mr Stein: Let me turn, then, to the schemes, the compensation schemes. I’m just going to describe what they are to make sure that we’ve got the sheer number of them.
There is the Group Litigation scheme, the GLO scheme. That one is run by the Department for Business and Trade. There is the Horizon Convictions Redress Scheme, which the Department for Business and Trade is also administering, which deals with redress for people whose criminal convictions are overturned by legislation. Yes?
Nicholas Read: Correct.
Mr Stein: There is the Overturned Convictions Scheme – the Post Office runs this one – dealing with redress for people whose Horizon-related criminal convictions have been overturned by the courts, yes?
Nicholas Read: That’s correct.
Mr Stein: There is the Horizon Shortfall Scheme – Post Office is administering that one – administering the Horizon shortfalls. That was established in 2020 to provide redress for postmasters who were not claimants in the Group Litigation?
Nicholas Read: That’s correct.
Mr Stein: Okay. So two schemes being run by the Department of Business and Trade and two being run by the Post Office?
Nicholas Read: That’s correct.
Mr Stein: Okay. In addition to that, we also have a Suspension Remuneration Review being run by the Post Office, yes?
Nicholas Read: Yes, that’s correct.
Mr Stein: That’s for individuals who have been essentially highlighted by Lord Justice Fraser’s judgments, those people that have been suspended whilst investigations were carried on and its redress being considered in relation to those suspensions; is that correct?
Nicholas Read: That’s correct.
Mr Stein: There is also an Adequacy of Payments under the Shortfall Scheme, a review of the shortfall scheme payments, because it is being considered that some payments were inadequate; do you agree?
Nicholas Read: That’s correct.
Mr Stein: Then, unless you’re going to tell me there’s another one, there is a Stamp Compensation Scheme that is ongoing as well; is that correct?
Nicholas Read: That’s correct.
Mr Stein: So the evidence in relation to stamps was given, I think, by the NEDs in part. That was because another debacle committed by the Post Office was in relation to stamps, how it was dealt with and interference in branch accounts. Have I missed any schemes?
Nicholas Read: Yes, there are other schemes.
Mr Stein: Right. Are they schemes that are dealing with financial redress to individuals?
Nicholas Read: That’s correct.
Mr Stein: What are they?
Nicholas Read: There is a Process Scheme that is currently in pilot as well, at the moment and there are, I don’t recall off the top –
Mr Stein: Help us understand what a Process Scheme means?
Nicholas Read: Again, it’s a pilot to try and understand if there are other areas of discrepancy that people have come forward and said, “We have areas where we think there may be detriment”. So we’re looking at all of those. We want to be very open and transparent and, if there are people who come forward and say that they have experienced some form of detriment, we want take sure that we are addressing it head on.
Mr Stein: Let me give you an example of the experience of one individual we represent. It’s Mr Peter Worsfold. He has finally had his offer on his GLO scheme claim last week. Across multiple heads of loss, he has been offered only 70 per cent of what he claimed, and the reason he has been given, and I quote, is:
“… evidential uncertainty as a result of gaps within the supporting evidence provided.”
Okay?
Now, in the questions being asked yesterday by Mr Beer, he took you to a document whereby one of the ministers at the department was concerned about the question of evidential support and essentially saying, that’s Mr Hollinrake, that give the people the benefit of the doubt, in relation to evidence.
Do you, Mr Read, believe that subpostmaster claimants should be given the benefit of the doubt across all schemes?
Nicholas Read: I don’t have the detail to be able to comment across all schemes but I’ve been very clear that the evidential bar must remain low and the evidential bar must be such that the benefit of the doubt is for postmasters, and I’ve been very clear about that and I’ve said that here on – in this Inquiry and I do believe that. And that is exactly what should happen. That –
Mr Stein: It needs to be believed, doesn’t it, Mr Read? I’m butting in because of something you said earlier in your evidence. You’re explaining about the real difficulties for the Post Office in looking at shortfalls because of the amount of time it goes back through, back through into the early 2000s, and indeed, there are questions being asked about another electronic scheme called Capture, so it may go even earlier than that.
Those evidential difficulties in trying to analyse shortfalls are the same sorts of problems that some people are also experiencing with trying to get their way through these schemes.
Nicholas Read: Mm.
Mr Stein: So’s a common problem that you understand from the Post Office point of view and the subpostmaster point of view, don’t you?
Nicholas Read: Yes, I do understand that.
Mr Stein: Which is why the benefit of the doubt should be given, if a subpostmaster –
Nicholas Read: I agree.
Mr Stein: – says “This is what’s happened, I’m afraid I can’t find the document, I buried it, I lost it, I didn’t want to think about it”, that can affect whether they have the documentation, can’t it?
Nicholas Read: Of course it can, yes.
Mr Stein: Now, the Horizon Convictions Redress Scheme, which is there to deal with criminal convictions overturned by legislation, as we understand it, 335 letters have been sent out to roughly a cohort of well over 1,000 people that were convicted over the years through the Post Office’s prosecutions and the scandal. 335 letters doesn’t seem to be the right number, Mr Read?
Nicholas Read: Is this the scheme that’s run by the Government or is it the scheme that’s run by –
Mr Stein: That’s the Government –
Nicholas Read: Yes.
Mr Stein: – and it’s a scheme that relates to the convictions that are being quashed through legislation?
Nicholas Read: Understood.
Mr Stein: 335 letters only have been sent out. So, essentially, it seems as though there have been identified 335 people to get letters that deal with their convictions, telling them that they’ve been cleared. More work needs to be done in this area, it is clear; do you accept that?
Nicholas Read: This is the Government scheme so it’s difficult for me to comment on the detail of –
Sir Wyn Williams: Well, I was going to ask you, Mr Read, does the Post Office have any involvement in administering that scheme, and I use the word “any”: for example, is it incumbent upon the Post Office to try and identify people which it prosecuted?
Nicholas Read: We obviously –
Sir Wyn Williams: That’s just by way of an example.
Nicholas Read: I mean, I was about to come on to tracing. I think that’s clearly what we’re discussing here, is the ability to trace and, clearly, we have an accountability for that because many of the records will be held by Post Office. But, as we’ve already discovered, records aren’t, and data isn’t, as –
Sir Wyn Williams: But what’s interesting me, following Mr Stein’s questions, is whether there is a process, as between the Post Office and a government department, and again, I’m using the words “a government department” because there’s the possibility that the Department of Trade is involved, there’s the possibility that the Ministry of Justice is involved. What is the process for trying to track down all these people?
Nicholas Read: I don’t have the specific details but you’re absolutely right that there is an operational agreement between the Post Office and the Department for Business and Trade because the Department for Business and Trade is obviously responsible for this particular scheme. The mechanics of how that scheme works and what the operational KPIs, in terms of the sort of time it takes to do disclosure, and the time that it takes to do the tracing, and the investigation – or not the investigation, but the ability to diagnose those databases is obviously something that is part of the operational agreement between the two parties. I don’t have the specifics behind that.
Sir Wyn Williams: Fine.
Mr Stein: So what this means, Mr Read, is this: that it seems almost five months from the passing of the Act, which is the Post Office Horizon System Offences Act 2024, more than 60 per cent of the victims of this scandal do not know that they’ve been vindicated. That’s what appears to be the current situation.
Nicholas Read: If that’s what you’re telling me. I’m not familiar with those statistics, to be fair. It’s a –
Mr Stein: On the giving of information, so that the scheme can have its operation, so that people can know that they’ve been vindicated, so that they know they’re entitled to have compensation, you’ve just answered the questions from the chair in relation to information going from Post Office. That’s clearly a job that the Post Office needs to do.
Have you considered this with the NFSP because they will also have lists of individuals that have been members over the years? Have you considered that possibility of joint working with the NFSP, get the message out, but also whether they have names that could assist?
Nicholas Read: I don’t know whether that’s been considered. It may well have been considered. This isn’t specifically an accountability that I’m particularly close to, to be fair.
Mr Stein: But it’s work that needs doing?
Nicholas Read: Oh, clearly it is, yes.
Mr Stein: Would you join with making a request to the Chair that the Chair himself would, if he would be so kind, send a message out to all media outlets – and I think it’s sometimes called a blog these days, I don’t know whether we’ll do a blog – but it would assist if this Inquiry set itself out and made a very clear message to all of those people that are being dealt with so harshly by the Post Office, that are being convicted, to come forward, yes?
Nicholas Read: I absolutely want that to occur. We’ve talked to the CCRC, we’ve talked to the Advisory Board, we’ve talked to the Inquiry, we’ve talked to the drama that was played at Christmas, in an attempt to try and get communication out for people to come forward. We have tried numerous and multiple attempts at tracing and we’ve used Citizens Advice, we’ve used many other outlets to try and do this. I agree with you, Mr Stein, it’s very, very frustrating but we must continue to try and push this.
Mr Stein: Do you accept that there’s more joined-up work to be done in relation to this, with the NFSP. There are three firms of solicitors that represent number of people –
Nicholas Read: Absolutely.
Mr Stein: – before this Inquiry. They should be tapped for their expertise?
Nicholas Read: Absolutely.
Mr Stein: They’re conveniently all starting with the letter H: Howe+Co, Hudgells and Hodge Jones & Allen.
Nicholas Read: I agree.
Mr Stein: Okay, so use their expertise, I respectfully suggest, in making sure that the message goes out?
Nicholas Read: I agree.
Mr Stein: Lastly, as mentioned earlier, you and others within the Post Office have been meeting with our clients –
Nicholas Read: That’s correct.
Mr Stein: – and taking part in meetings that I know have been difficult for you, obviously incredibly difficult for the people that meet with you?
Nicholas Read: Indeed.
Mr Stein: You’re leaving the Post Office, other people that have been taking part in those schemes are also leaving the Post Office. How are you going to make sure that the Post Office keeps its – the term used is “corporate memory” – keeps its memory of the effect of what happened to people?
What are you going to do to make sure that people working in the Executive Team, the Directors that are not postmasters, actually understand the depth of hurt and feeling of this scandal?
Nicholas Read: We’re doing a number of things. I think, as you mentioned, I’ve done a number of restorative justice meetings over the past couple of years, I think 37 I have attended. I speak at great length to the organisation, at my town halls and at my 10@10 meetings, to try and convey the trauma and the harm – is the word that I tend to use – that had been inflicted upon many of the families involved. I have spoken to Government about it and, obviously, encouraged my Board members and my Group Executive members to attend the restorative justice meetings. I think it helps shape the solutions that we should come up with and help people in the organisation to understand the implications of this.
We’ve recently instigated, as Ms McEwan mentioned, online and e-training for all colleagues in the Post Office to help people understand just what the Post Office has put many of your clients through.
Mr Stein: Let me square a particular circle. You’ve mentioned families.
Nicholas Read: Yes.
Mr Stein: Mr Patterson, the European Director of Fujitsu, when he gave evidence before this Inquiry, answered my questions and I asked him questions about whether Fujitsu, the company, broad shoulders financially, is prepared to support people that have been affected through this scandal. What I mean is the family members, the children who watched their parents go through hell, that have had their education disrupted, that may have been put off an entrepreneurial career through this scandal. There is no scheme that deals with those individuals at the moment whatsoever.
Have you had any communication from Fujitsu to the Post Office saying, “What a good idea, let’s get something done for the families, those people affected in that way”; have you had any communication from Fujitsu to that line?
Nicholas Read: I don’t believe I have. I –
Mr Stein: Has the Post Office set up any schemes that are looking in the direction of support of providing educational support, bursaries and the like, in relation to those people affected in that way, who are not currently affected by the schemes?
Nicholas Read: We are still having conversations with DBT about this. I can assure you, and you’ll be able to talk to Simon Recaldin next week, that both of us are absolutely clear that the family of – the families of victims need to be considered in this process. And there are two lines of investigation for us here: one is working with DBT to bring this to life. We do believe it is very important, and I mentioned it in my witness statement, that it’s something that I personally am very engaged in. And, secondly, we’ve obviously discussed, and at the restorative justice meetings as well, just precisely what – some form of memorial, some form of ability to remember what has occurred, and how do we put that into practice. So those are the two lines of investigation that I am pursuing with DBT.
Mr Stein: I have asked you on a number of occasions through the questions I asked you within what is, I’m afraid, sadly over an hour, in the remaining post that you have at the Post Office, to take on particular tasks. I ask you one more.
There are going to be communications with Fujitsu regarding the question of how they’re dealing with the Horizon system.
Nicholas Read: Yes.
Mr Stein: We know that. Mr Railton is committed to that; you have had past communications. In whoever is conducting the communications with Fujitsu, can this topic again be raised: support making good the positive answer that we have from Mr Patterson, that Fujitsu does think it’s a good idea to try and assist those people, the family members, that are outside all these schemes?
Perhaps by working hand in hand with the Post Office, something good can come out of this scandal to support those family members that have also been affected. Do you also commit to that as well?
Nicholas Read: I think it’s a very good idea, Mr Stein.
Mr Stein: Thank you. Excuse me one moment. I just need to check – thank you.
The Witness: Thank you.
Sir Wyn Williams: Before the next questioner, Mr Read, can I be clear on the list of schemes that you and Mr Stein agreed were in existence, that the Suspension Remuneration Scheme, that is administered by the Post Office, I take it, and the decisions about how much to offer are made by the Post Office, having taken advice; is that the position?
Nicholas Read: That’s correct, sir. Just to bring that to life, in Fraser J’s judgment, he noted that suspensions had not been on full pay, so there were individuals who were suspended with no pay at all. We’re trying to address that particular shortcoming.
Sir Wyn Williams: Right. What was described as the adequacy of HSS payments, if that is to be considered a separate scheme from HSS, nonetheless, that is administered by the Post Office, and who is the decision maker in relation to that?
Nicholas Read: The Remediation Committee oversees the schemes that we manage and, clearly, as I discussed yesterday, the funding will come from Government, and so they will be involved from an operational perspective in terms of what the parameters of those schemes are.
Sir Wyn Williams: Yes. But can I take it, if it has been fully formulated – if it hasn’t been fully formulated please tell me – but is the adequacy of HSS payments effectively being determined – I’m not saying by the same people – but by the same process as the HSS payments themselves, namely, that an independent panel look at it, and make a recommendation to the Post Office?
Nicholas Read: The scheme itself hasn’t been fully formed, sir. We –
Sir Wyn Williams: All right, so stop there. There isn’t yet a process which I can say, “Right, that’s what they’re doing”, sort of thing?
Nicholas Read: That’s correct, sir.
Sir Wyn Williams: Fine. Thank you. Next one, please.
Mr Beer: Yes, due to the operation of Mr Stein’s watch, we are going to rejig things slightly for logistical reasons. It’s Ms Watt on behalf of the NFSP.
Sir Wyn Williams: Right.
Questioned by Ms Watt
Ms Watt: Good afternoon, Mr Read. I’m over here if you can see me. We do sometimes have a little difficulty with this.
I ask questions on behalf of the NFSP. I am here today with Tim Boothman who is the Chair of the NFSP, you may be able to just about see him around the pillar.
Nicholas Read: I can’t. Hello to you.
Ms Watt: I want to ask you some questions, a number of different questions. I think you would agree, in the light of the Horizon scandal, that one of the most important initiatives for the Post Office is its replacement, and getting confidence that nothing like Horizon can happen again; would that be right?
Nicholas Read: That would be right.
Ms Watt: At paragraph 11 of your witness statement, you say that the Post Office has been unable yet to deliver a new and bespoke IT system for postmasters. It’s understood that that new system to be introduced is called NBIT, New Branch IT; is that right?
Nicholas Read: That’s correct.
Ms Watt: Is it the case that the NBIT system was originally due to be in place in 2025, and that those postmasters in, for instance, what we know as the Hard to Place scheme, were scheduled by the Post Office to leave the network before NBIT went live?
Nicholas Read: That would be logical. I think we certainly, when we set out in March ‘21, which was the original date for initiating the programme of NBIT, we had envisaged that the replacement for Horizon would be in place by ‘25. Insofar as your link to the Hard to Place branches, that’s obviously a scheme that was established during Network Transformation. It’s a scheme that has extended, I think by nearly 10 years in total. So I’m not quite sure the two necessarily dovetail together. I don’t think there is a particular link between those two schemes.
Ms Watt: Is it the case that the Post Office has already purchased at least some of the hardware and that by the time NBIT eventually rolls out, that hardware could be out of date?
Nicholas Read: We’ve certainly purchased some of the hardware. I don’t know the specifics of whether it’ll be out of date or not out of date but, yes, we have.
Ms Watt: Are you familiar with and do you agree with the Computer Weekly report that we’ve heard about which states that the development of NBIT will cost taxpayers over £1 billion, lacks quality, and could be unachievable?
Nicholas Read: It’s quite a lot to unpack in that particular statement by Computer Weekly. I think it’s fair to say that the replacement programme for NBIT has certainly increased in cost, in terms of our budget, and is certainly going to take longer to deploy. I don’t think, at this stage, that it is realistic to suggest that it’s not going to be fit for purpose. Certainly, the 250 postmasters who are involved in the IT forum that helps shape the development of NBIT haven’t provided that level of feedback.
I would agree, it is definitely slower than we would have anticipated and I would also agree that the difficulty of getting off Horizon in 2015 that was experienced by IBM, which was the first time that we, as I understand it, wanted to get off Horizon, those challenges are just as prevalent today, and I think the level of complexity associated – the technical complexity associated with getting off Horizon has been underestimated, and that is one of the core reasons why the delays have and the costs have increased.
Ms Watt: Would you accept that the Post Office has not been fully open and transparent about the development of NBIT as it should be, especially in the light of Horizon?
Nicholas Read: No, I don’t think that’s the case. I think we have wrestled with getting the delivery of the releases out on time. As I mentioned before, we have number of postmasters who are helping us with this in terms of the IT forums, and we believe that we’ve been as open and transparent with them about what’s going on and their feedback has been instrumental in terms of trying to shape things.
Ms Watt: Well, I’m not going to call it up, you may have seen the evidence, but at paragraph 277 of Calum Greenhow’s witness statement, that was WITN00370100, he says that on 29 May this year, he met with you and others at the Post Office and the NFSP were asking about NBIT:
“… and we were provided with an update. However, the following day Computer Weekly broke the story that NBIT was unachievable. Whilst we knew it was running late and over budget at no point in the meeting of the previous day were we told it lacked quality, according to the auditors for the Department for Business and Trade, or that Post Office had asked for nearly £1 billion to fund the project, or that the Infrastructure and Projects Authority were now involved, or that the project had been brought into the Government major projects portfolio.”
Would you agree that the Post Office, which failed to be transparent about Horizon, is now failing to be transparent about NBIT?
Nicholas Read: No, I don’t think that’s the case. I do recall that Calum – and I think Tim did too – came to the offices. I think, amongst a range of different topics, we talked about where we’d got to with NBIT and the progress that we were making. So I don’t necessarily agree with that statement, no.
Ms Watt: I’d like to turn to a different topic now. In paragraph 20 of your witness statement, you state that around 4,000 Post Office’s are loss-making and loss making also for the postmasters who operate them, and that is around one-third of the post offices in the UK. I want to ask what you have done during your time, or are you going to do, to reduce the central costs of Post Office to improve the viability of postmasters in the running of their post offices?
Nicholas Read: I think the central – there are two core drivers to increasing remuneration for postmasters. I think one is to drive revenue and, therefore, to be innovative with new products and services, and the second, obviously, is to reduce the operating costs associated with the centre but also, the operating costs associated with running a Post Office in and of itself.
So just taking those one at a time, if we think about the introduction of NBIT and the replacement for Horizon, we believe that the operating cost of doing such a thing will reduce by about 60 per cent and that will be both for branches themselves, as well as for the centre. So that will reduce a run rate of around 60 million a year to Fujitsu to anywhere between sort of 20 and 30. So that will be probably the main driver.
I think, secondly, we’ve been on a trajectory of trying to reduce the headcount within the Post Office since about 2016/2017. I think we were at 7,500 heads in 2016/2017, we’re now at 3,400. I would fully recognise that we have further to go and I’m sure that the Strategic Review will look closely at the central costs to make sure that we continue to reduce those central costs. So I think that would be my secondary point.
The third point, obviously, is the way to increase the revenue for these particular branches is to make sure that we can drive footfall and ensure that the products and services that we are selling in post offices are relevant to today’s consumer. So we’re spending a lot of time thinking about how we are central to cash and central to financial services, as well as the major strategy that has been deployed by the Post Office over the last 18 months, which is clearly a multichannel, multiproduct strategy, employing the likes of Amazon and DHL and DPD and Evri in our branches.
So I think it’s a two-pronged strategy, would be the biggest way to describe this. One is to continue to innovate and deliver new products and services and indeed allow postmasters to share in some of the digital developments that we’ve made, particularly with our savings products, but also to make sure we continue to cut costs. It’s the crucial way and the most obvious way to drive profitability.
Ms Watt: Just going back to the Strategic Review that you mentioned in part of that answer, given that Network Urban Reinvention 2003, Network Change 2007, and Network Transformation 2012, did not provide a Post Office that was fit for purpose, nor did it improve viability or security of postmasters’ investment, is it not the case that the Strategic Review is just another way of transferring risk and cost from the Post Office onto postmasters?
Nicholas Read: I think I said on Wednesday that I had a great concern, when I took over the Post Office in 2019, that postmasters had been left behind in a drive for profitability, commercial sustainability and the agenda associated with both of those two from a Post Office perspective. We’ve tried to address that. I think Nigel is very, very alive to the desire to have a new deal for postmasters and, as I mentioned earlier, the polarity issue in terms of making sure postmasters are front and centre.
Given what you’ve said, I’m not that familiar with the three or four specific strategic reviews that have been conducted since the earlier 2000s. I think the scrutiny and spotlight that this Inquiry has placed on the Post Office is such that it would be impossible for us, even if we wanted to, which we don’t, to do anything other than make sure that the Strategic Review is for the benefit of postmasters. That is what the Post Office is all about: serving 10 million customers every single week in our post offices. It’s not about the centre.
Ms Watt: Now, my final question – or it’s a series of questions, different topic. I’m going to do some summarising and then I’ll ask you some questions. I’m going to call up a couple of documents.
You’ve been asked by Counsel to the Inquiry about the continuing issues with the culture of the Post Office, you’ve also been asked questions about the Past Roles Project and its failure to conclude within the almost two-year period it’s been underway, and that’s with regard to those who were involved in the pre-2015 Horizon scandal issues. You probably remember those questions.
Nicholas Read: Indeed.
Ms Watt: I think your position is that, following the judgments in the GLO, cultural change is important and, from your perspective, has taken place at least in part; is that correct?
Nicholas Read: That’s correct.
Ms Watt: I think your position is that the Past Roles Project is an important one –
Nicholas Read: Yes, it is.
Ms Watt: – not least to give subpostmasters confidence that the culture and attitude towards them has indeed changed?
Nicholas Read: Absolutely.
Ms Watt: So I would like to ask you about something specific in respect of those two points and to suggest to you that there is actually a direct effect between those two things on subpostmasters and their representative body, the NFSP. Now, in this phase, the Inquiry has heard evidence from the two Postmaster NEDs and from Calum Greenhow, the Chief Executive of the NFSP – and I think you’ve said you heard at least some of that evidence, or so –
Nicholas Read: I did, yes.
Ms Watt: – as to how near impossible it is to get anything done – that’s done today – which benefits subpostmasters, such as remuneration. In his evidence, Mr Greenhow put that down in large part to the culture at the Post Office, that it has not, in fact, changed and needs to change, in order for there to be a real difference for subpostmasters.
Now, under your five-year leadership, there are some people who were there during the peak of the Horizon scandal era and who today deal with postmasters and postmaster issues. I’m just going to give a little list and then I’m going to ask you some questions.
So there’s Nick Beal, Head of Network, which we understand includes the NBIT project and who gave evidence on behalf of the Post Office to Mr Justice Fraser; Martin Edwards, the former Chief of Staff to Paula Vennells, who is now Network Strategy and Deliver Director; Tracy Marshall, Head of Postmaster Engagement, who we saw in the emails yesterday was providing reassurance on the remote access issue back in 2011 and has a senior and extensive role in relation to postmasters and is, in fact, the very person that the NFSP has had to deal with over a good number of years on almost every aspect of subpostmaster discussions and negotiations.
Would you accept that subpostmasters will likely find it incredible that someone who assisted Angela van den Bogerd in 2011 with reassurance on remote access is the very person with whom their representative body has to deal on all of the issues associated with subpostmasters?
Nicholas Read: First and foremost, as I said yesterday, I’m very clear that we will not walk past allegations of wrongdoing, or misbehaviour and, when they are presented to me, and when they are present to the organisation, we will address them, and that stands firm. And I explained how that process was going, both with Past Roles and with Project Phoenix yesterday, and I still stand by that.
Where there is – and this is materially different – where there is an issue of confidence, then clearly we need to have sensible conversations with individuals to invite them to step back and to make sure that the confidence of postmasters is sustained. That is the single-most important thing and I absolutely agree with you.
However, as I said before, where allegations are made and when they are explicitly made, we will investigate those individuals and make sure that anybody who was involved in any activity in the past is addressed.
Ms Watt: Now, just to be clear, by questions were about the confidence that subpostmasters and their representative organisation can have, as opposed to any specific allegations of wrongdoing. So just to be clear about that.
Nicholas Read: I understand.
Ms Watt: I’d like to call up a document, which is WITN00370106.
This is a letter from the NFSP, from Calum Greenhow, to the then Postal Affairs Minister, Kevin Hollinrake, of January. It is following the Mr Bates vs The Post Office ITV drama. If we could control to page 2 and look at the third paragraph, the one that begins “The NFSP has raised concerns internally”. So this is a letter to Mr Hollinrake about the various issues arising from the drama:
“The NFSP has raised concerns internally with Post Office that there are still employees of Post Office who were involved in internal discussion about bugs, defects or errors, where directions were given for minutes not to be taken, or were part of the Investigation, Audit and Contracts departments who hold roles that are still postmaster facing. We are not confident that the correct review has or will be taken.”
We can take that down.
Would you accept that the NFSP was right to bring this issue to the attention of Minister Hollinrake? I mean, that’s a year on from you starting your Past Roles project.
Nicholas Read: Of course, it’s absolutely in the rights of the NFSP to discuss anything about the Post Office with the Minister, and I would encourage them to continue to do so if they felt that we were in some way failing.
I think it’s important to highlight – and I said it yesterday – that we are frustrated that the Past Roles Project has not gone as quickly as possible. I mentioned that we had 1,700 colleagues in the organisation who have been in the organisation for in excess of 10 years. There’s a lot of investigative work to do, a lot of data to cover and a lot of people to ensure that we are making the right decisions.
This is not something that we can follow some of the practices of the past, should I say. It’s very important that we get this right, and that we give people who have employment rights the right level of opportunity to express precisely what it is they may or may not have done. So the investigative work has been slow and I would agree with that and I acknowledged that yesterday.
I would have much preferred it to have been quicker but, as I say, I can give you confidence that we will not walk past any allegations, and we will not walk past any wrongdoing by individuals who are in the organisation today that may still be operating.
Ms Watt: Mr Read, not just slow, too slow, would you not say?
Nicholas Read: I did say that, yes.
Ms Watt: I’d like to call up another document, that’s NFSP00001471. This is an email from Calum Greenhow to you of 29 April 2024. That’s this year. He’s sending it on to you so that are you can send it to the Post Office Board. He’s saying he doesn’t have all the addresses of the Post Office Board, can you pass it on.
So he says:
“I write to the Post Office Board after watching the events in the Horizon Inquiry over the last few days. It has once again highlighted employees of the Post Office who in the past were part of the obfuscation of the truth in relation to the accuracy and reliability of the Horizon system and its use in the victimisation of postmasters, their assistants and Crown Office employees and the ruining of their lives.
“Some of these employees of Post Office involved in the past remain employees of the Post Office today, where their present roles is very much postmaster facing or indeed are in senior management positions.
“This information is not unknown to the Board, yet as a group, there has not been any action taken to remedy the situation. How many more current employees will over the remainder of the Horizon Inquiry be revealed to have been aware of the inaccuracy and unreliability of the Horizon system, be involved without the Board of Post Office Limited taking the required action … This is not the first time I have raised this with the Post Office.
“I am sure you will appreciate that as a group of postmasters ourselves, we are growing increasingly concerned that we keep having to deal with those individuals who have been involved in the most reprehensible behaviour towards postmasters and indeed, as has been repeatedly stated”, and he goes on to talk about what was to said at the Inquiry.
“To be clear, it is imperative that the Board takes the required governance remedial action to identify any and all current Post Office employees …”
He goes on to say:
“If the … Board fails to take such governance action, then it will fall to the current Postmaster Non-Executive Directors to resign”, on this point.
Now, if we take that document down, this is Mr Greenhow raising directly with you in April this year and asking you to take that to the Board. What did you actually do with that email?
Nicholas Read: It was circulated to the Board. It certainly formed part of the discussions that we as a Board have had since that time on past roles, and I will refer to the comments that were made by Karen McEwan last week in her evidence about how seriously this has been taken at the Board, about how complicated it is and how much debate and discussion is going on at a senior level.
As I said earlier, we would like this to be much easier, and you’ll have seen emails that have come up in the evidence from me on this particular topic. It would have been much easier if this was a very simple process. It isn’t. We’re trying to deal with confidence of postmasters, we’re trying to deal with individual rights of colleagues, and we’re also trying to deal with an investigative work to find out if there are allegations that are substantive to wrong behaviour or past behaviours. So it is a complicated piece of work, I agree, and it’s not easy for us to come down on a left or right decision. It’s much more nuanced than that, I’m afraid.
Ms Watt: Did you know that after that email of 29 April, that the Post Office intended to send those same people to the NFSP’s annual conference on behalf of the Post Office until Mr Greenhow asked the Post Office not to send them?
Nicholas Read: I wasn’t aware of that, no.
Ms Watt: Just a final question, then. So would you agree that, given the Past Roles Project, which you have said started almost two years ago, it is, in fact, a disgrace and disrespectful to subpostmasters that those involved in the past, not about wrongdoing, but in front-facing postmaster roles, are involved in so many matters that affect the postmasters today?
Nicholas Read: No, I don’t think it’s a disgrace. As I said before, we are not going to have a witch hunt unless allegations are made very clearly, and that is still my position. I’ve been very open and said that we will remove individuals where there is a lack of confidence and that is something that we are obviously working through and Karen, as she mentioned last week, was doing exactly that.
Ms Watt: Thank you, Mr Read.
Mr Beer: Sir, we’ve got two sets of questions to come now: 45 minutes from Mr Moloney and ten minutes from Ms Allan on behalf of Susan Sinclair.
Sir Wyn Williams: Yes.
Mr Beer: There are two options, one we could take a ten-minute second break now, ie a second break for the morning and then do those 55 minutes of questions and not have lunch or we could do Ms Allan’s questions for now for ten minutes, take lunch and come back after lunch for Mr Moloney’s questions.
Sir Wyn Williams: I am content with either course. Is there a consensus amongst people present in the hall as to what we should do?
Mr Beer: I’m looking at the shorthand writer in particular. She said option 2, so I think Ms Allan now, lunch –
Sir Wyn Williams: Then lunch.
Mr Beer: – and then Mr Moloney.
Sir Wyn Williams: Fine.
Mr Beer: Over to Ms Allan, then.
Questioned by Ms Allan
Ms Allan: Good afternoon, Mr Read. I’ll stand up so you can see me. Obviously, I’ll sit to do my questions.
My name is Christie Allan and I represent Core Participant Susan Sinclair who is a wrongfully convicted postmaster. She was the first to successfully appeal her conviction in Scotland, which only happen as recently as September last year, despite her being convicted in 2024.
You’ve provided evidence yesterday about the Post Office’s engagement with the CCRC, that being the Criminal Cases Review Commission in England, and, indeed, Mr Henry put it to you that, as soon as it came to pass that there were serious problems with Horizon and certainly upon receipt of the Horizon Issues Judgment in 2019, the Post Office ought to have been banging on the door of the CCRC and Crown Prosecution Service in England and Wales, begging for them to come and review these cases as the convictions were unsafe, to which you answered “Yes, I see where you’re coming from”.
Notwithstanding this, you refer in your first witness statement to a number of meetings with Post Office’s Board, which did eventually occur with the CCRC, albeit two years later, regarding the criminal appeals in England and Wales, and Post Office’s role as a prosecutor.
In response to Mr Beer’s question to your earlier today, you confirmed that, as far as you’re aware, the Board of Post Office has not engaged with the Scottish Criminal Cases Review Commission or Crown Office, albeit the Remediation Subcommittee was potentially overseeing those matters.
Can you therefore tell me about any proactive steps that Post Office took, particularly in light of the Horizon Issues Judgment in 2019, to immediately seek to rectify the miscarriages of justice which occurred in Scotland as a result of Post Office’s failings in its duties of disclosure?
Nicholas Read: I am not close enough to that particular issue that you’re describing. As you rightly point out, the Remediation Committee has been engaged in those matters, I don’t sit on the Remediation Committee. Again, I am fairly certain that Simon Recaldin, who is a Subject Matter Expert in this area, will be providing evidence next week. I know – I think it’s on November 4, in fact. He’s obviously going to be much better placed to comment. I don’t want to sort of muddy that water.
Ms Allan: But to be clear, the Post Office’s Board didn’t engage with the Scottish Criminal Cases Review Commission or Crown Office –
Nicholas Read: Not as a Board. It may well have been the case that the Remediation Committee did or indeed that the Remediation Unit did. I’m afraid I don’t have that detail.
Ms Allan: You’ve repeated over the course of three days the fact that, since before 2015, and indeed before your appointment, the Post Office ceased to privately prosecute postmasters in England and Wales. Remind me again the reasons for this?
Nicholas Read: Sorry, do you want to repeat the question? Sorry.
Ms Allan: Before 2015 and before your appointment, the Post Office ceased to privately prosecute subpostmasters in England and Wales; what were the reasons for that again?
Nicholas Read: Why did they cease to –
Ms Allan: Yes.
Nicholas Read: – to prosecute? I mean, clearly –
Sir Wyn Williams: Can you answer that, Mr –
Nicholas Read: I’m not sure I can, specifically.
Sir Wyn Williams: I think there’s quite a – probably quite a complex answer to that and it all occurred before Mr Read was in post. So I think that I have as much information as I am likely to get on that from the previous phases of the Inquiry.
Ms Allan: Thank you, sir. I will move on.
In your evidence on Wednesday, when asked by Mr Beer whether Post Office’s current investigative function is fully compliant with all relevant legal standards, you confirmed, “As far as I’m aware”; is that correct?
Nicholas Read: As far as I’m aware, yes, that’s correct.
Ms Allan: You are aware, Mr Read, that Mr Beer asked you what your response was to the Lord Advocate – Scotland’s most senior law officer – stripping the Post Office of its role as a Specialist Reporting Agency in Scotland earlier this year, and you confirmed that it’s not an enormous surprise that this decision has been made. Why does that not come as a surprise?
Nicholas Read: Well, I think it’s in keeping with the direction of travel of the last five years, since the HIJ and CIJ were handed down. I don’t think that would come as a great surprise to me. That’s my point.
Ms Allan: Prior to this, Post Office in its role as a Specialist Reporting Agency was an organisation who could investigate and report crimes directly to the Crown Office and Procurator Fiscal Service, the independent Public Prosecutor in Scotland, as opposed to having to first report this to other law enforcement agencies to investigate, such as the police; is that your understanding?
Nicholas Read: I’m afraid I don’t have the level of detail that you’re suggesting. Prosecutions haven’t occurred since 2019, since I’ve been in position. In fact, they haven’t occurred since 2015. So forgive me, but this level of detail is not something that I am aware of.
Ms Allan: Well, that would be what a Specialist Reporting Agency does and that was Post Office’s role prior to May earlier this year, when it was stripped of that role.
The Lord Advocate, in deeming that the Post Office is no longer fit to be a Specialist Reporting Agency, also confirmed that, in light of the Post Office’s failures, work is now underway to strengthen the guidance and safeguards that exist to ensure that all Specialist Reporting Agencies abide by the essential duties of disclosure and candour in Scotland, thus inferring – and she went on to confirm – that the Post Office did not.
Mr Read, is it really correct that Post Office does not have an official response to being stripped of its role as a Specialist Reporting Agency in Scotland?
Nicholas Read: I’m afraid I’m unable to answer that question. I don’t follow your train of thought in what you’re trying to ask me to answer. It’s a little bit too nuanced for me, I’m afraid.
Ms Allan: So there’s not been any discussions in light of the Lord Advocate’s stripping –
Nicholas Read: No, there hasn’t. Not that I’m aware of –
Ms Allan: Not at Board level –
Nicholas Read: – at Board level.
Ms Allan: No, and there’s no review work planned by the Post Office to review this?
Nicholas Read: It’s nothing that’s come to the Board that I’m aware of. As I mentioned before, Simon Recaldin is probably best placed to discuss this when he comes on 4 November.
Ms Allan: On the basis that, due to a failure in candour in reporting by the Post Office to the Crown Office and Procurator Fiscal Service, how, therefore, if there’s no review and no discussion taking place, will Post Office now ensure that it acts with candour, in providing evidence of suspected criminality to other law enforcement agencies, such as the police, if not now directly to the Crown Office in Scotland?
Nicholas Read: I think Mr Bartlett, when he comes next week to articulate and describe the role of the new investigative function, which he will do, the Assurance & Complex Investigations Team, he will be able to articulate very clearly how the team is constructed, who is in that team and what their objectives are, particularly without engagement with law enforcement agencies and I’m sure, as part of that, he will be talking about the jurisdictions that you are referring to.
Ms Allan: Mr Read, I would say it’s not just those jurisdictions, it’s reporting criminality to any law enforcement agency in any jurisdiction. Can the Post Office now be trusted to do that with candour, despite the fact it didn’t do that in Scotland?
Nicholas Read: Yes, I believe they can and, as I mentioned yesterday, we are liaising with law enforcement agencies on specific elements of organised crime and the like, and clearly tying to support those agencies wherever we can, in terms of the level of detail that we support and supply.
Ms Allan: Thank you.
Sir Wyn Williams: So we’ll break off for lunch now and resume when, Mr Beer?
Mr Beer: Sir, could I say 1.40?
Sir Wyn Williams: Yes, certainly.
(12.47 pm)
(The Short Adjournment)
(1.40 pm)
Questioned by Mr Moloney
Mr Moloney: Good afternoon, sir, can you see and hear us, as is the usual question?
Sir Wyn Williams: Yes, I can thank you.
Mr Moloney: Thank you, sir.
Good afternoon, my name is Tim Moloney, and I ask questions on behalf of a number of Core Participants, essentially postmasters, all of whom have been prosecuted to conviction by Post Office and subsequently have had their convictions quashed.
Nicholas Read: I understand.
Mr Moloney: Quite close to the beginning of your evidence, Mr Beer asked you about the appreciation at senior levels in Post Office of the seriousness of the implications of the Common Issues Judgment and the Horizon Issues Judgment, and what that was not long after you took up your post.
Nicholas Read: Yes, he did.
Mr Moloney: Yeah, and you agreed to his term that the leadership team was living in a dream world, some of them, and didn’t seem to appreciate the implications of the judgments?
Nicholas Read: Yes, I qualified that by saying that some were in denial and some were in paralysis of the judgment that was made and limited contingency had been put in place for the prospect of losing the litigation.
Mr Moloney: But the primary focus was on looking to the future, without there being a real emphasis on rigorously examining what had gone on in the past at that stage?
Nicholas Read: I think that’s a fair conclusion, yes.
Mr Moloney: So, for example, you weren’t directed towards the examination of the propriety of previous convictions?
Nicholas Read: No, I wasn’t, no.
Mr Moloney: But you went on to say that the negotiation and settlement process around the Common Issues Judgment in the Horizon Issues Judgment gave you an opportunity to more fully understand the implications of the judgments?
Nicholas Read: Yes, unquestionably, that that was my genuine introduction to the victims, first and foremost, and also, therefore, the understanding of the behaviours, rather than necessarily the system, if that makes sense. I think that was my introduction to behaviours of the past.
Mr Moloney: Yes. Can I just focus on your introduction to the victims –
Nicholas Read: Yes.
Mr Moloney: – for these purposes. You were able to listen to postmasters and hear the accounts of what had happened to them?
Nicholas Read: That’s precisely how that process worked, yes.
Mr Moloney: Just as one example of that, did you take part in a mediation meeting in respect of the GLO at which postmasters were present?
Nicholas Read: Yes, the four or five days of mediation/settlement, that process, I did speak and listen quite extensively. I think there were five or six who brought their narrative to life for me, yes, which was very helpful.
Mr Moloney: How that narrative was brought to life, Mr Read, was that you, was it with Jane Davies, went into a room with those five or six, just to hear their stories?
Nicholas Read: Yes, no, it wasn’t with Jane but, yes, that is correct, yes.
Mr Moloney: One of them was Jo Hamilton?
Nicholas Read: That’s correct.
Mr Moloney: Another was a Scottish woman who’d been one of the lead claimants in the GLO, a lady by the name of Louise Dar; do you remember her?
Nicholas Read: Yes, I do. Yeah.
Mr Moloney: She’d been cross-examined during the course of the GLO?
Nicholas Read: Yes.
Mr Moloney: In that meeting, you told the postmasters that you would do everything to transform the future of Post Office?
Nicholas Read: Yes, that was my commitment.
Mr Moloney: Yes. Importantly, Ms Dar – and she broke down as she told you this – told you what had happened to her and said – and this may have been important to you in appreciating what was needed – that you needed to fix the wrongs that had been done in the past, as well as looking to the future; do you remember that?
Nicholas Read: I do, that’s correct.
Mr Moloney: Was that an important meeting for you, in terms of the understanding of, to use your term, the harm that postmasters had suffered?
Nicholas Read: Yes, it was and, as I say and as I said a couple of minutes ago, it brought to life the behaviours of the Post Office, as opposed to necessarily my understanding at that stage, which was it was purely system led.
Mr Moloney: Now, one of the people who had suffered harm a number of years prior to that meeting was a woman by the name of Jackie McDonald from Preston in Lancashire?
Nicholas Read: Okay.
Mr Moloney: Now, I have to just give a little bit of detail of Jackie McDonald’s case, in order to ask the question that I’d like to ask about her case, if I may, Mr Read.
Nicholas Read: Understood.
Mr Moloney: So Jackie McDonald had encountered shortfalls in her Post Office. She reported them to management. She was ultimately suspended after an audit, some £90,000 or so shortfall, and her assistant Katie took over as the manager. The shortfalls continued. Katie had to stop work because she was suffering from anxiety and depression, as a result of the continuing shortfalls and, ultimately, Mrs McDonald was prosecuted. Are you aware of her being prosecuted as one of the people who was prosecuted?
Nicholas Read: I don’t remember the specific case. When was this, what date was this?
Mr Moloney: It was in 2010/2011. So some time before the GLO, some eight years before the CIJ and the HIJ.
Nicholas Read: I understand.
Mr Moloney: Now, she was 47 years old and the mother of teenage children when she went to prison. She was sent to prison for 18 months after pleading guilty to theft. She went to Styal Prison to start with, which is near Manchester, and then she was sent to Durham Prison, and she spent her daughter’s 18th birthday in Durham Prison. Then she later went to a prison near York called Askham Grange.
You may have seen during the evidence of Mr Bradshaw, because Mr Bradshaw investigated Mrs McDonald, that he recorded in a self-appraisal form, after her conviction, how ensuring that a plea of guilty to false accounting was not accepted but insisting on a plea of guilty to theft was essentially one of his key achievements of the year; did you see that?
Nicholas Read: Don’t recall it specifically but yes.
Mr Moloney: He recorded on the form that he had persuaded the prosecution barrister to proceed with the allegation of theft and not accept a plea of false accounting. Okay.
Mrs McDonald has explained her experience, described her experiences, in a statement to this Inquiry. She explained how traumatic the audit and investigation process was and the Auditors asked her “What have you done with the money? What tree have you squirrelled it away in?”, and her house was searched, and in front of her, the searchers were asked, “Is she cooperating? Is she answering questions?”
One of the people about whose behaviour Mrs McDonald complained was a woman by the name of Caroline Richards. Caroline Richards was a Business Development Manager, who had called in the Auditors and attended the audit, and she’s the person that Mrs McDonald had been liaising with.
As long as go as 2013 in her application to the Mediation Scheme, Mrs McDonald said the following, Mr Read:
“The Investigators for the Post Office were bullies and intimidated me the first time they came in with their lies about my individual case being unique and uncommon. They returned once again when I was forced to step down and Katie was running the Post Office under someone else’s name, and intimidated her with wage deductions from monies missing and jail time. My husband eventually came downstairs after he heard the news of the threats Katie was receiving, and told them both, Steve Bradshaw and Caroline Richards, to get out of the shop immediately and never come back.
“Katie had to leave early and had to take a leave of absence because of anxiety and depression because of the bullying that she took from those Post Office Investigators.”
So the Post Office Investigators being Steve Bradshaw and Caroline Richards.
You told the Inquiry – and in fact, in answer to questions from Ms Watt, you’ve reiterated this just before lunch, Mr Read – that you’ve been very clear that “At no stage will we walk past allegations of wrongdoing in the organisation”, and you’ve made that very clear publicly to all colleagues and postmasters themselves.
You said specifically, on Wednesday – and it’s at page 48 of the transcript – and you’ve repeated it this morning, to be fair to you, Mr Read:
“With regard to the Remediation Unit, I’m very clear that we’ve 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’m confident that there are not individuals involved in postmaster-facing activity that had roles in the past where allegations of any wrongdoing has been brought to my attention.”
Is Caroline Richards still employed in the Remediation Unit, Mr Read?
Nicholas Read: This is quite a difficult question because – and I’m looking to Sir Wyn – I’m not sure I’m at liberty to discuss some of the specifics about these individuals. If you recall a couple of days ago we talked about external agencies supporting us and there are a number of individuals that I think it would be inappropriate for me to mention and to give any insight into what is specifically happening. I know that doesn’t sound particularly helpful but I –
Mr Moloney: No, I understand, Mr Read, and I think it would be unfair on all individuals if I were to not understand.
Nicholas Read: Yes.
Mr Moloney: Plainly there have to be parameters.
Nicholas Read: Correct.
Mr Moloney: Can I ask you some more general questions –
Nicholas Read: Yes.
Mr Moloney: – about that, then.
Sir Wyn Williams: Can I take it, Mr Moloney, that you don’t wish to pursue that specific question?
Mr Moloney: Sir, I think the question has been answered, to be honest, and so –
Sir Wyn Williams: I see –
Mr Moloney: I think there are – there are obviously – we have to be responsible with questioning, sir, and –
Sir Wyn Williams: I only asked you so that you didn’t feel inhibited on behalf of your client in going any further if you thought that it was appropriate to go further. If you’re content with where we’ve got to, that’s fine by me.
Mr Moloney: If I’m being told by a witness that he has real reticence about going here, that there are particular reasons why they can’t go there, then I think it is only responsible, because I can deal with this generally. I’ve asked my question, I’ve received an answer and I can deal with this generally now, without causing undue difficulties which may not be necessary at all in order to make the points I need to make.
Sir Wyn Williams: Fine. Thank you, Mr Moloney.
Mr Moloney: Mr Read, without descending to the specifics and recognising your qualification as to postmaster-facing activity, would you accept that, as a general principle, somebody about whom complaints had been made of the nature that were made against Ms Richards, should not be involved in the remediation process?
Nicholas Read: I agree with that and I’ll just bring a little colour, if I may?
Mr Moloney: Yes.
Nicholas Read: The Project Phoenix work, which is ostensibly feedback and narratives that we’ve received during Phase 1 of the Inquiry, in terms of the Human Impact Hearings, as well as what I have experienced through my restorative justice meetings, and I received direct feedback during those meetings on individuals, that was the genesis of the Project Phoenix work. 47 particular cases, I think as I mentioned previously – not 47 individuals but 47 cases – six individuals who were involved in those meetings.
We have interviewed many of the individuals again, through their legal representatives, and sought to be able to discuss with those individuals the names and the issues that emerged during the Human Impact Hearings and that emerged during the restorative justice meetings.
We’ve examined over 130,000 documents associated with those particular case studies. The number of individuals impacted is six, of which, as I mentioned I think on Wednesday, three are specific cases that we’ve just touched on now that I would say we’ve got external agencies helping have a look at that.
Mr Moloney: Can you understand that for postmasters who are making a claim for compensation, the idea that the unit that is dealing with claims for compensation might be somebody who was involved in previous misbehaviour, would be something that would concern them?
Nicholas Read: I think that would be very concerning for them, yes.
Mr Moloney: Because you have said, and it’s perhaps likely that Mr Recaldin will say, that, even as a first principle, perhaps Post Office should not have been responsible for administering the HSS?
Nicholas Read: I have said that and I’m sure Mr Recaldin will say the same.
Mr Moloney: So to compound that with having a member of staff – and I’m speaking in general terms now – against whom complaints had been made for misbehaviour during the investigation process, would be to add insult to injury, in a sense, wouldn’t it?
Nicholas Read: I understand that.
Mr Moloney: You talked this morning of rebuilding trust. It would be integral to rebuilding trust to ensure that that didn’t happen, wouldn’t it?
Nicholas Read: It would be essential, yes.
Mr Moloney: That’s all I’d like to ask you about that.
I’d now like to ask you about the Strategic Platform Modernisation, SPM, and NBIT, and this is the only other topic I’ll ask you about, Mr Read.
Nicholas Read: I understand.
Mr Moloney: You understood from your early meetings, during the mediation of GLO, the harm that had been caused, and Horizon software lies at the root of all of that harm, doesn’t it?
Nicholas Read: Indeed.
Mr Moloney: Postmasters suffered enormous harm because of it?
Nicholas Read: That’s correct.
Mr Moloney: For many other reasons as well but, at the core of it, is the Horizon software and its unreliability?
Nicholas Read: That’s right.
Mr Moloney: Plainly, you’d accept that dealing efficiently, dealing with alacrity with the Horizon issue is something that Post Office should face, given the harm that it has caused to postmasters?
Nicholas Read: Yes.
Mr Moloney: I’d like to ask you, if I may, about the progress that has been made with that, and I’d just like to look at two documents, as please. One is a readout of a minister with Minister Hollinrake in April 2023, and I’ll take you to it.
Then the second document is the Board minutes from 4 June this year.
Nicholas Read: Okay.
Mr Moloney: So if I could first go to the readout of the meeting with Mr Hollinrake, and that’s BEIS0000653. Thank you very much. This is, we can see, the introductions. We don’t need to go there but we can see the attendees, if we scroll up, please. Thank you. We can see that you’re there, Mr Read, as is Mr McInnes from Post Office and Lorna Gratton and also Minister Hollinrake.
Nicholas Read: Yeah.
Mr Moloney: Can I just go to some of the detail of this and, if we could scroll up further now, please, so that we can get the main body. That’s great. That’s spot on, thank you.
We see at the start that you raise the fact that the Permanent Secretary had made the decision to withhold the funding and asked for Mr Hollinrake’s opinion. Mr Hollinrake said that he, the Treasury and Permanent Secretary are keen to see a plan from Post Office about its funding ask, and know that the Horizon replacement is a concern.
You said that the funding ask won’t be ready/ approved by the Board until June and main issues are Horizon replacement, POL underestimated the cost of this, and then the Inquiry costs and the compensation costs.
Then I’ll go onto the rest of it. Did you, at this stage, not have a firm plan as to what to do with Horizon?
Nicholas Read: Yes, we did have a plan but, as we were overrunning, it was important that we come back to Government, who wanted to understand what they thought our revised plan for Horizon was, in terms of the overall funding for Horizon.
Mr Moloney: Then if we go down further, we see that, in the penultimate bullet point of this, which is on the second page, but we can see it here:
“[Nick Read] said that another pressure was the Inquiry, which is going to scrutinise the rollout of the Horizon replacement; POL needs to ring-fence/ compartmentalise this piece of work.”
What did you mean by the Inquiry is going to scrutinise the rollout of the Horizon replacement?
Nicholas Read: I think exactly that. I’d obviously made a commitment in 2019 that we would get off Horizon, and there was a twofold reason for that: one because Horizon was 30 years old, it was expensive to run, expensive to manage and clearly had been associated with appalling issues of the past.
And the second reason – so that was the first reason – the second reason was it was clearly a system that was tarnished as a consequence of the past and I wanted to make sure that we moved across – we got off it.
My point to talk about ring-fencing and compartmentalising was that we submitted our funding requests to the Department and the investment that was required for the next phase of the Horizon work needed to be very clearly understood by BEIS, and I wanted to make sure that when we made that submission they understood the extent and the necessity to get off Horizon and what that looked like and, more importantly, that they understood specifically why it was late and why it would cost more.
Mr Moloney: You had had really quite significant delays in relation to the replacement for Horizon?
Nicholas Read: We had at that stage, and I think what had happened by – I think we said it was May ‘23, this meeting, I seem to recall.
Mr Moloney: April ‘23.
Nicholas Read: April ‘23.
Mr Moloney: Yes.
Nicholas Read: So by April ‘23 we had embarked on two very clear streams of work: one was around the design and build of the system; and the second piece of work, which was initiated in January that year, was around the deployment, training and rollout of the system. And they were two very distinct pieces of work and so that was the point I was trying to draw to the attention of the Department.
Mr Moloney: So by April 2023, was the design and build of the system pretty much set in stone or were there decisions still to be taken?
Nicholas Read: We – it’s a difficult question to answer. I think we had not got to the stage (unclear), we hadn’t, at that stage, developed the banking and total mail functionality of NBIT, and so there was still a long way to go, so it was still quite early in terms of its evolution. We were still having conversations about is this a replacement for Horizon or is this a modern system development that is going to ensure that postmasters are in a very different – are put in a very different place?
And I think, if I look back to 2019, it was very much we are replacing Horizon, as opposed to “This is going to be a full-scale transformation of the underlying EPOS system”, which is very much the attitude today. And I think that’s one of the core distinctions between why, when we set out on this journey, the replacement was 180 million or there or thereabouts, and why that cost has obviously increased as a consequence of what we have learnt through the Inquiry. But, more importantly, that we want a system that more than just a replacement, but actually is a wholescale transformation of the way we do business in the Post Office.
Mr Moloney: Can I just take you to the final paragraph on page 1 of this document that I’ve brought up. It reads:
“[Kevin Hollinrake] asked how [Post Office] is going to try to find a number that they are comfortable with for the cost of replacing Horizon. [Nick Read] said that they are considering more of a modest approach rather than something transformative [for example] not rolling it out to all 11,500 branches, and opting for the minimum viable product. Another issue is that we don’t know what the future of [Post Office] will be and designing a system that will work for POL in decades to come is difficult.”
Is that reflective, Mr Read, of there being very firm decisions about what this was going to look like in April 2023?
Nicholas Read: I think the issue here is that the Department had decided to withhold funding. They were concerned about the potential cost of the replacement system, and they wanted us to consider other options and all options, in fact and it was at this stage that we came back and had a broader conversation around, well, what are those options?
Mr Moloney: So there isn’t any certainty here, is there; and you were essentially considering something less than transformative?
Nicholas Read: Yes, I mean that is – that was one of the options that was on the table.
Mr Moloney: Yes. So there was no certainty in April 2023 about what the replacement for Horizon was going to look like?
Nicholas Read: Well, we thought we were on a particular journey, and the Government were concerned about the increasing cost and they wanted us to – and they wanted to get assurance from that, which is obviously why we’ve had two external parties assure for the Government on their behalf what exactly is being developed.
Mr Moloney: Can we go to the second document I’d like to look at, please, which is POL00448648. Before I ask you questions about this document, Mr Read, we heard evidence from Mr Railton on Tuesday that you’ve already referred to.
Nicholas Read: Yes.
Mr Moloney: You were present when Mr Railton gave his evidence?
Nicholas Read: I was indeed, yes.
Mr Moloney: Mr Railton has been Interim Chair since 24 May 2024?
Nicholas Read: That’s correct.
Mr Moloney: These are Board minutes from 4 June 2024. So just over a week after Mr Railton became Interim Chair. You’re present, obviously, as “NR”, and Mr Railton is “NR” with a lower case “a” – “NRa”?
Nicholas Read: That’s correct.
Mr Moloney: Now, page 5 of 21, I’d like to look at please, because this deals with the Strategic Platform Modernisation. Mr Blake took Mr Railton to a different section of this document, the minutes, where Mr Railton was asked about how he was the first to suggest a break clause in the continuing contract with Fujitsu; do you remember that?
Nicholas Read: I do remember that, yes.
Mr Moloney: That can be seen at page 11 of this document –
Nicholas Read: Okay.
Mr Moloney: – but page 5 is the Strategic Platform Modernisation and we can see here, and it should be under “Investment Committee”, so it should be down the page, yeah, there it is. 3.5, “Investment Committee”:
“Key points advised …
“the [Investment Committee] met on 16 May and focused on SPM [the Strategic Platform Modernisation]. There were uncertainties in respect of this project across number of issues including funding.”
So this was June 2024, Mr Read, only some five months ago – four months ago, in fact.
Nicholas Read: Four.
Mr Moloney: “Two external reviews had been completed in respect of the project and both concluded red ratings. The build/ buy point had been considered, although the build approach without the necessary inhouse expertise seemed flawed. [Mr Railton] shared his view that the conversation on buy/build was the wrong question and thought that the question was build/build and then the question was whether to build internally or externally. There needed to be a number of conditions met for a successful internal build however such as a stable business, good governance and quick decision making. With the Company not fulfilling this conditions the view of [Mr Railton] was that a third party should be commissioned to build. [Mr Railton] advised that he saw 3 options, firstly SPM could carry on as was, secondly a third party could be engaged to build the new system, and thirdly that Horizon could be brought in house. All of these options needed to be carefully considered;
“the dashboard reporting to the [Investment Committee] showed 17 red platinum projects. A number of these were outside appetite although there was a lack of clarity around the definition and terms were not used consistently throughout the business. [It was] noted issues in respect of the copper stop project including management of the contractor and communications.”
There’s still really quite a lot of uncertainty around SPM, even in June 2024, isn’t there?
Nicholas Read: Different uncertainty but, yes, there is uncertainty.
Mr Moloney: That’s the new chair coming in essentially suggesting there needs to be root and branch consideration of this?
Nicholas Read: That is correct. Yes.
Mr Moloney: That’s only four months ago?
Nicholas Read: Four months ago.
Mr Moloney: Yeah. Mr Railton was asked by Mr Blake, when he gave evidence, the following, and this is at page 164 of his evidence:
“We’ve seen in the YouGov report, for example, and in evidence the Inquiry has heard, of issues still being experienced by subpostmasters in relation to their use of Horizon.”
That’s the importance of it, Mr Read, isn’t it?
Nicholas Read: Yes.
Mr Moloney: It’s still ongoing.
“Is it possible, is it likely, that subpostmasters are going to be using that same system into 2030?”
Mr Railton replied:
“It is possible. I don’t think it’s likely and certainly our intention and the intention of the new team is to move away from Horizon to a new system that can deliver – I’m sorry to go back to the strategic review, but a system that’s fit for the future as soon as possible but to do that in a way that doesn’t disrupt postmasters’ activities.”
So that was the answer as to whether or not, essentially in 2030 – which is when the Fujitsu contract is due to run out, isn’t it?
Nicholas Read: Well, we haven’t got agreement to a five-year commitment, yes, but that was the plan.
Mr Moloney: Yes. That’s the possibility. Is there a firm decision, in the Strategic Review, as to how to do this? I’m not asking you what the decision is. Is there a firm plan now in respect of all of the replacement for Horizon in the Strategic Review?
Nicholas Read: I have not yet seen the specifics of this. As you’re probably aware, for the last six weeks I’ve stepped back to focus on the corporate statements associated with the Inquiry, and that is something that I’m sure by the end of this particular session I will be back involved in that activity. So I can’t give you that assurance at the moment, Mr Moloney.
Mr Moloney: Has it taken too long to find a replacement for Horizon?
Nicholas Read: Yes, it has.
Mr Moloney: Do you bear any responsibility in how long it has taken, Mr Read?
Nicholas Read: Yes, I mean, if you go back to my last statement that I made, the very last pages on that statement, I have number of regrets, I think, in my five years in the business, and one of those regrets is the inability to have the bandwidth to get involved in the SPM programme and project, as much as I would have liked, having been spread a bit too thinly. And that is a big regret of mine and I wish that I’d had more time to do that – one of number of regrets but that was certainly one of them which I expressed in my statement.
Mr Moloney: That’s all I ask, Mr Read, thank you.
The Witness: Thank you.
Mr Beer: Sir, unusually, I’ve just got couple of questions to ask which I’ve been asked to put to Mr Read, one by way of correction of something that I said, and then some supplementals that follow it.
Sir Wyn Williams: Sure, Mr Beer.
Mr Beer: It will be less than five minutes.
Further Questioned by Mr Beer
Mr Beer: Can we look please at POL00448701.
Thank you. You remember I showed you this letter, it’s Mr Vamos’ letter, the “Dear all” letter?
Nicholas Read: Yes, indeed.
Mr Beer: I drew your attention to the third paragraph, the fourth line, in which it was said:
“In reality, it is highly likely the vast majority of people who have not yet appealed were, in fact, guilty as charged and were safely convicted.”
Yes?
Nicholas Read: You did, yes.
Mr Beer: I’d suggested that this was put up on the Post Office’s website –
Nicholas Read: Yes, you did.
Mr Beer: – but it was no longer on the website. In fact, it has been drawn to my attention that it is still on the Post Office’s website. The website, which I’m looking at now, contains some text alongside it, ie the publication of Mr Vamos’ letter. It says:
“The Post Office has published, on 22 February 2024, correspondence from 9 January [that’s your letter to the Lord Chancellor] sent by the Post Office to the Ministry of Justice, copied to the Department for Business and Trade. The purpose of the correspondence was to explain the work that the Post Office had requested its legal counsel, Peters & Peters, undertake to proactively identify on the papers available any convictions that could be unsafe. This was primarily to offer the Government any support that might assist them as they consider relevant issues in advance of passing legislation, without any value judgement on what the correct course of action might be.
“The letter references a note provided by Post Office’s legal counsel. This note was not solicited by the Post Office and, as can be seen, was sent to express the personal views of its author.
“Post Office was in no way seeking to persuade Government against mass exoneration. Post Office are fully supportive of any steps taken by Government to speed up the exoneration of those with wrongful convictions and to provide redress to the victims with the information having been provided to them to inform that consideration.”
So your letter of the 9th is published, Mr Vamos’ “Dear all” letter is published and then there is this explanatory text alongside it, which says:
“Post Office was in no way seeking to persuade Government against mass exoneration.”
Can we look, please, at your letter of the 9th, POL00448381. I drew your attention to the fourth paragraph of this, if we scroll down, “A natural corollary”, et cetera, yes? We looked at that this morning.
Nicholas Read: We did, yes.
Mr Beer: What I didn’t do is go over the page. If we go over the page, please, you wrote in the penultimate paragraph:
“In the meantime, I attach a note prepared by Peters & Peters which covers this and other issues you may find helpful in your deliberations.”
That’s the Vamos “Dear all” letter. So whoever the “Dear all” was sent to, it had certainly got to you by this time, hadn’t it?
Nicholas Read: It looks like it, yes.
Mr Beer: The covering text on the Post Office website, when it speaks about the Peters & Peters note, essentially takes two points: it says, firstly, Mr Vamos’ note was not solicited.
Nicholas Read: Yes.
Mr Beer: Secondly, it says it expresses the personal views of its author. Was that the Post Office distancing itself from the content of Mr Vamos’ letter?
Nicholas Read: I think it was just trying to explain the letter. That’s my understanding.
Mr Beer: You, in your letter, attached Mr Vamos’ “Dear all” letter, didn’t you?
Nicholas Read: Indeed.
Mr Beer: Were you allying yourself with the contents of it by doing so?
Nicholas Read: No, I’d been very clear that we weren’t making any value judgements. We felt obliged to alert the Ministry of Justice to exactly what work had been done and to aid them in their deliberations.
Mr Beer: Thank you.
Sir Wyn Williams: Thank you, Mr Beer.
Thank you, Mr Read, for four witness statements, two of which are very long and detailed, and for giving evidence over three days before this Inquiry. I’m very grateful to you.
The Witness: Thank you, sir.
Sir Wyn Williams: Right, we’ll adjourn now and resume on Tuesday morning at 10.00.
Mr Beer: Thank you very much, sir.
(2.21 pm)
(The hearing adjourned until 10.00 am on Tuesday 15 October 2024)