Official hearing page

6 November 2024 – Kevin Hollinrake and Carl Creswell

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(9.30 am)

Sir Wyn Williams: Before we start with evidence, Mr Beer, I have another sad announcement to make.

I have to inform all those who are following the Inquiry that one of our Core Participants, Mrs Carol Riddell, died on 25 October. Mrs Riddell became the subpostmistress in her home village of East Boldon in the northeast of England in 1991, and continued in post until 2000. She was therefore in post when Horizon was rolled out and she found dealing with Horizon particularly difficult.

As a consequence of that and her own ill health, her husband, Alan, took over as the subpostmaster in 2000 and continued in that post until 2013.

During her time as subpostmistress, Mrs Riddell had to contend with a very serious armed robbery at her Post Office during the course of which she was blinded by having acid thrown in her face.

In latter years, and perhaps for many years, both Mrs Riddell, and then her husband, Alan, were assisted by Ms Jean Smith, who was a very close family friend, and assisted considerably in the running of the post office until, in 2013, her involvement ceased. All three of those persons – well, Mrs Riddell was a Core Participant, and Mr Riddell and Ms Smith remain Core Participants at the Inquiry.

Mr and Mrs Riddell were claimants in the Group Litigation. I’m sorry to have to report that neither have received full compensation under the relevant scheme as of today.

On behalf of all members of the Inquiry Team, and on my own behalf, I extend deepest sympathy to all Mrs Riddell’s family and friends.

Over to you, Mr Beer.

Mr Beer: Thank you, sir. Before I start with the evidence of Mr Hollinrake MP, just two short matters.

Firstly, some clarification of the evidence of Simon Recaldin that he gave on Monday. On Monday, 4 November, Mr Recaldin gave evidence about the current position of assistants and managers of postmasters who are unable to claim under a redress scheme for shortfall payments made. Mr Recaldin said in evidence – the transcript reference for Monday is page 50, line 16 – that the position was under consideration by the Minister.

The Inquiry was informed by letter from the Post Office’s solicitors yesterday that this evidence was, in the words of the letter, “not quite correct”. Instead, and I again quote from the letter:

“There have been discussions with DBT officials in this regard, although the Post Office is not aware of anything formal under consideration.”

By its letter, the Post Office apologises for what it describes as the confusion in this regard.

The second announcement, sir, is that at 10.00 I’m afraid we have the fire alarm. It will be in the course of Mr Hollinrake’s evidence, and so I propose that we sit here – or, in my case, stand here rather awkwardly – for five minutes whilst that is got out of the way.

Sir Wyn Williams: Well, perhaps I might invite you to sit down, Mr Beer!

Mr Beer: That would be very kind. Thank you, sir.

Sir Wyn Williams: Right.

Mr Beer: With those two points, may I call Mr Kevin Hollinrake, please.

Kevin Hollinrake

KEVIN HOLLINRAKE MP (sworn).

Questioned by Mr Beer

Mr Beer: Good morning, Mr Hollinrake. My name is Jason Beer. Can you give us your full name, please?

Kevin Hollinrake: Kevin Hollinrake, Member of Parliament for Thirsk and Malton.

Mr Beer: Thank you. You have made kindly a witness statement for us which should be in hard copy in front of you. It’s dated 7 October 2024. The URN is WITN11460100. It’s 17 pages in length and I think there is one correction to make, if we turn to page 12, please. It’s at tab A2, I think, for you.

Page 12, paragraph 44.

Kevin Hollinrake: Yes, got that.

Mr Beer: About four or five lines in –

Kevin Hollinrake: Yeah.

Mr Beer: – it says in brackets at the end:

“… as I think there were 200 people earning over £100,000 a year …”

Do you wish to correct that figure to 143 people?

Kevin Hollinrake: Yes, that was from memory. It’s 143, having seen the actual documents that I was given at the time.

Mr Beer: Thank you very much. So cross out “200” and add “143.”

If you go to the last page, page 17; is that your signature?

Kevin Hollinrake: Yes, it is.

Mr Beer: With that correction brought into account, are the contents of the statement true to the best of your knowledge and belief?

Kevin Hollinrake: Absolutely. Yes, they are.

Mr Beer: Thank you very much. Can we start, please, with your background, Mr Hollinrake. I think, after a career in business, you were elected as the Member of Parliament for Thirsk and Malton on 7 May 2015?

Kevin Hollinrake: That’s correct.

Mr Beer: You served as a Conservative backbencher for seven and a bit years until, on 27 October 2022, you were appointed by the then Prime Minister, Rishi Sunak as Parliamentary Under-Secretary of State in the Department for Business and Trade?

Kevin Hollinrake: That’s right.

Mr Beer: Then you were promoted to the position of Minister of State on 26 March this year, 2024, being Minister of State for Enterprise, Markets and Small Business; is that right?

Kevin Hollinrake: That’s correct.

Mr Beer: A position you held until 5 July 2024, when a Labour Government was formed on that day as a result of that general election?

Kevin Hollinrake: That’s correct.

Mr Beer: Is it right that in both positions, both as Parliamentary Under-Secretary of State and then as Minister, the Post Office Limited was amongst your wide portfolio of responsibilities?

Kevin Hollinrake: It certainly is, yes.

Mr Beer: So, in short, you held ministerial responsibility for Post Office in Government for one year and eight months between October 2022 and early July 2024?

Kevin Hollinrake: Yes, I did.

Mr Beer: Thank you. In opposition, I think you held – so after July 2024 until today – in fact until yesterday – you held the position of Secretary of State for Business and Trade?

Kevin Hollinrake: That’s right.

Mr Beer: But I think the new party leader, Ms Badenoch, appointed you yesterday to the role of Shadow Secretary of State for Levelling Up, Housing and Communities?

Kevin Hollinrake: That’s true.

Mr Beer: Can we please look at your witness statement, it’s page 3, paragraph 6.

Kevin Hollinrake: Yes.

Mr Beer: Paragraphs 6, 7 and 8. It will come up on the screen as well. In the preceding paragraphs you’ve set out the extent of your ministerial responsibilities, but you say in paragraph 6:

“During my entire time … from 27 October 2022 until the General Election in July 2024, the Post Office fell under my ministerial remit, and as part of this I was responsible for leading the Government’s action on redress for subpostmasters and Post Office reform.

“This was my number one priority as Minister, no question about it. It was of key importance to the Department and it was also an issue which I cared about personally from my time as a backbencher.

“My appointment was manna from Heaven to me because it meant I could actually help to fix something important. There wasn’t a day, night or weekend that went by when I wasn’t doing something on the Post Office redress schemes and transformation. I would say at least 25% of my overall time and during many periods a much higher percentage [of time] was focused on this.”

You speak there about the Post Office being an issue about which you cared personally from your time as a backbencher. Can you help us: can you explain why that was?

Kevin Hollinrake: Well, my life has been small business. So one of the nice things about being a Member of Parliament is when you – from the backbenches you can speak on virtually whatever you’d like to speak on, and so I tend to focus on small business, and one of the first things I tried to help resolve with some of the banking scandals where big banks had mistreated small businesses, particularly Lloyds, HBoS and RBS GRG. So I spent many years on the All-Party on Fair Business Banking on those particular issues.

Mr Beer: Just slow down a little bit. You mention, I think, the APPG?

Kevin Hollinrake: That’s right.

Mr Beer: Tell us very shortly about that APPG?

Kevin Hollinrake: Yes, so the APPG was an All-Party Parliamentary Group on Fair Business Banking, which was there to try and make sure that small businesses had a voice when they were mistreated by large organisations, and there was some terrible mistreatment of small businesses by those particular banks.

So when I came across this particular scandal, which I did as a result of a letter from Paul Marshall, who is one of the barristers who got involved in this case and sought to have injustices brought to light, and did so successfully, I met with him, and realised how serious this was, but also, the parallels that existed between this scandal and previous scandals, where we’d sought to get compensation for those people.

And so it then became something I talked about from the backbenches and continued to do so until I was appointed Minister, and that’s why I said it was something that I was very pleased to – that was part of my portfolio because, as a backbencher, you have influence but you don’t have any power but, even as a junior minister, you have some power to try and make things happen and that’s what I tried to do as the Minister.

Mr Beer: Thank you. Can we look at an example of what you did from the backbenches. Can we look, please, at UKGI00030648. It will come up on the screen. If we look at the foot of the page, we will see an email from you to Darren Jones and others on 5 July 2020. This would have been at the time that you were a backbencher?

Kevin Hollinrake: That’s correct, yes.

Mr Beer: If we look at the bottom of page 2, on to page 3, we can see it’s signed off by you as MP for Thirsk and Malton and the Co-Chair of the APPG that you have just mentioned?

Kevin Hollinrake: Yes, that’s right.

Mr Beer: We see that this was primarily addressed to Darren Jones, if we go back up to the distribution list. Can you help us: at this time, in what capacity or context were you writing to Darren Jones, July 2020?

Kevin Hollinrake: Well, it was trying to highlight some deficiencies with the compensation scheme, primarily –

Mr Beer: Sorry, it’s my fault for a poor question. In what capacity were you writing to him?

Kevin Hollinrake: Sorry. Yes, Darren Jones is the Chair of the Select Committee for Business and Trade – Business, Energy and Industrial Strategy Select Committee, as was then.

Mr Beer: Thank you. So he was chair of the committee with primary responsibility for essentially the business area of the Post Office and its scandal?

Kevin Hollinrake: Exactly right, and he was doing some work – the committee was doing work on the scandal, and it would be – as I said before, as a backbencher you don’t have the power which you need to draw together a coalition of people to try and raise the issue – raise issues through the various different channels, and this is one of the channels we were trying to use to raise issues we felt existed with the compensation schemes.

Mr Beer: Thank you. You say:

“… thank you for the fine work that you and the Select Committee are doing with regard to the Post Office scandal.

“You may be aware of the above issue already …”

By that, I think you mean the subject line “Another Post Office scandal? Convicted claimants paid no compensation by Post Office”; is that right?

Kevin Hollinrake: That’s right.

Mr Beer: “… but I have been contacted by Paul Marshall, a barrister who has been informally assisting some of the Post Office victims, about a further injustice relating to this scandal in that convicted claimants have been paid no compensation by the Post Office and are specifically excluded from the Historic Shortfall Scheme. Paul originally contacted me as a result of my work [of the] Chair of the APPG on Fair Business Banking on the Lloyds/HBoS Reading scandal where he highlighted clear parallels between this affair and similarly disgraceful abuse of power in the Post Office scandal.”

Just to note, we’ve got those documents that have kindly been provided with Mr Marshall contacting you on two occasions, and drawing parallels between the Lloyds/HBoS scandals and this one:

“That some one should be prosecuted by a state institution and imprisoned on the basis of false evidence, known to be false, is antithetical to everything that liberal democracy and the ‘rule of law’ stand for.”

I should say that the purpose of me asking you questions about this is to gauge the temperature of your feelings whilst a backbench MP and see whether you carried those forwards when you became a Minister.

Kevin Hollinrake: Sure.

Mr Beer: “Such things are rightly associated with authoritarian and despotic regimes. And yet, for 20 years, the Post Office conducted such prosecutions.”

Over the page you then give some examples:

“Tracy Felstead was imprisoned aged 19 in 2002. Mrs Seema Misra was imprisoned when 8 weeks’ pregnant in 2010. Their cases have been referred to the Court of Appeal by the [CCRC], together with 47 others, following Sir Peter Fraser’s judgments in the Bates v Post Office litigation. Post Office Fujitsu witnesses have been referred to the [DPP]. The CCRC has described these prosecutions as ‘an affront to the public conscience’.

“It has now emerged that, while many assumed that the Post Office paid about £58 million (the vast majority of which went to pay costs and expenses) in compensation to its subpostmasters and subpostmistresses, including to those who had been convicted and imprisoned as a result of its seriously flawed prosecutions, this assumption is incorrect. Astonishingly, it is now apparent that under the terms of the settlement, negotiated between Freeths LLP, for the 550 claimants, and Herbert Smith Freehills LLP, for the Post Office, it was agreed that the Post Office was to pay no compensation at all to claimants in the Bates v Post Office litigation who had been convicted of criminal offences. The explanation for this remarkable conclusion is provided by a note written by Paul, a copy of which is attached to this email.”

You indeed attached a copy of that note to the email.

“Putting to one side any legal justification for that extraordinary outcome (none being immediately obvious), it is one that will offend anyone with a sense of justice. Many of those convicted and imprisoned, perhaps understandably, have suffered serious ill health including mental illness, as a consequence.

“I am also very concerned about the involvement of Herbert Smith Freehills … “

I am not going to read that paragraph but, essentially, you say that you fear that they have adopted an overtly and overly adversarial approach.

You say:

“I urge the Select Committee to lead the calls for a proper compensation scheme that will enable all the victims of this terrible tragedy and injustice to receive reparation for the injury done to them by the Post Office that is, shorn of niceties, a state institution. The continuing absence of such a scheme will augment injustice with injustice and be inexcusable. It is an outrage that some victims should now be left to their own devices to pursue an uncertain claim against the Post Office for malicious prosecution. Further, the circumstances of settlement, and the denial of recompense to those most grievously injured by the Post Office, now adds to the requirement for a proper public inquiry into this shameful episode.

“At the very least, the time period for the [HSS] should be extended by 3 months to 14 October 2020. This will provide a reasonable opportunity for those affected to be able to properly evaluate the courses open to them. The issues demand careful and mature consideration.”

Then you say you copied in the Business Secretary, Alok Sharma, the Small Business Minister, Paul Scully and the Justice Secretary, Robert Buckland:

“… who clearly have an interest and I hope will also take up these matters.”

You expressed, I think it is fair to say, very strong opinions on this scandal in the course of this email, didn’t you?

Kevin Hollinrake: I did.

Mr Beer: Did you carry those very strong opinions into Government when you became a Minister two years later?

Kevin Hollinrake: Yes, I did.

Mr Beer: It is apparent from the evidence that we’ve got that you tried to resolve what might be described as issues with compensation and redress?

Kevin Hollinrake: Yes, I certainly tried to do that.

Mr Beer: What hindered you?

Kevin Hollinrake: I think the nature of any compensation scheme, and I saw it in the previous compensation schemes we had dealt with, at Lloyds, HBoS and RBS, is that any compensation of any individual is complicated because everybody’s life is different, everybody’s lives are complex, and the detriment to people’s lives is often completely unique. Of course it’s completely unique. So, if you’re going to set about putting in place a compensation scheme that’s going to assess everybody’s loss individually, that’s going to take time. And it’s bureaucratic process. You need to –

Mr Beer: Sorry to interrupt you. So, essentially, the first part of your answer there was it’s the nature of the exercise, so it’s not somebody hindering me, or an institution –

Kevin Hollinrake: Yes.

Mr Beer: – hindering progress: you’re saying it’s a natural consequence –

Kevin Hollinrake: Yes.

Mr Beer: – of the problem that needs to be solved?

Kevin Hollinrake: Yes. I never experienced anybody – if the question is – I never experienced anybody in Government or the Civil Service who tried to hinder compensation to any individual. It’s a result of a complex process, that inevitably is the case between an individual whose life has been affected in many, many different ways, both in terms of financially, in terms of their health, their mental health, their physical health, that of their family, that – in terms of the impact upon their livelihood, all those things have to be taken into account.

And I think one of the things we need to learn from this, and I’ve covered this in my statement in later stages, is how we do this better if this – God forbid this should ever happen again.

And so I think, Sir Wyn, you have said in your earlier remarks on this is that, in terms of the compensation schemes, you know, if you’re going to go there you wouldn’t start from here, in terms of how we’ve done this, but nevertheless we are where we are – we find ourselves, and so it is – as I say, it’s the complexity is the biggest problem, and the adversarial nature of putting a claimant’s lawyer arguing the case with the Department or the Post Office’s lawyers. And that doesn’t help either.

And so there are ways, I believe, to expedite that, some of which we found through things like fixed-sum awards, which have had a great deal of success, but there are other things we need to do as well to try to expedite this process now and for future compensation schemes.

Mr Beer: In the course of that answer you said you didn’t come across anyone in Government, and you included with that the Civil Service, who hindered you. Did you deliberately exclude the Post Office?

Kevin Hollinrake: No, I didn’t. I mean, I don’t believe anybody in the Post Office sought to prevent compensation flowing and, again, that’s something I covered in my witness statement. I think there were some failures within Post Office. You know, some of the disclosure failures, which have been well publicised, for the Inquiry, but also in the individual cases, took too long, and were flawed, and mistakes were made.

So there are logistical problems, and some that has to be described as incompetence as well as fairly for other reasons. But I don’t think – I haven’t met anybody who didn’t want to compensate postmasters as quickly as possible.

Mr Beer: Thank you. Can we look, please, at BEIS0001023. This is an email exchange from, in fact, earlier this year. You’ll see that it’s dated 5 February 2024 and it’s from Minister Hollinrake, that email address, to Rob Brightwell, who is a senior servant within the Department, along with Carl Creswell – who we are to hear from later today – and others.

If you look at the foot of the page, please, and over to the next page, you’ll see it’s from Jamie Lucas, who was then your Deputy Head of Office and Private Secretary; is that right?

Kevin Hollinrake: That’s right.

Mr Beer: If we go back to page 1, please, it refers to a “slightly impromptu meeting with the Minister”, ie you, “just now”, and it’s apparent that a submission has gone up to you, and you’ve provided comments and he’s passing these on to the civil servants, yes?

Kevin Hollinrake: That’s right.

Mr Beer: You comment essentially in five bullet points. You say:

“I’d like to see how we calculated Alan Bates’ compensation please? Even a ready reckoner of £50,000 a year for 18 years plus interest seems to be considerably in excess of the offer we made. Not sure we aren’t making all this too complicated/getting into the weeds too much at times.

“The £450,000 interim on receipt of a full claim is a good idea, we should the same for the GLO, say £50,000?

“Why does it take 30 weeks to respond to a late HSS claim?

“I think we need an appeal mechanism in addition to the HSS FSA. I think we should consult the HCAB [Advisory Board] before implementing either.

“Please can I have a table showing a comparison of tariffs for non-pecuniary [Overturned Convictions] v HSS [schemes].”

I think that’s essentially what you’re describing in that last bullet point.

Kevin Hollinrake: That’s right.

Mr Beer: So the passages in italics there, that’s essentially you speaking directly?

Kevin Hollinrake: Yes.

Mr Beer: So, what: you would have read a submission, not liked some of what you had seen in it, and passed this on to your private secretary?

Kevin Hollinrake: That’s right.

Mr Beer: Did you do this frequently, this kind of thing, get actually into the details of individual claims?

Kevin Hollinrake: Yeah, where necessary. I mean, obviously ministers are not there to resolve individual claims but I was concerned – as concerned, I think, as anybody when you felt things were not working as quickly as they should, and so – and, you know, the bureaucratic nature of things, as I say, I expressed some frustration within those paragraphs about, you know, just really arguing about very small elements of a claim, which, you know, speaking frankly – and listen, this isn’t a criticism of lawyers, so I hope you don’t think it is. There’s a lot of lawyers in this room right now, I wouldn’t want to do that! But it can be the case that things take too long and for the wrong reasons.

So arguing about the mileage claim for somebody going – which I heard is one claim because somebody had had to put their mileage going from their place of home to a place of work while they were trying to – while they were waiting for their compensation, is not the kind of thing we should be doing.

I just felt there wasn’t a sense check about – you know, when I dug down in some of the claims, as I would do. You know, I didn’t – I think at times we have to get into the weeds as ministers, myself, we can’t just rely on everything we are told. And so it would be the case that people would contact me through various different sources, could be email or social media, and I would be willing to go in and say, “Okay, tell me about that case and tell me why it’s taking so long and tell me why that offer is at that level when it doesn’t sound like anywhere near the level it should be”.

And I think I expressed that frustration in Sir Alan Bates’ case, in that, you know, it’s the level of offer that I established that had been made didn’t seem to make sense when you took a common sense view of it.

Mr Beer: Your Private Secretary continues, skipping over the next lines:

“He [that’s you] has also expressed to me that he’d like the detail behind a number of high-profile claims. For example, Jo Hamilton claims that her original offer went from 20% of her original claim to 80%, why is that? Christopher Head’s was on 15% of what he claimed, why? And obviously, as referenced above, Alan Bates’ claim …”

There’s a note already being drafted on this, your private secretary understood.

So one can understand why you would wish to know the detail of what you described here as high profile cases, because you might be asked about them. Was that the reason that you were getting into the weeds here?

Kevin Hollinrake: Not – of course, that’s, you know – we’re public servants, we react to public concern quite rightly, but it was more about how the schemes were operating: were they operating effectively; were they operating on a basis of common sense; were they operating on a basis that the benefit of the doubt was given to the claimant? All the things we had committed to do, and I would expect a compensation scheme to operate on that basis. So it was really trying to not resolve that particular claim to get it out to the newspapers, it was a case of, you know, let’s improve these schemes across the board, and so these were just examples of things I was aware of.

I took the same view on things that didn’t – weren’t necessarily as high profile as Sir Alan Bates or Jo Hamilton; it was on people that I say contacted me directly, I would try and get the same answers in those cases.

Mr Beer: So is this kind of thing that we read here typical of you essentially carrying forward the rather strong sentiments that we saw expressed in your backbencher MP from when you went into office as a minister?

Kevin Hollinrake: Yes, that’s exactly right.

Mr Beer: Thank you. That can come down.

(Pause for fire alarm test)

Mr Beer: Mr Hollinrake, I think we can continue now. We’re about to turn to a new topic, which is Post Office governance, and the provision of information to you from or by the Post Office, and decision making. If we can start by looking at your witness statement, please. It will come up on the screen, page 6, paragraphs 19 and 20.

Kevin Hollinrake: Before I do that, can I just add to what I was going to say earlier –

Mr Beer: Absolutely.

Kevin Hollinrake: – that was probably cut off by the fire alarm. I suppose what I felt through this, having been through what I saw in the Lloyds compensation scheme, that the legal system, for whatever reason – and, you know, I’m not sufficiently qualified to opine on it, but it treats people when they are mistreated, terribly, especially the big companies and the individual. And, yet, when it comes to the compensation, the people who are responsible for the compensation, I felt treat those people, hide behind the law, in terms of properly compensating those individuals.

And I think there’s something fundamentally wrong with that, and it’s not – this isn’t the only time we did it. You know, in fact, in the Lloyds scheme we handed the compensation back to Lloyds to provide the compensation but, in fact, in the HSS scheme we handed the compensation scheme back to the Post Office to deliver the compensation.

I think (a) that doesn’t give anybody confidence that the compensation will be delivered properly but, also then, it becomes very legalistic, and I think there’s something very fundamental we need to learn from that. Some of that was covered under the National Audit Office report on this, but we should never do it like this again.

Mr Beer: Can I ask you two questions arising from that answer. You said that, when providing compensation for those that have been wronged, we tend to “hide behind the law”. That tends to suggest that you have taken the view that those that are providing compensation or determining compensation are not applying the law, as they would see it, that –

Kevin Hollinrake: I don’t think that. I don’t think that – they’re not applying – I think they’re applying the law too strictly, in that this is how we compensate people according to the principles of how a court would deal with this, and this is how we arrive at the calculation that we would do a very complex assessment of loss. But I think, to me, that is too much. We need to – too much, too legalistic, too adversarial and it doesn’t give the benefit of the doubt to the claimant, and it becomes very, very bureaucratic.

And there are some basic principles how you compensate people through the courts, I understand that. But I think applying purely legal principles to this, I’m sure there are very good reasons why that happens, but does mean that these compensation schemes to me can be flawed.

Mr Beer: Can I explore that part of the answer a little further. Is your view or your complaint that the law is used, ie common law and statute law, in determining the amount of compensation, or is it that lawyers are involved in the administration of the scheme?

Kevin Hollinrake: Yeah, I think it’s a bit of both but, you know, if two lawyers are arguing that can take some time. And, again, I’m outnumbered in this room, so I’m not trying to be critical of legal processes but, to me, there should be, as the National Audit Office said and why – one of the things we tried to do, and probably failed to do – I’ve made mistakes here, I’m not saying, you know, I was the only person who did anything positive in this space, not at all. Many good things were done by many people, both by the ministerial and through the civil service, through this process.

But I think, you know, you need somebody independent of the legal processes sat in the middle somewhere to be able to sense check some of these things that are happening, rather than applying the strict rules of engagement, rules of compensation, in these situations, because that will just take too long and not properly reflect the situation that people have faced or the losses that they have incurred.

Mr Beer: The second follow-up was that you said, in your first answer after the fire alarm, that “We handed back” or “handed to Lloyds and then the Post Office, responsibility for administering the scheme or, in our case, some of the scheme”. Can you develop, please, your complaint or view there?

Kevin Hollinrake: Well, I mean, the culture of the Post Office has been discussed at length, so people are bound to feel there is some of that remaining within – in terms of the claimants, and I think that probably some of that was remaining. You know, I think – but there’s going to be little confidence from the claimant when they feel they’re being compensated by the organisation that has been responsible for the huge suffering that they’ve experienced, that they’re going to get properly compensated and that suffering has been is properly recognised, so I just don’t think that is the right way to do it.

Mr Beer: Was it an active question within your 18 months as a Minister under consideration of whether the Post Office should be given or should retain responsibility –

Kevin Hollinrake: Yes.

Mr Beer: – for administration of certain of the schemes?

Kevin Hollinrake: Yes, certainly. And, again, I know you’ve stated this in the past, you know, we are where we find ourselves. So revisiting the HSS scheme, which had largely, by that point in time, made offers to the vast majority of people who had put claims in, you know, starting that all again, although we did, as you referred to in my earlier – some of my earlier comments on this is that we should have put in place an appeal mechanism, so people who feel they have been shortchanged could contest the compensation they had been provided with, and that some – and, latterly, we also pushed for a fixed-sum award for those people, so compensation could be topped up to at least a minimum level.

So yes, it’s very much the case that we – that I felt that shouldn’t have been given to the Post Office originally but it was. And later schemes, the GLO scheme, was given – as in agreement with the claimants’ lawyers, was done by DBT, operated by DBT, which I think was – was better, I’m not saying even then you shouldn’t do something slightly different from that in the future.

But one thing that I was surprised about, early on in my tenure as minister, I think this decision might have already been made, but the Overturned Conviction Scheme was then given back to the Post Office to handle, which again, to me, was a step backwards from understanding the GLO scheme should be handled by the DBT, so independent of the Post Office, then, you know, the first Overturned Conviction Scheme was handled back by the Post Office, and that, to me, is the wrong thing to do.

Mr Beer: Was it ever passed on to you that Mr Read as CEO and his Board, corporately, did not wish for the Post Office to administer either the HSS or the GLO scheme?

Kevin Hollinrake: I think the Post Office, including Nick Read, would have been very happy if they weren’t dealing with the compensation. That was certainly the conversations I had with Nick in the past.

Mr Beer: So why was it, if there was a meeting of minds between you and him, that that didn’t happen?

Kevin Hollinrake: Because the decision had already been taken. The HSS had already been largely – like you say, most claims had been either resolved or offers had been made. The GLO would decide to do externally, which I think everybody was happy with, and the Overturned Convictions Scheme, the original one, although it came across my desk, I remember making some comments on brief that I’d had of “I don’t understand why this is going back to the Post Office” but I think the decision had already been taken by the Secretary of State at that point to do it that way.

Mr Beer: The Secretary of State at that time being?

Kevin Hollinrake: I think the original decision had probably been made by Kwasi Kwarteng. I can’t be sure of that but, certainly, it was something – a comment I made to – on the brief received that I didn’t understand why we – this was going back to the Post Office.

Mr Beer: Thank you. Can we then turn to the topic I was going to –

Sir Wyn Williams: Before we do, Mr Beer, I understand your concern about each side arming themselves with lawyers and arguing it out. I don’t think I am a lawyer any more. I can say that: I used to be one but I’m not more. Anyway, it was both the Post Office’s choice and the Department’s choice to arm themselves with lawyers. They didn’t have to have a room full of lawyers to argue this out. That was, if I can use the word, your choice.

Kevin Hollinrake: Yes.

Sir Wyn Williams: “You” collectively, you understand?

Kevin Hollinrake: Yes, that’s right.

Sir Wyn Williams: So why?

Kevin Hollinrake: Well, as I say, I don’t think we should do that in the future. You know, I think we should have some independence in the middle of it, and something that we – I certainly –

Sir Wyn Williams: Well, I appreciate about the future but – and I’m absolutely not saying this in a critical sense, it’s an enquiring sense – you obviously had considerable scepticism about how quickly lawyers could sort this out.

Kevin Hollinrake: Mm.

Sir Wyn Williams: So you become the relevant minister in 2022, admittedly the HSS is well down the road, but the Overturned Conviction Scheme wasn’t well down the road and the GLO scheme had hardly begun. All right? So why not then say, “Right, we’ll have a completely different attitude in the Post Office and the Department. We won’t arm our defence with lawyers, we’ll have reasonable whoever, who will just look at these claims and make fair assessments”?

Kevin Hollinrake: Yes, and if I had my time again, that’s exactly what I would’ve done – one of the mistakes I made. It was very early on in my time as Minister that the GLO scheme came down the track. It was only after two or three months after, I think, and met with various different people, including people like Kevan Jones, Lord Arbuthnot and others, who were – all seemed to be quite happy with the way the scheme was established.

Looking back now, I don’t think I should have been happy with that. There were scheme reviewers, Sir Ross Cranston was brought in as a scheme reviewer for the GLO. I think what I should have insisted on at that point in time was for someone like Sir Ross to play a greater role right at the start, rather than be the back stop for a dispute. And I probably hoped, which is probably a vain hope, that that process could happen more quickly. And – but it’s too far down the line.

So I hold my hands up, you know, and I say sorry to people whose claims have not been settled quickly enough through that process. It’s something I got wrong. I’m sorry that’s the case.

Sir Wyn Williams: Well, I wasn’t, actually, as I hope I made clear, necessarily saying you were wrong but I was exploring the reasons why, in the end, this scheme, all schemes, have become – these are my words and they may not turn out to be my final words – but apparently a battle between lawyers, in certain cases.

Kevin Hollinrake: That is definitely the case and something we should not do – not let happen again.

Sir Wyn Williams: All right.

Mr Beer: Can we then turn to the topic, topic 2. It was paragraphs 19 and 20 of this witness statement and this is after you become the Minister. You say:

“I continued to be briefed on issues throughout my time as a Minister. I had regular meetings with the lead departmental officials – David Bickerton (Director General), Carl Creswell (Director) and Rob Brightwell (Deputy Director) – and in those meetings I would often make requests for more information on particular topics and raise and discuss ideas for change.”

Then in 20, you say:

“It was also important to me that I should receive unfiltered information from stakeholders, and right from the start I asked my private office to arrange calls with Nick Read, Alan Bates and Lord Arbuthnot.”

So you’re there describing getting information through the usual channels, ie through departmental officials, but also going directly to both the Post Office and to relevant stakeholders, yes?

Kevin Hollinrake: Yes, that’s right.

Mr Beer: In your witness statement, it’s paragraph 55, which is on page 14. Just by way of background, in 54 you say:

“… the Government and the Post Office have approached compensation with the best of intentions, but there have obviously been a number of problems, especially in relation to the pace at which subpostmasters have received compensation (or not).”

Then you set out some reasons, and you say:

“There were, as I understand it, a number of reasons for this during my time as Minister …”

Then the first of those is:

“Slow and flawed disclosure by the Post Office …”

Can you help us: what information were you provided with as to the Post Office providing “slow and flawed disclosure” in connection with the compensation schemes?

Kevin Hollinrake: It wasn’t information I was given by officials; it was just usually case – when I’d spoken to victims or the representative of victims, or evidence we’d hear at the Select Committee inquiry, or things I would read in the various media reports so that would tend to be where I revealed that it was taking longer than it should.

Mr Beer: So this is disclosure by the Post Office in and for the purpose of a compensation and redress scheme?

Kevin Hollinrake: Yes, absolutely. I’d speak to obviously the claimants’ lawyers and they would say to me that’s certainly part of the problem. I think that was a problem particularly early on when the Post Office, to be fair, was getting up to speed with a lot of these cases. As we introduced things like the fixed-sum awards, which are one of the things that have made a big difference in terms of making sure the flow of compensation increased, and there has been, I think, around a fourfold increase in the amount of compensation paid over the last 12 months. I think now it stands at £438 million, it was just over 100 million this time last year.

So many things have worked that we tried to do but – so that – one of the – where the areas that helped in was the Post Office, by using that – by using that approach, it meant the Post Office had fewer cases to have to disclose evidence to because the fixed-sum awards don’t require disclosure of evidence. So there is a twofold benefit in using that approach as one way to get compensation to people.

Mr Beer: Other than the introduction of fixed-sum awards, did you do anything in response to the information that you were given that the Post Office was providing slow and flawed disclosure?

Kevin Hollinrake: Well, certainly, it was a topic of conversation we had when I had regular meetings with Nick Read and others, that we urged them to increase the pace of compensation, we were always reassured that was going to be the case. Again, on an individual case level, if things were brought to me, I would attempt to have those cases – understand why those cases were taking so long and urge the relevant participants to accelerate the – whatever information gathering was needed and provision was needed.

We also set an SLA, a service level agreement, kind of expectation on things like the GLO, that offers were made to individuals within 40 days of offers being – of claims being submitted. But, of course, that’s down the track from when claims could – because – could be submitted because they would require the disclosure of evidence to make the claim.

So there were some attempts to accelerate things but we also brought in schemes reviewers, again, Sir Ross Cranston, being on the GLO scheme, Antony Higginbotham for the – on the Overturned Conviction Schemes, which we were very keen to make sure they could play some part in trying to make sure those schemes were fit for purpose. And, indeed, the establishment of the Horizon Compensation Advisory Board, with Lord Arbuthnot and Kevan Jones, and I was very keen to make sure there was cross-party representation on that. But also there were people who had been fierce critics of the Government on that Board including Sir Professor Richard Moorhead – sorry, Professor Richard Moorhead – to make sure that they could have some oversight of how those schemes were operating and establish where things were going wrong, and be able to advise us on what we needed to do to try and help.

Mr Beer: You also cite, as a second reason – this is something you have mentioned earlier this morning – the fact that large claims were being held up by demands for detailing information on trivial issues, such as mileage and travel. Who was providing you with that information?

Kevin Hollinrake: It would tend to be the claimants. I think this was something that Jo Hamilton, for example, has often mentioned to me when I met her. There was information required that seemed pretty trivial and not material to what compensation might be offered that would seem to be – seemed to be – have to perform part of the claim before it was submitted.

Mr Beer: In relation to that, did you communicate any concerns about delays in large claims being essentially stalled by demands for trivial details to –

Kevin Hollinrake: Yes.

Mr Beer: – anyone at Post Office.

Kevin Hollinrake: Yes. Sorry, yes, it was certainly a conversation we had in our regular meetings with the Compensation Advisory Board, how we’d do this a different way. It was very much the case that I felt there should be some sense checking, rather than simply just going – getting – sense checking in terms of what might be an appropriate level of compensation for those kind of things, and there would be – and that there should be a way to give a – an assessment of the – of somebody’s loss without having to go into a detailed assessment of that loss. There should be – and this is something that was piloted, that there should be a general – there should be less of an expectation, less requirement for there to be a submission of individual loss at financial level or in terms of people’s health or mental health, that we should be able to work that out on the basis of some kind of tariff. That was certainly a scheme that was piloted within the Department that I understood helped to some degree.

Mr Beer: You also cite, thirdly:

“… the requirement that each claim had to be supported by medical evidence of trauma and physical impacts and forensic accountancy evidence for financial loss, when these experts had limited capacity …”

Who was providing you with that information?

Kevin Hollinrake: Again, that was a conversation I had with the civil servants, Carl Creswell, Rob Brightwell, who were clear that there were some issues around just – there was a queue for getting the forensic accountancy or the assessment of somebody’s impacts on their health, or their mental health, and those kind of things can take time, even when people are working on those cases but there was a queue of cases to be heard by those, as people who are experts in that field.

If we could move – and I think we did this on a pilot basis, which I understood was successful, this was probably towards the end of my tenure as Minister – to have, I say, a general kind of – a lower requirement for assessment of individual need and more of a kind of general figure that could be put on that kind of loss, that could provide a basis of compensation rather than a more detailed assessment.

Mr Beer: You’ve mentioned a couple of times in your answers that you asked for the issue that was being raised in front of you to be sense checked, or words to that effect. What did you mean by that? I sometimes find that when people use that phrase it can carry a number of meanings, some of which obscure what is, in fact, happening?

Kevin Hollinrake: Well, I think I used that in terms of Alan Bates’ case. If you just look at the case, somebody who has been campaigning on behalf of thousands of people for 20 years, and then you make an offer of compensation at the level it was initially made, you’d think somebody who has been working for 18/20 years on a case, the amount of time it was required for somebody to work on that full time – and I’m sure he was working more than full time in his campaign – you can probably add it up pretty quickly that that claim should be significantly higher than the claim that was initially issued.

Similarly, with things like Jo Hamilton –

Mr Beer: Just stopping there, you mean sense check in –

Kevin Hollinrake: Yeah.

Mr Beer: – apply some common sense?

Kevin Hollinrake: Yes, that’s exactly what I mean.

Mr Beer: Okay. You were moving on Jo Hamilton?

Kevin Hollinrake: Yeah, well, similarly, you know, asking Jo to evidence her mileage between her home and workplace where she had to clean to keep, you know – to make sure she could, you know, pay for her things she needed to pay for and subsist, was just, to me, ludicrous.

Mr Beer: There were proposals for upfront offers in a fixed sum. Where did that idea originate from?

Kevin Hollinrake: It originated from me. I floated the idea at a Departmental meeting with the Secretary of State and the Permanent Secretary, and David Bickerton and others were at that meeting. And it was a frustration for myself and the Secretary of State, indeed, who was always very supportive of all my efforts to accelerate compensation, that things weren’t moving quickly enough.

To be honest, again, I wish I’d recommended it earlier because it was very well received by all the people at that meeting, that we should look at a different way of doing this, but the original idea came from an idea, you know, a principle, an approach we took at the Lloyds/HBoS Compensation Scheme, where we suffered exactly the same problems even when the scheme was redone with Sir David Foskett as the – as running the Foskett panel, still the compensation claims took a long time to assess those losses and to agree what the compensation levels should be.

So what we alighted upon was using this fixed sum award approach, which was very successful and allows people to walk away from the process much more quickly and get compensation more quickly and move on with their lives because, as we know, and it’s terrible to hear about Mrs Riddell, and my thoughts are with her and her husband and others, how people do – have, you know, passed away without ever seeing compensation. It’s simply wrong.

And it’s a way we can accelerate the compensation to make sure those people at least can move on with their lives to some extent after all the terrible things that have happened to them.

Mr Beer: Can we look, please, at BEIS0000808. This is a letter – I think we’ve only got this as an undated or finally dated draft – but it’s dated August 2023. You’ll see that it’s from the Secretary of State, who was then Kemi Badenoch, if we just go to the top, thank you, to the Chancellor, then Jeremy Hunt. “Accelerating Post Office … Compensation” is the title and Ms Badenoch’s letter reads:

“Kevin Hollinrake and I are both determined that postmasters affected by the Post Office Horizon scandal should get proper compensation – and they should get it as rapidly as possible.

“Three different compensation arrangements are at different stages of maturity …”

Then she summarises, including some figures, the HSS, the Overturned Conviction Scheme and the GLO scheme.

Ms Badenoch continues:

“The scandal ruined many postmasters’ lives. The longer compensation goes unpaid, the more criticism we shall face – including from the Williams Inquiry. If we were to fail to compensate all the GLO members in time we would face severe criticism from all sides.

“Kevin and I have therefore been looking at ways in which we could rapidly speed up the processes. We already make interim payments of £163k to almost all postmasters whose convictions are overturned, and we undertake only limited scrutiny of GLO claims for certain heads of loss under £10k pants and HSS ones under £8k. We are looking to extend these measures substantially in relation to the GLO, which has started to receive claims.

“Some of the options we are considering would actually save more on the cost of lawyers or other advisors than they would cost in extra compensation. Others do have additional costs – but in my view this would be well worthwhile in the light of the non-financial benefits of accelerating the schemes. In particular, I would like us to be able to offer a £100k fixed payment to every claimant who applies to the GLO scheme. I recognise that announcing this would create significant pressure to offer the same for HSS claimants, which we should consider separately, but I believe this the right route far for the GLO scheme. Such radical action would offer great advantages in terms of the speed of the process. The DBT Accounting Officer has expressed some concerns about the value for money given the repercussive risk and raised the potential need for a direction for this idea.”

That’s a reference to a ministerial direction, yes?

Kevin Hollinrake: Yes.

Mr Beer: “I would welcome your views on the best approach, being mindful of value for money considerations, and whether you agree that we should pursue this.”

The letter was copied to you.

So this was a joint suggestion between you and Kemi Badenoch; is that right?

Kevin Hollinrake: That’s right.

Mr Beer: Do you agree with everything that she has written?

Kevin Hollinrake: Yes.

Mr Beer: Can we look, please, at BEIS0000705. We can see from this – if we go down to the bottom, please, it’s over the page, the end of the letter – Mr Hunt, the then Chancellor, replied. Go back to the top, we can see in his paragraph 1 in his reply to the Secretary of State, Ms Badenoch, that her letter must have been dated 9 August. Then if we scroll past paragraphs 2, 3 and 4, he addresses the request, the ask:

“In relation to the specific proposal for fixed-sum awards on the GLO scheme, while successful delivery is paramount, we must also have regard to our responsibility for the public finances and to ensuring that the treatment of claimants on each Horizon compensation scheme is fair to that of their peers.

“As you note, making fixed-sum awards on the GLO would incur significant repercussive risk and cost, including to the [HSS]. Given the extent of this risk and its high likelihood of crystallisation, I would encourage you to explore the full breadth of other options to advance the ultimate objective of timely and successful delivery of full and fair compensation.”

Then the letter continues about some other things.

That’s essentially a rejection of the proposal; is that right?

Kevin Hollinrake: Yes, that’s right –

Mr Beer: It doesn’t say so, in as many terms. It says, “Please explore other options”.

Kevin Hollinrake: Yes, which, you know, we – clearly, we were.

Mr Beer: What was your reaction to the rejection of the proposal made by you and Ms Badenoch?

Kevin Hollinrake: Well, disappointment but I wasn’t surprised because it is quite – was quite – I think we’d – I think the Secretary of State had described the proposal as radical, actually, in a previous letter, and it is quite a radical thing to do, and a Permanent Secretary would never sign this off on value for money grounds because that’s what Permanent Secretaries are there to do, to protect public money.

Personally, I felt it was still the right thing to do and we continued to press for it because – I think Jeremy Hunt has always been massively, massively supportive of everything I tried to do in terms of providing compensation to postmasters, as has the Secretary of State and others, and the Prime Minister indeed, Rishi Sunak. But I don’t think any of them had had the experiences of previous compensation schemes that we had experienced, the ones I referred to earlier, particularly Lloyds and RBS, so I felt it was something that we would, in the end, have to do.

Mr Beer: Thank you. Can we move to BEIS0000722. Can we look, please, at the bottom of page 2 and on to the top of page 3. We can see an email from Carl Creswell, to, amongst others, your email address. It’s “Minister HOLLINRAKE”, the rest of it has been redacted on data protection grounds. Is that essentially your private office?

Kevin Hollinrake: Yes, that’s right.

Mr Beer: It wouldn’t be to you personally?

Kevin Hollinrake: No.

Mr Beer: This is essentially a record of the outfall from the decision we have just looked at. We can see it’s in late September, 22 September. If we go forward to point (3), so if we just scroll down, please. On (3), that’s a reference to a point earlier in the email chain, which I’m not going to turn up, but CST, which I think means Chief Secretary to the Treasury, I think; is that right?

Kevin Hollinrake: That’s right.

Mr Beer: The Chief Secretary to the Treasury, that would have been, I think, John Glen, at that time; is that right?

Kevin Hollinrake: That’s right.

Mr Beer: That was before Laura Trott took over in November:

“… the [Chief Secretary to the Treasury] has approved in principle a higher scrutiny threshold for Group Litigation Order claimants. He has tasked his officials with agreeing a sensible level with us, rather than picking a figure say as £100k of £50k. Our current scrutiny policy is rather [selective] and just covers up to £10k shortfalls, so moving to a higher and less restrictive threshold as soon as possible would be useful and enable us to process more claims more quickly.”

Can you explain to us what the “higher scrutiny threshold” means?

Kevin Hollinrake: It would mean when you did receive a claim, whatever that scrutiny threshold was, if it was below that threshold, then there would be a pretty light touch process in agreeing the claim. So if it’s £10,000, or you expect to say it’s less than £10,000, just pay it. And what the officials were keen to do and I was keen to do was raise that threshold so, if you’d got a claim of up to, say, £100,000 that light-touch process would be applied to that particular claim.

So you wouldn’t get into this lawyer-to-lawyer process of arguing about semantics, I would say, in many cases about the level of the claim in certain areas. You’d just pay it.

Mr Beer: So by raising the level, you would bring more claims within the no or lesser scrutiny approach?

Kevin Hollinrake: That’s right, yes, I think it’s fair to say probably this is one of the alternatives to a fixed-sum award. The difficulty with this in replacing a fixed-sum award, is that clearly you can’t reveal this scrutiny threshold to the claimants because everybody would just put a claim in, if it was lower than that, up to £100,000 level, if that’s where you set the threshold. So it’s something you use internally, rather than disclose externally.

Mr Beer: The email continues:

“This leaves the question of our proposed £100k, which the Chancellor is resisting on the basis of concerns about precedent for other compensation schemes, as well as potential repercussions. As we explained ahead of the recent [Secretary of State] meeting, we floated the idea of a £75k upfront payment with [Treasury] officials, but were again rebuffed as a matter of [Treasury] principle. Our understanding is that the [Chief Secretary to the Treasury] is sympathetic to our proposals from a political perspective but feels unable to go further because of advice from [Treasury] officials about the impact on other compensation schemes, (eg Infected Blood) and the strong views of the Chancellor.

“I would be grateful for Ministers’ views on handling, please.”

So that’s a direct request to you; is that right?

Kevin Hollinrake: Yes.

Mr Beer: “In addition to reaching agreement at official level to an amended scrutiny threshold (even at £40k would enable us to process a significant number of GLO cases more rapidly), minister Hollinrake/[Secretary of State], could consider writing to [Treasury] ministers to represent the case [to them] and ask them again to reconsider. I would prefer not to hold up progressing the scrutiny threshold because we are processing cases every week and it may take a while for that political conversation to reach a conclusion.”

I’m reading between the lines here – can you help with whether I’m correct in my reading between the lines – that there was a difference of view between the Chief Secretary of the Treasury and the Chancellor and you were being asked as a minister to approach the Chief Secretary to the Treasury, ie at many ministerial level, rather than going back to the Chancellor who had expressed his view more than once.

Kevin Hollinrake: I might be wrong but I don’t think the Chancellor and the CST did differ actually. I think the CST – Chief Secretary of the Treasury – was happy to look at a higher level of scrutiny but still had the same reservations about the fixed-sum award, the upfront offer, as he calls it here, as the Chancellor did on value for money grounds. And I know this has been a topic of conversation, and you’ve queried it, I think, Sir Wyn in terms of public money: there is a requirement within the work we do and within the Civil Service to protect public money and to look after public money, and there’s – it may seem callous in this regard, and I can understand why people might see it like that, but you’ve got responsibility to the individuals their families, of course, to properly compensate them. You’ve also got to – so be fair to them.

You’ve also got to be fair to other postmasters so everybody gets treated equally but you’ve got to be fair to taxpayers as well, so I do understand the grounds whereby ministers and officials would push back against the fixed-sum award because it does mean extra levels of compensation, it does mean more money paid out.

So I don’t think anybody pushed back on the higher scrutiny level, although they did ask us to decide upon the – or argue for what the right level, but the fixed-sum award was more difficult to agree, it is quite radical.

My experience was that civil servants, certainly Carl Creswell and Rob Brightwell, were very supportive of that, as was David Bickerton and the Secretary of State, indeed, but when it gets to Permanent Secretary level, both in the Treasury and in the DBT, the Department for Business and Trade, at that point in time, somebody has to sign it off on value for money grounds, they would not do that, it would have to be ministerial direction, which I was very happy to sign, if somebody had asked me to do that. But I can understand why it’s controversial.

Mr Beer: Could you have been the appropriate person to have signed a ministerial direction?

Kevin Hollinrake: I don’t think without the support of the Secretary of State, realistically, or indeed the Chancellor, that would have been possible.

Mr Beer: Do you think the Treasury regarded the Post Office scandal as the priority that you evidently did?

Kevin Hollinrake: Yes, I do, although I probably had greater experience of it than some perhaps other people working in the Treasury. So I think anybody who has had the direct experience – my predecessor ministers or civil servants dealing in these cases, or many of the backbench Members of Parliament, or many of the campaigners, obviously, here and further afield knew how serious it was; I don’t think until the TV series was aired that many – that there was – that was a view widely held everywhere in Government, and everywhere in the public consciousness.

Mr Beer: What was your response to the Treasury’s resistance to the proposals that were being made to it?

Kevin Hollinrake: Well, keep making the case, as we did. One-to-one conversations with various ministers in Treasury. You know, I perfectly understood the response because of the reasons I set out earlier about public money but I still think it was the right thing to do, so we kept arguing for it. But, in the meantime, I think as Carl says in this email, he says that we’ll carry on with things like – things we could do, in the meantime, things like the scrutiny threshold, which would help, while I was still continuing to make the case for fixed-sum awards, as we’d got agreement to do in the overturned convictions.

What this is really talking about is expanding fixed-sum awards into the GLO and the HSS, as eventually we did.

Mr Beer: Could we look, please, just before the break at POL00448411.

Kevin Hollinrake: Before we get to that, actually, just the reference there to the Infected Blood, one thing – and this is obviously not a matter for this Inquiry, Sir Wyn – but, to me, the Infected Blood Scandal should have fixed-sum awards, and that’s not a feature of those – of that compensation schemes right now – scheme right now.

Sir Wyn Williams: I think I’ve got my hands full without that!

The Witness: I understand that.

Mr Beer: Thank you. This is a letter with which the Inquiry is familiar. It’s from some anonymous Post Office whistleblowers. I think you’ve seen this as a result of disclosure to you in the Inquiry. Did you see this at the time?

Kevin Hollinrake: Not at the time. This was about a week after the election was called, so that kind of correspondence would not be shared with me. It may not have been shared with me in the normal course of events because I think this letter is unsigned, actually. So –

Mr Beer: It isn’t signed. It’s signed off by the “POL Whistleblowers”. We can look at that at the foot of page 2.

Kevin Hollinrake: Yes, signed off unnamed people, which I’ve got to say, in my experience as a Member of Parliament, I think people who are not prepared to put their name to a letter, I think you’re bound to think twice about completely trusting the contents of something that’s not signed by an individual.

Mr Beer: Could you think the opposite: that the strength of views that are expressed are to be accorded particular weight because the people who are writing the whistleblowing letter think that retribution will be taken against them if they are identified?

Kevin Hollinrake: I think it’s something you should read. I don’t think you shouldn’t read it, but I think it’s – if somebody makes allegations that they’re not prepared to stand up to the individual – I understand why somebody might not want to, particularly if they hold a position that might be affected by the claims they make.

So I say I’m not saying you shouldn’t read it or ask questions on the basis of it but I think to trust it completely on the basis it’s not something you can then go and interrogate both sides – clearly you can ask questions of the people who were – allegations were made against but it’s – obviously, you can’t then go and ask questions of the people that have made the allegations.

Mr Beer: Thank you. It’s just one passage in paragraph 4 on page 1, the paragraph beginning “Furthermore”. It says:

“… key people are not being appropriately managed by [that’s Nick Read or Mr Read]. You are no doubt aware that Ben Foat has been given significant time off work (he has hardly been seen this year) and for the last few months he has been on permitted fully paid leave, to allow him to prepare for his half day at the Inquiry on Monday, 3 June. Not only this, but he has also had a forensic lawyer assigned to him for over 12 months, to assist with the questioning at the Inquiry, costing the public (we are told) [about] £700,000 (we are all wondering why on earth he has to practice so hard to tell the truth).”

Then it continues. Were you aware of this suggestion, that one of the witnesses to the Inquiry had had a lawyer supplied to them which had cost about £700,000?

Kevin Hollinrake: I wasn’t aware of that figure. I mean, it doesn’t surprise me that they had legal advice. I had legal advice to give evidence today to understand the process and what was expected of me. I was very surprised that anybody needed time off to be able to prepare for this Inquiry. I’ve not had any time off to prepare for it.

Mr Beer: But I think you are saying that, because of the timing of this letter, of 20 May, it was within the purdah period and, therefore, it wouldn’t have got through to you?

Kevin Hollinrake: Yes, I never saw this letter at the time. I only saw it when it was given to me as part of the bundle.

Mr Beer: So it wasn’t something – because on the one hand, you’re campaigning quite hard for fair provision of full and fair compensation to subpostmasters and, on the other, on the face of it, a relatively high sum of money is being expended for preparation to give a half day’s evidence at the Inquiry. But this didn’t essentially arrive in your inbox?

Kevin Hollinrake: I don’t know if it’s true but it seems an absolutely ludicrous amount of money if that’s the case.

Mr Beer: But it didn’t get through to you?

Kevin Hollinrake: No, I never saw this letter until I saw it the other day, so –

Mr Beer: So you couldn’t have caused it to be investigated or explored?

Kevin Hollinrake: No.

Mr Beer: Thank you.

Sir, might that be an appropriate moment for the morning break?

Sir Wyn Williams: Yes.

Mr Beer: Can we break until 11.05, please?

(10.49 am)

(A short break)

(11.05 am)

Mr Beer: Thank you, sir.

Mr Hollinrake, can we just continue on the issue of compensation a little longer and go back to paragraph 55 of your witness statement, which is on page 14. Thank you.

You mention in (b) and (c) essentially evidential thresholds for claiming and then payment of contribution, yes?

Kevin Hollinrake: That’s right.

Mr Beer: Are you aware that UKGI was involved in setting the minimum evidential thresholds?

Kevin Hollinrake: No, I wasn’t aware of that.

Mr Beer: Who did you think set the minimum evidential thresholds?

Kevin Hollinrake: Well, I guess I assumed they were set by DBT, or whoever established the terms of compensation that were formed on the basis of how their compensation processes would work. So I expected it would be the Department in consultation with legal representatives.

Mr Beer: Would you agree that medical records are necessary for those claims which allege some personal injury, whether physical or psychiatric, so that the severity of the injury can be accurately assessed?

Kevin Hollinrake: I think that was definitely the principles of the scheme. I think what we tried to do later on is reduce the need for evidence around that. So you might say, well, somebody in these circumstances, we would expect the compensation for somebody in that circumstance, whatever happened to them, to be at this level, rather than the need for specific assessment of that – the impact on that individual. That’s what we were trying to get to, to reduce the need for this evidential requirement.

But to form a basis of somebody’s claim, I think that – I understand why that was part of the original scheme. Because every situation is different, therefore its difficult to assess everybody’s loss or impact on somebody on the basis of a tariff, but what we looked at doing later on, as I said earlier in my evidence, is maybe there’s a way to do that without the need specifically for that to be evidenced. If a claimant’s lawyer could say, “Well, this is the impact, we believe based upon other experience we’ve had with other claimants, this should be the level of compensation for the impact they’ve had on their lives”, and then hopefully that could be then agreed without needing for a detailed assessment, which should accelerate the process of compensation.

Mr Beer: Presumably, you’d be aware that, in some cases, obtaining medical evidence can benefit claimants by achieving a higher award or, for example, where the expert recommends that treatment is necessary, then the cost of that treatment can be part of the claim?

Kevin Hollinrake: Yes, and nobody would ever want to stand in the way of what – any assessment that would lead to fair compensation of an individual’s claim. It wasn’t saying it would be a cap, it was simply saying is there a way to expedite this on the basis that you could have a sum that might reflect on the impact of that individual that could be agreed between – would be the claimant’s side – the claimant’s representatives, and the representatives on the other side of the scheme, be it DBT or Post Office.

Mr Beer: As to (d), “the involvement of lawyers on all sides”, is it your view that postmasters should have the assistance of a lawyer for complex claims?

Kevin Hollinrake: Oh, yes.

Mr Beer: Are you aware that the Department has rejected a suggestion that early legal advice, ie pre-offer, for postmasters should be funded by Post Office?

Kevin Hollinrake: I think the different schemes operate in different ways. HSS operated in a different way. I think the legal advice came down the line, rather than upfront. So I think the idea behind the HSS scheme, as I understand it, was to try and make it take away some of that lawyer-to-lawyer friction and to try to make these claims – try and expedite the claims to make them be able to settle more quickly. I understand why it was done like that, but that may well have meant that people didn’t get the right advice early on, which is one of the reasons we wanted to push for fixed-sum awards on the HSS scheme because there was a concern that things like consequential loss weren’t properly assessed in the original scheme.

Mr Beer: Are you aware that, in the majority of cases in the HSS, they do not involve lawyers or forensic accountants’ evidence?

Kevin Hollinrake: I think I understood that to be the case yes. It was supposed to be assessed in a non-adversarial process, so the panel of KCs and other experts were there to try and take an inquisitorial approach to assessment of the compensation and pay it that way. It was, as I say, an attempt to take away some of that lawyer-to-lawyer friction but there may be concerns then raised that did people get the right advice right at the start.

Mr Beer: Then, finally on this, are you aware that, for cases outside the parameters of the funding agreement between DBT and Post Office, the Post Office is required to wait for settlement offers to be ratified by the Department who then have, on occasions, to liaise with the Treasury?

Kevin Hollinrake: I wasn’t aware specifically of that process, no.

Mr Beer: Can we turn, please, to the issue of the relationship of Postmaster Non-Executive Directors to the Board, and with Government. In a witness statement provided to the Inquiry – there’s no need to display it, the reference is WITN11170100, at pages 119 to 110 – Saf Ismail, one of the Postmaster NEDs, said that he “had conversations with individuals at DBT”, namely Carl Creswell and the Minister, you, to raise concerns that the business of the Post Office was in a “very precarious position” but that he felt “ignored”.

Firstly, do you remember Mr Elliot (sic) coming to you?

Kevin Hollinrake: I remember we had a meeting, an online meeting with Saf Ismail and Elliot Jacobs, I think, to discuss where the Post Office was and their role within it, in terms of being non-executive roles, and the potential change of chair. And, of course, I can’t think specifically – I can’t remember specifically them saying that, you know, things – I don’t remember them saying everything was fine, nor can I ever remember them saying that things were disastrous and unfixable, and certainly my feeling was, in that conversation that we had with them online in that meeting, is that they were both keen on the new chair we were recommending to take over at the Post Office, Nigel Railton.

Mr Beer: Can we look, please, at BEIS0001020. You will see this is an e-mail from and to your private office email address, yes?

Kevin Hollinrake: Yes.

Mr Beer: This is, as we’ve seen in the past, a means sometimes employed of recording a meeting: an email to yourself, essentially.

Kevin Hollinrake: That’s right.

Mr Beer: In this case, it was from Jamie Lucas again to himself, essentially a minute of the meeting; is this the meeting you were referring to?

Kevin Hollinrake: That is right.

Mr Beer: It’s 28 March this year. You will see it records, in a sort of semi-verbatim fashion, what was said with you being referred to as “Kevin”, Mr Jacobs as “Elliot” and Mr Ismail as “Saf”.

You’ll see there’s some quite general information passed and, essentially, sort of pleasantries right at the beginning, where I think you’re presumably warming each other up at the beginning of the meeting there. Then if we look at the second paragraph, you say:

“… we are on the same page on central costs.”

Mr Elliot says:

“The minimum wage … is becoming a problem.”

Bottom of the page, you say:

“Agree with what you’ve said, the top and the bottom of it.”

This is essentially about not Horizon issues at the moment here; speaking about, essentially, the future of the Post Office.

Then over the page. They say that:

“It’s a lack of a roadmap [that’s a problem]. We live in [I think that’s supposed to be a ‘never-never land’] between sustainable business and social purpose.”

You ask: “Who’s your stand out?”

Mr Jacobs replies: “Nigel Railton.”

Mr Ismail agrees. Then it continues.

What was the purpose of your engagement with the Postmaster NEDs in this way?

Kevin Hollinrake: I guess to find out what was going on at the sharp end and what they really felt about the business, and I was keen to have their confidence that we were truly interested in making sure that the Post Office had a viable future, not just as a network but also at an individual postmaster level. So I always liked to talk to the people who were at the sharp end, and I think both Saf and Elliot both operated as well as non-execs, so they are postmasters as well as non-execs. That’s the reason they’re on the Board.

So I was very keen to hear from their perspective but also for them to feel that they were being heard.

Mr Beer: Was this part of a regular series of meetings with them or was this essentially a one-off?

Kevin Hollinrake: I think it was a one-off, although I had spoken to them separate – in separate situations, when I attended a board meeting, and I think when we were at various conferences, National Federation of SubPostmasters conferences as well. So it was never something I was afraid to do, talking to the people who were the operators of the network themselves.

Mr Beer: In general, what was your relationship like with the two Postmaster NEDs?

Kevin Hollinrake: I think good. As I say, it wasn’t a day-to-day working relationship but I hope they felt that I was willing to listen to what they had to say, and the thing, the responses I gave them were what I truly felt and, as it says in this exchange, I did agree with a lot of the things they were talking about, particularly the need to reduce central costs, so that more of the revenue that flowed into the Post Office centre then flowed out to the postmasters who were actually doing the day-to-day business at the sharp end.

Mr Beer: Do you understand how Mr Ismail feels able to say that he felt ignored after his conversation with you?

Kevin Hollinrake: I was surprised that’s the case, you know, but if that’s how he feels, that’s how he feels.

Mr Beer: Did you take any action as a result of the things they said to you in the course of the meeting?

Kevin Hollinrake: I think the principal thing we were talking about here, which is what we certainly agreed on, was the need to cut costs so centre, which is something I was very keen to do, that was something I’d talked to Nick Read about and other members of the Post Office Board. I got frustrated, I think I said in my witness statement, that that didn’t happen more quickly. But that was certainly a conversation I had with Nigel Railton when we first met about the potential for him to take over as chair.

And I understand, you know – and Nigel was always very keen to do the same. He felt the same, and I think he has spoken subsequently or recently about his plans to reduce the cost at the centre, which definitely need doing.

So I don’t think there’s anything in here fundamentally, if we’re talking about central costs or the shape and size of the network, which both are matters for consideration and action, or anything that I didn’t agree with or wasn’t willing to act upon. So I’m surprised he felt ignored. I’d be very happy to have a conversation about why he felt that.

Mr Beer: Thank you. That can come down.

Turning, then, to the issue of cutting central costs. Can you firstly explain in summary terms what you mean by cutting central costs?

Kevin Hollinrake: Well, it’s – I had a business background, and when you hit trouble in a business, as the network has – and lots of those troubles have come as a result of customer behaviour, as well as other matters, in terms of how difficult it is as a postmaster to make a living. So, you know, we use high street shops less than we did before because people have different ways of shopping. I understand that. And so – and the Post Office and lots of the services we used to get from the Post Office, such as our driving licence or passport, many of us do online now, which has hit postmaster income significantly.

So what you do when you’re in a situation where your branches are less profitable, the first thing you should look to do, in my experience, is cut costs at the centre because they are not the most important – the most important people in your network are the people serving the customers day to day because they’re generating the revenue. So what you’d expect to happen, therefore, is the size at the centre, particularly the executive and the management team, you look at how many people you have in that Executive Management Team and look to cut it. And, typically, what I did in my own business when you hit trouble in the past, you would have cut that by at least 40 per cent, if not more.

And that’s some of the conversations we had with the Chief Exec and their team and the Finance Director, or the Acting Finance Director, the acting CFO. You know, how many people were at different salary levels within the organisation, and what was going to be the direction of travel in terms of reducing the costs of those people at the centre. There were other costs as well, and the plans to reduce costs of directly managed branches, for example, which are a significant cost, and to the – to Post Office Limited, and that was something we discussed but, certainly, focusing on the people, the management team at the centre and the Executive Team, I think 143 people earn £100,000 or more, and you expect there to be a direction of travel in terms of reducing the numbers of people who earn that kind of money.

Mr Beer: Can we turn, please, to page 8, paragraph 30 of your witness statement. Under the heading “Post Office Board and culture”, within paragraph 30, you say this:

“… there are also signs that the Post Office remains too inward looking and dysfunctional.”

Then examples of being too inward looking and dysfunctional you then give. You say:

“Good examples are the failures to disclose information to the Inquiry, [2] the slow pace of disclosure for compensation cases, [3] the reluctance to reduce central costs to allow a consequential increase of revenue to postmasters … [4] the Henry Staunton saga, [5] the failure to deal with longstanding issues with senior executives, such as Alisdair Cameron, [6] the Remuneration Committee’s decision and processes around the sign off of bonuses for complying with the Inquiry’s disclosure requests, [7] the persistent and aggressive lobbying by the CEO to significantly increase his remuneration.”

It’s quite the list.

Kevin Hollinrake: Yes.

Mr Beer: Amongst those matters that you mention is a reluctance to reduce central costs to allow a consequential increase of revenue to postmasters’ remuneration. The way that’s written, I take two things from it, can you tell me whether I’m correct to do so: firstly, that you drew a link between the reduction of central costs and the increase of revenue to postmasters?

Kevin Hollinrake: Well, inevitably there is.

Mr Beer: Was that the purpose of the reduction, in your mind, of central costs?

Kevin Hollinrake: Yes, of course.

Mr Beer: Then the second thing is that there was a reluctance to do so –

Kevin Hollinrake: Yes.

Mr Beer: – by the Post Office?

Kevin Hollinrake: Absolutely.

Mr Beer: Who within the Post Office did you detect a reluctance in to reduce central costs?

Kevin Hollinrake: Well, the Chief Executive. I mean, the Chief Executive carries the can for everything and it’s not easy to be a Chief Executive and it’s not easy to be a Chief Executive of an organisation that had hit so much trouble. So I sympathise about the difficulties of running this organisation, but that – I don’t sympathise with doing things that were clearly needed to be done.

And had Nick Read come back to me and said, “No, you’re wrong, Minister, Kevin” – whatever you want to call me – “we need to keep the people for this, that and the other reason”, then I would have listened to the argument, of course, but I never heard a compelling reason why that should not be the case. There was, as I understood it, an acceptance that there should be an area where we would look to save costs, that could mean then more money flowed into the postmasters themselves.

But then nothing happen about it, despite our urging at several – at every juncture, at every meeting. And you could easily say, “Well, you should have done more” and I would hold my hands up and say I should have done more to insist upon this, but that was never properly forthcoming and that, to me, is a failure of leadership.

Mr Beer: Can I look at those two things that I’ve taken from the sentence, and that you’ve confirmed, then – the first of them is the link between a reduction in central costs and increased remuneration for subpostmasters, and that as an aim – by looking at POL00447841. You’ll see this is a letter from you to the then Chairman, Mr Staunton, of 29 June 2023. It’s a five-and-a-half-page letter including its annex, and its heading sets out its purpose, namely to set out the strategic priorities for 2023 to 2024.

Could you just explain why you write letters of this kind and what their purpose is?

Kevin Hollinrake: Obviously, we are the shareholder for the organisation and, therefore, it’s up to us to set out the priorities that then the Chair and the Chief Exec should then focus upon.

Mr Beer: Page 2, please. You say:

“… I would like you to focus on the following priorities, and align the reward package to the shareholder priorities …”

So “align the review package to the shareholder priorities”; what does that mean?

Kevin Hollinrake: I would guess that’s a case of the – the – any bonuses that would be due to senior executives should reflect the priorities that are set by the shareholder.

Mr Beer: Okay:

“1. Effective financial management and performance, including management of legal costs to ensure medium term viability.

“For the [financial year 23/24] the Post Office should …”

Then as the fourth bullet point:

“Maintain stringent cost control, and maintain a clear focus on value for money and efficient delivery across the cost base, including …”

Then there are five sub-bullet points, the last of which is:

“Other measures aimed at reducing central costs wherever possible.”

Is this the record, essentially, of you telling the Post Office to reduce central costs?

Kevin Hollinrake: Yeah, I mean that’s one of the records. The other records containing within the meetings that are minuted between myself and Nick Read.

Mr Beer: But this is a particularly formal way of doing it –

Kevin Hollinrake: Yes.

Mr Beer: – by setting out the shareholder strategic priorities; is that right?

Kevin Hollinrake: Yes.

Mr Beer: This says that the direction to reduce central costs has, as its aim, the medium-term viability of the Post Office, yes?

Kevin Hollinrake: Yes.

Mr Beer: In the heading at the top.

Kevin Hollinrake: That’s what it says, yes.

Mr Beer: Rather than with a view to increasing postmaster remuneration. In the letter, it doesn’t set out, as a strategic objective, the need to increase postmaster remuneration, or that the Post Office should work towards that. Was that a strategic priority?

Kevin Hollinrake: Yes, it definitely was. It wasn’t a case I was trying to do this to reduce the contribution by the taxpayer – and it was a case of, from my focus, it was very much – all the conversations I had with postmasters, be it through the conferences I attended or by other means, was very much an understanding that life was difficult as a postmaster. Many were working at or below minimum wage, and the Post Office itself would not be viable if its network would not be viable. So that’s the most important part in terms of viability of the network, in my view.

Mr Beer: If we just look through, just if we scan through the four strategic priorities, there’s a mention at the foot of that page there, in the last bullet point under number 2 of postmasters. But that’s in the context of rolling out to them the Strategic Platform Modernisation Programme. So far as I can see, that’s the only mention of postmasters in the strategic priorities, if we go over the page and look at priorities 3 and 4. Are you saying that it was to be taken as read that postmaster viability and, as part of that, remuneration increase was a strategic objective?

Kevin Hollinrake: Well, I don’t think anybody who had an interaction with me in terms of the management team or leadership team would have any doubt that it was my intention, and a requirement of their work, to make sure that we reduce costs to make sure that – and the beneficiaries of that should have been the postmasters. It may not specifically say this in here and maybe it should have done, but that was certainly the case, that’s what we were intending to do.

Mr Beer: Can I look at the next part of the equation then, in that sentence that we read, which was that there was a reluctance within the Post Office to reduce central cost, by looking at BEIS0000805. I think this is essentially a presentation or a series of slides for a presentation for a meeting that was held on 5 December 2023, which I think you attended?

Kevin Hollinrake: Mm.

Mr Beer: This is part of the Post Office presentation to you, or to the meeting at which you were present. It’s, I think, annotated up the slide pack if we look, for example, at page 3, presumably by somebody at the Department because this was disclosed to us by the Department.

Overall, can you just describe the purpose of the meeting; can you remember?

Kevin Hollinrake: Well, obviously, central costs is mentioned there, and one of the – I think the next slide then talks about the number of people on high salaries. So I’m not saying the only purpose of the meeting was to look at central costs but, as far as I was concerned, that was one of the most important areas for discussion at the meeting.

Mr Beer: Can we turn to page 7, please:

“Further scope for self-help is possible but this either involves trade-offs in the near term or it delivers benefits outside the [three-year plan].”

Then this the Post Office speaking, essentially:

“We have cost saving targets for [the financial year 23/24] …”

I think that’s a reference back to the letter we just looked at:

“… and we will have further targets for [24/25].”

Then:

“However cash constraints limit what we can deliver in the near term.

“If [the Department] was to [do something] (and noting subsidy has been flat for five years) we would [have to do something] we would have more funds to support cost saving activity.

“We know our costs can and should be reduced and we have a track record of taking costs out across our business over the last ten years. But to have any material lasting impact we need access to funding.

“With limited capacity, tight cash and uncertain future funding, working up detailed cost saving plans is speculative and high risk. Plans developed today can only be implemented today.”

Was this Post Office saying to you that cash constraints limited how far the Post Office could cut its central costs, further than it was already doing without Government support?

Kevin Hollinrake: Yes, that’s right. That’s what they’re saying.

Mr Beer: Do you agree that Government constraints, in fact, significantly limited how far Post Office was able to go in cutting central costs?

Kevin Hollinrake: No, I don’t. And the conversation I think has been minuted elsewhere that my – whenever we discussed this, there are things like directly managed branches, for example, redundancies at the centre, all these things cost money. In the short-term there is a short-term impact when you make these decisions, I completely understand that.

My clear message to Nick Read and others was, “You make the business case for that investment that we would need to get from Treasury to fund those changes, and I’ll make the case for you to make those changes”. So there should have been nothing that would stop Nick Read or others making the business case to me and, if it made sense, I would have taken that to Treasury to get the money, if that made financial sense to do so.

Mr Beer: So what you were being told on this occasion evidence of or an example of the reluctance to reduce central costs that you’ve described?

Kevin Hollinrake: Well, it was one of the barriers that might be put in the way. The response I always get to that is “Fine, okay, we’ll come back with a business plan to do that”, I never got that business plan back. So there was never a clear argument made to me to say, “Okay, you put X amount of money in here, we can deliver that, we can bring that money back to you in savings”, or in terms of how that may work over a period of time. And so that was never the case that that was – that – it was never the case that that case was made.

I’ve heard this a lot from a business perspective, that you need people at the centre to do all the work at the outside and even though the outside is getting smaller and clearly, in many ways the Branch Network is getting smaller because some of those branches are not physical branches any more, they’re drop and collects and other things, and yet the centre remains the same size. To me, that’s wrong. That’s the wrong emphasis. The first thing you should look to do is reduce costs at the centre.

It’s not uncommon that the management team at the centre don’t want to do that because there are lots of people they work with on a daily basis. So it’s a difficult thing to make redundancies. I’ve been through it. It is heartbreaking. You are letting people go you’ve worked with for a long time but that doesn’t mean that’s not the right decision to make, and – but the difficulty here was it just did not move forward at the pace it should have done.

Mr Beer: You tell us in your witness statement that the solution is good leadership, nothing can replace that. It’s paragraph 48.

Kevin Hollinrake: Yes, I said that.

Mr Beer: Would you accept that, as the Government minister for this 18-month period, you had a role in the leadership of the Post Office?

Kevin Hollinrake: Yeah, of course. You could easily make the argument I failed, I could have pushed harder. I will hold my hands up to that effect. The thing is, you can’t do it for them, the Chief Exec is there for a reason, paid a lot of money to do that job, the Chair the same, and the other in the management team. You can see how many people in the organisation – there are 43 people, I think, in the organisation paid more than £150,000 a year, so you’d expect those people to be competent at delivering on priorities set by the shareholder.

Mr Beer: You say this of Mr Staunton, if we turn it up, please, it’s page 9 in your witness statement, at 34, which is at the bottom:

“Whilst I did not have regular contact with Henry Staunton, as Nick Read was my principle [sic] point of contact at [Post Office], my own view of Mr Staunton was that he was incapable of chairing this organisation. I first started to doubt his judgement only a few days into my ministerial role when he strongly advocated a very large percentage increase in the CEO’s remuneration. I was very aware from my meetings with senior officials at UKGI – Tom Cooper and then Laura Gratton – that they did not rate him very highly and felt he was a Chair from a previous generation.”

Given that you had doubts about Mr Staunton as soon as you took office and heard from others about his inadequacies, why did it take a considerable period of time after then to essentially move against him and ensure his removal?

Kevin Hollinrake: I don’t believe you should go round sacking people on a whim. I always try to work with people in my business life, and also in this life, in trying to give people the opportunity to get the job right. Now, that was an early reflection in terms of the remuneration point, I wasn’t – I was – it wasn’t handled directly by me; it was my Secretary of State, Grant Shapps, who handled the remuneration situation.

But, certainly, a chair coming on and arguing for, I think – I’ve never seen the letter but I think it was a doubling of Mr Read’s – Nick Read’s salary, I think we all were pretty shocked by that within the Department. So, at that point in time, red flags appeared and I think it wasn’t the only time he made that case.

But, you know, I say, he wasn’t my principal point of contact. As I went through this, and certainly, latterly – it was only latterly that we heard that Mr Staunton’s allegations – I think proven allegations – of misogyny and racism and bullying, these kind of things that he was – that he was alleged to have done, you know, over time it became the case that I think it was quite clear his position was untenable and that was a position that was held by UKGI and the civil servants responsible.

Mr Beer: Why did the senior officials at UKGI not rate Mr Staunton very highly, so far as you understood?

Kevin Hollinrake: Well, I just don’t think they felt he chaired the Board very well. I think, if you look at the report that was done separately, evidenced by Grant Thornton, it talks about some of the processes, meeting discipline, lack of structured management information, all of those things a chair is responsible for. So I guess that was a reflection of some of those failures at board level, and that’s very much the responsibility of the chair.

Mr Beer: In paragraph 36 of your witness statement, you say you’re aware of Mr Staunton’s allegations, in which he claimed that a senior departmental official had told him to go slow on compensation for subpostmasters and also about the reasons he was given for his departure and you say, “So far as I’m concerned this was nonsense”.

Can you explain why you think that what Mr Staunton has alleged was nonsense?

Kevin Hollinrake: Well, I just don’t imagine who he had a conversation with on that basis. And, if you look at Mr Staunton’s evidence to the Select Committee, after he was let go, he actually says that there was nothing wrong with the HSS scheme. I think that’s, again, evidenced within my witness statement, that he said it was – that bit of it was going fine. Now, I think anybody who has been through this process as part of the HSS would not say “Everything was fine with the HSS schemes”. We know there were problems with that.

In fact, he refers to that in one of his other emails, this claimant who only received £16,000. That’s one of the concerns he raised.

So I just do not think that Mr Staunton’s evidence holds water on so many different levels. I think that what he – what I think he says in the Select Committee, the problem was with the overturning of the convictions, which we did. We overturned the convictions of probably 700 people but that was something we were in the process of doing at that point in time, something that never happened in the history of Parliament.

So I just didn’t think that any of his allegations were ever evidenced or ever made sense.

Mr Beer: Thank you. Can I turn to Mr Read. You tell us in your witness statement that the Post Office was your number 1 priority as Minister, that you spent at least 25 per cent of your overall time, and at many periods a much higher percentage, focused on the Post Office, and that Mr Read was your principal point of contact at the Post Office.

You tell us in paragraph 44 if we move on, please:

“As time went on I formed the view that Nick Read was unable to lead the organisation as it needed to be led.”

You say:

“I repeatedly asked for basic information about management headcount … and a plan to reduce … senior management headcount and cost … It was like drawing teeth.”

What information are you referring to: basic information?

Kevin Hollinrake: Well, you saw, I think a bit earlier on the – well, it’s in evidence in the pack, if it wasn’t shown on the screen – the numbers of people earning more than £100,000. You’d expect, quite simply, the situation today – and this is what I set out at various meetings we had, how did you think those numbers – what the direction of travel with those numbers in a year’s time, in three years’ time, you’d expect that direction of travel to be significant in terms of reduction of cost.

It’s quite simple: you’d expect a Chief Exec to deliver that from one Board meeting to the next, so within a month, and that never happened.

Mr Beer: You tell us in paragraph 46 that you worked constructively with Mr Read, you would meet and talk. You thought it might give him a decent chance to see through the reform of Post Office’s culture:

“But my view was that the guy was being paid lots whilst not doing a very good job. On the other hand subpostmasters … were struggling to break even at best.”

What, in your view, were the key issues with Mr Read’s leadership at the Post Office?

Kevin Hollinrake: Well, I was always being told that – things within the Post Office nick Read was having problems doing, and motivating the team. I think I was told by Lorna at UKGI that the team needed motivating, we needed to bring somebody else in to motivate the team, the leadership team. Well, that’s the job of the CEO, quite clearly: reducing central costs; the disclosure of information to the Inquiry, and to make sure that information was disclosed to cases. I think there was a – at one point a server was discovered, or two servers were discovered that carried lots of information that hadn’t been disclosed to the Inquiry.

There were constantly a number of different issues that were being – that had been raised with me or had been raised in the media, that gave rise to concern that the organisation wasn’t being led well.

I think, again, this is set out by the Grant Thornton report in terms of the limited effectiveness of the Board, as it was stated in their report on 24 June: a lack of clarity, low levels of trust within the Board, no unifying purpose, a lack of succession planning, and we talked before about the processes of the meeting discipline and the people agenda.

So it was quite clear that the organisation was not being run as well as it should. As I said before, it was a difficult organisation to run, hugely in the public spotlight because of all the – because of all what’s happened to it. So I’m not saying this job was easy but I think there were some fundamental failings and shortcomings amongst the leadership that meant it hasn’t moved forward at the pace it should have done.

Mr Beer: Paragraph 45, which is above the one highlighted, you say:

“Nick Read’s pay as CEO was always a running theme.”

I’m not going to explore that with you but later in the paragraph, at the end, you say:

“It was generally thought that Nick Read was always on flight watch, even before this.”

First of all, can you explain so that I understand what you mean by he was always on “flight watch”.

Kevin Hollinrake: Yeah, I think Henry Staunton had referred to this, that – and so that my officials at times – that he may leave if he wasn’t given more pay. So not just that, that’s not the only thing that Nick might consider as a reason to leave. You know, he was massively under pressure and I think anybody running that organisation would have been. So I understand this was not an easy gig.

But I think it principally meant he’d leave if we weren’t careful. My response always to that was “Well, you know, if that’s the case, that’s the case, and we’ll find somebody else to lead the organisation if he decides to leave”.

Mr Beer: You tell us later on your witness statement that:

“My own view was that we should not be moved by the threats to leave. If he wanted to leave, he should leave.”

Is that right?

Kevin Hollinrake: That’s right.

Mr Beer: Can we look, please, at POL00448706. This is a letter from you of 21 April 2023, about Mr Read’s remuneration, to Mr Staunton, the then Chair of the Post Office. You say in the second paragraph:

“The Government continues to be grateful for Nick Read’s work in leading [Post Office] since his appointment as Chief Executive Officer in September 2019, and I recognise the significant commitment and effort he is putting in to tackle the multiple challenges that the company is facing.”

If you just scan the next two paragraphs, then the large paragraph at the foot of the page. So in this you refer to a miscommunication between Post Office and Government, in relation to a backdated pay increase for Mr Read.

You say that you were content to approve it and that you recognised the significant commitment and effort he’s putting in to tackle multiple challenges.

Can you help us, why did you approve the backdated pay increase, if Mr Read wasn’t, as you say now, doing a very good job?

Kevin Hollinrake: Well, this is fairly early on, don’t forget. I think I was moved from the (unclear) Government changes that I think came into effect in February of that year, so my responsibility for this at that point in time was greater. I think the previous Secretary of State held a lot of the responsibility with the Post Office prior to that. The new Secretary of State, Kemi Badenoch, had been very happy to leave me more to it since then.

As general principle, I’ll work with anybody until I’m ready to not work with that person. So it’s not the case of at this point in time we were trying to been about Nick Read’s departure. It was the fact that if he was ready to go, he should go. But we weren’t saying at this point in time, that it was something we were actively trying to do in trying to get rid of Nick Read.

So that being the case, we were trying to work with him on the basis of a constructive relationship and Nick Read, at this point, hadn’t had an increase in pay, as I think it says in the letter, since 2019. And there was some confusion about when this pay rise is made, and in the context of some much larger pay rises that Nick Read and the Chair was pushing for. It seemed a reasonable thing to pay this relatively modest increase in his pay at this point in time on the basis he hadn’t had a pay rise for four years.

Mr Beer: Mr Hollinrake, thank you very much. Those are the questions that I ask.

The Witness: Thank you.

Mr Beer: Thank you very much for answering them. There will be some questions from the Core Participant representatives taking us up until about 12.30.

I think we start with Ms Page. We’ve got questions from Mr Stein as well, and one from Ms Watt on behalf of the NFSP.

Questioned by Ms Page

Ms Page: Mr Hollinrake, hello.

I want to ask some questions about the £600,000 offer, which was made to those whose prosecutions were held to be an affront to the public conscience.

In January this year, Mr Recaldin from the Post Office’s compensation schemes, had an exchange with the Department for Business and Trade. He started it off with Carl Creswell and Rob Brightwell. They remained copied in throughout the exchange but the responses came from Beth White. If I can just summarise what he says in his emails, his argument was that the £600,000 was effectively a floor, in the sense that everyone in the Overturned Conviction Schemes would be entitled to it and, therefore, it should be paid to everyone straightaway.

His point was that those who were able to show that they were entitled to more could treat it as an interim payment and, for everybody else, it would just be a full and final payment but paid out straightaway?

His argument was also that paying it out to everyone straightaway in that fashion would get compensation flowing quickly because everyone is entitled to it, everyone might as well have it, those who still have more to claim thereafter can do so, in the time that that takes; do you see his point?

Kevin Hollinrake: I do.

Ms Page: Well, the response that he received was as follows – I think we will have time to bring it up, so I’ll ask for it to be brought up. It’s BEIS0000738. If we could start on page 2 – if we could zip down to page 2, thank you. This is Beth White and, as I’ve said, it’s copied to Carl Creswell and Rob Brightwell:

“Simon,

“You asked yesterday whether the aim was to get money as quickly to claimants, or to get F&F [evidently full and final shorthand] to claimants. Our focus is on achieving the latter. This proposal [ie his proposal] doesn’t encourage any pace or movement to full and final settlements does it? Ministers and politicians as shown in the Select Committee are keen to take steps to encourage victims getting their full and final settlement as quickly as possible.”

If we go up, he tries one more time, and then on page 1, Ms White comes back to him again. He says:

“So we hold back funds that we could pay to pressurise sorry ‘encourage’ F&F?”

Then her response above that. If I could pick it up from the second sentence:

“You asked yesterday whether you should focus on maximising payments or maximising settlements yesterday. We were very clear that we would like you to focus on ensuring that claimants are able to settle their claims as quickly as possible, as this is what ministers and other politicians are keen to achieve …”

Neither Mr Creswell nor Mr Brightwell stepped in to contradict that. Was the Department for Business and Trade right to say that ministers wanted to effect full and final settlements ahead of getting payments out of the door?

Kevin Hollinrake: Sorry, would you just ask that question again?

Ms Page: Well, these responses are saying very plainly, “We don’t want you to maximise getting payments out of the door, we want you to maximise getting full and final settlements. That’s what we’re aiming for”.

Kevin Hollinrake: No, we wanted both. Will you go back to the original point that Beth made, in that first sentence?

Ms Page: Yes, page 2.

Kevin Hollinrake: Yes, that’s right. You asked whether the aim was to get money out as quickly to claimants or to get full and final settlements to claimants. She says the focus is the latter; I say the focus is on both, because the way the fixed-sum award works, as you will, I’m sure, know is that some people, if they’ve gone through a full and final settlement would have got less than £600,000. Some would get more. So the point is, it shortens the queue for the others.

If you take half the people out of the queue – because one of the problems we heard is getting people heard that – their claim heard or getting the assessments made, forensic accountants, experts on mental health, physical health, all those things, but if you have fewer people having to go through that process, they can get to the claim point more quickly because people have come out of the process. It was never trying to say to somebody, “Your claim might be worth 1 million, we’re going to give you 600,000 to get you out of this”. It was a choice people could have and they could make the assessment based upon their personal circumstances. It was never trying to shortchange people.

Ms Page: Let’s have look at how it panned out as far as Mr Recaldin was concerned. In the Inquiry, on Monday, he said this:

“I was extremely uncomfortable with that, and I think I’m making my point, articulating what is the right thing to do because I didn’t want to delay. It seemed to me I was getting an implication to delay redress in order to hold out for full and final settlement. There’s an offer there. I want to pay the offer amount [ie the 600,000] then I don’t want to feel restricted about not paying that out because I’m any going to pay out if it’s a full and final settlement. But they made it clear, absolutely crystal clear, ‘No Simon, the objective is there, black and white, full and final settlement’.

“So I then had to issue instructions internally to say that those potential interim payments, the Government will not approve them now, and they didn’t approve them because they were holding out for full and final settlement.”

Kevin Hollinrake: He’s wrong and, if he’d come to me and expressed those views, I’d have explained to him why he was wrong – I’d have listened to him. We had a very similar conversation with the Horizon Compensation Advisory Board and Lord Arbuthnot made this argument too: he said “Why can’t we pay to everybody and then we let the people who want to claim more”. And you can make that argument and James did. But I say, I point to it, if you do that, you will not shorten the queue for people who think they’re claims are worth more than 600,000.

So I’ve pointed out before how we’ve seen this massive uplift in compensation over the last year, which has to be a good thing, a fourfold increase to now over £438 million, I think it is. A lot of that is through the fixed-sum awards.

I think of the latest scheme, of the GLO scheme, of the 306 claims submitted so far, 96 per cent have received offers, 295; 228 have agreed offers, I think 66 per cent of claims, through the fixed-sum awards. Again, in terms of the new Horizon Convictions Redress Scheme: 36 claims have been submitted; 36 offers have been made and paid.

So we’re seeing much more rapid compensation through this mechanism. That does not stop people going for the full assessment and, if you do if a complete a full claim, which you can do more quickly now because you can access the reports now for the forensic accountants and the other advisers you need, assuming you submitted that claim, then you get £450,000, as an interim payment. So –

Ms Page: Why not 600?

Kevin Hollinrake: Why not 600 – well, it was actually £450,000 as recommended by Sir Gary Hickinbottom, as the payment we should make. I can’t remember why we said not £600,000 at that time. I guess it’s because the claim might not stack up at 600,000.

Ms Page: Is it not because it’s putting pressure on people to accept the full sum of £600,000?

Kevin Hollinrake: That was never the intention.

Ms Page: It might not have been the intention; can you not see that’s the effect?

Kevin Hollinrake: Well, if you – I’m very happy to hear from you or anybody else in this room, or anybody else outside this room, about ways to accelerate compensation to individuals. We felt this was the best way. I’m very happy to have a conversation with you at a later stage why you think – how we think we might do this in a better way, and the Advisory Board would do that too, but we accepted virtually every recommendation made by the Advisory Board.

Our intention was always to try to expedite claims full and final settlement, or full assessment claim, or a fixed-sum award, whichever people would prefer.

Ms Page: This was the message that your Department sent to the Post Office:

“You asked yesterday whether the aim was to get money as quickly to claimants or to get F&F settlements to claimants. Our focus is on achieving the latter.”

Kevin Hollinrake: That’s not true, and I never had a conversation with Beth about that. If she’d have asked me, I’d have explained it to her. But definitely myself and Carl Creswell and Rob Brightwell, and the Horizon Compensation Advisory Board, were all completely on the same page as this, as this is the right way to do it.

Ms Page: One more issue, if I may, Mr Hollinrake. It’s about Herbert Smith Freehills. Now, in January this year, Post Office told you that HSF were to be phased out. In March this year, in another meeting, I can give the reference because this is not one that has come up before – we don’t need to look at it – BEIS0000754, you were told, again, that the Post Office were looking at alternative providers.

Back in July 2020, in the email that you wrote as chair of the APPG, which we’ve already looked at, you said on page 2:

“I’m also very concerned at the involvement of Herbert Smith Freehills, who I understand are advising on the design and implementation of the Historic Shortfall Scheme. The mere fact that HSF acted on behalf of the Post Office in the legal action with the responsibility to minimise losses should prohibit them from taking any role in a compensation scheme.”

Of course, you were also aware and you said in that email of their involvement in the compensation scheme for small businesses after the banking scandals and the question marks over their role in that case, as well.

It was an obvious problem, wasn’t it, having Herbert Smith Freehills involved in the compensation schemes?

Kevin Hollinrake: Yes.

Ms Page: Yet here they were, four years on, and you were still having warm words about them being phased out, alternative providers. Do you regret not doing more to make sure that they were properly exorcised from all the compensation schemes?

Kevin Hollinrake: Yes, absolutely. I mean, you know, I’m sure there are some very good people in Herbert Smith Freehills, I’m not criticising everybody who works in that organisation and I’m not saying they weren’t trying to do the right thing but perception is reality. I think there’s a certain part of – as has been said earlier within this Inquiry and by the Chair, that we are where we find ourselves, and what’s the best way from getting here to there?

So, yes, I mean just tearing out a big lump of the existing compensation scheme and the processes and the legal advice of that scheme maybe isn’t the quickest way to get compensation out the door, so it does take longer. Should it have happened in the first place? Absolutely no, it shouldn’t.

Ms Page: Thank you. Those are my questions.

Questioned by Mr Stein

Mr Stein: Mr Hollinrake, my name is Sam Stein. I represent a large group of subpostmasters, also people that worked in Post Office branches and we represent people that have been through the Court of Appeal and who have had their convictions overturned, and people that have had their convictions overturned via the legislation.

Now you’ve mentioned and discussed with the Chair, Sir Wyn, the issue of lawyers being involved and how far and to what extent that assists.

You’ve had experience yourself, am I right in thinking, with a constituent of yours, who came to you to discuss their issues – someone that has been affected by the Post Office scandal – and that they were discussing with you an NDA, non-disclosure agreement, and the potential effect of their signing of the Official Secrets Act; is that right?

Kevin Hollinrake: I don’t remember that particular case. I did have a constituent in Norton, near Helmsley, who passed away, but I’d never met that individual before, that was the case, who’d been – was part of the 555. I may be wrong but I don’t honestly think I did.

I think David Davies brought up the point in Parliament about the Official Secrets Act and the implications that had in terms of the ability for people to speak out.

Mr Stein: I’m grateful. That’s of assistance.

Subpostmasters signed the Official Secrets Act on taking up post. As far as I know, they still do so. I’ll stand corrected if I’m wrong. One of the issues that we have come across is that they therefore think that that may inhibit them actually engaging with the Post Office, even on such matters as compensation schemes. So that’s something that has been raised. We can’t go into Parliamentary discussions but that’s something you’re aware of that has been raised.

Kevin Hollinrake: Yes, I’m aware of that.

Mr Stein: We have experience as well that, since the legislation cleared those people who had not had their cases taken before the Court of Appeal before – because there’s a certain issue regarding people that have gone to the Court of Appeal in the past – but those people in the past whose convictions have been cleared. We’ve had people contacting my instructing solicitors Howe+Co saying, “We’ve got this letter about my conviction, is it real? Is this the Post Office trying to do something else?”

In other words, the sheer level of mistrust that is engendered by scandals such as the Post Office also means that people need support from lawyers; do you agree?

Kevin Hollinrake: Oh, yes. It wasn’t a personal criticism of you, Mr Stein, in terms of my earlier remarks on lawyers.

Mr Stein: Thank you very much. I’ll put that one on my website!

The other issue, of course, and perhaps slightly more seriously, is that people that have been through these scandals, the Post Office scandal, you mentioned the Blood Inquiry and what happened there, people are damaged, severely damaged. People are damaged in their physical health; people are damaged in their day-to-day ability to cope; people’s lives are blighted by lack of sleep, mental health problems, and the like, by the fact that they are forced into poverty, by the fact they are forced into trying to cater for the day to day.

Now, you’re someone with a long track record of supporting small businesses and you know that small businesses depend upon everybody working together to run that business within a family. Yes?

Kevin Hollinrake: That’s right.

Mr Stein: So again, the difficulty for those people left in these dreadful situations is that they do need support from lawyers that are prepared to engage at early stages with either Government or what’s happened within a scandal in order to provide access way to compensation, yes?

Kevin Hollinrake: Quite right, yes.

Mr Stein: Let’s go one step further. The route through which compensation is often argued tends to go this way before inquiries: what happens is, first of all, there is a need to try and see if the Inquiry will seize upon the question of compensation. All of that work is often done pro bono by lawyers, such as Howe+Co, myself and others, to try to, in fact, get the Government – if the Government is at the root of the scandal or at least part of it, as it is here – to engage even on the very basis of compensation.

All of that work has to be done on behalf of a large number of people. One or two people lawyers can cope with on a pro bono basis but you cannot represent people when you’re talking about tens and numbers of people that gets up into the larger numbers. There is simply not the capacity for lawyers to do so. So what has to happen is that those lawyers make, as part of their campaign, the attempt to try to get Government to engage on compensation issues.

Let me tell you about the next stage. The next stage is when there is a bare acceptance that there might be a need to have lawyers on behalf of claimants, there’s then a wrangle about how much they should be paid and about the hours they should spend on such matters. So the next stage is then fighting about how much it is that someone can have.

On the other side, what happens is that the Government, represented by lawyers, and indeed the Post Office, represented by many different firms of lawyers, is able to fund the payment for their hourly rates as they go forward.

So you can see there is an initial inequality that I’m afraid relates to the claimants’ side; do you agree with that?

Kevin Hollinrake: Yeah, I do, yeah.

Mr Stein: Now, you say in your statement this: your appointment – this is paragraph 8, sir – was:

“… manna from Heaven to me because it meant I could actually help to fix something important.”

You go on to say this:

“There wasn’t a day, night or weekend that went by when I wasn’t doing something on the Post Office redress schemes and transformation.”

So you understand how much hard work is involved in trying to get things moving in relation to these matters and you understand that that type of work, that day and night work on behalf of people trying to get things done and fixed is very difficult when, essentially, it is not funded at all; do you accept that?

Kevin Hollinrake: Totally.

Mr Stein: Now, you’ve mentioned the question of working with schemes that don’t perhaps, on the Government’s side, necessarily have the full engagement of an entire legal team, legions of lawyers working on their behalf. Could you consider this: in scandals such as the Post Office, whereby the Government is part of the problem, the Government owning the Post Office, the single shareholder, unless the Government approaches the question of compensation with a spirit of generosity, there is always going to be a need to have lawyers on both sides, probably, fighting it out –

Kevin Hollinrake: Yes.

Mr Stein: – because, without a genuine spirit of generosity in relation to the prospect of payment to those claimants, then essentially there will always be a fight and the claimants will have to be represented?

Kevin Hollinrake: Yes.

Mr Stein: Now, Sir Wyn is left with the task – which I know he welcomes and looks forward to – which is the drafting of his report. The drafting of this report will take place once all the lawyers stop talking, sometime through this year and into next year.

Now, one of the matters that he has to wrestle with are questions of recommendations. We’ve had by now two other reports that touch upon how do recommendations get implemented. The Grenfell reports and the Blood Inquiry report have both recommended that a committee of Parliament, probably a select committee, continues to oversee recommendations made by inquiries. I’m not asking you your opinion about that, what I am asking is this: do you accept that there is a need for a body, probably such a select committee, to look at the question of how compensation is dealt with, where scandals such as this take place, to learn lessons from what has happened in the past, from past inquiries, to consider how better the frameworks for compensation can be set up and managed in the future?

Kevin Hollinrake: Yes, I totally agree with that and we tried to kind of replicate that in a – perhaps a less formal way with the Horizon Compensation Advisory Board. I wasn’t criticising the lawyers, the actual lawyers on either side of the process, actually, and we never would have been here if it hadn’t been for lawyers, this would never would have come to light.

And I fully understand that this is all done, as you say, on a pro bono basis and, as I say in my statement, this came to light because of Paul Marshall, and it was supported by Flora and lots of other people who did a fantastic job on a pro bono basis to bring this to light. So, in many ways, you’re the heroes of the hour, in terms of making sure this came to light. I’m not trying to be nice to you because you’re asking me difficult questions.

But my point is not really that you shouldn’t have lawyers on either side; in fact, you should have somebody in the middle. That’s really my point. And I think this is what the National Audit Office have said. I don’t think a select committee can ever play that role. It might do some oversight or an advisory board can do some oversight but it needs somebody right in the middle who is not incentivised for this process to take longer because you and I would probably recognise that, if you work for a large legal company, you’ve got an amount of hours to bill on a monthly basis, maybe some of those processes take longer than they might.

So if somebody in the middle can say, “No, I’m not worried about this small element of this claim or that particular legal point you’re raising, I’m taking a view on this”, exactly in the way you phrase it, so that it is generous and seen to be generous to the claimants, who are involved in the scheme; I don’t think you can do this just by lawyers arguing on either side. That’s my point.

Mr Stein: Yes. What I’m terming the “spirit of generosity” really must come about because it is in situations, such as the Post Office scandal, whereby, at the heart of it, there is a recognition that harm has been caused. That’s the starting point for this Inquiry. So when we’re talking about the spirit of generosity, it is in fact the balance, it’s the repair or an attempt to repair the harm that has been caused by one actor, in this case the Government and its single shareholder status in relation to the Post Office.

So it’s about acceptance of “This is what we’ve done, we’re sorry about it being done. We’re not only sorry but we’re actually going to pay up and we’re going make sure we pay up as open handed as possible, bearing in mind public finances”.

That essentially is what should be embraced; do you agree?

Kevin Hollinrake: That’s exactly what should happen.

Mr Stein: Thank you, Mr Hollinrake.

The Witness: Thank you.

Sir Wyn Williams: Ms Watt.

Questioned by Ms Watt

Ms Watt: Thank you, sir. Good afternoon Mr Hollinrake, I’m over here.

Kevin Hollinrake: Good afternoon, hello.

Ms Watt: We have this difficulty every time I ask a question.

I’m going to ask a question on behalf of the NFSP and I’m going to call up a document and I’ll give the number for that but you might recall that on 8 January this year, just after the ITV drama Mr Bates vs The Post Office, the NFSP Chief Executive Calum Greenhow wrote to you and that letter is WITN00370106. I’d just like to call that up.

If we scroll to page 2, it’s about halfway down the page, the paragraph that begins:

“Postmasters are justly and rightly highlighting their concerns over the robustness of Horizon today, with the NFSP repeatedly calling for the system to be externally audited to ensure that nearly five years after Justice Fraser’s Horizon Issues ruling that the system is robust. Everyone, whether postmaster, assistant, or Crown Office employee of the Post Office, still use Horizon today and collectively we have to have confidence that the system works as it should and does not have bugs, defects or errors that secretly affect branch office accounts. Government as the solicitor shareholder should be ensuring on behalf of the general public that this is the case.”

We can take that document down.

The Inquiry has also heard – I’m not calling this up but I think you’ve referred to it, in any event – about the results of the YouGov survey for the Inquiry. That’s EXPG00000007.

That indicated that 49 per cent of respondents using Horizon at present were at net dissatisfied with Horizon compared to 25 per cent who were net satisfied. In addition, 57 per cent of respondents had experienced unexplained discrepancies within the last 12 months.

In addition to that, the Inquiry has heard evidence about the delays to the New Branch IT System, NBIT. It’s years behind now and millions over budget, and it’s possible, it sounds like, that the Post Office may have to look even beyond NBIT. But, certainly, it’s unlikely that Post Office is going to move away from Horizon any time soon.

So what I wanted to ask you was: would you agree that an external audit of the Horizon system is necessary, in other words something that’s completely independent, to report back to everyone with an interest, involving and including postmasters?

Kevin Hollinrake: That sounds very sensible to me.

Ms Watt: To your knowledge and following on from that letter of 8 January this year, and appreciating that your knowledge may extend only to 4 July this year, in light of this letter, has there been any proposal that you know of within Post Office for the current system to be externally audited?

Kevin Hollinrake: I don’t think that’s something that we ever directly discussed, although we did discuss some of the concerns about ongoing discrepancies. Postmasters are dealing with cash every day. There will be discrepancies, or there are bound to be some discrepancies. I think the problems with Horizon were not just IT problems. They were also the approach of the Post Office in terms of their willingness to prosecute and their willingness to think the worst of postmasters.

And it’s my understanding that Post Office take a completely different approach to this, instead of an adversarial approach to some money missing, it’s inquisitorial approach which is “Okay, you know, let’s certainly give the postmaster the benefit of the doubt”, which you would expect to happen in this kind of network. So I understand that to be the case.

It wasn’t the case that anybody came to me in my tenure as Post Office Minister to say, “This person has been taken to court” – in fact the Post Office no longer take forward private prosecutions – “but he’s been taken to court on the basis of evidence from Horizon or something that is” – so I never heard those concerns, either from the NFSP or from others in terms of this was a live problem ongoing about these issues about discrepancies being then taken forward in terms of something along the lines of what happened with Horizon previously.

Ms Watt: Although that point is being put in that letter, you would accept?

Kevin Hollinrake: Yeah, and I have no problem at all in an audit of the system and, clearly, I’m not the decision-making minister now, but that would seem sensible to me because the first time I’d seen the YouGov survey, in terms of the pack that I read over the last few days, but on that basis of lack of trust amongst the network for that system, I think that would seem eminently sensible.

Ms Watt: Okay just to tie that off: can I take it from what you’ve said, in your time, up to when you concluded your role, that the Government, as the sole shareholder, hadn’t asked the Post Office to conduct such an audit?

Kevin Hollinrake: I don’t remember us doing that, no. But we did ask questions about the approach that Post Office is now taking where there were discrepancies.

Ms Watt: Thank you.

Sir Wyn Williams: Can I detain you for five minutes? I think that’s it, Mr Hollinrake.

Kevin Hollinrake: Yes, certainly.

Questioned by Sir Wyn Williams

Sir Wyn Williams: It may be that I will need to form a judgment about the pros and cons of the fixed offers that operate, all right? I’m not sure if I will need to do that but, just in case I do, since you were obviously very influential in their introduction, I’d like to get your view as to what are the pros and cons.

Kevin Hollinrake: Yeah, of course.

Sir Wyn Williams: All right? I think I can identify as two pros, speeding up the payment of compensation – yes –

Kevin Hollinrake: Yeah.

Sir Wyn Williams: – and, in all probability, significant savings in legal and expert costs. Yes?

Kevin Hollinrake: Yes, that’s true.

Sir Wyn Williams: Can you identify other pros for me, before we get to the cons?

Kevin Hollinrake: Well, like I said earlier, some people who would have got less than the fixed-sum award will now get –

Sir Wyn Williams: Well, that might be thought to be a con. So let’s come back to that in a moment.

Kevin Hollinrake: No, well – okay.

Sir Wyn Williams: Can we try and do it in that way? So we’ve got speed of payment and, as I say, I can imagine that, if you got an actuary or an accountant on it, they might be able to justify value for money in terms of saving and legal costs, and all the rest of it. So those are what I see, at least, as the two major benefits of the scheme.

Kevin Hollinrake: Okay.

Sir Wyn Williams: Okay?

The cons actually relate to the recipient because it’s not a con for Wyn Williams if my true claim is worth £5,000 but I get £75,000. It’s a windfall, yes?

Kevin Hollinrake: Yes.

Sir Wyn Williams: But it’s a con also, isn’t it, for the public at large if that happens.

Kevin Hollinrake: I mean, the public at large pay more, you mean, in terms of the taxpayer, yes.

Sir Wyn Williams: And there’s a point about the fairness as between claimants.

Kevin Hollinrake: Oh, you could definitely argue that, that some people would feel, you know, that person is getting more than they should or the same as me, that person is only due £5,000 and I’ve got £75,000, and I was due that and they’ve got the same as me. You could argue that.

Sir Wyn Williams: Sure. Then the other part of that thinking process is that people who are, shall we say, claiming £85,000 or £90,000, might well feel pressured into taking £75,000 because they know that, if they don’t accept the £75,000 at a point in time, it’s lost forever, as the current scheme currently operates.

Kevin Hollinrake: You could argue that.

Sir Wyn Williams: Well, I think I would argue it, if I was a lawyer.

Kevin Hollinrake: Well, I’d argue differently. I would say there was, of course, a case for that, so people might decide to take a view. And can I say, nobody is saying those people shouldn’t that have legal advice or other advice before they decide to take that.

Sir Wyn Williams: I appreciate that but the point I’m going to come to is this: that in normal litigation, okay – set aside costs consequences – if you, the Government, make an offer in a case of £500,000, then, except in those very rare cases where you withdraw it completely, it’s always available to be taken. Right?

In this scheme, if you don’t accept the 75,000 or the 600,000 at a particular moment in time, that sum is lost forever and you’re on risk of getting less. Is that fair to describe as a downside?

Kevin Hollinrake: Well, that would depend on the rules of the scheme. I’m not saying –

Sir Wyn Williams: Sure. So that’s my last question to you.

Kevin Hollinrake: No, I don’t say for a minute that, if somebody decides to go down a full assessment route and then is only offered, let’s say, £60,000 rather than £75,000, would you give them the 75 anyway? I think you can argue that case.

Sir Wyn Williams: Well, I think I was being a bit more generous to the Post Office or the Government. I’m simply going to suggest that why is it you’ve got to make a once-and-for-all choice at a moment in time, as opposed to being able to say, “Well, look I’ve now gone down the full route but I realise that I’m on risk and so I want to draw back and take the 75,000”; what’s wrong with that?

Kevin Hollinrake: No, I don’t think potentially there is anything wrong with that and that could be a feature of a future scheme, and we had that discussion ourselves internally. I was going to say it was never the case – I don’t care how much this compensation scheme costs, of course we’ve got to have an eye on public money, but what is fair is fair. So if it costs – it’s now – the envelope, I think, is 1.8 billion. I don’t care if it costs 2 or 3 billion, I said this to James Arbuthnot and the officials. It was never a case of trying to save money; it was always a case of trying to expedite and accelerate the amount of compensation that goes to individuals. We would never try to shortchange anybody, and the scheme should never do that.

Sir Wyn Williams: Well, armed with your views, I’ll ask Mr Creswell and your successor minister in due course what they think of that.

All right. Jolly good, thank you.

Kevin Hollinrake: Thank you.

Sir Wyn Williams: Thanks very much, Mr Hollinrake, for your assistance to this Inquiry.

The Witness: My pleasure, thank you.

Mr Beer: Thank you, sir. Can we break until 12 – 1.30, please?

Sir Wyn Williams: I’ve heard of truncated lunch times, but even by your standards, Mr Beer, that was pushing it a bit! Yes.

Mr Beer: 1.30, yes.

(12.30 pm)

(The Short Adjournment)

(1.30 pm)

Sir Wyn Williams: Mr Blake.

Mr Blake: Thank you, sir. This afternoon we’re going to hear from Mr Creswell.

Carl Creswell

CARL PHILIP CRESWELL (affirmed).

Questioned by Mr Blake

Mr Blake: Thank you very much. Can you give your full, name please?

Carl Creswell: Carl Philip Creswell.

Mr Blake: Mr Creswell you should have in front of you a bundle containing two witness statements that you have produced. Can I ask you to turn to the first witness statement. That should be dated 2 October 2024; is that correct?

Carl Creswell: It is.

Mr Blake: Can I please ask you to turn to the final substantive page, that’s page 71. Can you confirm that is your signature?

Carl Creswell: It is indeed.

Mr Blake: Can you confirm that that statement is true to the best of your knowledge and belief?

Carl Creswell: I can confirm that.

Mr Blake: Thank you very much. That has a unique reference number of WITN11730100 and will be published on the Inquiry’s website.

You then also produced a second witness statement. You should have that in front of you, dated 22 October 2024.

Carl Creswell: I do.

Mr Blake: Can I ask you, please, to turn to the final page of that statement, that’s page 20. Can you confirm that that is your signature?

Carl Creswell: It is.

Mr Blake: Can you confirm that that statement is true to the best of your knowledge and belief?

Carl Creswell: It is.

Mr Blake: Thank you very much. That witness statement has a unique reference number of WITN11730200 and will likewise be published on the Inquiry’s website.

By way of background, you are a civil servant and have been since 1998; is that correct?

Carl Creswell: Correct.

Mr Blake: You have a background in a variety of roles, including Director of Better Regulation, and you were also involved in, for example, the establishment of the Competition and Markets Authority?

Carl Creswell: Correct.

Mr Blake: You are currently the Director of Post Office Policy and Business Engagement, and you’ve been in that role since April 2019?

Carl Creswell: That’s right.

Mr Blake: Thank you very much. Mr Creswell, I’m going to start by asking you just some general background about your Department and your role within it?

In your statement, you touch upon changes that took place just before you arrived, I think in 2018, to the Department’s role vis à vis the UKGI. Can you assist us with that briefly?

Carl Creswell: Of course. So you’re right, in 2018 there was a step to move some more Parliament-facing functions out of UKGI into the core department. So that started with dealing with correspondence and Parliamentary questions, and that sort of Parliament-facing activity. In about March 2019, I was asked by Alex Chisholm, who was then the Permanent Secretary, to move into a newly created director role within the core department, and the intention of that was to create a strong Policy Team to sit alongside the UKGI team that was being run by Tom Cooper.

And that was a broader function than just dealing with Parliamentary Questions and so on; it was much more about what are the Government’s policy responsibilities vis à vis the Post Office, and also issues of funding, and so on.

And UKGI’s role narrowed at that point to be more focused on the commercials around the business and appointments issues and remuneration, and so on.

Mr Blake: I think you’ve said in your witness statement it’s effectively setting apart the policy direction from the corporate governance and financial advice roles?

Carl Creswell: That’s correct, and there were various motivations for why that happened, which I could expand on if you’re interested?

Mr Blake: If you could briefly, yes.

Carl Creswell: Okay. So at the point at which I joined – and I talked to both Alex Chisholm and then Kelly Tolhurst – it was on the back of Mr Justice Fraser – and now allow Lord Justice Fraser – judgments, there were quite serious concerns at ministerial and Perm Sec level about whether we were providing adequate support to ministers on Post Office related issues. I think there was a bit of a loss of faith from Kelly Tolhurst in the support she was getting from UKGI, so my role was to carve out space for a new team, and I was given licence to bring in more capacity, in order for me to create that stronger team that would act as a bit of a counterpoint and balance with UKGI.

Mr Blake: Is it easy to separate out those two distinct roles?

Carl Creswell: I have found it to be so but, over that first year, towards December ‘19 we had to do some work through setting out, ultimately in a framework document, the relative responsibilities of the different parties, so the Department, then BEIS, and the Post Office and UKGI.

There is an interaction between some of our responsibilities but I think the delineation is fairly clear. So I know you will be hearing from Lorna Gratton. She and I worked very closely together but we don’t overlap in our areas of responsibility: she is clear that I am the one who is responsible for supporting business cases that go to Treasury about the money that the company needs; I am clear that she supports the recruitment of chairs and CEOs and others to the company.

Mr Blake: In terms of briefing a minister, do you take sole responsibility for that or do you both brief ministers?

Carl Creswell: It depends upon the occasion and the topic. So I do see Gareth Thomas, my current Minister, more frequently than Lorna, but Lorna does also come and join meetings on occasion with the minister, dependent on the topic. Later this week, the Secretary of State, Sir Jonathan Reynolds is seeing Nigel Railton for a catch-up conversation, and we will have both someone from the Policy Team and someone from the UKGI team there because there are interests on both sides of our fence that need to be represented.

Over time, in my tenure over those five years, I have taken on a much bigger role in relation to redress, than I had in the early parts of my tenure, where UKGI did a lot of the work on, for example, the Horizon Shortfall Scheme, and so my conversations with the minister about redress don’t tend to now have Lorna or UKGI present in the room.

Mr Blake: Thank you.

We’ll go into details in due course today about various schemes and various developments but, just looking at that separation broadly and looking at the evidence that you’ve heard throughout this Inquiry, do you think that current division is right; do you think it should change in some way?

Carl Creswell: I think it works well actually, thank you. I think we have got a good relationship and clear delineation of responsibilities and, obviously, I am not running the Post Office and I am not attending the Post Office Board and I’m, therefore, quite dependent upon UKGI’s expert analysis on commercial issues, but also on the flow of information from the Post Office through Lorna and her team to me and to my team because, if that relationship didn’t work, I would have a much less strong grip about the issues that were bothering the Post Office Board, for example.

So I say that by way of an example about what I think works well. I suppose, in theory, if the relationship between the two teams or myself and Lorna didn’t operate effectively, then that would be a challenge but I think that would probably be inherent in any structure, since I don’t think it would be sensible for me to sit on the Post Office Board. That is Lorna’s role as the shareholder representative.

Mr Blake: Thank you. In terms of the time that you spend on Post Office matters, you’ve said in your witness statement that you spend, I think, 80 per cent of your time on those matters and you have a few other matters outside of that role?

Carl Creswell: That is correct as of now. In the past, though, over that five-year period I had a much wider set of responsibilities, including during the Covid period of, you know, 2020 to 2021, working with the retail, hospitality and wedding sectors, and other responsibilities that I had. But over a period of time, particularly as our role in redress has grown, with DBT running two of the compensation schemes, I’ve narrowed my brief to focus primarily on the Post Office, and in the coming months, actually, I expect to lose my business engagement responsibility and focus inclusively on Post Office issues.

Mr Blake: You have explained that you have 70 staff within your team. Is that because you’re particularly busy dealing with redress matters and will that stay the case or will, in due course, that team wind down to some extent?

Carl Creswell: So if you take a sort of very long-term view, I would expect that team to reduce in size quite significantly, yes. But there is a lot of work still to do on redress, as no doubt we will go on to discuss.

And when I joined in April 2019, I had two members of staff, so we’re actually above 70 staff now, as a result of recent recruitments but since, probably, the end of last year, I’ve doubled the size of my team to respond to the need to legislate to overturn 900 convictions, to work with people affected by the Capture system, to set up and then run the Horizon Convictions Redress scheme as well as then the GLO scheme.

Mr Blake: Thank you. I’m going to take you through the early months of your time at the Department and focus on the Group Litigation. Can we bring up on screen UKGI00009785, please. This is an email chain from May 2019, so your first month, really, in the role. If we scroll over the page, please. If we could scroll down slightly. A note here is being drafted for the Minister, that’s Kelly Tolhurst at that stage. You are sent an email by Tom Aldred, who is part of the UKGI team?

Carl Creswell: That’s right.

Mr Blake: We see here I think it’s a combination of his draft and also your changes to the draft in a slightly lighter text.

Carl Creswell: Yes.

Mr Blake: I’ll just read to you a few passages from there. He says as follows:

“As discussed, Tom has shared a draft note to go to Kelly, which I’ve pasted below. What do you think? Jess has confirmed that she is happy to pass to Kelly as an email rather than a [submission].”

The draft is as follows:

“I gather you mentioned a couple of things to the team after the meeting with [the Post Office] yesterday. One being what happened at the Board in relation to the legal advice. The other that you’re concerned about the company’s approach to forecasting the potential size of liability.”

Under the heading of “Litigation”, it says:

“On the legal front, I think we’ve reached a sensible position with [the Post Office] changing its legal advisers and seeking a more conciliatory approach. Like you, I have been concerned about their approach. I wasn’t happy with the meeting the company that with you and Alex last October. That was followed up by a very critical ruling from the judge a few months later following which I spoke to Tim and Paula to say that I felt there needed to be a major change of approach. Our interaction to the Legal Team at [the Post Office] wasn’t limited to the litigation – in general we found [their] chief counsel wasn’t easy to deal with and I had passed feedback to the management and Tim on various occasions.

“Things [had come] to a head after the Common Issues Judgment when it became totally clear – I think to everyone on the Board – that there needed to be a change to personnel. This led to Jane MacLeod – Chief Counsel – leaving the company.”

In terms of the atmospherics when you first joined the team, what was the feeling towards the Post Office’s approach to the litigation?

Carl Creswell: So Kelly Tolhurst was very frustrated on a number of fronts, to be honest, when I first met her. She was very frustrated about what had happened. I think she felt embarrassed, as I think she probably said in her own evidence, about the outcome because I think Al Cameron and Tim Parker had been much more optimistic about the likely outcome for the trial and I think she felt – she was a relatively new minister and I think she felt on her watch something awful had happened and she hadn’t known that it was coming.

She felt that the company was failing to give her information that she needed to fulfil her responsibilities as the minister. She was also very angry with Tom Cooper, which is part of the backdrop to this email and my advice back to him. And so she had lost confidence, I think, in the whole arrangement and set-up.

So, within that, I think you’re right, she was unhappy about the approach being taken by the Post Office and the sort of “We are being sued”, rather than “justice for postmasters” approach that you could see evidenced, and I could see that myself from talking to the Post Office in my early days talking to people like Mr Cameron. And I think that left her feeling a bit vulnerable but also trying to but also trying to work out what happened next.

Mr Blake: If we scroll up, please, we can see your response. You say, at the bottom of page 1 into page 2:

“Thanks for sharing this with us. I’ve set out my thoughts below, in the spirit of tying to help you land your messages well!

“The tone feels a bit defensive to me, so I’ve suggested some changes below. Kelly seemed to partly be sparking because she thought that she was hearing something different yesterday (decision by consensus) compared with what she heard during the recent phone call (coup).”

Can you assist us with what is meant there?

Carl Creswell: Of course, yes, I also worked with Kelly on other areas of responsibility, such as on the retail sector, so by this point I’d already established what I thought was quite a good relationship with her. Tom Cooper was holding the role that Lorna Gratton is now holding obviously in UKGI –

Mr Blake: Sorry, please if I can pause you there. If it is possible to speak slightly slower, that would be very helpful?

Carl Creswell: Of course.

So what was happening here was I was trying to help Tom navigate through a tense situation with Kelly Tolhurst, where I’d been discussing with her for a period of time, and so too had the Permanent Secretary, what changes were needed to respond to the Minister’s concern about the Post Office. And this whole email chain occurred in a situation where Tom Aldred, who worked for Tom Cooper, and I had met Kelly, and Kelly had aired various concerns.

Tom Cooper then returned, I think, from leave or absence of some kind and wanted to go to Kelly, and have a conversation with her, because he had heard secondhand that Kelly was a bit frustrated. My judgment was that what the Minister wanted was for us to move beyond some of the previous conversations that we had dealt with without Tom Cooper there, and that it would actual undermine our ability to get more confidence back in to Tom Cooper if Tom wrote this sort of email that picked up things that actually Kelly had reached a conclusion on, and that it was better to sort of leave some of those issues as they were and then move forward.

Would you like me to say a little bit more about the “coup” question?

Mr Blake: Yes.

Carl Creswell: So I think this was a question of slightly different language between the two of them. Tom Cooper had said in a previous meeting to Kelly, “Look, it’s great the Post Office has decided to change its Legal Team following on from the judgment”, and in order to I think make it clear that he had played a significant role in that, at the Post Office Board, remembering that this was at a time when Kelly felt that the Government representative had not been sufficiently pressing the Post Office for a number of months, he described it as a coup, by which I think he meant this was a victory for common sense in terms of getting the Post Office to shift its approach.

She took that, I think, to be a sign that things were still not right in the Post Office Board and that there was a problem, and I think there was still a slight disagreement of language of talking across each other, which was slightly typical of their relationship at that point.

Mr Blake: I think you address that here. You say:

“I explained that you had meant “coup” in the sense of a victory for common sense, but she still seemed concerned. So my advice would be to emphasise that we have got to a better place, give the details of what happened and explain that you’re going to be keeping a close eye on them going forward.

I also think it would be best to leave out the reference to the leadership of the company. Strictly speaking she didn’t raise it with us in those terms last night – what she said was that she remains nervous about the Post Office approach. I also think Kelly is unlikely to want to discuss it at this stage. I feel that we have made some good progress this week”, et cetera.

What was the feeling towards the leadership of the company at that stage?

Carl Creswell: Well, I think Kelly was quite frustrated with both Tim Parker and Alisdair Cameron. I think she found their approach quite patronising and quite bullish, and I think she felt – and I must admit I had some sympathy for this – that they were slightly in denial about the magnitude of the judgment, and they still hoped at this point – remembering it was May 2019 – that the Post Office would be successful – I can’t remember whether the recusal attempt had been rejected by that point or not, it had started before I joined but concluded shortly thereafter. But the appeal requests were still in play and I think she felt that the leadership was still somewhat in denial. Yeah.

Mr Blake: Thank you. If we turn, please, to page 1, and the final email in that chain that I’ll read to you.

It’s the response from Tom Aldred and he says:

“For my own part, although she didn’t say explicitly that she had concerns with the leadership, I thought it came across pretty strongly in her remarks and in her questions about how we appoint the Board, and her desire to attend. While I’m tempted to hope it blows over, on balance I’m more attracted to addressing it head on. If she really doesn’t have confidence in the leadership this has the ability to make everything else a lot more difficult and we need to understand what’s driving her concern.”

So did the Minister at that stage have concerns about the leadership of the Post Office?

Carl Creswell: She did have some concerns and she did suggest that she would like to join the Post Office Board and actually sit on the Board, which is slightly unusual in corporate governance terms. I felt that Tom Cooper approaching her and saying “Let’s have a conversation about the leadership”, given that she had quite a level of concern about the support that she got from him, I felt wouldn’t be that helpful because I felt that Tom would probably go in and say how great, you know – that the least were fine and that we didn’t need to change the leadership.

So my judgement was the best thing to do to support the Minister at this point was to try to dissuade Tom from going in heavily on this issue, given that I actually felt that she had become more comfortable over the period up to May 2019, with where we had got to but still wanted us to do further work on things like information sharing from the Post Office.

Mr Blake: We’ll get onto couple of emails that say exactly that. If we could turn to UKGI00009832. We see on page 2, over to page 3, an update from Ben Foat, General Counsel at the Post Office, providing an update regarding the permission to appeal decision of the Common Issues Judgment, and also in relation to costs.

If we can see over the page, thank you very much, it says:

“We were in court today before the Managing Judge … to seek permission to appeal the Common Issues Judgment and determine how the costs of the Common Issues trial should be treated.”

If we scroll downs on “Permission to Appeal”, he says:

“As expected, the judge didn’t agree there was a real possibility of Post Office successfully appealing his Common Issues Judgment and did not give us permission to appeal …”

If we scroll down, he addresses costs. He says:

“The judge exercised his discretion and awarded the claimant their costs of the Common Issues trial, rather than reserving the question until later in the litigation when the full impacts of the Judgment would be determined.”

If we scroll up, please, to the bottom of page 1, we see an email from you to Tom Cooper. You say:

“Thanks very much for sharing this all so promptly.

“I suspect that this latest development will strengthen Ministers’ concerns about [the Post Office’s] approach to the litigation, so I’m trying to get around the scale of the implications.

“My reading of it is that the decision not to let them appeal and require going to the Court of Appeal is completely straightforward and anything different would have been a surprise … But the costs order is the worrying bit because it will increase the liability for [the Post Office] beyond any damages. Presumably that’s only for this first case but it might set a worrying precedent for the future.”

You say:

“Do you think there’s an argument that it should change our assessment of whether it’s desirable for [the Post Office] to consider settling at this stage?”

Just pausing there, what was the position within your Department about settling at that stage, and what was your own personal opinion?

Carl Creswell: Yes, so within the Department, Alex Chisholm and I were both clear that a settlement would be needed, and that was the right course of action. My own personal experience of working in another department, the Department for Education, was that a settlement, when there was a legal dispute against a public body, is a classic thing you would do when you have been found guilty. So we were all of that view and, to be fair, I think Tom Cooper was in that space, as well, I think the company was probably still hoping that it would, you know, that people would see right and that the judgment would be overturned in some ways. Ha! And my reading of the judgment was – and I wasn’t – and I’m not, a legal expert but that the costs order was an indication that the Post Office was very unlikely to be successful in that course of action in trying to get the judgment appealed.

So for me this was a flashing warning light on the dashboard saying, you know, there’s no way that their optimism is going to work out.

Mr Blake: You say there:

“Even though the new lawyers seemed to be saying that [the Post Office] has a case, it feels to me like this is going to run and run (and perhaps not end well, given what the judge has already said).”

If we scroll up we can see the response from Mr Cooper. He says:

“The judgment itself isn’t a surprise. If the Court of Appeal turns it down that would count as a real setback – probably the biggest so far by some margin.”

Were there real concerns at this stage about how the litigation was being run or continued to be run?

Carl Creswell: There were a lot of concerns about how it had been run up until this point. I think prior to my arrival in post, Sir Alex Chisholm had taken some advice or he’d read – he’d read some of the advice about the strategy that was being taken by the company in seeking to appeal. I think there was a concern about the recusal, you know, attempt but that was, again, prior to my time. I think people were – were dubious that the appeal would succeed, but felt that it was a judgement for the Post Office Board about whether to request that appeal.

My view was, “Look, this looks like you’re going to lose and you might as well accept that sooner rather than later and then get on to settling”, because part of my responsibility is to support the current company with all the current postmasters, as well as dealing with the historical liabilities and, to my mind, you needed to get quickly through that sort of settlement in order to help the company move forward.

I think Tom Cooper also would think that settlement would be a good idea but it was his team in UKGI that had been providing advice about the litigation, prior to my arrival, and even sort of from now onwards a lot of the submissions were written by UKGI but with input from me.

Mr Blake: Moving on shortly in time, can we please turn to BEIS0000830. We’re now on 4 June 2019. There’s a read-out from the industry meeting from the Post Office, if we turn to page 3 please. Under the heading “Litigation”, it says:

“[Secretary of State] (backed up by Kelly) [the Minister] has serious concerns about the direction of travel of the litigation and [the Post Office’s] handling of it. Referenced the first judgment and particularly the recusal application as evidence of poor judgement of the Board.”

Were the concerns as broad as the Board itself, rather than those two individuals who you have already mentioned?

Carl Creswell: I wasn’t present in this meeting, so I didn’t actually hear that conversation. But from – and I didn’t actually meet the Secretary of State at that point to discuss it – Greg Clark – but I was talking to Kelly and I think she was concerned about the Board more widely, and I think that’s why she wanted herself to join the Board.

Mr Blake: It continues:

“The Secretary of State gave a clearly steer that he wanted the Department to be on the side of the postmasters (he said it felt like there were shades of Windrush regarding the potential for a number of injustices to come out) and wants a strategy on how we can take this forward. He wants to resolve that is quickly given the damage it’s doing to the reputation of the Post Office.

“Kelly reiterated her concerns about the effectiveness of the Board, and about the information shared with her. She pointed to the fact that [Post Office] hadn’t done any detailed work on the potential liabilities from the case as a concern.”

If we scroll down we can see “Action the Secretary of State has asked for”:

“He has asked for a BEIS strategy to ensure the litigation is settled quickly and put [the Department] on the side of the postmasters; resolve the CEO pay issue so we can recruit the best candidate; and consider how we deal with the ongoing management of [the Post Office], given the concerns ministers have on Board performance.”

Can we please turn to UKGI00010212, please. There is there a meeting with Tim Parker and Alisdair Cameron on 24 June 2019. That’s a meeting with you; is that right?

Carl Creswell: I was present at the meeting but it was actually for Kelly Tolhurst to meet those individuals.

Mr Blake: Thank you. So where we see the internal attendees, that’s in addition to the Minister?

Carl Creswell: Correct, so where it says, for example, in the section below “In response to your letter of 29 May”, it wasn’t my letter; it was Kelly Tolhurst’s.

Mr Blake: Thank you. If we turn over, please, to page 2, it sets out the Post Office’s approach to ongoing litigation and it suggested, as follows:

“Please express your dissatisfaction with the current status of the litigation and invite the Post Office to present details of their strategy.”

The second bullet point:

“Please provide the below steers to the Post Office, reflecting the options agreed by the [Secretary of State]. [The Department’s] preference is for [the Post Office] to pursue early settlement of the case.

“[The Post Office] should carry out a project on how to structure and operate a settlement including a fund which would subsequently assess claims and award compensation according to pre-agreed criteria.”

Carl Creswell: Mm.

Mr Blake: Is this where we see the beginnings of what became the redress schemes or is this simply focused on the settlement of the litigation vis à vis the litigants?

Carl Creswell: So it was a major step towards the settlement in December ‘19 with the GLO group. Within this comment is the hint at the sort of redress schemes that we have now set up and I must admit I had forgotten, until I saw this paper, that that idea had been floated at the time. I think the Post Office’s lawyers had been looking at various options. My memory is that the idea of a fund that would award out compensation was rejected, following conversations with the claimants in the GLO group, on the grounds that, actually, what was needed was early settlement and money to go to the GLO claimants quickly, to be distributed by Freeths or whoever through a formula, rather than the start of a claim-based system, which is more like we have now.

There’s a missing piece of the jigsaw between the document you’ve just shown me and the previous one, which was the actual BEIS advice, which was requested by the Secretary of State that responded to some of Kelly Tolhurst’s and the Secretary of State’s concerns, including a long list of options, the most radical of which would have been to have replaced the leadership. But the Secretary of State decided not to do that.

Mr Blake: Thank you. So one option up in the air at that stage was to replace the leadership. This is a rung or two down from that, is it?

Carl Creswell: In timing terms, yes, that’s correct. I think I heard Kelly Tolhurst talk about this when she gave evidence here before as well. I think the view was taken with the Secretary of State that a new CEO was needed, both a permanent and a new CEO, ie probably not Al Cameron, and that, in that context – and that obviously led to the appointment of Nick Read later that year – replacing the Chair at that point probably wouldn’t be a good idea because you would create more instability at a critical time when the company needed to move on.

Mr Blake: Thank you. If we could turn to BEIS0001130. There’s another meeting with Tim Parker in October, 31 October 2019. You attended that meeting, you’re listed there as an attendee; is that correct?

Carl Creswell: I’m definitely listed there and I’m sure I did attend, yes. Yes, this was for Alex Chisholm –

Mr Blake: Thank you.

Carl Creswell: – with Tim and Tom and me.

Mr Blake: If we scroll down, there are issues listed there:

“Litigation: judgment in the Horizon trial is expected in early November, following the discovery that [the Post Office] had failed to disclose information (Known Error Logs) that may provide a fuller account of bugs in the Horizon system. Whilst this appears to be Fujitsu’s responsibility Justice Fraser is likely to be highly critical of [the Post Office]. A decision on [the Post Office’s] application to appeal the Common Issues trial is expected on 12 November.”

If we go over the page, please, there are issues to be raised with Tim Parker. The first of those is culture:

“POL’s culture needs to change and as the shareholder we expect the Chair and Board to be leading this.

“The leadership’s decision on the litigation (such as the failed, expensive recusal attempt) and the proposal to pay bonuses in full appeared tone deaf and complacent.”

By this stage, it seems very strong criticisms of the way that the Post Office is being run; is that fair?

Carl Creswell: Yes, the bonuses incident over the summer, which, you know, again sits between some of the earlier documents and this one, caused great frustration for Alex Chisholm and others in the Department because it was a classic example of the company failing to acknowledge that they had harmed so many postmasters through, you know, the horrific scandal, and were still trying to pay themselves large bonuses. And it took Alex quite a lot of effort to persuade them not to pay those bonuses in full.

Mr Blake: Thank you. One final document on the litigation, that’s UKGI00047866. We’re now in April 2020, so we’re now a year into your role in the Department. I’d like to start on page 3, please, it’s an email from Minister Scully’s private email to you and others:

“Please find attached a letter from Tim Parker to the Minister regarding the Post Office’s financial exposure resulting from the number of cases potentially being referred from the CCRC to the appeal courts.”

If we scroll up, we can see a response from you to the Permanent Secretary and others. You say:

“You should see the attached letter, which provides more detail on the additional past prosecutions the Post Office has identified. The letter includes an eye watering maximum liability that they [may] be exposed to.

“Minister Scully is meeting [the Post Office’s] leadership for the quarterly shareholder meeting tomorrow afternoon and we are briefing him to express disappointment and put pressure on [the Post Office] to ask for more information ahead of our putting advice to ministers.”

Is the picture getting somewhat worse by this stage?

Carl Creswell: Yes, and I think Sarah Munby touched on some of this in her evidence yesterday. I think we knew after the Lord Justice Fraser judgment that the Post Office had acted awfully. We didn’t really realise probably as much as probably we should have done, until, you know, the Hamilton judgment, quite how badly the company had behaved. And even prior to that judgment, the advice we were getting was that they might not lose on both limbs, you know, of the case, and so the sort of – there was still some uncertainty about what the outcome would be.

And then we have a letter from Tim Parker saying that the liability that they would be bringing to Government that needed to be funded was of an order of magnitude of around 700 million, in a world in which their revenue is about 800 to 850 million. So it was, you know, it was eye watering because of the sheer scale of it. But, no, you’re absolutely right. And the disappointment from ministers probably reflected that sense of, “Oh goodness, it’s even worse”. And this sort of direction of travel continued over a period of time as more stones were lifted up and more problems of past behaviour were discovered, with the help, to be honest, of Nick Read as the new CEO, helping turn over some of those stones.

Mr Blake: If we turn, please, to page 1, we have another email from you. If we scroll down, please. You say as follows, you say:

“The Minister expressed his disappointment as you can imagine and emphasised how important it is for the Post Office to share information with us.”

Was there a concern about a lack of transparency from the Post Office?

Carl Creswell: I think the Minister was concerned that the company could perhaps have shared more information about this in advance, probably because the outcome that was being pointed at was so negative. I think he felt they should have said in advance that this was the likely outcome. I am not sure how completely fair that was because the Post Office was saying it is possible that we might not be successful, although, as I said earlier, they did not say, “We’re likely to lose on both limbs and, you know, be found guilty of malicious prosecution”, or whatever. So I think I could have just said yes.

Mr Blake: Just looking at of the picture, then, as it presented itself to you within or by a year into the role, it appears that there were real concerns about the leadership of the company, including as wide as the Board; is that right?

Carl Creswell: Actually, by this point, the concerns from ministers weren’t quite the same. So, yes, Minister Scully that the Post Office hadn’t shared more information about the likely liability in relation to this court judgment but Nick Read had joined at the end, about November, from memory, 2019, and there had been some turnover in the Board as well, and Kelly Tolhurst had moved on and Paul Scully was now meeting regularly with Nick Read.

So that earlier level of heightened concern from Kelly Tolhurst had been sort of passed by, and I think the Minister was less – this Minister was less of the view that the whole Board needed to be replaced. And of course, the settlement had been reached in December ‘19, albeit that it then turned out in 2020 to have been much smaller from the postmasters’ perspective than we had frankly realised.

Mr Blake: Irrespective of that, was the general feeling that this was a company that had handled the litigation badly?

Carl Creswell: Yes.

Mr Blake: It was a company of which your Department had concerns about the culture within the company as well. We saw that reference in that meeting with Tim Parker. Were those cultural concerns present as at April 2020?

Carl Creswell: They were, although what I would say was that when Alex Chisholm sat down with Nick Read for introductory conversations, that was the central topic of conversation between them. So Alex was effectively saying to Nick, “One of your biggest challenges is to grip the culture”, and they talked about different ways of assessing what the culture was like, getting some externals in to come and give a view to enable Nick to put in place changes, including heightened engagement with postmasters, that would help respond to some of the cultural challenges that were there.

So I suppose what I’m trying to say is that it wasn’t a sense of resignation about, “Oh, the culture is awful, it’s never going to change”; it was high on the agenda for issues to be addressed.

Mr Blake: Would you say that there were serious issues with the company to be overcome by that stage –

Carl Creswell: Oh, yes.

Mr Blake: – or to be addressed?

Carl Creswell: Oh, yes. No, I mean, throughout most of my time working with the Post Office there have been quite serious issues.

Mr Blake: In those circumstances, the question might be asked, why was it felt appropriate for the Post Office to be charged with some of the redress and compensation schemes?

Carl Creswell: Yes, of course. It’s a very good question. The only redress scheme in play at this point was the Horizon Shortfall Scheme, then called the Historical Shortfall Scheme. That was, as you probably well know, set out delineated, drawn in the settlement deed for the GLO order in December ‘19. And up until – well, I had not had any concerns expressed to me at that point about the Post Office running that scheme. Indeed, the settlement deed said, “This is a scheme that should be run by the Post Office”, and it even drew out the stages that should happen for the dispute resolution appeals process.

So maybe the question of ownership, as the NAO goes on more recently to describe, should have come up at that point but it didn’t at that point and, indeed, I suppose we regarded it as a relatively small scale consequence of the December ‘19 settlement. We were clearly wrong on that.

Mr Blake: Who do you consider to be responsible for that underestimation as to how significant a scheme it might have to be?

Carl Creswell: I suspect there were stages throughout the different players involved. So I think – I suspect that the GLO group and Freeths didn’t realise quite how many others there were out there because, otherwise, they would have probably joined the 555 in recommending that there should be this consequential shortfall scheme. But the Post Office should have had a better sense or should have analysed more firmly, you know, the indicative numbers of a couple of hundred people who might be involved in the scheme. UKGI, as I say, were working closely with the company on HSS for quite a lot of that time, 2020, 2021, and we too in the Department probably should have found a better way to analyse it.

Mr Blake: I think the initial estimate was 200 applications; is that correct?

Carl Creswell: I think that’s right.

Mr Blake: There were, you say in your statement, 12 times that that applied to the Horizon Shortfall Scheme before November 2020 and, obviously, much more since then as well.

Carl Creswell: That’s right and probably a lot more to come as the Post Office is now writing out to a much wider cohort than the 4,000 plus that are already in the scheme.

Mr Blake: Who made that original 200-applicant estimate?

Carl Creswell: I think it came from the Post Office and Herbert Smith, based upon the conversations with Freeths and the GLO group. I don’t know for sure whether Freeths gave that number or whether it was just a Post Office estimate. When I had to give some advice to Alex Chisholm about what was happening in the mediation, he asked me to spell out, as Accounting Officers do, what other sort of consequences would come about as a result of agreeing to the mediated settlement, and one of the issues that I highlighted there was what I was being told about the need to run a Horizon Shortfall Scheme, and we took that number from what we were given by the Post Office, at a time of fast-paced mediation, I would say.

Mr Blake: Were your Department doing any work in trying to estimate those numbers?

Carl Creswell: No. No, as I say, at that point I still had a relatively small team and was taking a lot of advice from UKGI. I have reflected a little bit on this because it’s obviously quite a big point of criticism about our failure to understand how big the HSS was and I think that’s that would probably be fair.

In my heart of hearts, I think I probably didn’t particularly think it mattered how big the scheme was in relation to settling in December ‘19 because I did not think it was material to whether the Permanent Secretary should accept what was on the table from the GLO group, and I regarded it as our best estimate at that point to answer the question from the Accounting Officer, and that then the scheme would run and, whereas with the 555 group you have a defined cohort, there must always be a risk when you run an open scheme that more people apply than you realised.

Is that a failing? Well, if people deserve the redress and they apply, no, as long as you can respond to them quickly enough, which is a separate question.

Mr Blake: We know that UKGI had a Non-Executive Director on the Board for many years prior to that. Did they give you any estimates about the numbers of likely applicants?

Carl Creswell: Well, that was the UKGI team to which I was referring. So Tom Cooper was the shareholder representative and had been for about a year, I think. And it was either he or his team that provided the figures. I think it was his team that then wrote the advice to ministers that said “This is what the settlement is, and this is the number that we’ve been given of the 200 potential claimants to the HSS”.

Mr Blake: So the numbers came to you from UKGI, but you think that’s likely to have originated from the Post Office itself?

Carl Creswell: Yes, I don’t see how UKGI could have made an estimate without information from the company.

Mr Blake: We know that Herbert Smith Freehills were involved in that original process in building up the scheme. You’ve probably heard some criticisms of that. What is your personal view about their involvement?

Carl Creswell: You mean, rather than my view about the scheme that they designed?

Mr Blake: Yes.

Carl Creswell: So I have heard quite a lot of criticism of HSF, from the perspective of people saying HSF were guilty and culpable for the way in which the Post Office ran its litigation. I have found that harder to accept because I know that they were brought in to play a role for the Post Office around April time, after the judgment had actually come out. So I think it is important to be clear when their role started. I think there has been quite a lot of criticism about their sort of high-end City law firm, slightly assertive approach, that sometimes rings true to me, from having seen how some of those schemes are rolled out. And I have had quite a bit of personal sympathy for the view that Kevin Hollinrake expressed earlier about how the Post Office needs to change its law firm, you know, supporting it in a number of those schemes, for the reason that we had feedback in Parliament and elsewhere about how Herbert Smith were handling some of the dispute resolution meetings with claimants.

I remember Alistair Carmichael in a Westminster Hall debate talked about a meeting that he had heard about where a victim had met with Herbert Smith and Herbert Smith had not been particularly friendly with them, and I know the Post Office took steps to put Post Office staff into those meetings because they felt that that would respond.

So that’s not to say – you know, as Kevin Hollindrake said earlier, there are good people in Herbert Smith who have worked very hard on the schemes but I think they are both, from a reputational perspective, not well liked by the postmaster community and, from a costs perspective, they have, I think, extracted quite a lot of money from the Post Office, who haven’t managed them as effectively as Sarah Munby and I would have liked from a costs perspective.

Mr Blake: Lorna Gratton’s evidence, written evidence – we’ll be hearing her oral evidence tomorrow – is to the effect that the Post Office’s external lawyers have taken a legalistic approach, and she’s also referred to a cultural clash with the approach of commercial litigators; do you have a view on that?

Carl Creswell: I mean, some of that is what I suppose I was hinting at. When we were working with the company on the OC scheme, which we were more involved in from the Department than we were in those early days of the HSS, the initial approach that was taken, which was very, I suppose you would say, mediation based, seemed to be being really slow. And I’ve apologised to Jo Hamilton for how long it took for her claim to work its way through those early stages and it seemed to me that it was quite confrontational and it didn’t feel to me that it would deliver the outcomes that the ministers wanted.

And the steps that the company then took to bring in more of the remediation scheme, which a drive led more by some of the people that Nick Read brought in, rather than by Herbert Smith – you know, as you probably heard from Mr Recaldin a group of people came in – that seemed to me to be an improvement on the kind of approach that would be more classically the commercial litigation approach that you’ve mentioned from Lorna Gratton’s evidence.

Mr Blake: Thank you. I’d like to address your Department’s approach to the initial Historic Shortfall Scheme. Could we turn to UKGI00012774, and this is a meeting of 22 October 2020 with Minister Scully.

I’d like to start on page 4, please. Sorry, if we have a look at page 1 because you can see there it’s a read out of Minister Scully’s call with Nick Read. If we scroll down, we can see you’re listed as a Government attendee.

Carl Creswell: Yes.

Mr Blake: If we could keep on scrolling down, there are various matters that are raised, not all relating to the Horizon system but all relating to the litigation. If we go over, please, to page 4 I’m just going to read to you three bullet points from there.

Thank you very much. We’ll start on that second bullet point:

“Minister asked for a quick update on the Criminal Cases Review Commission. Declan said Magistrate cases are going to Crown Court of Appeal. Decision is expected shortly. The Post Office will immediately engage with six cases if they are overturned and will try to head off malicious prosecution. Declan said the Post Office will look at how well they can mediate those six cases as a test case of how to handle the other cases. Tom Cooper said he agreed with the sentiment but there’s a lot to discuss in the approach around managing these cases, which will be discussed at the Board meeting later. Tom said that it’s not just a Board issue as it involves approvals and funding. [The Post Office] have been given interim payments of up to £10,000 on the schemes. Increasing amount of noise in the system, eg calls and emails.

“Tom Cooper said that the Post Office want to unblock de minimis payments on the HSS scheme.”

Just pausing there, because we’ll get to another email that talks about the de minimis payments, can you just briefly explain what the de minimis payments were?

Carl Creswell: This is quite similar to the conversation that was being had with Kevin Hollinrake earlier around the scrutiny threshold for the GLO, and so the approach that was being taken was to say that, if the claims were quite small, they should be paid with minimal levels of scrutiny. That would enable the company to have more resource to focus on the more complex claims and ensure that money could go out the door quickly to those people that were bringing the claims.

The point, I suppose, that Tom is making is that you can’t just deal with one part of the elephant, you need to be clear about the overall liability for the scheme and the overall approach, rather than just saying, yes, it’s fine we’ll deal with that. You have to, in Government approval terms, outline the overall shape, when you’re trying to get approval for it.

Mr Blake: So is it fair to summarise that as the Post Office wanted those small payments to happen quickly and your Department or UKGI, Government as a whole, wanted to look at the overarching scheme first, and establish the entire thing before speeding up those small payments?

Carl Creswell: Yes, I think that’s fair to say, yes.

Mr Blake: “The other issue is wrongful trading for the directors, as if the Post Office start making payments under the scheme but don’t have the funding to complete it, then that could put directors in a tricky situation.”

We’ve heard quite a lot about wrongful trading, we heard about it from Simon Recaldin the other day. Is it a real difficulty with the Post Office because, as you’ve said, the numbers were always going to hugely outweigh, in fact, the amount of money that the Post Office can make?

Carl Creswell: So at the beginning, actually, the view was that the Post Office could afford the potential scale of liability in relation to the HSS. So our role as a Department was more as it had been for the December ‘19 settlement, to approve it from the perspective of, you know, the overall Principal Accounting Officer working with Treasury because it was a novel contentious and repercussive type payment. But, as time went on and as the cost well exceeded what the Post Office could afford, then it became a broader and harder question for Government, as Sarah Munby talked about in some depth yesterday, because we then would need to go through the approval mechanisms which I recognise can sometimes take a long time, within Government.

Mr Blake: It may be an issue that we return to at the end of your evidence. We have heard quite a lot of evidence throughout this phase of CEOs, chairs coming in to the company, being told that they need to make the company financially viable, and then constantly having to go to the Post Office with a begging bowl – to the Government –

Carl Creswell: The Government.

Mr Blake: – with a begging bowl for money. Do you think that the setup of the relationship between Government and Post Office inevitably creates that kind of a situation that’s being discussed here?

Carl Creswell: It’s hard to think of an alternative that would avoid this situation. If you were to create an agency that was a real arm’s-length body, an executive agency, and make that the Post Office, you would have quite a different setup and then the liabilities would be ones for the core department. But what you would lose, I think, is that slightly more independent commercial flexibility where, you know, you would have the Post Office being run as a big retailer.

The wrongful trading risk is one that has been mentioned to us quite a lot over the five years during which I have worked with the company. The finance people in my department tend to take the view that it is overplayed by the Post Office leadership, as a way to get quite large commitments from the Government to underwrite whatever they want to do. And so I think, on the Government side, it’s fair to say, as you heard from Kevin Hollinrake earlier, quite often we have felt that the Post Office has opportunities within how it runs the company to make some savings that would allow them to absorb some of the costs.

That said, if you take the long view over number of years, and this for the start of it, it became very clear that the company could not afford what it needed to do in order to get redress to the people who had been victims of their activity. So it – this may on reflection have been slightly more debatable but actually it was pretty clear quite quickly that they couldn’t afford all of this and, as I said at the beginning, I’m not sure that an alternative governance innocence arrangement would have removed that wrongful trading risk in any sort of clear way.

You would have just taken it up to the departmental level where the Department would then say, “We have now got this liability on the core departments, because it’s an executive agency and Treasury you need to fund it because otherwise we will have insufficient funds”.

Mr Blake: Thank you. It continues:

“Minister said if can get the information on the de minimis case as soon as possible so he can look at that.

“Carl said that BEIS will work with the Post Office and UKGI to facilitate as quickly as possible, but that control considerations and financial considerations with BEIS finance and His Majesty’s Treasury need to be worked through. As the Post Office are now looking at funds in the region of £100m to £200m, that is very different to the original advice that went to Ministers and the Perm Sec previously. Declan said that virtually all 2,000 have gone thorough the eligibility test. Declan said that funding element is vital to progressing to the next stage.”

Can you assist us with the control considerations and financial considerations?

Carl Creswell: Of course. Well, as I was mentioning earlier, this question of whether something is novel, contentious or repercussive, is quite important when it comes to deciding whether a public corporation like the Post Office can proceed with something that the Board would like to do. So there is the accountable officer, in this case it was Nick Read, and then there is the Principal Accounting Officer, Alex Chisholm, I believe, at that point. I don’t think the Permanent Secretary could just decide to approve this and let those payments happen, because Treasury needs to be consulted because it is a novel contentious or repercussive proposal. So that’s partly what I mean by the control considerations.

The financial considerations is about where is of the money going to come from and I think Sarah Munby talked at some length yesterday about how, if I remember correctly, this took about four months end to end, and there are steps that we have to go through both within the Department and then with Treasury to convince them that all of this can be funded, and this was the first of a series of redress schemes where we found ourselves having to go to Treasury to ask for approvals, and I think it’s fair to say that the confidence in the Post Office early on was quite low from the Treasury side, and over a period of time it has become easier and better.

But I remember one of the business cases, I think it was for this one, we had 29 questions back, even prior to the actual approval meeting, where we went and had proper scrutiny from Treasury.

So there were some sort of forests to pick our way through before we could get the approval.

Mr Blake: So rightly or wrongly, would it be fair to say that, at this stage, the Post Office wanted things to go faster than, in fact, the Government could implement?

Carl Creswell: Yes.

Mr Blake: Thank you. If we please turn to UKGI00013196.

Sir Wyn Williams: Before Mr Blake takes you to that document, just so I’ve got this clear in my head, the settlement is December 2019, and I think I must be right in inferring that the idea of a scheme for people other than the group litigants themselves must have come from the group litigants?

Carl Creswell: Yes, absolutely. I think –

Sir Wyn Williams: So it follows, does it not, that Post Office agreed to that without, in truth, having any idea how many people might be involved?

Carl Creswell: Yes, I think that’s right.

Sir Wyn Williams: Right. Having done that, the scheme starts and still nobody has any idea how many are going to apply?

Carl Creswell: Over a period of time, obviously, it was adjusted, but I think that’s right –

Sir Wyn Williams: Sure, but the scheme starts in May 2020 from memory.

Carl Creswell: Mm-hm.

Sir Wyn Williams: Still nobody knows what’s going to happen. There’s a slow start and then a rush, and nobody has got the money to pay for it.

Carl Creswell: That’s right.

Sir Wyn Williams: That’s it in a nutshell, isn’t it?

Carl Creswell: Yes, the original estimate at that May point was 33 million, which could have been afforded by the Post Office, and then when the rush came it became clear it couldn’t be afforded.

Sir Wyn Williams: Yeah, okay.

Carry on, Mr Blake.

Mr Blake: Thank you if we bring up on screen UKGI00013196. This is your Department’s Historic Shortfall Scheme Steering Committee minutes of 27 January 2021.

You are the Chair or were the Chair of that committee; are you still the Chair of that committee?

Carl Creswell: Well, I am the Chair now. I was actually standing in for Mike Jørgen(?), who is mentioned later on because he was originally the senior responsible owner for the HSS, but I then actually took on that role. So I became, you know, the Chair. I was covering this role for this meeting but shortly, thereafter, I became the permanent Chair and I’ve chaired the meeting ever since.

Mr Blake: Thank you. If we scroll down and over the page, please, there’s a section on de minimis payments. It says there, “TC”, Mr Cooper, I think?

Carl Creswell: Mm-hm.

Mr Blake: “… presented the de minimis paper. He noted that the Post Office wanted to make these payments in November but the Department for Business did not provide its approval due to issues around funding and precedent setting elements. Both of these aspects have now progressed.”

I think we dealt with some of those this morning but can you just briefly assist us with what those issues of funding and precedent setting elements were?

Carl Creswell: I can’t remember the specific details about how we resolved them but I think the question was what will it take us as a Department, as raised with Minister Scully, to say, “Yes, the Post Office can go ahead with the de minimis payments because it would be a quick way to get money to the claimants and close down those claims”. The precedent setting question is what I meant around the novel, contentious and repercussive, ie if you agree – as I said about one part of the elephant, if you agree to that is particular intervention, does it mean that you have also taken decisions about the rest of the scheme at the same point? And I think that we and our Finance Team and Treasury just wanted confidence about what we were signing up to, in effect.

Mr Blake: It says:

“For fully quantified claims, the issues were in relation to the interests and legal costs. The Post Office wanted to pay compound interest and contribute to legal costs. Both set precedents. UKGI challenged compound versus simple interest and the advice from Herbert Smith Freehills is very clear. On legal costs the Post Office is providing £400 for de minimis claimants towards legal fees and £1,200 for claimants with bigger claims. UKGI has also seen other advice from Herbert Smith, UKGI is recommending that fully quantified de minimis claims be paid as soon as funding is confirmed. The payments will also need to be signed off by the BEIS Permanent Secretary and BEIS ministers.”

If we scroll down, we can see the approach towards partially quantified claims, if we scroll down please:

“Turning to partially quantified claims, Mr Cooper noted that the Post Office were taking a more generous approach and gave an example. He noted that officials are less comfortable with this; however, it is unlikely that we will get more information from the Post Office, given that these claims as per the de minimis principle are not being investigated.”

Does this show, again, at this stage, the Department is more cautious than the Post Office with respect to payments and quick payments?

Carl Creswell: Yes, I can’t remember whether officials means UKGI or BEIS. It could be either or both. But I think you’re right. I think it is. I think this is probably the Department scrutinising what the company is proposing and raising some questions about that.

Mr Blake: If we could turn to UKGI00043650. We’re now on 9 March 2021, another Steering Committee meeting. If we scroll down to the bottom, please, there’s a section on “HSS Finance Docs and Issuance of Settlement Offers”. “JS”, that’s, I think Joshua Scott from UKGI?

Carl Creswell: Correct.

Mr Blake: “… introduced the item. On the issuance of settlement offers he updated that the Post Office have around 100 ready to be issued but were waiting on the issuance of the funding commitment letter before proceeding any further. TC [I think that’s Mr Cooper] also noted that the funding commitment letter was among a suite of wider funding documentation that were all interrelated. CC …”

I think that’s you?

Carl Creswell: Mm-hm.

Mr Blake: “… and Mr Cooper expressed concern about the risk of other outstanding issues, such as the changes to branch definitions causing delay, but noted that it was a decision for the Post Office Management and Board regarding progress on settlement offers should other funding documentation be delayed.”

So at this stage the Post Office is ready to go with 100 settlement offers but they are waiting for a funding commitment letter?

Carl Creswell: Yes, and the funding commitment letter is a standard piece of documentation that normally the Finance Director from my Department would send to the Post Office before it can make a commitment, especially when we’ve had to go to Treasury for approval. The point around branch definitions is a separate one.

Mr Blake: Yes.

Carl Creswell: That is more about how the Post Office Board feels comfortable about its overall financial position, and the question here was whether there was an interrelationship between the two, ie do we need to have both resolved the funding commitment letter and given the company clarity about what it can count as a post office, where ministers had given more flexibility to the company, before it could proceed?

Mr Blake: Okay. The funding commitment letter issue goes back again to the wrongful trading issue, doesn’t it, because without that commitment, there could be a suggestion that the Post Office is acting improperly because it doesn’t have the funds?

Carl Creswell: That’s right. Exactly.

Mr Blake: If we scroll down the page, please, and over to page 3, under “Any other business” towards the bottom. I’m just going to read some of this for you. It says:

“CC [I think that’s you] noted that Nick Read had written to Minister Scully over the Department’s role in the delivery of a scheme for criminal cases.”

So we’re now moving on from the HSS scheme to the Overturned Convictions Scheme:

“[You] set out your view that the Department and UKGI do not have the capacity nor capability and would struggle to build this sufficiently. Furthermore, the Post Office holds the relevant information and there would be difficulties in a third party managing the scheme without direct access to the information. There was also a point that it would be more appropriate for the Post Office to continue to have ownership from a moral perspective over resolving their past issues. NB …”

That’s Nigel Boardman, I think?

Carl Creswell: Yes, he was the Chair of the Audit and Risk Committee in the Department.

Mr Blake: “… built upon these points and added a concern that accepting Nick Read’s proposal could create a precedent to other partner organisations.”

TT?

Carl Creswell: Tom Taylor, the Finance Director.

Mr Blake: Thank you.

“[He] also added that direct involvement in the schemes would remove the ‘fire break’ for ministers which can be important protection.”

So, at this stage, there are number of different reasons why the Department considers that it shouldn’t be running that scheme. If I could summarise what I see there and you can please assist me if I am wrong, it is for reasons of capacity and capability, for reasons that the Post Office should have ownership from a moral perspective and also for reasons of a firebreak to distance ministers from the scheme.

Carl Creswell: Well, there is a fourth, and a comment I have on the third. The fourth is that the Post Office holds the relevant information and, as we know, access to that information, disclosure, has proven problematic throughout, and so that was of an important fourth factor.

I think on the firebreak, the point that the Finance Director was making was around potential legal action against the Department. So I don’t think it was plausible deniability, or something like that. Ministers always felt politically accountable for whatever the Post Office did anyway, whether it was, you know, done by them or done in-house but I think the Finance Director would be more concerned about potentially bringing a legal liability into the core of the Department.

I think – I mean, you say that is the Department’s view. This was a conversation with a number of representatives at the point when that letter had come in from Nick Read and the mood in the meeting was this was the Post Office tying to shift the problem on to the deposit and get it off their books. I hope you might then move on later to the advice that I gave Sarah Munby and then the submission that we put up to ministers on this point because my view on this shifted after this meeting.

Mr Blake: Perhaps if you could explain that briefly and then we’ll come back to the various reasons.

Carl Creswell: Of course. So in Sarah Munby’s submissions of her written statement she quotes quite extensively from an email I wrote to her, where I said that I felt that, given how slowly the HSS was moving, the model of the Post Office delivering OC was not right and that we should consider setting up a new Directorate in parallel with my own, with a new director, overseeing the OC redress scheme.

Sarah replied to that and I think she touched on that in her evidence yesterday and said that she would like me to do a proper note, which I then did and she rightly yesterday said she approved it without changing it to ministers, outlining the pros and cons and that eventual advice went to Kwasi Kwarteng and was a mixture of pros and cons on a delicate question about whether we should set up a new team or not.

From my own perspective, I had previously had some experience of a compensation scheme in the Department, and I was also under quite a bit of financial headcount and admin budget pressure within the Department. So some of these points around capacity and capability were things that I felt quite strongly. It’s a very different environment now but, at that point, it was difficult for me to see how I would have been able to get hold of the skills and capacity to do this.

That said, between this email, this note, and then my advice to Sarah Munby, I felt that the balance had shifted, given how HSS was going to, towards a different approach, which, ultimately, Kwasi Kwarteng decided not to pursue.

Mr Blake: In terms of the position of the Post Office, we see there it seems to be at that stage the Post Office’s view that this should be a scheme that was run by Government.

Carl Creswell: Yes, and Nick Read had articulated that in a letter to Paul Scully saying, “Well, the HSS is one thing”, to summarise it slightly crudely, “It doesn’t look like an HSS-style scheme is what is wanted by the OC victims, and, actually, it will be much better for the Post Office if it could be dealt with by the Government, allowing us to focus on the future of the company”.

Mr Blake: By that stage, had Nick Read expressed any concern to you or any concern that you are aware of about Post Office running the HSS scheme, and whether Government should instead be running that scheme?

Carl Creswell: No, I don’t remember that. Obviously, Nick and I spoke every fortnight at least, and he and I did discuss difficulties with the scheme – with the HSS scheme, but – and this has come up quite a bit in the different evidence hearings, you know, should the Post Office have said in the compensation hearings what it really thought about this issue? And I think quite a lot of the tone of my conversations with the company were about this is the situation in which we find ourselves so let’s focus on what we need to do to make it work.

And I think that, you know, without trying to provide excuses for the company, I think that was probably the view, “We have taken a decision with ministers about how these things should run, we’re trying to make them work”. So Nick wasn’t saying to me, “Oh, please can you just take on the HSS?”, because it was in mid-flight and changing things in mid-flight can be disruptive. This was at the point before OC had launched, where he was saying, before we get into this, we need to have a conversation about who should run it.

Mr Blake: We spoke earlier, looking at the litigation, and issues with the competence of the Post Office, the culture within the Post Office, you’ve expressed here issues – a number of issues but you’re being asked by the Post Office to manage this other scheme. Was this a moment to revisit the question of the Historic Shortfall Scheme and, at that point, to have made a different decision?

Carl Creswell: I suppose there would have been moments throughout, before this time and afterwards, when we could have said, “Stop doing that work, please take it on into the Department”, but I think the argument I articulated earlier about changing horses in midstream, this was at a point when people had applied to the HSS, they were there being assessed for eligibility, there was Declan Salter and his team working on them, they pointed away from trying to take it on. And, furthermore, we hadn’t had complaints that I can recall saying the Post Office shouldn’t be running the HSS.

As I said earlier on, the settlement deed said the Post Office should run the HSS. That is what was happening. I think if you take the long view, concerns about how the Post Office, whether the Post Office was appropriate from the postmasters’ perspective for running those schemes have grown over time, and I wasn’t – I mean, I don’t think that was the argument that Nick was particularly making about why the Government should take it on. I don’t think he was particularly saying the postmasters don’t want us to run the OC scheme. I think it was a range of other reasons that he was articulating but, obviously, with the benefit of hindsight, it’s probably fair to say that there were points when we could have said the Department should have taken it on.

One final point, though, is that I wasn’t convinced at this point in this meeting that we would necessarily do a better job, given that we didn’t have a team of Case Assessors or the admin budget to actually do it.

Mr Blake: Thank you, if we could turn to BEIS0000988, I think this is the email from you to Sarah Munby, on 26 May 2021. I can just read those first two substantive paragraphs, if we scroll down. You say:

“Compensation for criminally convicted postmasters: the Post Office will now have received the awaited merits opinion from their lawyers. We understand it provides an assessment of the strength of potential ‘malicious prosecution’ claims from those whose convictions were overturned at the Court of Appeal and concludes that all postmasters are likely to have a strong basis for a claim. This means we’re looking towards the upper end of the financial cost band. It might also make things easier because the Post Office shouldn’t be tempted to resist any legal claim from this group of postmasters. Our plan for the short term is to seek approval within BEIS and then HMT for interim payments for these individuals. My team will work with UKGI on the business case for this and we plan to submit an ‘in principle’ submission to you in the next few dis. I may need to ask you to prompt Charles Roxburgh …”

That is His Majesty’s Treasury?

Carl Creswell: Yes, second Permanent Secretary at the time.

Mr Blake: Thank you.

“… if it looks like we’re going to run in Treasury issues on the proposed interim payments but that should wait until after we’ve agreed the business case here.

“We then need to do further work with UKGI and POL on how we administer the rest of the compensation and Mike and would welcome your thoughts. It looks increasingly likely to me that we should consider taking on responsibility for the design and delivery of the compensation scheme within BEIS though that would have large resource implications.”

So by this time, had your personal opinion shifted as to who should operate that?

Carl Creswell: Yes, this was the email that I was referring to that described my shift in position and that partly came about through conversations with Mike Jørgen, to be fair, who was then my line manager. As Director General he’d had some experience from afar around the cold health(?) claims that the Department had dealt with before for other compensation schemes, and he mounted the argument that, actually, the Civil Service have quite a lot of people who can do operational delivery who could have been brought to in help run this sort of scheme.

Mr Blake: To the best of understanding, why was it ultimately rejected by Kwasi Kwarteng?

Carl Creswell: So there were a couple of steps after this. First of all, we talked to Paul Scully and to Lord Callanan, who was then representing the Department in the House of Lords on Post Office matters, and also to special advisers on the back of some advice, a formal submission that went to ministers, and that’s the one to which I referred earlier, that argued about the pros and cons.

Views were split across those different people. I think Paul Scully favoured taking it on in-house; Lord Callanan expressed a view that it would be better to leave it with the Post Office. We purposefully presented it as a set of options, rather than recommendations to ministers because we felt they needed to weigh it up and reach a political judgement about it. I attended the meeting that happened with Kwasi Kwarteng. I believe Sarah Munby was there as well and Paul Scully and Lord Callanan and special advisers and Mike Jørgen and others, and we talked through it with the then Secretary of State, and he weighed it up, and discussed it with people and ultimately concluded that it would be better to rely on oversight of the scheme from the Department, ensure that there was sufficient governance over the scheme, but ask the company to run it themselves.

Mr Blake: Thank you.

Sir, that might be an appropriate moment to take our mid-afternoon break, I think 3.00.

Sir Wyn Williams: 3.00.

(2.47 pm)

(A short break)

(3.00 pm)

Mr Blake: Mr Creswell, I’m going to move on to a number of specific issues that have been highlighted in relation to the HSS scheme. The first is access to lawyers. One issue that we’ve heard, especially from Mr Recaldin, is the inability for lawyers to give early advice in relation to the HSS and also to commission early reports, such as forensic accountancy reports, and matters such as that, because funding isn’t available at that pre-offer stage.

Do you see that as an issue with the Horizon Shortfall Scheme?

Carl Creswell: I think it’s the fact of the design, that’s correct. Legal advice is not available upfront. It is available a later stage. The origin of that, and this was something that was discussed at the compensation hearings, and Sir Wyn’s interim report, I believe, was that the desire right at its inception was to try to avoid a very lawyer-heavy scheme. So my understanding is that the discussions around the settlement deed set out a requirement that the Post Office should run a scheme that was not full of lawyers, and I think that is indeed how the HSS has run.

I think that the Advisory Board, with whom I work closely, have expressed some concerns about how far HSS has gone in delivering fairness. I think a lot of the claimant lawyers, many of whom met the Advisory Board and myself last week, would say more fairness would have been achieved if those claimants had had legal representation. So I do recognise those criticisms.

I think it’s a very different model to the other schemes that we are running and I know Sir Wyn, I believe, commented that he thought the HSS in theory was capable of delivering fair outcomes. I think some of the criticisms of the scheme have been about the late provision of the consequential loss guidance, the overcomplicated nature of the form, how hard it is for vulnerable victims to fill in the form, and so on. Whether lawyers are the answer to that or not I think is a question on which others would probably be better placed to reach a view.

I would say that on those schemes where we have a lot of legal representation involved, the number of claims that come forward is much lower. So if you look at the OC scheme, it has taken a very long time to get to the point that we are now, where over half of the claims have been submitted. I’m not saying that is purely the fault of the lawyers by any means, but it is striking that the HSS scheme was designed in a way to try to encourage early submission of claims to the scheme, and then, having met them, the independent panel would say that they’ve worked hard to draw out the issues for which the claimants should get extra compensation, beyond what they have stated in the form.

Mr Blake: So when you say come forward, in terms of the Overturned Conviction Scheme, for example, you mean you have applicants who fully intend to apply but the building of the case at that initial stage with the lawyer takes time that doesn’t – isn’t in the HSS scheme?

Carl Creswell: Yes, yes.

Mr Blake: We’ve seen a lot of references to trying to keep the HSS scheme and the GLO scheme consistent with each other. That appears to be an inconsistency between the two. Why is there that specific inconsistency in respect of the Horizon Shortfall Scheme?

Carl Creswell: Yes, a very good question. We worked with the Advisory Board to try and ensure alignment around the principles for the GLO scheme cohort because both HSS and GLO have non-convicted claimants and we need to ensure consistency of principle across the piece, but what we also did was worked with Freeths whom, you know, we paid, in effect, to help us design the scheme and we worked with the JFSA to help us design the GLO scheme, and one of the points that we heard through those conversations was about a lesson to be learned from the HSS, which had been running for a while at that point and the requests were to ensure that legal advice was available upfront because it was felt that would better help the GLO claimants to formulate their advice.

And obviously a lot of the people in the – it’s not quite 555, it’s the 492 people within the scope of the GLO scheme – had an existing relationship with Freeths or another legal firm who could help them formulate those claims.

Mr Blake: Thank you. The topic of delegated authority, Mr Recaldin also gave evidence in relation to the levels at which that is set. In 60 per cent of cases he said he had to seek further authority and, in his view, the level at which authority is required is set at too low a level. Do you have a view on that?

Carl Creswell: I think over time we have seen more delegation towards the Post Office across a range of different aspects of the schemes. So for example, on OC, I hardly ever see a non-pecuniary claim and offer now. It’s dealt with by the Post Office within a very clear set of principles that have been signed off. We tend to see more pecuniary claims because those principles are a bit fresher and tend to be a bit more novel in their nature.

Mr Blake: Sticking, though, in respect of the Horizon Shortfall Scheme in particular –

Carl Creswell: Yes, I think it’s probably true that the collective view in Government has been to give Simon and his team a certain amount of discretion but not completely unfettered.

Mr Blake: Do you consider that changing that level of authority might speed up the Horizon Shortfall Scheme?

Carl Creswell: I’m not sure that that is really critical. I’ve spoken to Dr Hudgell quite a bit about how the HSS scheme is working and, over a period of time, I’ve tried to develop a relationship with some of the claimants’ lawyers to try to find out what is going on from their perspective, so I’m not just dependent on information from Mr Recaldin.

The number of cases in the dispute resolution process is quite small, so when Simon talks about more delegation, he’s talking about his ability to mediate a settlement in a handful of cases. So I can’t remember the exact number but it’s something like five or six claims have been settled through mediation this year. What has made a much more material difference in terms of full redress has been the 75k intervention.

Mr Blake: Thank you. That’s the next topic, the £75,000 offers and top-ups.

Do you understand legal advice to be available to those given the £75,000 offer or top-up?

Carl Creswell: No, it’s not.

Mr Blake: No.

Carl Creswell: Only – no, it’s not at that stage.

Mr Blake: Do you consider that that is helpful or unhelpful?

Carl Creswell: I think this is a matter on which there was consensus in the House of Commons when my ministers announced some of the interventions. So both my current set of ministers and my previous minister, Kevin Hollinrake, were of the view that what was needed was an intervention that would get us to full and final settlement for those people that chose to accept it as quickly as possible. And I think they took the view that having every claimant go and get legal advice would mean that aim would not be achieved for a very long period of time.

So back to my point around how many claims have come through for the OC, I think we’re talking about 61 out of the 111 plus probably PNC cases have come forward.

On the HSS scheme, we’re talking about over 4,000 cases at the moment. The wider population who could access the HSS is about 24,000 people. That doesn’t mean they will all reply but I think, if you look at it from the perspective of capacity in the market, I think it would be difficult to see how the legal community could support those, you know, that volume of claim.

Mr Blake: One of the documents that I took Mr Recaldin to – I can bring it up on to screen if you want but I don’t think it’s necessary – is a meeting at which he raised a concern, or he notified you and others that – he said, “Claimant lawyers may ask how can I advise my client” – this is in respect of the £600,000 payment –

Carl Creswell: Okay.

Mr Blake: – “is good enough, given no disclosure?”

I don’t know if you saw that document. I think it’s forwarded to you. You were present as well. The concern there being, without disclosure at that stage, how can somebody know if the figure is sufficient. That presumably also applies to the 75,000, so you don’t have a lawyer, you don’t have disclosure at that stage. Do you think that important rights of individuals to know the underlying information are being taken away by that process?

Carl Creswell: I think that the 75k, if you look at it through the lens of the HSS, is quite a large sum of money, though it might not sound it. But compared to the average offer that comes from the independent panel, that is quite a big uplift for many people. When I’ve discussed it with some claimants’ lawyers more privately, they have said that they feel that for many people who have suffered a shortfall and the distress and inconvenience that comes with that, 75k is an overpayment, based upon what they, you know, would be sort of expected to receive through a full sort of legal assessment.

The more complex claims, where 75k might not be sufficient, based upon HSS and other precedent, is where there are other consequential losses or a termination, or other sort of factors, and those are the claims that I think are more likely to lose out, I suppose, in accepting the 75k.

Of course, the lawyers, with respect to the people in the room, are always keen to have more clients, and so this is partly the conversation I have had with claimants’ lawyers who have said every person who applies for the £75,000 should get access to paid legal advice. But the inherent design of the HSS, as I said earlier, was to try to avoid that.

Mr Blake: I don’t know if you heard the discussion with Mr Hollinrake about the position that people are put in, in respect of the 600,000, or equally for the 75,000, and the risk that is involved in that decision if they can’t later down of the line say, “Actually, I’ve changed my mind”. What’s your view on that?

Carl Creswell: I did hear that and I heard Sir Wyn’s comments on it, as well. I think I would say that Kevin Hollinrake touched on the Accounting Officer considerations in relation to the 600,000, or indeed the 75,000. We didn’t need a direction in the end, although the Secretary of State, or Minister Hollinrake as was, would have sought to give one, and the reason for that was we got ourselves comfortable with the fact that this was an efficient way to deliver the outcome that ministers wanted to see. So that is what VFM means for me. It’s about the most efficient way to deliver the outcome set by ministers.

Now, prior to late 2023, there was probably more emphasis on full and fair and a bit less on prompt. And then towards the end of the year the political pressure on us became higher to deliver things more promptly, even if that meant you were foregoing some fairness in terms of consistency between different claimants, this point being that some people would gain more than others if they all level up to 75,000 or 600,000. But in Accounting Officer terms, it was justifiable to achieve that, that sort of intervention without a direction, because it was about delivering ministers’ aims.

Mr Blake: Is part of that, then, intentionally carrying a degree of risk to incentivise the acceptance of those offers?

Carl Creswell: Yes, I’m afraid that is the conversation we had had with ministers which is why I would sort of agree a bit more with what Beth White had written in that email, which has been discussed, I know, because I think from the politicians perspective, they were publishing regularly data showing how much money had been paid out to lots of claimants, and, you know, every member of the OC 111 has had at least £200,000 in terms of interim payments. But when you, as a politician, give a big number, people quite understand people come back and say, “Yes, but these people haven’t had their full and final redress. You’ve given them loads of interim payments but it’s just a big number that doesn’t mean anything to the poor people who haven’t got to the end of the process”, and obviously, you know, that’s very unfortunate.

So the political desire was actually to try to target more full and final settlements because that was bringing closure to those individuals and giving more demonstrable progress. It wasn’t, from my point of view, get as much money out of the door as quickly as you can by giving people even higher interim payments, and, actually, I think Mr Recaldin was incorrect in couple of points in his evidence but one of them was around this 600,000 being possible to be offered as an interim payment. It was expressly not – the Government policy was not 600,000 as an interim payment to every member of the OC, it’s a fixed-sum offer.

Mr Blake: You said that Mr Recaldin was wrong in a number of places.

Carl Creswell: Mm.

Mr Blake: Just while we’re on that topic, if there’s anything else you think should be drawn to the Chair’s attention –

Carl Creswell: Yeah, there are a couple of issues. One of which is he implied that it was only recently that the Department became comfortable with approving interim payments of a large size, which was why he was saying we should have done the £600,000. It is not true that we have only recently got comfortable with approving large interim payments, we have approved six figure interim payment sums from 2022 and 2023 onwards. So I think that was incorrect.

He also talked about the HSS appeals announcement being made in March, it was not. It was made in September. Because – I think that’s important because it makes it sound as if we’ve been sitting on our hands since March but we are currently consulting and I can say more about what we’re doing there if you would find that useful.

Then, finally, his comments about Emily Snow, who is an excellent member of my team, were completely incorrect about when we consulted the Post Office. We consulted Simon Recaldin’s team in June 2023. We got the data from the Post Office in order to build the business case for the 600,000 intervention. Emily then wrote on 5 September to the team in the Post Office saying, “Would you please consider the operational delivery implications?” She outlined her plan for HSF, Herbert Smith, to write to law firms on the day when we announced it. Eleanor Brooks, also in my team, spoke on 12 September to Simon.

Our Comms Team talked to the Post Office Comms Team. I raised it with Simon myself. He wrote to us, thanking us for sharing the analysis for the 600k and then we discussed it at the quarterly shareholder meeting. I’m sorry that was a little bit at length but I felt that the account that was given the other day was disingenuous because we had been involving the Post Office, including up to the level of Nick Read for a while. I think the issue, though, which I think is worth being aware of is that Simon and team did not agree with the £600,000 policy. They felt it was cutting across and undermining the principles-based system that they had been working on developing with the claimant lawyers for a very long period of time.

And we were caught, from my point of view, between the Minister’s desire to have a fixed-sum offer that would enable swifter full and final settlement, even if it meant overpaying at the individual level, and the Post Office’s desire to stick with the claim that was principle-based that would take a lot longer.

Sir Wyn Williams: Before we go any further, when I read the transcript of today, in respect of the last five minutes I may get the impression that you have told me that there is a shift in ministerial objective from the three words “full, fair and prompt” to at least an emphasis on “prompt”. Right? If so, I’ve not heard any minister or other politician articulate that publicly, and I don’t want to be unfair either to you or them but if it is the case that one of the driving forces behind the fixed offer is to elevate “prompt”, above what is full and fair, I’d like to know it in plain language, please.

Carl Creswell: And sir, responding to that, that is precisely what I am saying. I was given the steer by Secretary of State Badenoch and others that we needed – and some of this evidence is included in my bundle – to prioritise speed, even if it meant overpayment.

Sir Wyn Williams: Well, and underpayment because the way the fixed offer operates, once you don’t accept it, it’s lost forever, isn’t it? So there’s an overpayment possibility, certainly, but there’s also an underpayment possibility.

Carl Creswell: There is, although the 600k, I would say, is supported by legal advice.

Sir Wyn Williams: I am not saying that anybody is going to do it deliberately; I’m talking about the effect of it.

Carl Creswell: Yes.

Sir Wyn Williams: I can put myself in a position of a claimant who may claim £1 million, who is prepared to take the risk on not accepting 600. It’s much more difficult if your claim is 700 or 750, isn’t it?

Carl Creswell: It is.

Sir Wyn Williams: Yes.

Carl Creswell: May I also add to my comments based upon your earlier question?

Sir Wyn Williams: Yes.

Carl Creswell: I think for me, in looking at your pros and cons that you mentioned earlier, it’s worth thinking about the counterfactual of what would have happen if we had not introduced the fixed sums.

Sir Wyn Williams: I agree. I understand that there are a multiplicity of pros and cons. I understand that, which is why I was trying to tease them out of the minister.

Mr Blake: In terms of the counterfactual, is that principally of one of length of time awaiting payment.

Carl Creswell: Yes, I think I would have been sitting here today with a lot lower number on both the OC and HSS schemes for completion. My experience on the HCRS, which is the Horizon Convictions Redress Scheme, that we set up on the back of the legislation that we designed to overturn so many convictions, has been quite a high rate of people accepting the 600,000. So, obviously, I’m a civil servant who advises ministers, and they ultimately decide, and what we have decided in this space has been to meet what ministers have asked us to do, which is to try to ensure people can get to the end of the process as quickly as possible.

I think we probably fall short on some of that. As I’ve been discussing with Jo Hamilton earlier today, there are still part of what we are doing that aren’t going quickly enough.

Mr Blake: Moving on to the topic of employees and assistants, you’ll recall that is something that was addressed by Mr Recaldin. They’re not eligible under the Horizon Shortfall Scheme because they don’t have a contract with the Post Office. Are you aware of discussions to expand the eligibility criteria?

Carl Creswell: I am aware of exactly that question and we have been discussing it with Simon’s team and we are preparing advice for our Minister, Gareth Thomas, but we have not yet submitted it to him, but it is a live question. My new ministerial team has been quite focused on gaps between existing schemes and so, in our early time working together, they have been asking us questions about people who might fall between the cracks.

Mr Blake: Where do you see those principal gaps?

Carl Creswell: I mean, I think that’s quite a good example. We have also been asked questions around caution cases and prosecuted but not convicted claimants. There is also a question about family members which the previous Government was firmly set against including, certainly Kevin Hollinrake was clear on that in the House of Commons.

So we – and I suppose I should also say Capture, I’ve worked closely with number of the postmasters affected. I know that’s outside the terms of reference of this Inquiry but we have also been trying to look at the harms that have fallen, it appears, on, you know, a large group of people there.

Mr Blake: What is the direction of travel, as far as you see it, in respect of those cases: all of those, the various gaps that you’ve identified?

Carl Creswell: Well, I think our starting point as policy officials is to respond to the question of are there gaps? What are the gaps? Then we tend to say, well, what are the options and what do ministers want to do? And that is a cross-Government conversation that needs to happen. So I’m not, at this point, able to say where I think it will end up, but I think it is quite important, particularly to Gareth Thomas, my new minister, to make sure we are clear about who falls into which scheme.

This I also a point that the NAO brings out in its report earlier this year, where they say you need to be really clear about the eligibility of your compensation schemes, you know, the boundaries. And sometimes you draw a boundary that leaves some people outside and sometimes you need to expand the boundaries to bring people inside. And those are judgements for politicians to make.

Sir Wyn Williams: In terms of process, I’m just taking an example, an extension to family members or an extension to managers and employees, there will either have to be yet another scheme or it was HSS, because they couldn’t sensibly fit in to Overturned Convictions or Exoneration and Convictions, and they weren’t part of the GLO.

Carl Creswell: I think you are probably right. We could decide, I suppose, to say a postmaster who is in any of the schemes could include family member losses within their claim.

Sir Wyn Williams: So sort of what’s the correct word or phrase? They could – I can’t think of it, but they could bring – the postmaster could bring a claim on behalf of a range of people?

Carl Creswell: Yes, and some of the GLO applicants have indeed included family losses within their claim but, because of the ways in which the rules were drawn, based upon an agreement from ministers, those aspects of the claim are not compensatable, if that’s a word.

Sir Wyn Williams: Yes, the slang I was thinking of is that you could “piggyback” certain people onto existing claims?

Carl Creswell: That’s right and obviously family members would be quite a big expansion.

Sir Wyn Williams: Sure, yes.

Mr Blake: Do you have sums in mind that you envisage such expansion would involve?

Carl Creswell: No.

Mr Blake: The appeals mechanism, that’s something you have already touched on. You’ve explained at paragraph 33 and paragraph 60 of your statement – a route to appeal that’s being established. I’d just like to ask you about a number of documents where the matter has been discussed previously. It’s BEIS0001092.

This a discussion of 5 October 2023, at the monthly monitoring meeting. If we scroll over the page, please, to page 2. At number 4, we can see there you expressing some concerns with the potential for an appeals mechanism. It says:

“The group discussed the Advisory Board’s recommendation to introduce an independent appeals process on the HSS. Carl noted that there was a risk that, as envisaged, the appeals process would effectively be a rerunning of the HSS and would be very challenging on value for money grounds.”

Am I right to say that, at that point in time, you were concerned about the potential cost of an appeals mechanism?

Carl Creswell: It’s not – well, I suppose cost is a dimension but, in this case, it’s the efficiency dimensions of value for money that were on my mind, ie quite a large amount of money has been spent or had been spent at that point on running the HSS. The Advisory Board earlier than this date – I think June ‘23 – had first suggested that it might be needed and, at that point, I felt that what was being proposed was basically rerunning the whole thing again for claimants who had gone to the independent appeal, and on average I think at that point had received about £39,000 each. So I was a bit concerned about that. But we worked on this with the Advisory Board over a number of months and the Post Office gave us some ideas as well.

At that point, I think I probably hadn’t realised quite how many criticisms there were of the way in which the Post Office had run the HSS and it became clear to me eventually that the criticisms were so large that the Advisory Board were right, that we wouldn’t get closure on the HSS unless we gave individuals the opportunity to bring an appeal with legal support.

Mr Blake: If we could please turn to BEIS0001098. There’s then another monthly monitoring meeting on the 1 February 2024, so quite a bit of time has passed by this meeting. If we could please turn to page 3. We see there again the appeals mechanism is discussed. It says:

“CCo [that’s Catherine Connolly] explained that there had been 70 requests to open HSS cases. These will be assessed however it was noted that there is limited availability of the panel.

“The monthly monitoring meeting were told that the Department has started to receive correspondence regarding potential appeals too. The Department’s position is to explain that cases are settled. This aligns with what the Post Office are informing potential appellants.

“The Post Office stated that the Department need to be aware that not everyone had full guidelines (including legal) when originally claiming. There are currently no timescales with regard to appeals.”

You advised that:

“The Department were minded to see how the £75,000 initiative washed through, how many cases this resolved before further consideration of the appeals process.

“SR …”

I think that’s Mr Recaldin.

Carl Creswell: Yes.

Mr Blake: “… responded by reminding [you] that this went directly against the Post Office’s and the AB’s recommendation …”

What’s the AB?

Carl Creswell: That’s the Advisory Board.

Mr Blake: “… the [Advisory Board’s] recommendation currently with the Minister who had mentioned his consideration in the House of Commons. It also did not consider that an appeals process would address a number of other issues which had been and will be raised at the Inquiry.

“[You] recognised [his] points and pointed out the additional concern about the potential costs of establishing such an appeals process.”

We spoke about value for money before but actually here it’s directly on the issue of costs.

Carl Creswell: Yes, that’s right. We had advised Mr Hollinrake in December that it would be sensible to look at running an appeals mechanism. We ended up in this early period prioritising the 75k and this is obviously January of this year when there were lots of other interventions happening, such as the GLO fixed sum. I don’t know that I would agree that it was – that not introducing it was running counter to the recommendation. Certainly Lord Beamish – Kevan Jones – and others continued to press for us to do this. The Minister had not ruled it out; he did say he would do it.

My concern about costs was partly influenced by our conversations with the Treasury at official level about this proposal because, from their point of view, we would be effectively double dipping, coming back to Treasury, asking for another version of the scheme that had been quite expensive up until that point.

Indeed, I think Minister Hollinrake found it quite challenging to get the then CST comfortable with the idea of launching an appeals mechanism. He wrote in March ‘24 to the CST and continued to chase in the run-up to the election. But we weren’t able to persuade Treasury at that point to agree, and it then went on pause and we picked it up again with new ministers after the election and they quite quickly agreed that we should press ahead with this intervention.

Mr Blake: In respect of the criteria to be applied, do you know what the criteria will be?

Carl Creswell: So we have been consulting – started consulting various people on this. I wrote to Calum – who I know is in the room – from the NFSP, and also to Sir Alan Bates last week, and we attended a meeting with the Advisory Board, where we aired with them various proposals. Some of the aspects that we covered included the fact that the bar should be quite low, that we would like to model it – this is our proposal – on the HCRS scheme, ie people will have access to legal advice, based upon a legal tariff, and that then we in the Department will get some external legal support but will recruit a team of case assessors to assess those claims for appeal, that those case assessors would not see the panel’s decision on the case, but that they would have access to all of the documentation that was put together through RFIs, requests for information, and other such interventions.

We discovered with the Advisory Board whether those cases that have been through the HSS Dispute Resolution Procedure, that is the appeal mechanism set out through the original December ‘19 settlement deed, whether they should also be eligible to apply. Our emerging conclusion is the closed DRP cases should not be in scope because those individuals had had access to legal advice and had reached mediated settlements and other such steps, but that anyone whose case is still being considered by DRP could have the option to transfer in to the HSS appeals mechanism, that we would use the existing HSS principles, and that we would again have access to an independent panel but we would not put it upfront.

I think one of our views is that having the independent panel upfront in the HSS appeals process, ie pre-offer, has been one of the contributory factors to the slow progress of that scheme, and that’s not any criticism of the panel but it’s a recognition of the capacity constraint that is caused by having the panel review every offer, and we would then again have a tier of an independent reviewer, à la Sir Ross Cranston, though probably not him, on hand if anyone is unhappy with the independent panel’s view.

Mr Blake: Am I right to understand, therefore, that there won’t be a strict criteria for eligibility. I mean, to give an example, the GLO test for the independent reviewer is whether there’s been a manifest error, procedural irregularity or substantive error of principle. Those kinds of narrow criteria, legalistic criteria, will those kinds of things apply or is it just an appeal, effectively as of right, to this panel?

Carl Creswell: So I was interpreting what you said to be about the exhibit for someone to bring an appeal to the Department scheme.

Mr Blake: Yes.

Carl Creswell: Our emerging view is that the bar for that should be very low, so the eligibility should be very wide. You point around the independent review is a slightly separate one because it’s not about eligibility for the scheme; it’s about the grounds on which you can appeal the independent panel’s view on your claim, and this is what is happening in the GLO, where Sir Ross Cranston is that final point of arbitration.

Mr Blake: So that’s the second layer but, in fact, in terms of the first layer, having somebody in the Department review your claim afresh, there won’t be any strict criteria that’s applied?

Carl Creswell: Well, we will have to explain who can apply, but our intention is to make that quite broad and open, rather than limited, as we found was a criticism for the HSS early in its tenure. I would say I see it as three stages, probably. So we would have a Case Assessor in the Department with external legal support looking at the claim. If someone is unhappy as per the GLO, they can go to an independent panel. Question yet undecided, undetermined whether to have two bites of the cherry with the independent panel, and then ultimately an independent reviewer.

That might sound convoluted and bureaucratic, but actually those are protections in place for the claimants to ensure that they have an opportunity to challenge an offer.

Mr Blake: We have heard, in terms of the fixed-sum offer, so the £75,000, that in accepting that you are giving away certain rights, and one of those would potentially include the right to appeal; is that correct?

Carl Creswell: That is certainly the kind of policy.

Mr Blake: Can you see a difficulty with that policy in circumstances where the actual arrangements for that appeal mechanism aren’t even published?

Carl Creswell: I can see your point, and it is something that we discussed with the advisory board and are continuing to discuss with people as we go through the consultation. As I say, what we’re trying to do is learn the lesson of before you launch the scheme, talk to people about any concerns about the scheme.

Mr Blake: Is it a possibility that those who have signed away their rights to appeal may in fact, in due course, receive a right to appeal?

Carl Creswell: Would it be a problem if we were to allow them into the scheme?

Mr Blake: Is there a consideration being given to those who have signed up for the 75,000, waived their right to an appeal, being actually, in fact, allowed in that appeal mechanism because they weren’t aware of the circumstances on which you could possibly appeal?

Carl Creswell: I think we need to reach a view with ministers about what they would like to do. As I say, the proposition that we tested with the advisory board last week was based upon the existing policy, which has been to say: “Here is a £75,000 offer that you can accept, and that would be the final resolution of your claim, or you could continue through the existing Dispute Resolution Procedure, or the new appeal mechanism that the Department is going to introduce in the first part of next year.”

Mr Blake: Finally, in terms of the Horizon Shortfall Scheme, end date. Do you have in mind a date on which all that work will be completed?

Carl Creswell: Yes. So again, on the back of the compensation hearings and some of Sir Wyn’s comments, we consulted the advisory board. I think this was one of the recommendations in the interim report, that an end date was set. The advisory board’s board view was that it was too early to determine what that date would be, given that the Inquiry was continuing. And the Post Office tends to find that whenever there is publicity about activities, whether it is the ITV documentary and drama or the Inquiry hearings, that more people come forward with claims from within that wider cohort.

Ministers in the new administration have also encouraged the Post Office to write out to a large number of claimants who haven’t yet come forward, as I said, beyond the 40,500-odd that are in the scheme. So currently, ministers have not yet set a date, although I have discussed with the Secretary of State and Minister Thomas that it is our ability of drawing to a close, at some point, that window for HSS claimants to apply.

Mr Blake: When do you anticipate that will be?

Carl Creswell: When do I anticipate the end date will be?

Mr Blake: Yes.

Carl Creswell: Or when do I anticipate –

Mr Blake: On the knowledge you presently have, assuming that the ITV drama was the peak, in terms of publicity, when do you anticipate the scheme will end?

Carl Creswell: Well, I am not sure whether it is the peak of publicity. We have waves of publicity, of course. I think it’s a judgment for ministers. I think –

Mr Blake: As somebody with experience of the scheme for a number of years now, when do you personally think it will end?

Carl Creswell: Well, I think the question for ministers to decide is between the summer, or September next year. I think the judgement is partly how much time do we need to allow people to give them fair access to redress?

Sir Wyn Williams: Just so there is no public confusion about what we mean by “closing the scheme”, when I recommended that the scheme could be closed, I meant that it would no longer be possible to apply for compensation, not that everybody had been paid.

Carl Creswell: And that is what I’m talking about, as well.

Sir Wyn Williams: Yes. So we’re talking about a date after which nobody would be eligible to apply for compensation?

Carl Creswell: Exactly.

Sir Wyn Williams: Right. Fine.

Mr Blake: Thank you.

Moving now to the overturned convictions redress. I’d like to ask you a number of topics that, again, have arisen throughout other people’s evidence. The first is delegation levels again. Can you assist us briefly with how the delegation levels apply under that process in respect of the Post Office, leading to ask permission to settle claims?

Carl Creswell: Of course. So the OC has been on a journey, from those early cases that were mediated settlements, to the very helpful Lord Dyson ENE principles for non-pecuniary. Once those were up and running, we then gave delegation to the Post Office to work within those principles. And as I say, we only need to see a non-pecuniary offer if it brings a new head of loss, for example, that would be precedent setting.

The pecuniary principles, again, took a very long time to get agreed; but since they have been agreed, they have been have applied to more cases. And although we do still see pecuniary offers come to the Department, we have given more freedom to the Post Office to make those offers.

Mr Blake: Can I just touch on one clarification in respect of your statement. At paragraph 29 of your second statement, you’ve said that there was agreement of the pecuniary principles between the Post Office and the claimants’ legal representatives. It is the Inquiry’s understanding that there was consultation, but there wasn’t formal agreement. Is that something that you understand, or do you have a different view?

Carl Creswell: I suppose your understanding must be based upon what the claimants’ lawyers have said to you. I remember that consultation did happen between the Post Office and various claimant lawyers, and feedback was given, and the principles were amended in light of that.

I know Dr Hudgell did say to me that there may be elements of the principles that they would choose to challenge on a case-by-case basis, so perhaps your description is more accurate than what I’ve said in my statement on that point.

However, I do think our experience has been that getting those principles in place is immensely helpful. Even if you go slower – more slowly at first, you can then go more quickly afterwards because the areas for dispute narrow.

Mr Blake: Thank you.

My other topic under that heading was the £600,000 Government offer, but I think you’ve addressed that in addressing Mr Recaldin’s objections when it was first announced, and you’ve explained your position on that.

Carl Creswell: Yes, I think that’s right. I would say that the 450,000 intervention that Minister Hollinrake – Kevin Hollinrake touched on earlier is also quite helpful, from Sir Gary Hickinbottom’s recommendations. And he has played a very active role in case management, as he described at the Select Committee yesterday, which I think has really been welcomed by the claimant lawyers.

At the meeting last week when we met the advisory board and the lawyers, there was quite a bit of positive feedback about how the OC scheme was running now, and in particular, the role that Sir Gary Hickinbottom is playing in helping bang heads together, and so on.

Mr Blake: If we could move on to the Group Litigation, the GLO scheme. Can we start on BEIS0000722, please.

I’ll take this quite quickly because this was an email exchange that we saw with Mr Hollinrake this morning. It relates to the Chief Secretary of the Treasury’s approval of the various thresholds and the Chancellor appearing to resist the upfront offer. What is your view on how receptive the Treasury were to the proposals you were making in this regard? It’s page 3. We can have a look at those passages that Mr Beer took Mr Hollinrake to earlier today. Thank you.

Carl Creswell: Mm. Well, we got to the right place in the end, which was that Ministers were able to announce the intervention that the Secretary of State and Kevin Hollinrake wanted, but it together a lot longer than I think it probably should have done. I know that Kevin Hollinrake challenged what I’d said here about the strong views of the Chancellor. That information was based upon what the Treasury officials had told me: ie the Chief Secretary was sympathetic to the case from a political perspective, but the Chancellor was taking a bit of a broader precedent view – which, you know, to be fair to Treasury officials, is part of their job, to say: what is the repercussion of this decision on other schemes?

And there was quite a bit of resistance, as you saw through that letter that was, you know, sent back, which in summary said something like: “Good idea but go away and come back with a different number.”

And after January of this year, it then became possible to get political agreement on that intervention, which I think was the right outcome.

Mr Blake: Thank you. So the original thinking was 100,000, and then it went – and was agreed at 75,000?

Carl Creswell: Correct.

Mr Blake: Thank you.

The latest figures in terms of the GLO is that there are 306 claims received, 221 claims paid; is that correct?

Carl Creswell: Yes, and there are interim numbers, as well, around how many offers have been made, and so on.

Mr Blake: Are those figures slightly deceptive in terms of progress, because the most complex ones have yet to be settled and may take some time yet?

Carl Creswell: So it is definitely the case that the more complex claims are either ones that we’ve just started on, or are to come. So I’m not expecting many more 75ks between now and – you still get the occasional one, but they mainly settled early on. Of the 228 offers that have been accepted, 151 accepted the 75k. So that gives you an indication of the fact that we have dealt with some offers above that level, but it’s sort of broadly, I think, two-thirds one-third, if my maths is correct. Two-thirds 75k; one-third, I suppose you might say complex, above 75k.

I don’t have any reason to believe, based upon discussions with my team and my analysts, that cases we’ve seen above 75k are any more or less complex than the other claims that are coming. I don’t think Freeths or other legal representatives have held back more complex claims, particularly. I think they’ve been processing them as soon as those forensic accountant reports in the medical reports come through.

This is – I mean, this is one of the points of contention around the scheme: that we are awaiting 186 claims, and the conversation we had at the advisory board last week was about are we delivering full and fair redress? The answer was, from everyone there: “Generally we are achieving fair and full outcomes.” And that wording was included in the minutes that we published earlier this week of the advisory board conversation. The problem is the speed. And the Select Committee discussed some examples yesterday that I thought were requiring of more work on our parts around the way in which Addleshaw Goddard, who act for us on this scheme, ask for more detail from the claimants’ side.

The claimants’ solicitors raised a few issues with us last week. One of them was around Addleshaw Goddard’s approach to asking lots of questions. The other was around how long it has taken to get forensic accountancy reports to the quality needed, and it has been quite a long lag there.

The other issue that was raised, which I think is quite important, is around the sort to mental health challenges of some of the claimants who are needing to participate in this scheme. Whether that’s that it’s quite intimidating having to fill in the forms, which is something that Jo and I have discussed, or whether people are holding out for the Inquiry to complete, which is something that Mr Moloney has mentioned in the compensation hearings before, and advisory board mentioned as well.

Chris Hodges, the Chair of the Advisory Board, said that he felt it was important to say the schemes are there, the money is there, there’s 1.8 billion there. So anyone listening should, you know, feel ready to come forward – was his sort of view. But I can understand that, from what the claimant lawyers said, some of the claimants want more time, and don’t want to be pressed by a deadline for the GLO scheme for when they need to complete their claim.

Mr Blake: One of the issues that has been raised by Sir Alan Bates, for example, is setting a deadline for the GLO to be resolved.

Carl Creswell: Yes.

Mr Blake: What’s your view on that?

Carl Creswell: I mean, Sir Alan has been really helpful for us over a number of years, and was involved in the design of the scheme for us, but I know he’s unhappy with how aspects of it are running at the moment.

I think the view from my ministers – and I think the Prime Minister said this in a letter to Sir Alan earlier this week – that if claims come to us by Christmas, then we should be able to get offers out in the early part of next year. So it is – you know, 40 working days is our target for getting out those initial offers in 90 per cent of the cases. We have met that for a number of months, and I would expect we would be able to honour that commitment for those claims that come to us by the end of the calendar year. Which, you know, means that we should be able to get offers out to those GLO claimants by the end, you know, by the end of March in those situations.

Now that doesn’t mean that those claimants should feel forced to accept those offers, and I think, however good a job we and Addleshaw Goddard do to give generous and right offers, there will still be some claimants who wish to challenge those offers, which is why I think Government ministers have been reluctant to say no one – you know, everyone will get their money and no one can claim any later than the end of March. It’s a bit like the point we have discussed in the Inquiry before about the August deadline was an arbitrary one that would have forced some people either to apply either earlier than they were ready, or they would end up missing the boat.

So I think I definitely agree with the sentiment of you should get on with it and get the claims out, you know, get the offers out quickly, but I think the mechanism of saying you must – claimants must apply and you must give them an offer by the end of March might actually end up with vulnerable claimants either being forced to apply before they were ready, if you see what I mean.

Mr Blake: Thank you very much.

In light of the time, because we have to get to questions from Core Participants, I’m going to address the next topic quite quickly. That’s the Horizon Compensation Review Scheme.

Carl Creswell: Redress.

Sir Wyn Williams: Sorry, Mr Blake.

Just so I’m clear, the statistics about the number of people who to made claims in the GLO to the 30 August 2024 is paragraph 41 of your second statement. It may need a little bit of updating, but that’s by the by, for the moment. What it shows is that as of 30 August 2024 there were 492 eligible applicants, but only 264 completed claims received.

Carl Creswell: At that point, yes.

Sir Wyn Williams: At that point. Obviously there will be a bit of updating.

Carl Creswell: Yes.

Sir Wyn Williams: So there are still a very substantial number of people who have not yet made a claim?

Carl Creswell: Yes, and to be precise about the number as it sits now, 492 is still the claimant cohort.

Sir Wyn Williams: Yes.

Carl Creswell: 306 full claims have been received.

Sir Wyn Williams: So it’s 306 now.

Carl Creswell: And that leaves 186 that were not received.

Sir Wyn Williams: Right.

Carl Creswell: Now Freeths, as an example, tell me that they think they will be able to get their claims in by Christmas, and they own quite a big proportion of that remaining 186, and many of those claims are, I think, complete in part, at least.

Sir Wyn Williams: Fine, thanks.

Sorry, Mr Blake.

Mr Blake: So the Post Office Horizon System Offences Act 2024, under section 4, the Secretary of State has a duty to take all reasonable steps to identify those whose convictions have been quashed.

Briefly, can you assist us with how you are establishing those individuals?

Carl Creswell: Yes. So this is a responsibility that’s being discharged by the Ministry of Justice. We have two routes in. We have, when the scheme was launched in July, we opened a portal on gov.uk where anyone can self-assess and declare that they think they fall within the scope of the Act, and therefore should be able to achieve redress. And part of the reason for that is because of the passage of time, and some concern that it might be difficult for us to track down every last one of the cohorts.

We have also had data from the Post Office and from the CPS which has been shared with the Ministry of Justice. That cohort is 949 people in total for England and Wales, which is the jurisdiction that the Ministry of Justice oversees. The judicial authorities in Scotland and Northern Ireland have number of 130 between them, in addition to this cohort.

The MoJ has assessed 732 of that 949, and this data – these data are available publicly on gov.uk. And I can give you more information if you would find that useful.

Mr Blake: That’s fine, thank you.

Section 5 of that Act includes cautions. Now there has been some confusion in the Inquiry as to which compensation scheme is going to compensate people who have received cautions. In your view, which is the appropriate compensation scheme – or redress scheme, sorry?

Carl Creswell: So cautions could be in scope of OC if the work that was being undertaken was voluntary. So if, for an example a partner was helping – you know, I’ll say their partner – with the records for the accounts and then ended up being cautioned because of alleged falsification of accounts, that individual could be in scope of the OC, but most are actually picked up by the HSS scheme and the GLO scheme, where there are cases of people with cautions in scope.

Mr Blake: Those whose cautions are overturned by this new legislation, where would you say they should be applying to?

Carl Creswell: Well, I would expect anyone in that situation to be in scope of the HCRS, this new scheme. But I think I should probably check that with my team. The OC cohort tends to be a bit more bound, because it generally is people whose cases were overturned by the courts as opposed to this legislation. But I can share further information with you, if you would find that useful.

Mr Blake: Thank you.

There’s a category that isn’t covered by the new legislation: that’s those who were convicted and appealed unsuccessfully to the Court of Appeal because they didn’t satisfy the Horizon system essential prosecution criteria. What is the plan for those individuals?

Carl Creswell: There were a couple of different categories, actually, that were excluded when Parliament reviewed the legislation. There were DWP cases, as well, which is something the advisory board has been discussing actively. The Court of Appeal, as you say, and also other offences like capture related offences, all of which are outside the cope of the legislation.

The advisory board has been discussing the DWP cases and liaising with DWP about them. There’s no active plan relating to Court of Appeal cases that I am aware of, although, as I say, this is more a matter for MoJ to reach a view on.

This was quite contentious when the legislation went through Parliament, and there was quite a strong voice from the judiciary that those cases that had been determined by the highest court, effectively, in the Court of Appeal should not be overturned, whereas those judgments reached by a lower court could be. And that was a decision made by the Executive and Parliament.

Mr Blake: Two very brief topics before I hand over to others. The first is bankruptcy issues. You’ve addressed those in detail in your first witness statement from paragraph 114. Do you see any current issues insofar as that is concerned, and specifically with reference to any differences between how those matters are treated between the Horizon Shortfall Scheme and GLO participants?

Carl Creswell: So I think that the Inquiry’s intervention was very helpful in getting us to get a direction in relation to Moors(?), which helped us tackle that particular issue for the GLO group of claimants who were affected. So I think that has moved things on significantly.

I think there are clear principles in place in relation to bankruptcy, although some cases I know from Dr Hudgell were a bit contentious at the point of discussion with the panel, but I think there are principles now in place for how to deal with bankruptcy claims, but I’m probably not close enough to the detail for that.

We did have a concern which has been expressed publicly, I know, by one victim who is within the scope of the HCRS scheme, because early in the running of the HCRS scheme, there was a question about the approach that the Official Receiver would take in relation to bankruptcies and the claim on the estate. But that has actually now been resolved, and we are now able to make payments to those individuals who were falling foul of that uncertainty with the Official Receiver.

Mr Blake: Thank you.

Final topic is current priorities and current matters at the Post Office. I don’t need to take you to it. There was some document in your pack that relate to concerns at the Post Office about the increasing number of losses at the Post Office and how to address that matter. I don’t know if you’ve seen the various correspondence with Fujitsu in this Inquiry regarding future prosecutions. What do you see as the plan, going forward, to address issues with discrepancies, going forward?

Carl Creswell: So in my mind those are slightly distinct issues, although I recognise there is an interrelationship between them. I think, under Nigel Railton’s leadership, the company is taking quite an active approach to trying to bring postmasters with them on the discrepancies and losses issue. So I know they have taking steps to bring the NFSP and I think the Voice of the Postmaster into the Chesterfield office to come and see the back office that deals win the discrepancies, and various steps were taken, such as the dispute button, which I think was used a bit less than the Post Office had expected. And there were various training interventions and so on that were pursued.

And Kevin Hollinrake mentioned earlier the conversations we had had with the company about that.

What I believe is going to happen is that the Post Office is going to bring in someone external to have a look at the current Horizon system. When I saw the YouGov survey that the Inquiry published, I spoke to Lorna Gratton, ahead of a Post Office Board meeting, and said, “This is even worse than what I thought, from what I’ve heard from the company.”

She raised at the board meeting, I understand, the need to get some independent assurance for us and for the company, and I understand that any Nigel was of that view himself anyway, and so there are plans in place to bring in someone to provide a bit more confidence to everyone involved about how the system is operating at the moment.

I think the issue with Fujitsu is probably something you should discuss with Paul Patterson. There was a bit of a dispute between him and Nick Read around this issue, I know, I think earlier in the summer, where I think – I suspect that the Post Office feels, when the police approaches it requesting data, that it needs to release the data to the police. But they need some checks and balances around that, but I’m not closely enough involved to be able to tell you what the Post Office is doing.

Mr Blake: Thank you very much.

Sir, there are just some questions from Mr Henry and Mr Jacobs, and from Mr Moloney as well.

Sir Wyn Williams: Before they do, can I just be clear about the questions that I asked you about the greater emphasis on speed of delivery, right? Your answer is clear, but what I didn’t follow up with you and should have, is whether that steer, that I’ll call it a gloss on the earlier steer, is a steer which was given to you by the previous government or by this government, or by both.

Carl Creswell: Yes, the answer is by both.

Sir Wyn Williams: By both. Right. That’s fine. I just wanted to know. Fine.

Right. Who is going to first?

Mr Henry: I’ll go first if I may, sir.

Sir Wyn Williams: Can you swap places with Ms Page so I can see you, Mr Henry?

Mr Henry: Sorry, sir. I was taking cover.

Sir Wyn Williams: Even late in the day, I like to see the questioner.

Questioned by Mr Henry

Mr Henry: Thank you.

Hello, Mr Creswell. You’ve made two statements at reasonably long length. You haven’t mentioned Mr Cooper in either of them but you did mention him when you were being asked questions by Mr Blake earlier today.

The impression given was that Kelly Tolhurst, the minister, was not particularly happy with Mr Cooper’s performance, or would it be right to say judgement calls; is that fair?

Carl Creswell: At that early point in the tenure, that is the case. She became more comfortable with him over a period of time, but what I was describing was a particularly sticky patch early in my tenure in the sort of April/May period, which was the fallout from the judgment.

Mr Henry: Yes, the fallout from the judgment. How well did you know Mr Cooper?

Carl Creswell: I worked as closely with him as I now work with Lorna Gratton. The reason I spoke more about – well, the reason I didn’t really mention Tom Cooper was my statements are of a moment in time, principally about now, where I worked with Lorna and have done for about 18 months, I think.

Mr Henry: So you have worked closely with him?

Carl Creswell: Mm.

Mr Henry: I mean, he was, was he not, displaying a very pro Post Office line, wasn’t he?

Carl Creswell: I don’t think that is the conclusion that one would reach, having heard evidence from members of the Post Office who have spent quite a lot of time in this chair complaining about an overly-interventionist approach taken by Mr Cooper.

Mr Henry: Well, that might have been philosophically the fact that he was supposed to be a Non-Executive Director who thought that actually maybe he wanted to have an executive role, but he was aggressively taking the side of POL in the litigation and also on the recusal issue, wasn’t he?

Carl Creswell: Well, I wasn’t around at the point of the recusal. I believe he recused himself from the discussion about the recusal. I found him not someone who wanted to be an executive in the company, but someone who felt that the company wasn’t conducting itself as well as it should throughout the organisation. And he did put quite a lot of pressure on the executives in the company, and they didn’t like that, but that was what we wanted him to do.

Mr Henry: Can I just ask you, do you know Josh Scott?

Carl Creswell: I do.

Mr Henry: You do. Because in November 2019, Mr Cooper commissioned Mr Scott to do research on subpostmasters and their background stories, and that which they had mentioned to the press about the tragedies that had befallen them.

Carl Creswell: Okay, I don’t recall that, but I understand what you’re saying.

Mr Henry: Later on – and no need to take you to the document, but so the reference is clear for the Inquiry in due course, it’s POL00337435 – there is a note of a consultation with Mr Altman Queen’s Counsel at which a Mr Vamos, whom you will have known from Peters & Peters, was present, where the following is stated:

“Board desperate to decide whether to take potshots at Misra.”

Then, further down in the document, and it is at page 3 out of 4 of the document, there is a reference to:

“Tom Cooper and Tim Parker need to say ‘Misra has been saying X in the press’. What our actual review of her case is X.”

But presumably it meant “Y”.

Then Mr Altman says that he knew Misra well.

If you’d been aware of that, you would have exercised caution, would you not?

Carl Creswell: I –

Mr Henry: That’s dirty pool, isn’t it?

Carl Creswell: That certainly sounds like a strange approach to be taking. I think, in defence of Mr Scott, I imagine he was doing what he had been asked to do, in terms of factual material.

Mr Henry: No criticism of him at all.

Carl Creswell: Okay.

Mr Henry: No. But that surely would set alarm bells, would it not?

Carl Creswell: It certainly should do, and I don’t recall seeing that, you know, at the time. The strategy of attacking postmasters is not a winning one.

Mr Henry: No. Thank you very much.

Sir Wyn Williams: Who is next?

Questioned by Mr Jacobs

Mr Jacobs: Hello, Mr Creswell. I represent a large number of subpostmasters who were affected by the scandal. I want to ask you about delays in the GLO scheme.

You said at the beginning of your evidence that you’ve taken much more control in relation to redress, and that’s come across as your evidence progressed. Many of our clients were members of the GLO, and they have expressed to us concerns that their claims are taking inordinately long to finalise. I think, from what you’ve said, there are over 80 claims outstanding; is that right?

Carl Creswell: In terms of claims that have not yet had offers?

Mr Jacobs: Yes. Or those that have had offers that haven’t been accepted?

Carl Creswell: It must be something like that. I don’t immediately have the numbers to hand, but it would be something like that, probably.

Mr Jacobs: I’ll quote you, and correct me if I’m wrong. You said 306 claims received, 221 claims paid?

Carl Creswell: Well 295 offers have been made.

Mr Jacobs: Okay.

Carl Creswell: To the 306.

Mr Jacobs: Okay.

Carl Creswell: So there is obviously a gap between the 295 offers and the 228 that have accepted, but there is always a lag, because we may have issued an offer at the end of October, and the claimant has not yet replied and would do so soon. I think the most relevant fact, which may support your argument, is there were about 39 or 40 claims that were formally challenged.

Mr Jacobs: But about 80 outstanding; is that right?

Carl Creswell: Do you mean of the 295 offers that have been made?

Mr Jacobs: Those that haven’t accepted and are still involved in the scheme.

Carl Creswell: Yeah, I make it 74, but –

Mr Jacobs: Very well. Well, we’re nearly there, aren’t we.

Carl Creswell: Yeah.

Mr Jacobs: So the delays. You will know that the GLO was announced in June 2022. The scheme was published in March to April 2023. Then there was a 38-week period where the Post Office provided disclosure, at the end of which. So the scheme wasn’t really in operation until January 2024; is that right?

Carl Creswell: That sounds slightly later than I have in mind, actually, about when the GLO started running, because in January ‘24, that was when we launched the 75k fixed sum. And you’ll remember from the earlier correspondence that we were discussing – this was during Kevin Hollinrake’s evidence – we were discussing the scrutiny threshold in it must have been about the September of 2022. So the scheme must have been – you know, at that point, do you remember I was saying in my correspondence that we were handling cases every week? So it must be earlier than the time you are saying to me.

Mr Jacobs: Well, the point I make is that it only got really got going after the disclosure exercise had been concluded, because that was the point at which it was possible to instruct accountants to deal with the disclosure and assess the losses?

Carl Creswell: I mean, there were steps along the way such, as the 19.5 interim payments, 19.5 million interim payments that we got out early on. But in terms of the part of the process in which you are most interested, that had to be later on, and disclosure did take a while.

Mr Jacobs: I’m talking about the ability to instruct a forensic accountant.

Carl Creswell: I understand.

Mr Jacobs: You’re aware, no doubt, that the scheme is beset with delays at the moment because the current problem – I think it’s been alluded to – is that there are only a limited pool of forensic accountants, so there’s a bit of a bottleneck because they’re all dealing with a number of claims. The Inquiry has heard very sad news on a number of occasions, including today, that Core Participants have died before receiving full compensation. Do you agree it’s imperative that the Department does everything possible to address continuing delays in this scheme?

Carl Creswell: I do agree with that. I do. And it’s very regrettable that people have died without full compensation; I completely agree with you.

Mr Jacobs: At paragraph 81 of your statement you say that the Department has made further interim payments to GLO postmasters suffering hardship.

Carl Creswell: We have.

Mr Jacobs: You cite the risk of bankruptcy or the loss of a home as examples where payments have been made. At paragraph 151, you say that interim payments for medical expenses are automatically approved upon receipt of a medical report that supports the need for treatment.

Would such payments cover medical expenses where a subpostmaster, for example, needed medical treatment within a short time frame, but wanted to do so privately because they didn’t want to wait or be in a queue?

Carl Creswell: As far as I’m aware, they could well do. We discussed this with the advisory board last week around cognitive behavioural therapy, where some claimants are still in the system and have not had full redress, and need money to access that sort of support. And my team confirmed in that conversation that that was the sort of thing that we could provide funding for. I have personally signed off hardship payments for people who are struggling with their gas bills.

Mr Jacobs: Well, exactly. What if a close family member was struggling or needed medical care? A spouse or a child, for example?

Carl Creswell: I think I would need to check the exact approach, but I think obviously, as I mentioned earlier, the principles around whether family members are included or not is something where there is a line. I think the impact of an individual seeing the harm that has fallen on a family member as a result of the Horizon scandal can be funded through compensation schemes. That’s a sort of indirect funding. I don’t know, if a family member comes along and says, “I need funding to pay for this bill”, whether that particular bill would be covered through the payment to the postmaster or whether what we would do would be to provide a hardship payment against a head of loss from that main postmaster, and then it was up to the postmaster or former postmaster to decide how to spend that money, if you see what I mean.

Mr Jacobs: We have clients who are here today, and I won’t name them, but I am told that people here today have received such payments in respect of family members with medical conditions, and others have had pre-existing medical conditions that have deteriorated, and they have received payments in relation to that. But don’t you think that the availability of payments for subpostmasters, former subpostmasters or assistants, or family members who are struggling, for whatever reason, is something that should be published? It’s not something that people should have to go to their lawyers and write letters to make requests for. That should be information that’s freely available?

Carl Creswell: That’s quite an interesting point, actually. I mean, my team and I try hard to ensure that postmasters who need money whilst they are still in the system can access that money, and obviously we’ve had waves of interim payments, but we have also approved quite a large number of hardship payments, and the definition of hardship is very loose. It’s quite a low bar. So maybe that is something that I should take away and discuss with my team.

There is a trade-off between how much time is spent by claimants, victims, lawyers and departmental lawyers in handling small requests for funding, and then getting to the end of the challenge cases and getting payments out. Of course, small amounts of incremental requests every week would probably be excessive, but the principle of trying to ensure that people aren’t suffering whilst they’re waiting for their claim to be completed seems inarguable. So maybe we should amend our guidance to reflect that.

Mr Jacobs: That’s helpful. It’s also noted that you say the definition of hardship is – the words that you used are “loose” and “low bar”. So it’s a wide discretion, isn’t it?

Carl Creswell: Correct.

Mr Jacobs: Thank you.

My next question, then, is in relation to, at 3.55 I think today in answers to questions from Mr Blake, you spoke about the publicly available figures in relation to overturned convictions and people who qualify under the Act. Can I just ask you to confirm that that information is the Quashed Convictions Management Information published by the Ministry of Justice?

Carl Creswell: That’s correct, from 1 November, and it was included latterly in the bundles.

Mr Jacobs: Yes, I think what was included was October’s numbers, so I’m not going to take you to that, but there was one for 4 November that’s been published in the last obviously couple of days. You said in your evidence there’s a cohort of 949 in England and Wales.

Carl Creswell: Yes.

Mr Jacobs: 732 have been assessed?

Carl Creswell: Yes.

Mr Jacobs: There’s a cohort of 130 in Scotland and Northern Ireland?

Carl Creswell: Yes. 100 in Scotland and 30 in Northern Ireland.

Mr Jacobs: Have they been assessed?

Carl Creswell: I believe that they are in the process of being assessed and letters have started to issue. There was a press notice from the Scottish Judicial Authorities as well, which you might want to look at to see how far they’ve got.

Mr Jacobs: The figures that are published I think say that 441 individuals in England and Wales have been sent a letter?

Carl Creswell: Correct.

Mr Jacobs: Do you know how many have replied? Because this isn’t recent; this is over the whole period, isn’t it, that letters have been sent?

Carl Creswell: How many have applied is linked to how many people have submitted claims, and that’s 172 people. That’s up from 104 the previous month. So every day we are getting large numbers of people who have received those letters applying.

Can I just take the opportunity to give a couple of other bits of information around these stats that I think are relevant, which is that the MoJ, the Ministry of Justice, is now getting to the point where they don’t have evidence for everyone. So they have written out to lots of people, which are quite straightforward. You might have heard this through the discussions that my team holds with you on a regular basis.

There are 116 people in addition to the 441 who have been assessed and either have already been written to, or will be written to, saying: “We think you might be in scope, can you provide more evidence?”

So back to that point I made earlier to Mr Blake, there are two ways in. We have a bit of a Venn diagram: people that have come in of their own accord, and people from the evidence base. A point that I think hasn’t been expressed publicly very clearly is that 949 for England and Wales includes the 111 overturned convictions cohort. So the list that the Post Office provided included those whose convictions have been already overturned.

Mr Jacobs: I think it’s 104 letters have been sent out to –

Carl Creswell: That’s correct.

Mr Jacobs: – people to clarify whether they are –

Carl Creswell: You’re looking at the same table as me.

Mr Jacobs: Yes. We’ve heard, the Inquiry has heard – finally, from me – the Inquiry has heard evidence from the Post Office that searches are ongoing in relation to subpostmasters who were in post during the relevant period to see whether there may be further people whose convictions have been quashed. What attempts is the Department making to obtain responses from people who don’t respond, and to look for people who haven’t been identified yet but may be in scope?

Carl Creswell: Yes. So this is a question, really, that the Ministry of Justice Is dealing with. I understand they’ve employed external search – are you okay?

Mr Jacobs: Yes. Please continue.

Carl Creswell: I understand that the Department, the Ministry of Justice, has recruited some external search experts who are searching for people. I have also passed on to them the offer that I think you may have raised previously about the NFSP saying that they could perhaps help, and I’ve passed that on to the Ministry of Justice. They are also following up where there are no responses to the letters that have been sent.

Mr Jacobs: Okay. I have one further question to ask you. I understand that – of people that you’ve written to, how many of them have registered?

Carl Creswell: I don’t have that statistic here, I’m afraid.

Mr Jacobs: Are you able to answer this question: what is being done to find those who have not registered?

Carl Creswell: Well, that was what I answered earlier.

Mr Jacobs: Okay. That’s very helpful. I don’t have any more questions for you.

Mr Blake: Sir, there are no questions from Mr Moloney.

Sir Wyn Williams: So I think that’s it, then.

Thank you very much, Mr Creswell, for both your witness statements and for your oral evidence this afternoon.

We will resume at 10.00 tomorrow morning.

(4.20 pm)

(The hearing adjourned until 10.00 am the followed day)