21 June 2024 – George Thomson
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(9.45 am)
Mr Blake: Good morning, sir, can you see and hear me?
Sir Wyn Williams: Yes, thank you very much.
Mr Blake: Thank you very much. This morning we’re going to hear from Mr Thomson.
George Thomson
GEORGE RITCHIE THOMSON (sworn).
Questioned by Mr Blake
Mr Blake: Can you give your full name, please?
George Thomson: George Ritchie Thomson.
Mr Blake: Thank you very much. Mr Thomson, you should have in front of you a witness statement –
George Thomson: I do.
Mr Blake: – with the Unique Reference Number of WITN00970100. It’s dated 23 May 2024; is that correct?
George Thomson: That’s correct.
Mr Blake: Could I ask you to turn to the final substantive page, page 31.
George Thomson: I’m there.
Mr Blake: Can you confirm that is your signature?
George Thomson: That, indeed, is my signature.
Mr Blake: Thank you. Is that statement true to the best of your knowledge and belief?
George Thomson: It certainly is.
Mr Blake: Thank you very much.
Mr Thomson, you joined the Post Office at 18 years of age as a Postal Officer; is that right?
George Thomson: That’s correct.
Mr Blake: You became, at some stage, branch manager?
George Thomson: That’s correct.
Mr Blake: You joined the NFSP as a member in 1992?
George Thomson: That’s correct.
Mr Blake: You became a member of the Executive Council from 2004?
George Thomson: Yes.
Mr Blake: You were elected General Secretary in 2007?
George Thomson: Yes.
Mr Blake: When did you finish your term as General Secretary?
George Thomson: Early 2018, I was planning to go home, I was planning to leave anyway but I probably left about six months before I was going to because my family needed me back in Scotland.
Mr Blake: Thank you. I’d like to bring back up on to screen your witness statement, please. It’s WITN00970100. I’m just going to take you through some passages from your statement.
Paragraph 1, you say:
“In my estimation well over 100,000 people have used the Horizon system between 1999 and 2004 and only a small amount of users have had problems with the system.”
Can we turn please to paragraph 25, that’s on page 9. Halfway down page 9, thank you. You say there:
“We have always known that the Horizon system is systemically robust and is still giving a great service to our clients …”
You carry on to say:
“Only a very small number of users of the Horizon system over the last 25 years have claimed problems and any time these problems were raised, in particular remote access, admin reversals, [Post Office] denied this could happen.”
Over the page, please, 26. You say:
“The NFSP under my stewardship believed fundamentally that Horizon was a robust system without any systemic fault issues. In my estimation over 100,000 people have used the system since 1999 carrying out billions of transactions worth hundreds of billions of pounds with only a tiny percentage claiming to have problems with Horizon.”
Moving on to paragraph 33, please, page 12. Bottom of page 12 and into page 13, please. At the bottom of that paragraph, over the page slightly, you address Mr Castleton’s case. If we scroll down you say:
“On the issue of Horizon, I completely disagreed and still disagree with Mr Castleton that the Horizon system is not robust.”
34, if we scroll down, you say:
“Subpostmasters were always very uptight when the Audit Team turned up because they knew they would go through everything to make sure that it was all accounted for.”
A few sentences on, you say:
“When this happens it always brings angst to the subpostmaster community, and significant discrepancies can lead to a major change in the subpostmasters life circumstances.”
Page 15, paragraph 37, still on Lee Castleton. You say:
“Lee Castleton came to us I recall after he was terminated and was therefore no longer a subpostmaster. He had never been a member. If no one paid their membership dues until they were in trouble, there would be no organisation.”
Paragraph 38, we scroll over the page, please. The bottom of the page, you say:
“Firstly, I don’t believe that the actual operating Horizon system is covered in scandal but instead is a robust operating system without systemic problems. As I write this statement it is being used every day for millions of transactions and for an ever-increasing proportion of the nation’s banking needs.”
Paragraph 39, over the page.
“It is blindingly apparent to me from the volume of transactions carried out by the network and the very small number of users of the system that claim problems that it is a tiny fraction of the transactions that Horizon has processed over its lifetime that went wrong.”
Paragraph 45, that’s over the page, please. You say:
“Funds owed to [Post Office] growing significantly as any shortage is now mostly blamed on Horizon [you’re talking about the present day Post Office]. Indeed, [Post Office] management were instructed to write off 300-400 convictions by the government as part of the general amnesty they announced for affected subpostmasters.
“Let me reiterate that the NFSP under my leadership that Horizon was robust without systemic weaknesses, the sheer volume of transactions against the small percentage of claims proves beyond any doubt that the system was robust.”
Over the page, please, paragraph 49:
“I stated previously, over 100,000 people worked on the Horizon system between to 1999 and 2024 doing billions of transactions worth hundreds of billions of pounds including Government benefit work, DVLA work, Passport Office work, Royal Mail letters and parcels over the same period. A very small number of our members complained that Horizon was faulty.”
Moving on a couple of sentences, you say:
“At audit it was business as usual and some subpostmasters were unhappy that discrepancies had been discovered by the [Post Office] team.”
Paragraph 54, page 21. You say:
“As previously stated, the NFSP believed that Horizon was systemically robust and I believed when I left in early 2018 and still do as a private individual.”
Paragraph 59, that’s over the page, page 22, you say there:
“As previously stated, over 100,000 people have used the system from 1999 to 2024 carrying out billions of transactions worth hundreds of billions of pounds and only a tiny proportion had complaints regarding faulty Horizon usually verbalised at audit.”
Paragraph 60:
“I once again reiterate that the systemic robustness of the system was never in question in my eyes … I have always believed that JFSA and many of the news items have always painted Horizon as not fit for purpose, systemically faulty, and that every single mistake made in the [Post Office] network is the fault of Horizon. This viewpoint is not only factually incorrect but has damaged the brand and post offices all over the UK. This is my reason for the strong words I used.”
You’re referring there to a particular document.
Finally, paragraph 67, that’s page 25, again you’re referring to a document I’ll take you to in due course. You say:
“My concern is that the Horizon programme, the Panorama programme, ITV’s docudrama and ITV’s news coverage in particular since then had given the impression that the Horizon system is systemically faulty and not fit for purpose. This is of course nonsense which, in hindsight, would have been a better word to use instead of ‘BS’.”
Looking at your statement and those passages that I’ve taken you to, do you think there might be something in the suggestion that you lacked sympathy for the accused subpostmasters?
George Thomson: No, it’s just a fact. It’s a fact of life. Horizon was dealing with billions of pounds worth every week of Government benefits when it first came in. Two weeks ago, it was announced that, in April this year, the same system did just short of £3.5 billion of banking transactions. So it’s a strong system, it’s a well-used system and I still support it systemically as being very robust. However, we’re going to touch on other issues. It is very robust.
And if I can just go back to – it was close run thing if we even had the Horizon system. So Peter Lilley in the mid-’90s announced a benefit card and, when the Labour Government came in in ‘97, Horizon was over budget by a significant sum. It was a year behind schedule and, for a period, the Labour Government was going to push everybody to automatic credit transfer into the bank. And we fought a rearguard action to do two things. I wasn’t General Secretary at the time but I was very active in Scotland at the time and we fought a rearguard action, including the Federation down at Shoreham, to make sure Horizon went ahead. And I think Royal Mail ended up buying Horizon for £500 million or £600 million and to make sure that the Government still allowed people to get their benefits at the Post Office.
So the Federation has always been supportive of Horizon because Horizon was the difference between half the network being closed down by the Government and no benefits being paid at the Post Office from the year 2000 onwards, so we’ve been very supportive of its necessity for the Post Office Network for the last 25 years.
Mr Blake: Mr Thomson, this Inquiry has heard about lives ruined, people who have taken their own lives, bankruptcies, imprisonment. Having looked at those passages that I’ve just read to you, do you think that there might be something in the suggestion that you lacked sympathy for those accused subpostmasters?
George Thomson: No, I don’t but what makes me angry is that the Post Office on every occasion denied – so in terms the system being robust, it always has been. But the Post Office always denied that there could be issues like remote access or administration reversals, every time we raised them. So the Post Office not telling the truth is what annoys me, and the outcome, and the implication that’s had on individual subpostmasters who are still in the network, and the people that had to leave for various reasons and who are – a lot of them are here today.
Mr Blake: Do you think you may have become too close to the Post Office in your time as General Secretary of the National Federation?
George Thomson: We always worked closely with the Post Office. The issue – and the Inquiry has not shown it and the press haven’t shown it, our members were never workers. Our members were self-employed business people who purchased a franchise off the previous subpostmaster and, on many occasions, had to give the Post Office 25 per cent when the network was doing very well and the franchise was doing well; they had their own staff, they had to dismiss some of their staff if there were errors; they had their own lawyers; they had their own accountants.
So our people were never workers in the sense of working directly for the Post Office. They actually are small business people who went into a contract with their eyes wide open, and we believed that the Horizon system – and I still do – it wouldn’t be doing £3.5 billion a month banking, as we speak, if it was not a robust system. In fact, I believe that there’s probably going to be a three or four-year extension to the Horizon system for the next three or four years and, no doubt, the business transactions will be increasing dramatically.
So I wouldn’t say I was close to the Post Office over it. I’ve always been as supportive of Horizon, or more supportive from the very get-go. In other words, some senior managers in the year 1999 or 2000 would have been far less affected than my members if Horizon had never been implemented in the first place. So I’ve been a very, very strong supporter of Horizon to keep the network open, to keep income running to subpostmasters, and I’m still a strong supporter because it is still – banking is bringing in, into the postmasters’ packets, as we speak, just now, into their salaries, about as much as Royal Mail, in some branches. So banking is becoming the number 1 issue for our members in terms of banks closing and our members doing the banking for the UK.
Mr Blake: Mr Thomson, I want you to give full and frank answers today.
George Thomson: Yes.
Mr Blake: But, if we are going to finish today, I think could I ask you to keep your answers relatively short?
George Thomson: Well, I’m here to tell the truth and I’m here to explain the background for everything as well.
Mr Blake: And I’m asking the questions and the question that I just asked you was: were you too close to the Post Office; and I think your answer to that is “No, I wasn’t”.
George Thomson: No, I wasn’t.
Mr Blake: Let’s look at funding of the NFSP.
Can we turn to NFSP000009591. This is the first topic, funding. I’m going to move on chronologically to development over time. This a letter from 2013, sent by the Certification Office – or, sorry, a response to the Certification Office. Can you recall in 2013 the issue of the NFSP’s independence being questioned by the Certification Office.
George Thomson: I certainly can.
Mr Blake: Who were the Certification Office?
George Thomson: Well, basically, they decide if you qualify to be a trade union or not and, at that time, we had a small section of postmasters who have broken away and joined the Communication Workers Union, as is their right to do so, and, not that long after that happened, someone wrote in to the Certification Officer to say that they did not believe that we qualified as a trade union, and that happened to be the case and it happened to be the case because, to be a trade union, the majority of your members must be classified as workers.
So, unfortunately for the Federation, all our members, every one of our members, was a self-employed entrepreneur, a self-employed businessperson, so therefore, we were delisted by the Certification Officer. We did not want that to happen. It may have happened further down the line, if we had instigated it, maybe another two or three years, but it was pre-judged. Someone put – I don’t know who it was, I’ve got my suspicions, it doesn’t really matter now – but a letter was put in and, unfortunately, I remember speaking to the Certification Office, they said, “Look, you almost certainly shouldn’t have been recognised as a trade union in the first place because you’ve always represented self-employed people, rather than workers”.
Mr Blake: Thank you. Mr Thomson, it would be nice if I could get a question in from time to time today.
Let’s stick with this document. This document isn’t addressing that issue. So there were two issues with independence: one was whether subpostmasters satisfied the legal requirements as employees or workers, et cetera. But this was a first issue and that was actually about the independence of the NFSP; do you recall that issue?
George Thomson: Yes.
Mr Blake: This is your response to that complaint, is it?
George Thomson: That’s my response, yes.
Mr Blake: So I’m just going to take you through this letter. It starts as follows:
“Thank you for your letter of 9 May, notifying me of correspondence received by your office that raises concerns about the NFSP’s status as an independent trade union within the meaning of Trade Union and Labour Relations (Consolidation) Act 1992.”
Then you go on to address each of the complaints. If we could scroll down, the first is union facilities and you say as follows:
“The NFSP is currently in receipt of an annual grant of £175,000.”
Pausing there, May 2013, was that the main grant you received from the Post Office, £175,000?
George Thomson: I can’t recall because, during Network Transformation, there were significant grants because our team were out in the field at meetings virtually every night of the week, up and down the UK. So there was significant funds that way. However, most years it was the money paid in lieu of union facility time that was our biggest grant from the Post Office. Not every year but was years that was the case.
Mr Blake: That’s this, the 175,000 –
George Thomson: That year. Some years it was higher than that.
Mr Blake: Thank you. You say there:
“The grant enables an official to pay for a substitute post office clerk whilst they undertake union duties.”
Did that cover anything for yourself in terms of substitution of Post Office work. You didn’t actually run a Post Office, I don’t believe, at this time, did you?
George Thomson: Our rules at the time is you couldn’t run a Post Office and be General Secretary. My wife became the postmistress she already worked there. I think the rules have changed now. I don’t really know because I really don’t have much to do with the Federation.
Mr Blake: So would that amount pay for your wife. Where would that go, that £175,000?
George Thomson: My wife wasn’t active in the Federation, so it would hardly pay for her. It’s a strange question.
Mr Blake: The suggestion here is that the amount pays for somebody to work in the Post Office covering your duties?
George Thomson: Not me, all of our Executive Council are branch officials or branch officers or chairmans of branches, the actual structure of the Federation, not the General Secretary. I got my wage from the Federation.
Mr Blake: Thank you. If we scroll down, we then come on to other commercial arrangements:
“The NFSP has for many years been in receipt of commission income from the sale of insurance and other finance service products.”
It says there:
“NFSP’s initial agreement is for five years at a commission rate of £80,000 per annum.”
So you received £80,000 from commission from insurance, so that’s not related to income from the Post Office; is that right?
George Thomson: It’s right and it’s wrong. We had a contract with Zurich Insurance and we got significant funding from Zurich commission because, obviously, we introduced them to subpostmasters. The Post Office came along and said they were going to launch – as part of the financial products they were launching, they were going to be launching business insurance and they wouldn’t like a situation where they were competing with us pushing forward Zurich.
So it was just a straightforward transaction, okay, we get £60,000 or £80,000 a year from Zurich into the Federation, if you want us to push the Post Office business insurance, you’ve got to match that or we’re not going to do it, and that’s what they agreed to do.
Mr Blake: So there was also income relating to insurance commission from the Post Office?
George Thomson: That’s what I’m saying, yes. So it was Zurich for a long time and then the Post Office, for a good few years, were giving us about £60,000 or £80,000 a year, I can’t recall, it was 10 or 12 years ago, but it was a significant sum of money. But it just replaced the lost commission from Zurich.
Mr Blake: So at this time, 2013, it seems as though you are receiving income from Zurich. Oh, no – so that was terminated and then the £80,000 at this stage was paid by the Post Office?
George Thomson: I think that’s correct and that’s certainly what did happen. I don’t know if the dates were correct there.
Mr Blake: Then advertisements in the SubPostmaster journal, it says:
“The NFSP has a monthly members’ journal in which advertising space is sold on a commercial basis. From time to time [the Post Office] place advertisements and is invoiced under normal commercial arrangements. Invoiced advertisements for the year ended 31 December 2011 [nearly £13,000]”, 2012, £11,000.
So a further, £11,000, £12,000 from the Post Office for advertisements in the SubPostmaster journal –
George Thomson: Yes, that could be things like they had a savings product and – a savings product at the time they were pushing, Instant Saver, it was called. I think it were things like that. General Post Office products they wanted us to push to our members but also to the wider community as well.
Mr Blake: Then the “NFSP conference”:
“Representatives of [the Post Office] regularly attend the NFSP’s annual conference as visitors. Additionally, in recent years, they have taken a stand as part of a small exhibition held for the benefit of members at conference, and have also sponsored the annual conference gala dinner. The total amounts received from [the Post Office] in relation to these items was [£7,000] and [£6,500] for the years ending 2011 and 2012 respectively.”
So there’s further income from the Post Office in relation to the NFSP conference and also the sponsorship of the dinner. Then you say:
“Turning now to the specific amount of £341,850 for ‘Network Transformation and support activities’ referred to in your letter, I comment as follows …”
You set out there the various payments from the Post Office to the NFSP: £250,000, £22,000, nearly £70,000. Can you assist us, NFSP Trading Limited, what was that?
George Thomson: It was, if you like, a subsidiary of the main organisation, dealing with retail and commercial. It was never particularly successful but it was always there and it has been – I don’t know if they’ve wound it down now or if it’s still there. But all these figures you’ve given, they’ve been on the accounts for years. Any member of the public could have read these.
We represented members who ran franchises for the Post Office and we worked closely with the Post Office because we both needed to have a successful franchise, which is – you know, that’s the reality and it’s not surprising we worked closely with the Post Office as we had a franchise.
Mr Blake: In terms of your own personal income, I think you said you received an income from the NFSP. Did you also receive an income from NFSP Trading Limited?
George Thomson: Never. I got my salary from the company and it was a decent salary, so I didn’t need it to be, you know, supplemented elsewhere. Even though, I must say, that when we were cutting back some of the costs, I actually doubled up and was doing the retail side for a year. I was never out of the Institute of Directors about 7.00 at night in London after my day job. But again, that was me, you know, looking after the Federation, as the Federation looked after me.
Mr Blake: So 2013 we have the £175,000, £80,000; we have an additional £12,000, or so from the advertisements; we have the £7,000; we have the nearly £342,000 in relation to the Network Transformation Programme. So in the year 2013, do you think the income from the Post Office would be somewhere between £500,000 and £1 million or would it be –
George Thomson: It might have been and, if you take into account, as well, the fact that one of our key arguments for trying to retain a bit of union status was because the Post Office carried out check off for us, ie they took money every month from our members’ remuneration and they sent it to the Post Office. And, actually, if we had to put something in place, it would have probably cost us maybe ten times more than the Post Office could do it for.
But it’s the same with the CWU. The CWU, they’ve still got check off, which is worth a fortune to the CWU. That means money every month or every week is taken of your members’ salary and paid to the organisation. So there’s nothing that – there’s nothing big there. And, as for the value of union facilities – and the CWU do a good job, I’m not knocking them for a minute – but their union facility time, at the time you’re talking about there, was many, many millions of pounds a year more than the Federation.
Mr Blake: Mr Thomson, can I just stop you there? I haven’t made any criticisms, I’m just taking you through the figures.
George Thomson: Yeah, I know. I’m trying to give you a better understanding of the situation.
Mr Blake: Could we please turn to NFSP00001464, please. This a letter of 13 January 2014, and this is addressing the point you made at the beginning. It’s from the Certification Office and, if we scroll down, we can see it says:
“The Certification Office has now considered your representations …”
That’s not just the representations we’ve just seen but further representations addressing the separate matter that you’ve addressed. They say as follows:
“He has determined that National Federation of SubPostmasters does not meet the definition of a trade union provided in section 1 of the Trade Union and Labour Relations (Consolidation) Act. Accordingly, I must inform you that … the National Federation of SubPostmasters was removed from the list of trade unions today, 13 January 2014.”
So after an issue was raised about independence and then a further issue was raised as to whether, in fact, you could be a trade union in itself, it seems as though the NFSP was removed from the list on 13 January 2014; is that correct?
George Thomson: That’s correct but I had a conversation – I’ve got the advantage over you – I had a conversation with the Certification Office and they told me it was because we should never have been a trade union in the first place and it was because our members were self-employed. Because, if you use your logic for the first part of your evidence, every trade union in Britain has check off, you could argue are they totally independent? But, of course, that would be a nonsense, wouldn’t it, because it doesn’t stop them being independent just because they’ve got a value of check off: the National Health Service, all the unions there, the Royal Mail, the local authorities. So I understand what you’re saying but I disagree with your logic.
Mr Blake: Mr Thomson, were there implications, negative implications, for the NFSP, of being removed? Might, for example, there have been a possibility that you’d have to give funds back to members – a possibility?
George Thomson: There was no advantage whatsoever and, in fact, looking at what we did, because it came as a shock the fact that someone – you know, we’d been a trade union for years, and years, and years, albeit we operated like a trade association, many, many aspects, retail advice, HR advice, all these different things. So it came as a big surprise, and I actually sat in my office with the Finance Director, Philip Bloor, and I said to Philip, you know, “The implications here, have we got a future?” And I said, “We’ve got about a year and a half to make our mind up what we’re doing”, and Philip said, “Look, George, if you’re looking after the staff and everything in this building, make sure they get what they’re due and everything else, we’ve not got much more than half a year to go”.
So we certainly did not want to lose our trade union status at this time. We were worried about check off, losing the ability to get check off, which to put something else in its place would have cost us a fortune. We would worried about our officials and our branch secretaries being able to get money for being out and about and having to cover their staff themselves.
So no. But that’s not to say, that’s not to say, that two or three years time down the line, as we looked at our future, then we may have decided to become a trade association without that, you know, punch – and the bat that we had from the Certification Officer after someone had complained.
Again, I’ve got my feeling that it was to do with the group that went to the CWU but that’s just my thoughts.
Mr Blake: Can we turn to POL00004484, and it’s page 2. By the summer of 2013, if we scroll down, you were negotiating with the Post Office with regards to the future. This is an email sent on your behalf. Who were Sue Barton and Nick Beal, very briefly?
George Thomson: Post Office officials that we dealt with on a regular basis. Sue was quite senior. Nick was less so.
Mr Blake: So the summer of 2013:
“Dear Sue and Nick, to facilitate the best use of time during the conference call this afternoon, I would like to lay out a framework for potential agreement as follows …”
There’s there the following various items, and it’s number 4 that I’d like to look at, please:
“[The Post Office] and the NFSP to sign a 15-year contract for the NFSP to represent all post office operators. This will include:
“Financial agreement
“£500,000 payment [in] 2013-14
“£1.25 million payment 2014-15
“£1.25 million payment 2015-16
“[Going up to] £2.5 million payment [from] 2017 to 2028
“This process allows for the drop-off of our present membership fee, and facilitates the change from check off towards [Post Office] charging a fee from all agents which is passed directly to the NFSP.
“Memorandum of Understanding to be worked on with rights and responsibilities on both sides.
“If necessary, NFSP will drop the union badge to sign contract.”
Now, pausing there, when you say “drop the union badge”, in fact, by this stage, you didn’t have the union badge or soon after, by early 2014, you didn’t have the union badge.
George Thomson: Yeah.
Mr Blake: “Please note – a signed agreement with the blood of both myself and Paula is necessary on the future of the NFSP before any agreement is granted on either [Network Transformation] and other points.”
Now, at this point, the numbers of subpostmasters was getting somewhat smaller, wasn’t it?
George Thomson: Yes, it was, but there’s other issues as well. The franchise over – from about the end of the ’90s, the franchise was struggling. Government were withdrawing work, people were moving to the banks, particularly with their benefits, automatic credit transfer. So the franchise had not been as attractive as it used to be.
So what we did, working with Royal Mail Group, working with Post Office Limited, we had Urban Network Reinvention, that was the first one, we had 2,500 postmasters left with up to 26 months’ compensation. The alternative was a lot of them would have went bankrupt so they were quite happy. We then had Network Change, again, roughly about another 2,500 left. And then Network Transformation, which brings me right to your question.
And what happened is for the majority of our members, the biggest part of their business was the Post Office income and that’s how they were struggling. Some of them had retail but our members tended to have small retail. So we were losing people who were Post Office specialists, who had a bit of retail, who were active in the Federation, who knew their councillors, who knew their MPs. And they were all leaving, and it was apparent to me that, if you were then transferring a very small post office into a big convenience store and it was, say, only one-tenth of his income, these people were more involved in retail and they wouldn’t join a specialist organisation.
So every meeting I was at, for about two or three years, every conference, every special conference, most of the meetings with the Post Office, I would say, “Look, we have saved the Network, we’ve saved the Post Office but, as a result, it’s the Federation that, in effect, has killed itself off. That is not acceptable”, and when I at first –
Mr Blake: Mr Thomson, I’m going to have to stop you there.
George Thomson: That’s fine.
Mr Blake: All of we’re addressing here is the finances and all my question was was, at this time, the numbers of subpostmasters was some what getting smaller?
George Thomson: Yeah, but –
Mr Blake: Do you agree with that or disagree with that?
George Thomson: I’m giving you the reason why it’s getting smaller –
Mr Blake: I didn’t ask for the reason, I just asked whether it was increasing or not?
George Thomson: It was decreasing not increasing.
Mr Blake: Thank you very much. The figures that we see here, they’re quite significant figures, raising from £500,000 to £2.5 million by 2017 –
George Thomson: That’s because we –
Mr Blake: – is that correct?
George Thomson: That’s correct but we took on few functions and it was to help postmasters to grow their income and to become less reliant, so, within that money, what does it include?
Mr Blake: I didn’t ask what it included, all I’m asking is about the figure, purely the figure. The figure is increasing quite a significant amount, is your proposal, over a small number of years, reaching £2.5 million from the Post Office by 2017; do you agree with that or disagree with that?
George Thomson: I was giving you a reason why –
Mr Blake: I didn’t ask for the reason.
George Thomson: Well, that’s what you’re getting.
Sir Wyn Williams: Well, Mr Thomson, I understand that you’re anxious to get across your point of view but, in truth, it’s much easier for me if Mr Blake asks the question, you answer it, and then, if, at the end of Mr Blake’s questions, you feel that there are other things that you want to say, then within reason, I will permit you to say that. All right?
But it will be much easier for today’s progress if you simply answer the question put to you and then, as I say, if necessary, I’ll afford you some time to wrap up, so to speak. Okay?
George Thomson: Okay.
Mr Blake: Let’s move to POL00424024. Now, there are meetings between yourself and the Post Office leadership during the period 2013/2014, to discuss the future. This is a briefing for the CEO of the Post Office. So we’re at 11 December 2014, and a meeting between yourself and Paula Vennells; do you recall that meeting?
George Thomson: Yes, I had many, many meetings with Paula and Moya. Yeah.
Mr Blake: Thank you. The purpose of the meeting is as follows:
“Purpose of meeting is to discuss current/emerging strategic relationship with NFSP senior members.”
There’s further background if we scroll down, please, “Grant agreement …/Network Development”.
So we are going to see “MOU” mentioned a few times, Memorandum of Understanding. Was that the proposal we’ve just looked at, the emerging proposal that we’ve just looked at?
George Thomson: Yeah.
Mr Blake: Thank you:
“NFSP has now returned their marked-up diversion of the MOU/Grant Agreement and there are a number of key elements within their proposed changes to take account of. Critically, as expected, they are asserting a position that they will not engage in any detailed discussions related to Network Development until the [Grant Agreement] is signed and that the [Grant Agreement] sets out clear parameters that do not provide their support for any Network Development beyond that defined in the current [Network Transformation] plan …”
The next paragraph I’ll just read the final sentence or a couple of sentences there:
“Signals from George privately are that he understand the reality of the market and uncertainty in the business around signing an agreement binding [the Post Office] to make payments to NFSP without prior agreement on Network Extension, albeit he is formally asserting a position that the [Grant Agreement] is part of [Network Transformation] and a dependency on them supporting compulsion in [Network Transformation].”
So that’s the status of the negotiations as at 11 December 2014. I’d like now to turn to POL00386638, please. This is another brief for Paula Vennells, 5 February 2015 so these negotiations are going on 2013, 2014, into 2015; is that your recollection?
George Thomson: That’s my recollection, yes.
Mr Blake: We can see in brackets there, halfway down this page, it says:
“Intent is not to discuss the MOU/Grant Agreement but in the event this is raised, update as follows …”
There are bullet points there for Ms Vennells. One of them is:
“We believe, with careful consideration and crafting, a suitably framed agreement that clarifies termination events and has a break clause linked to a review and termination payment will be a good deal for NFSP and one that will ensure they have an independent future.”
So, by this stage, I think one of the main topics of discussion between yourselves and the Post Office was termination events, so whether and in what circumstances the Post Office could terminate the agreement and also whether they had to pay you money if they did so; is that right?
George Thomson: That’s correct.
Mr Blake: If we scroll down, we can see “Further Background”. “Current NFSP position”, as believed by the Post Office, was that:
“The Grant Agreement is a given – it was part of last year’s [Network Transformation] discussions.”
So it seems, by that stage, you’ve already agreed to support Network Transformation; is that right?
George Thomson: Yeah, we were very supportive of Network Transformation because of the conditions facing subpostmasters. The franchise was becoming a busted flush, people couldn’t make a living and we got hundreds of millions of pounds of Government funding to give people compensation to leave or to give them big funds to stay and modernise, and there was modernisation funds available, as well, under Network Transformation.
Mr Blake: It says:
“However NFSP have introduced a clause that requires [Post Office] to pay 3 years (£7.5 million) in the event of termination – which, from NFSP’s perspective, could only occur for a material breach.”
So part of that discussion, as late as 2015, was still about the financial position and how much money the NFSP would have to be paid in the event that the Post Office terminated the agreement; is that right?
George Thomson: It was, and it was important because it took a lot of badgering for Paula to agree to the 15-year deal. And I was wanting to make sure that if Network – once Network Transformation had finished, that the Post Office couldn’t just come along and get rid of the Grant Agreement. I think, having a Federation made a difference, albeit – albeit – can I just say on that particular point – although I left six months before I was going to, I had already decided that the new world – because I can be quite outspoken and vociferous – that the new world with a grant for me wasn’t a world I wanted to be part of.
So I’m being honest here, I’m here to be truthful, I’m not here to make friends. So I already had some concerns that some of my teeth were being pulled when we moved to the 15-year deal, maybe another operator could do it, you know, maybe someone more compliant could do it but I had decided that it wasn’t for me and I was going to move on.
So even though I left six months earlier for family reasons, I’d already indicated – so everybody in the Federation new I was leaving anyway but I just left a bit quicker.
Mr Blake: Sticking with the bullet points:
“NFSP will not accept the principle of a break clause linked to agreement to a termination payment.
“If no agreement is reached, NFSP have options – most likely a merge with CWU.”
Now, I don’t need to take you to another document but it looks as though merging with the CWU was, in reality, a bargaining chip on your part; would you agree with that?
George Thomson: No, because the difficulty – as an individual, I’ve got a lot of – massive respect for Billy Hayes, who was the retired General Secretary, and massive respect for Dave Ward, who is the present General Secretary. The big reason – I actually spoke to hundreds of postmasters during this period and I always asked, “If we were going to join, or in future if things were changing, would you join the CWU?” And maybe one in four said they would, but three-quarters made the point, “Look, George, we run a franchise, we’re business people, we don’t want to join the CWU”.
So my concern was always that, if we joined the CWU, I would have no problem with that but we probably would not have taken much more than a quarter of our membership. That was my concern. So, no, it wasn’t just a bargaining chip.
Mr Blake: Perhaps we could keep this document on screen and I will take you to that document. It’s NFSP00001079. Perhaps we can keep it up on screen as well. Thank you very much.
This is a document that has 29 July at the top and, if we scroll down, we see there a paragraph that begins “30 July, Camden”, and it’s that last sentence there that I would like to read to you. It says:
“We are getting closer and closer to tipping point of lack of influence, and [the Post Office] getting closer to completion of [Network Transformation].”
So this is slightly earlier:
“If CWU is rejected our biggest bargaining chip is gone!”
It seems there to be there suggested that the CWU is being used as a bargaining chip against the Post Office.
George Thomson: I dispute that. I know what it says there but I dispute that.
Mr Blake: If we take that down, please, and stick with the one on the right-hand side. If we scroll down, please, “Our position/Next steps”, this is the Post Office:
“We remain of the view that a strong relationship with NFSP is the right outcome – but not at any price.”
Then that final paragraph there, it says:
“Although we have yet to position it as follows, the reality is that we need to convince George that a 15-year deal fully independent and funded by Post Office with a 5-year break clause with a termination payment that equates to a 1-year notice period is a far better deal than a merge with CWU that simply promises 5 years in an organisation that cannot afford to subsidise the NFSP with a declining membership, is frankly bankrupt and likely to merge with Unite within that timescale.”
Can we please turn to CWU00000011. This is an email to members, 29 May, so we’re now in the summer of 2015. It is a letter from yourself. You say, as follows:
“I am very pleased to report that we have, after protracted negotiation, reached a prospective agreement with Post Office Limited, under which the NFSP will be provided with grant funding for a period of 15 years. This will allow for a period of stability for the NFSP and enable it to continue to represent and promote members’ interests. The detail of the prospective agreement will be explained at the Conference.”
So it seems that, by the summer of 2015, you had agreed with the Post Office in principle; is that right?
George Thomson: My team and some of Paula’s team could not believe that the Post Office would concede to grant funding. You know, some people would say “They can’t agree to it, George, because it’s akin to creating a closed shop, where everybody, in effect, has to join”. That’s been – we got round that. So it was never a given, it was never given we would get that off the Post Office and I know, for a fact, that a lot of Paula’s team were against it, a lot of Paula’s team would have preferred that the NFSP withered on the vine and went away.
But – however, we got it. So it was always a possibility we could have joined the CWU because, actually, joining the CWU would have been a far easier thing to achieve than what we got, and so, to some extent, I was futureproofing the Federation going forward.
Mr Blake: So by 2015, May 2015, you had the agreement in principle for 15 years. Was it similar to those figures that we discussed at the beginning?
George Thomson: It could have been. There was – some of these figures went up because we took new teams on. That’s what I was trying to explain. We took on a six-man retail team to go out to branches to help people explain the retail. We put a six months mail segregation team on because people were missing the targets and our members were losing millions of pounds of payments for Royal Mail, so we put a team in the field, which I believe is still there, to help our members get it.
Mr Blake: Purely in terms of figures though, we’re talking over £1 million initially, rising to over £2 million plus?
George Thomson: Because of these reasons, yes.
Mr Blake: There’s then the conference in June 2015. Could we, please, turn now to NFSP00000957. There was a special conference on 18 June convened for this purpose; is that right?
George Thomson: That’s correct.
Mr Blake: These are the minutes of that conference. Can we please turn to page 15, and there’s a section that I’d like to read out to you – slightly further down, please. It’s an exchange between yourself and somebody called Robert Cockburn from the Scottish Northern Branch. He says, as follows, “Good afternoon”.
Just pausing there, there were options presented at this conference: there was the option that we’ve just seen, there were other options relating to, for example, merging with the CWU; is that right?
George Thomson: That’s correct.
Mr Blake: “Good afternoon. I’d just like to ask the Executive Committee if this is such a frightfully important day for our organisation why we haven’t been allowed to question the CWU and National Federation of Retail Newsagents today.”
That’s met with applause. The national Federation of Retail Newsagents was a third option, wasn’t it?
George Thomson: That’s correct and, at one time, so was the Association of Convenience Stores but they backed out quite early.
Mr Blake: You respond as follows:
“I think that’s a good question Robert asks and he asked it in Scotland we’ve had it in a few areas as well. The position of the Executive Council, the Executive Council are the ruling body of the organisation and obviously they listen to the membership and they are elected from the membership. It was felt quite strongly that the best option by a proverbial mile was the MOU and that if we were to join another organisation, particularly a trade union, we would leave the whole playing field empty and someone like the NFRN would come along to the Post Office and say ‘They’d joined the CWU, they’re a union, why don’t you deal with us as a trade association?’ And the reason that we felt quite strongly that we would not get someone along from the National Federation of Retail Newsagents or the CWU, is that the best option and the preferred option for this organisation is the MOU and the Conservative Party wouldn’t have, you know, Ed Balls comes along to their conference, maybe now they would right enough, but we decided as the leadership organisation on your behalf that the MOU is of the best, you have the vote on it, but to bring the CWU along or NFRN, then we do not think that is a wise thing to do.”
So, essentially, although there is a vote and there are a number of options, the only one that you are, in fact, presenting is the MOU that you have agreed?
George Thomson: Well, the executive had many meetings and the negotiating team had meetings and we decided how to run the conference and that was accepted. But, again, I have to reiterate the point, I did have numerous conversations with postmasters regarding the CWU and, if we had been able to take more people with us than what I anticipated, then it was more of an option, but it was becoming quite clear. And what was also clear and what put a lot of postmasters off, there was already a CWU subpostmaster section that I believe never went above 200, and I think that showed the difficulty we would have taking a significant amount of subpostmasters with us into the CWU.
Mr Blake: Thank you. The response then from Mr Cockburn, he says:
“George, that’s all very well and good to say that the Executive Committee support the MOU, that may well be the best option, but everybody here runs their own post office and they know what’s best for them, and with all due respect to listen to you guys presenting for the CWU and the National Federation of Retail Newsagents, it’s secondhand, you want the MOU and you’re presenting their options as secondhand options”, et cetera.
Again, met with applause.
Apart from the money from the Post Office, there were some significant advantages to the NFSP. One of them was, for example, automatic enrolment for all new model operators; is that right?
George Thomson: That’s correct.
Mr Blake: Membership fees paid by the Post Office, so not from the members?
George Thomson: Yeah, and that was for a lot of members, the bigger branches, that was roughly £200 a year saving. For the smaller branches, roughly about £60 a year.
Mr Blake: Also sole recognition was also part of the deal, wasn’t it?
George Thomson: Well, we always had recognition. The CWU wanted recognition, particularly after we lost union status, and they were told no. We – thinking back, we were never recognised for negotiation rights as a trade union. But the Post Office recognised us as the only organisation it could represent subpostmasters. So, even though we had been a trade union for a long time on paper, on that particular point, the Post Office didn’t recognise we were a trade union in terms of real negotiation rights. And that’s probably because we had to work with them all the time.
We were – we both needed the Post Office to be doing well, we both needed the network to be strong, of a decent size and we all needed Government work coming in. So we had – our interests were totally aligned with the Post Office on the day job that I was doing all the time.
Mr Blake: Tying all of that that I’ve just taken you to from the beginning of your evidence until now, tying that all together, we’ve seen, 2013 to 2015, negotiations about the future, significant sums of money being agreed and negotiated and agreed with the Post Office; do you think that there might be something in the suggestion that you were financially dependent on the Post Office, especially at an important time in the life of the Horizon scandal?
George Thomson: Well, nothing to do with the Horizon scandal but, because we were losing membership with transformation programmes and restructuring, our membership dropped to something like 5,000, and we had loss about 8,500 subpostmasters over the last 12 or 13 years before that and, a large majority of them, probably 6,000 or 7,000 were our members at the time.
So, basically, the Post Office money that we were going to get was, if you like, replacing what used to be membership money that we had lost because we had supported – it comes back to my argument – we had supported three restructuring programmes, we had saved the network, we had saved the company and we were going to be the ones that actually had to fall on our sword and not exist any more. And that was the logic. The logic of a deal with the Post Office, it was tied to Network Transformation, Urban Network Reinvention and Network Change. It was never ever tied to Horizon because my support for Horizon, even though we’ll come on to it later on, has never wavered since the year 2000. It’s never wavered.
Mr Blake: We’ll look at your support for Horizon, I’m going to take you very shortly chronologically thorough that, but, if we look at the 2013 to 2015 period especially, it was a time at which the NFSP’s situation was financially precarious and a time at which you are negotiating significant sums of future funds with the Post Office; do you agree with that?
George Thomson: That’s got absolutely nothing to do with Horizon, yeah, I’d agree with that but how that’s linked to Horizon, I’ve not got a clue. I don’t know how you come to that conclusion.
Mr Blake: Let’s look at issues with Horizon chronologically and we’ll start in 2006. Could we please look at NFSP00000555. As you say, we’re going to go quite far back in terms of your support for the Horizon system.
George Thomson: I wasn’t General Secretary until 2007 but I know I’ve answered some questions before that because I was on the Executive Council.
Mr Blake: Absolutely. We’ll see a report of a meeting of the Executive Council on 9 January 2006. If we turn over the page, we can see Colin Baker was, at that time, General Secretary. We do have your name there as a member who was present; is that right? We can see there on the right-hand side at the bottom, the very final name of those present is yours.
George Thomson: Yes, I see it, yeah.
Mr Blake: You were there because you were a member of the Executive Council?
George Thomson: That’s correct, yes.
Mr Blake: Page 8, please. If we scroll down, there’s a section where subpostmasters’ pay is discussed and we see there it says as follows:
“There followed some discussion on the situation regarding long-term Horizon failures around the country.”
Now, this wasn’t a time of rollout, it was 2006. Do you recall in 2006, at the Executive Council meeting, the matter being raised that there was long-term Horizon failures around the country?
George Thomson: If I recall, the Horizon system, in effect, is our Post Office EPOS system, Electronic Point of Sale. That’s what it is, and what was happening in certain branches, the screens were going dead, the chip and PINs were going dead, people couldn’t transact. So it wasn’t like this was something hidden. Actually, it was a pain in the backside. People couldn’t operate their branches so we actually – we were able to put goodwill payments in place. But this happens, you know, it happens with supermarket tills, EPOS, it happens with chip and PINs, even as we speak. It happened last week in my shop, last week.
Mr Blake: NFSP00000517. This is another meeting in 2006, now March 2006. Can we turn, please, if we look over the page, you’re present. Page 20, “Horizon Service Improvements”:
“An update on service improvements had been circulated.
“Concerns were raised on how robust the Horizon system was.”
So you were present at a meeting of the National Executive Council in March 2006 where concerns were raised on how robust the Horizon system was; do you recall that?
George Thomson: Yes, pertaining to a particular issue, which was that screens were going blank, chip and PINs weren’t working, postmasters were aware of that because they couldn’t actually open their post offices. This is a particular thing and we negotiated a Google payment based on the volume of your customer transactions and the length of time they were out, so this was something that was quite apparent. It’s a bit like your EPOS system – if you’ve got a Spa or you’ve got a Premier, if your EPOS system goes down, you physically can’t serve your customers.
So this wasn’t something that was heading away, it was in your face, it was a technical difficulty that they had resolved.
Mr Blake: Is it beyond comprehension that there may have been other technical issues at that time with the Horizon system?
George Thomson: Well, as far as we, as an organisation were concerned, this was a till system, this was a computer system that was doing, at one time, about 70 million transactions a day – a day – and, if there had been a systematic failure or a systematic problem with the computer system, we would have been inundated. We could not have done our day job and that simply was not the case. So, if you want a definitive, I can’t give you a definitive but logic would suggests that there was no significant systemic issues with Horizon.
Mr Blake: You’ve used the word “systemic”; I haven’t used the word “systemic”. All I’ve asked is: concerns are being raised about how robust the Horizon system was, is it beyond comprehension that it wasn’t just screen freezes, that there may have been other technical issues that you weren’t aware of?
George Thomson: It’s always a possibility, given the Post Office’s stupidity on steroids how they’ve handled the case in the last couple of years, yes, it could be the case but nothing I was aware of. And, certainly, when branches were closed because their screens were blank and because their chip and PINs were down, there was certainly no big chunky people coming forward saying, “I’ve lost a lot of money because my screen was blank”. So this was about a goodwill payment on something that was relatively easy to resolve.
Mr Blake: You were aware that there were helplines for technical issues?
George Thomson: Yes, of course.
Mr Blake: Were you aware of people complaining about those helplines?
George Thomson: Well, some people could go direct to the helplines, others – quite a few people went thorough my Assistant General Secretary, a very good colleague, Marilyn Stoddart, who had a team of people working with Horizon issues, as we all did, yeah.
Mr Blake: Can we turn to NFSP00000491. We’re still in 2006. We’re now in June 2006. If we turn over the page again, you’re present. Can we go, please, to page 10. About three-quarters of the way down page 10, please. Thank you. If we scroll down towards the bottom, there’s a bullet point there that begins “Npower”. I think it’s the one just below – thank you – yes:
“Npower issuing cards that would only swipe at PayPoint. When customers call Npower, they were being told it was because Horizon was unreliable.”
Are you aware that Npower had been telling people that Horizon was unreliable?
George Thomson: I’m not aware of that but, however, again, I reiterate my point, the system was dealing with hundreds of millions of transactions a week and we were not having the kind of level of complaints that would indicate if there was significant failures within the system. That’s a fact.
Mr Blake: If we scroll over, please, over the page. There’s a section on “Network”. There is a heading “Horizon Failures”, it’s page 13. The third bullet point under “Horizon Failures”, it says:
“The failure after the Bank Holiday has been explained and contrary to popular belief it was not caused by overload, it was caused by an individual accidentally switching something and messing up the system.”
Were you aware in 2006 of complaints about the system being messed up?
George Thomson: Well, I wasn’t, but I wasn’t General Secretary. But nothing that I’m aware of, but what I will say is that Marilyn Stoddart and Lynda Willoughby were excellent at dealing with Horizon complaints, as was my PA at the time, Sharon Merryweather, so they dealt with any complaints that came through, they would speak to Rod Ismay, you know, all the Post Office staff. But I was certainly at that meeting, yes.
Mr Blake: POL00041564. We’re now into 2009. This is the Computer Weekly article of 11 May 2009. It begins by reference to Lee Castleton, and we’ll address Lee Castleton’s case shortly. If we go over the page, please. We also see, if we scroll down, reference to Jo Hamilton signing her accounts, even when she knew they were wrong because she says calls to the Horizon helpline didn’t stop the deficits occurring and she felt backed into a corner.
Noel Thomas, reference to him; fourth postmaster, Amar Bajaj; over the page, please, fifth, Alan Brown; sixth, Judy Ford; seventh, Alan Bates. It says:
“All of the postmasters we spoke to say that their union, the National Federation of SubPostmasters, has refused to help them investigate their concerns.”
Some of those who I’ve just mentioned were members of the NFSP. Why weren’t you helping them at that time?
George Thomson: Well, there are two things that I’d answer to that. The first thing is that if you look at where the suspensions have taken place of people over a period, only about 30 per cent of them were our members. There was a big chunk of postmasters’ staff who were suspended. There was a big chunk of directly employed staff, ie Crown Offices, and, obviously, a big chunk of non-members because we only represented about 60 per cent. So in my calculation, before I came here today, I reckon that less than 30 per cent of the people who ended up being suspended were subpostmasters – sorry, our members.
That’s the first thing I’d like to say.
But, certainly, we would always investigate but, if the Post Office – and it comes back to the issue that makes me annoyed about the Post Office, I absolutely was aligned with them in the systemic reliability of the system, and I still am. However, I think their behaviour in taking postmasters – firstly, suspending them and taking postmasters to court, when they apparently knew that there was backdoor access, there was admin reversals, there was bugs, that they never ever made us aware of.
So I’m supporting the Horizon system but these issues that they denied are unforgivable, and they’re unforgivable because we could have resolved them quite easily. I don’t know if I’m allowed to expand on this because, if we had been told that there was backdoor access, we would have worked out a protocol with them, right: you need the postmaster’s permission.
Mr Blake: Mr Thomson, that’s something I think you’ve addressed in your witness statement.
George Thomson: Yeah, but are you bringing that up, that I’ve addressed it?
Sir Wyn Williams: Yes, I have that point, Mr Thomson, I can assure you.
The Witness: Thank you.
Mr Blake: You’ve said that 30 per cent, approximately, on your calculations, would have been members of the National Federation.
George Thomson: Yes.
Mr Blake: Why not fight for those 30 per cent at that time?
George Thomson: But you didn’t let me expand on my answer. The reality –
Mr Blake: You’re talking about backdoor access, which is one issue of number of different issues that this Inquiry has heard about. You have complaints from a number of people, you’re saying that 30 per cent of whom would have been your members –
George Thomson: Yes, and we took – and we took –
Mr Blake: – why not fight their cases?
George Thomson: We did fight their cases but we asked the Post Office. Now, what are we to do as an organisation? So we were a small body, you’ve got a Government-run company where the managers at senior level are telling you that, if a postmaster has that kind of error, that kind of value, it has to be them, because the computer is systemically robust, there’s no backdoor access. If you have a Government director on the Board from the Department of Business, on the Post Office Board, they’re telling you – or they’re on the Board so you’re assuming the same thing, when you’ve got a big trade union like CWU having hundreds of members over the period suspended as well, and they’re not taking court action, what do you mean: stand up for our members or represent?
We took – every case that was brought to us, we took it up with the Post Office, right? What we didn’t do, is –
Mr Blake: Can I pause you there. You said every case that was taken up with you, you took to the Post Office. Let’s scroll back on this page, let’s start at page 2. Jo Hamilton, who sits here today. Did you fight her case with the Post Office?
George Thomson: Well, fighting your case is different from taking it up, so –
Mr Blake: What did you do in relation to Jo Hamilton?
George Thomson: Well, it would be Marilyn, Linda or Sharon would undoubtedly contact the Post Office at various levels to try and find out and, if the answer was, “This is a set of circumstances” – and given we didn’t know the full picture in terms of what could be done and what could not be done, then there’s nowhere else for us to go. Now, if you’re suggesting that we should have spent hundreds of thousands of pounds on every legal case against the Post Office, we didn’t have the funds and it’s something we had never provided in membership.
Mr Blake: Mr Thomson, we’ve been over the funds. You were receiving millions from the Post Office. The evidence that the Inquiry has heard is that Jo Hamilton was told –
George Thomson: I don’t agree with you. You’re talking –
Mr Blake: – “You’re on your own”.
George Thomson: The timeline for the funds from the Post Office and the timeline for the funds from some of the members, you’re trying to make out that some how me were flush with money because we were always getting these types of sums from the Post Office. That’s not correct. We were a small membership organisation, we’re losing members because of three structuring programmes. So what you said there is factually not correct, we werenae wallowing around in money as you’re implying.
Mr Blake: No one is necessarily asking you to fund legal challenges but did you ever issue any press releases supporting any of these individuals, asking the Post Office to thoroughly investigate?
George Thomson: Well, given that we supported it as a robust system, and the Post Office lied to us regarding some of the things that were happening, I don’t know – if we’re getting assurance from the Chief Executive of a Government run company with a Government representative on the Board, and another trade union with £250,000 members, the CWU, who – I don’t know if they took any kind of action against the Post Office, I do not know – but then expecting an organisation that had fell to below 6,000, 5,000-and a bit to have that kind of resource, quite frankly, we didn’t.
Mr Blake: How many resources would it require to issue a press statement?
George Thomson: A press statement saying what?
Mr Blake: Urging the Post Office to –
George Thomson: No, because –
Mr Blake: – urgently investigate –
George Thomson: No, many, many of these ex-members believed, like Lee Castleton – he was never a member, we’ll come on to that – but many of these people – and it’s still the same now, and my criticism of Justice for Subpostmasters was that they gave the impression and stated that this basically system was kaput, it wasn’t fit for purpose, it should be replaced. I think Alan Bates even goes as far as to say that the Post Office should be wound down.
So we did not know there was some issues because the Post Office didn’t tell us. So how you then expect us to take some kind of action based on a big lie that has taken place, ie the Post Office withholding all this information, I do not understand.
Mr Blake: Thank you, sir. That might be an appropriate moment for our first morning break.
Sir Wyn Williams: Yes, by all means. What time shall we resume?
Mr Blake: Could we resume at 11.10, please.
(11.00 am)
(A short break)
(11.10 am)
Mr Blake: Thank you. Can we turn to NFSP00000347.
Mr Thomson, you mentioned the case of Lee Castleton and we’ll address that now. This is a letter to the National Executive Council regarding the case of Lee Castleton. This is sent on 29 September 2009 and it says, as follows:
“Dear Executive Officer
“Please see the email below from ex-subpostmaster, Lee Castleton, which has already been forwarded to you. Both myself and my predecessor have in the past investigated the issue and corresponded with Mr Castleton regarding his belief that the system was not robust and failsafe. This issue has now been placed on the agenda for discussion at our forthcoming Executive Council meeting.”
If we scroll over the page, we can see the email. He says as follows:
“I am writing to you as you are an Executive Council member of the NFSP.
“My name is Lee Castleton … I used to own a sub post office until I had a problem in 2004. I do not wish to burden you with my own personal story in this letter but I am more than willing, if you wish, to go into great deal at a later date. I have been asked to ask you if you feel any responsibility with the safety of your members that you were elected to represent?
“I am part of a growing group of postmasters who are both serving and ex-serving and we have all suffered problems with the Horizon system. Our goal is to publicise the belief that the Post Office Horizon accounts system is flawed, and that the way in which this problem is dealt with is systematically heavy handed and is effectively swept under the carpet, the public in our opinion should be allowed to hear all sides and decide for themselves. We have evidence of Horizon not performing properly and we have evidence from IT technical experts who support our claims.
“We as a group are actively looking for opportunities to publicise the problems that we feel are not being dealt with by the Post Office and are being ignored by the NFSP. We have had numerous amounts of column inches and various magazines and of course the BBC have now shown the Taro 9 programme on BBC Wales. Again, as a group, we are now embarking into mainstream media coverage with BBC Watchdog preparing a programme along with various radio shows asking for interviews. At least one MP is to approach the Government and ask them to launch an enquiry.
“This is of course very good for our group and the publicity is good for our cause. Clearly you as a senior person within the NFSP will be asked for comment on this issue.
“It should be of utmost concern to you as a senior official that Horizon can go wrong at the very least your union should be holding its own enquiry to establish the facts. Postmasters are being sent to prison, being given criminal records, and are being made bankrupt.
“I have been asked to write to yourself and ask what you are doing with respect to the problem and what you are doing as group at the NFSP to protect and educate your membership. I quote from your website.”
There’s a section there from the website, “Help in difficult times”:
“Our Branch Secretaries provide practical advice and emotional support and are able to represent members if they encounter contractual issues or difficulties.
“Read more about how the NFSP can help in difficult times …”
He ends by saying:
“We hope that this is a question you wish to answer, and prove with actions that you are facing up to this problem and are doing all you can to protect your members. You do have a personal duty of care to your members. I look forward to hearing from you.”
I’m going to turn over to the actual meeting that followed. It’s LCAS0001376. We start on page 2.
Thank you. So this is the report of the meeting that was held on 5 to 7 October 2009. If we scroll over the page, there’s a section Lee Castleton. You were, by this time, the General Secretary of the NFSP, weren’t you, 2009?
George Thomson: Absolutely.
Mr Blake: “Lee Castleton – Horizon:
“Historic case. Lee Castleton had never been a member of the Federation and had only attempted to join after he had got into trouble and was therefore rejected.
“General Secretary had received the documents relating to Horizon security that was used by [the Post Office] in court cases, but it could not be shared with the Executive Council.”
Just pausing there, do you recall what it is that you had received?
George Thomson: I think that was the – it might have been the previous General Secretary but can I just say on the Lee Castleton issue that you’ve raised –
Mr Blake: I’ll ask you a number of questions about the Lee Castleton case.
George Thomson: Right.
Mr Blake: I’m just asking about this one bullet point at the moment. Do you recall receiving documents that was used by the Post Office in court cases?
George Thomson: I may have but, this far on, I don’t know for definite, and that’s just the truth.
Mr Blake: It then says:
“Lee Castleton had taken [the Post Office] to court, his expert witness was very flawed, hence the case was lost and the court awarded full costs to [the Post Office] of approximately £300,000.”
Are these likely to have been your words your announcements to the meeting?
George Thomson: They may well have. I undoubtedly would have spoken to the Post Office about the background to the case and I’ve obviously got notes for Lee – I don’t know how much you’re going to allow me to say but Lee Castleton was appointed on 18 July 2003, four years before I was General Secretary. But that’s not the issue. I’m not hiding anything. He was suspended on 24 March 2004 and the email that was taken when he actually – it was I think it’s – his father-in-law –
Mr Blake: I’ll take you to that document.
George Thomson: Okay.
Mr Blake: Let’s go –
George Thomson: Thank you.
Mr Blake: – step by step:
“Press have got involved over the past few weeks.
“Clarified that the Federation had to be very careful. Our job was to protect subpostmasters. It was important not to create a situation where hares were sent running by encouraging members to believe Horizon had faults.”
Now, is that likely to have been your words?
George Thomson: Absolutely, systemic faults, yeah.
Mr Blake: “If [Post Office] customers believed the system was error ridden they would be reluctant to do business at a time when the contracts were desperately needed by the network.”
Again, likely to have been your words or a summary of your words?
George Thomson: That would be in line with my broad support for the system, yes, absolutely.
Mr Blake: Not only your support for the system but the importance of public perception of a system that worked?
George Thomson: And the reality on the ground because we were dealing, as I said, with hundreds of millions of transactions a week, and very few complaints. That’s just a fact of the situation.
Mr Blake: You go on to say that:
“Over 37,000 subpostmasters and clerks had used the system since its implementation. Billions of transactions had taken place. It was easy to blame Horizon when a shortage occurred.”
If we scroll over the page, please:
“The simple fact was that Lee Castleton did not have a case. Both the current and the previous General Secretary had made that clear to him on numerous occasions after investigating the circumstances, however the case was yet again doing the rounds of the Executive Council.”
Now, what exactly did you do to investigate the circumstances?
George Thomson: I contacted and had discussions with the Post Office. But can I just say, as well, we’ve been – Lee Castleton was never a member of the Federation. We – we –
Mr Blake: We will get to that?
George Thomson: – we didn’t even have to have it on our agendas. We had something to do with a non-member, who had never been at a member, and we had it at the highest level with the operation, and I dealt with the highest level of the Post Office. So these criticisms that we did nothing for our members when we’re doing all that for a non-member.
Mr Blake: Mr Thomson, Mr Castleton’s letter that I’ve just shown you was asking you what you were doing for your members. It wasn’t asking for you to help Mr Castleton. It was asking “What are you doing to help your current members who may be experiencing the same problems as I experienced?” What is it, looking at that first bullet point, that you did to properly investigate the circumstances of his case, so that you could have some reassurance in respect of all of your members at that time?
George Thomson: I raised it, once again, with the Post Office and, for the life of me, I don’t expect – I don’t understand what further action you would expect us to take. So, if you’re going to a company that’s Government owned that has a Chief Executive that’s telling you one thing, that has a director on the Board from the Department – from BIS, from the Department of Industry, then where are you going to go with it? That’s what I fail to understand.
And because of the volume of transactions that were being done properly, we knew it could not be systemic. So I don’t know where you expected us to take it and, more importantly, I don’t know if an organisation, 230,000 people, CWU, if they took any action that involved taking somebody to court.
Mr Blake: Next bullet point – well, we’ll look at some CWU documents in due course:
“There followed considerable discussion on the subject.”
It then says:
“Though a couple of Executive Officers had some minor misgivings regarding Horizon, the vast majority were happy that it was accurate.”
So there is a recognition that some members were concerned regarding the accuracy of Horizon; do you recall that?
George Thomson: When I took over on the Executive Council and then became General Secretary, it was settled policy, both from the previous General Secretary and the executive teams – and my executive teams – that we supported Horizon, because it was a robust system. Was there any person in particular? I don’t think so. It might have been Mark Baker(?). Mark was probably away with it and Mark was the only one that criticised Network transformation, sometimes he criticised Horizon but not all the time, it was usually Network Transformation Mark criticised.
Mr Blake: Generally, when you have a policy, a policy will be based on some research, some investigation, and then you formulate the policy, and, perhaps, if circumstances change, you revisit the policy. Did you, at this stage, revisit the policy, carry out any investigation?
George Thomson: We carried out an investigation with the Post Office. In terms of revisiting the policy, I’ve told you, only a tiny fraction of postmasters were ever having problems with Horizon and the settlement group that took place, and everything that’s happened recently, it’s a small, small group of subpostmasters. If you compare that to the billions of transactions that took place, it’s a tiny, tiny fraction.
But you, of course, are investigating Horizon, you should be able to tell that. It’s a very small amount of people who claimed that Horizon caused massive problems for them.
Mr Blake: Some of whom went to prison, some of whom took their own lives –
George Thomson: I’ve got that in my witness statement. I’ve been around a long time. Postmasters have always been – and you keep quiet about things because (a) you want to protect the brand but you want to protect the postmasters, as well, the reputation of the community, the postman as well. I’ve been around a long time: suspensions have always taken place, prosecutions have always taken place, under the manual system as well, hundreds of subpostmasters suspended.
We had a franchise that was in crisis and we always tried to help people, of course we did, try and find out what had happened, spoke to – speak to Chesterfield to see if they’ve sent too many pension dockets away or if they went missing. We did all these things, we helped people that had been suspended but I’ve got that in my witness statement and I hope we get onto it because my witness statement gives the reason why it’s a tiny percentage and why this happened before computerisation, well before computerisation.
Mr Blake: “Lee Castleton had wanted the Federation to back his court action that would have run into six figures, stressed again he had never been a member and as such, it was requested that Executive Officers did not respond to his correspondence.
“If there had been systematic problems with Horizon over many years the Federation would have taken action as a whole. All the cases investigated in depth so far had proven the error was on the part of the subpostmaster or their staff.”
How many cases did you investigate in depth?
George Thomson: With these numerous issues, I can’t recall, but we raised numerous issues –
Mr Blake: Did you investigate any cases in depth?
George Thomson: When you say “in depth” what do you mean? We took it up with the company that employs them, the Post Office. We took it up – I spoke to Paula, on numerous occasions about Horizon being robust, particularly regarding backdoor access. And, if the people at the top of the company are telling you that it cannot be accessed apart from the people on the counters, at the Horizons – on the Horizon terminals how do you possibly disprove that when you’ve got a Government – and how does the CWU disprove that when you’ve got a Government director on the Board as well? Where are you meant to take it, a small organisation of 6,000 people?
And we’re talking about a non-member. So, you know, the reality is, we’re accused of not representing members and then you accuse us of not representing non-members. It’s quite staggering, frankly.
Mr Blake: “The General Secretary gave an undertaking that in cases where a member believed the problem was Horizon, he would raise the case with [the Post Office] at the highest level. Executive Officers to notify such cases to Shoreham.”
How many cases did you raise at the highest level with the Post Office?
George Thomson: Over the years, maybe 20 or 30 but, again, I would go in there with John Scott, Head of Security, with Paula, with other people on the team and say, “Look, we’ve got noise about this particular case. What’s the background? Is it possible – is it possible that it could be the computer system?” And we believed it was systemically strong, and I still do, my wife uses it, our family has used it for – since its inception, you know, 20-odd year ago. But if they’re telling you on some of the smaller issues that they didn’t ‘fess up about as I’ve mentioned, you know, backdoor remote access, then how are we meant to disprove that when you’re getting that from the very top and you also know that BIS has got someone on the Board? Where are you meant to take that?
Mr Blake: So, if it was the case that you were told of a number of bugs in the system –
George Thomson: I wasn’t.
Mr Blake: – would you change your position?
George Thomson: If I was told – so if I was told that there was backdoor access –
Mr Blake: Forget backdoor access –
George Thomson: – or bugs –
Mr Blake: You’ve said “backdoor access” a number of times but let’s focus on bugs, bugs in the system, something that affected balancing. If you were told there is a problem in the system that has, in some cases, let’s say 60-odd cases, affected the balancing in branches, would that have changed your position?
George Thomson: It could well have done and a combination of everything else. I certainly –
Mr Blake: What would you have done in those circumstances?
George Thomson: Well, eventually, we probably would have tried to employ a computer expert. If we believed that the Post Office were covering up to the degree it now looks like they were – and it’s stupid because we could put a protocol in place, hopefully allowing me to explain that later on, but I’ve got my doubts – then we could have – then we could’ve worked something out, yes. But if we knew these things, we certainly would have done something about it. So –
Mr Blake: Mr Thomson, just stopping you there. If you were told that there was a bug that affected 60-odd branches and that it affected the balancing of their accounts, you’ve said you would have tried to employ a computer expert?
George Thomson: No, let me – let me – what I’ve said there – if we realised it had been a big problem, in the first instance, we would have obviously sat down with the Post Office, right, “We’ve been told there’s bugs. How is this possible? How are you dealing with it? Are you making postmasters aware? Are you getting the – what did you do to the computer to rectify it? Did you get permission? What was the outcome?”
Mr Blake: You would have grilled the Post Office in those circumstances, would you?
George Thomson: Of course we would have done it more, yeah. But when you get people just saying to you, “I think it was bug George”, where do you take that?
Mr Blake: Okay, well, we have your evidence.
NFSP00000256, please. I’m very briefly going to finish the Lee Castleton issue, page 8, please. You were mentioning an email or a complaint, I think, from his father-in-law. That’s this email perhaps. It’s an email that says it’s November 2004. This is the original complaint:
“Last night around 4.50 I had a call from a gentleman asking if we could help his son-in-law who has been in his office since 18 July 2003. He has been suspended since March 2004 and was terminated on 14 July.
“His problem was that he originally had a loss of £1,000 which he put in himself. Then a few weeks later down the line he was £2,500 down and the following week he was another £4,200 down. By the end he was told that he was £27,000 down.
“He would like to know if we could help him. I told him it would be very doubtful as he has never been a member.”
If we go to page 7, please. There’s an email that says:
“David Milner called today if we had heard from Marine Drive Post Office and the problems they’d been having. I said I spoke to the subpostmaster and his father-in-law about it and passed it on to Kevin.”
There’s a little note there:
“Advised Mr Castleton cannot help because he’s not a member. He claims he sent in an application.”
I think, if we turn to page 3., we can see, if we look at the bottom of that page, there’s a little note there, 8 November 2004:
“Sent in £157.08 for membership, Kevin declined it.”
Then if we turn, please, to page 4. We see the communication to Mr Castleton, from Kevin Davis, senior assistant General Secretary:
“I’m returning your postal order to the value of £157.08 because I cannot accept your application for membership.”
Now, I think you want to deal with this issue because I think it may have been – well, it was your evidence that he wasn’t a member and, therefore, you didn’t have to deal with him. This is the relevant correspondence. Do you think that that explanation that’s set out in that letter is sufficient to Mr Castleton –
George Thomson: Well, this was before my time but I’m going to answer it. The reality is no membership organisation – a membership organisation is a bit like having insurance. You can argue how good or bad that insurance is, that’s why we’re here today but, if you have household insurance and your house burns down or you go on holiday and break your leg, you can’t claim after it’s happened and Mr Castleton came to us after he had been suspended and one of the conditions of being a member, you have to be a subpostmaster. He wasn’t a subpostmaster. Now, that’s not a technicality.
So when I came – when I got in, I did speak to Mr Castleton on the phone and I might even before it, and he wanted us to fund the case. And he ended up – you know, it’s horrible – ended up losing £300,000 and that’s heartbreaking, and it is, but we did raise his case, he wasn’t a member, and to get criticised for not helping a non-member, for someone who used to be a General Secretary of a trade union, albeit, you know, with a retail belts onto it, it’s a bit hard to take.
He was – he was never, ever a member and yet we spent time on our Executive Council debating it over the years. And when I did speak to him it was about getting funding to take on the Post Office.
Mr Blake: That letter, though, that doesn’t explain any of that, does it?
George Thomson: Well, I can’t comment on a letter that was taken, you know – I didn’t become – I’d just become an executive officer. I’m not hiding behind it because I know the general direction of travel. It is what it is. It happened in 2004. I became General Secretary in 2007. I could say “Well, I’m not answering it because I wasn’t General Secretary” but I’m trying to help as much as I can.
Mr Blake: Let’s move on to 2012 now. Can we please turn to NFSP00000977. This is the branch secretary’s circular; is this something you would have signed off?
George Thomson: I certainly would have been involved with it, yes. Marilyn would have had input, Paul Hook maybe, in terms of the publicity team in that, yes. But I would have been involved in a lot of it.
Mr Blake: Let’s scroll down, there’s a section on “Media coverage of Horizon disputes”. It says:
“As a result of recent media coverage, members may be aware that Post Office Limited has agreed to an independent audit of a handful of cases where Horizon irregularities are claimed to have taken place.”
That’s the Second Sight investigation.
George Thomson: Yeah.
Mr Blake: “The National Federation of SubPostmasters is surprised that [the Post Office] has chosen to follow this approach. We have seen no evidence in any of these cases that Horizon was at fault and we believe that the system remains robust.”
What would be wrong with the Post Office employing an independent company to look into the reliability of the Horizon system?
George Thomson: Well, firstly, we didn’t know, as I said, about bugs, about admin reversals, about backdoor access. But what was more annoying about this is that this was a time when we were looking to move the Post Office in the direction of mutualisation and postmasters having a much bigger role in the running of the company, for all the right reasons because, a lot of times in the past, the Post Office hasn’t been particularly well run.
And I was furious that we had been excluded from such a fundamental decision as taking on Second Sight. That’s what most of the anger was about. It was quite incredible that us, as an organisation, who’d been so supportive – for the reasons I’ve given, because it’s a robust system that I supported from its very inception – would have been excluded from such a significant decision, it was quite scandalous that we –
Mr Blake: The last paragraph on the page:
“The NFSP is surprised that [the Post Office] has chosen to follow this approach. We have seen no evidence in any of these cases that Horizon was at fault and we believe the system remains robust.”
What’s being said there is “We are surprised that the Post Office has asked for an independent investigation because we’re not aware of any problems with the system”; isn’t that what’s being said?
George Thomson: But we were not aware of any problems with the system and –
Mr Blake: So what had been wrong –
George Thomson: – we’d been working hand in hand with the Post Office for a franchised brand, they should have included us in any decisions they made regarding Second Sight, absolutely.
Mr Blake: What would be wrong with an independent investigation into the Horizon system? Why were you, the NFSP, surprised and upset by that approach?
George Thomson: For the reasons I’ve given, that we were excluded from such a significant decision.
Mr Blake: Can we please turn to NFSP00001314. We’ll start on page 3, please. So we’re in June 2012, so the same month. It’s over to page, the bottom of page 3, please. There is a letter from somebody called Paul Taylor, drawing your attention to a BBC News article that announces the Second Sight investigation. It’s an article that mentions, for example, Seema Misra, somebody who had been convicted and sent to prison.
If we scroll over the page, Mr Taylor says:
“I have previously written to you regarding a computer errors not balancing correctly at the end of each day and my 63-year-old mother having to use her own money to balance the system. After constant checking, as my mother used to work in a bank and has been a subpostmistress for twelve years, she is more than able to do this basic task, however, the system still did not balance even when on paper it should. Because of this she has had to use her own funds to balance the system or be accused of being incompetent or fraudulent.
“After weeks of telephone conversations by my Mother with unhelpful staff from nameless Post Office personnel I contacted your organisation in order for your support and advice.
“Your advice was close to useless, your support was non-existent and my mother was just insulted by a man stating the obvious over the telephone.
“So please explain to me the link I attach below and why after several letters you did not bring this to my attention?”
That is the reference to the Second Sight investigation and the reasons for that investigation. Mr Taylor says:
“I would like you to contact Mrs G Taylor [and it gives her post office address] and apologise for your lacklustre performance and how you are going to support her further as I thought is the whole point being a paid member of National Federation of SubPostmasters.”
So here we have somebody who is, in fact, a paid member of the National Federation complaining, raising issues about balancing issues resulting from the Horizon system. If we go on to page 3, please. It’s the bottom of page 2 into page 3. Here is the response from you.
It says:
“Dear Paul
“Thank you for your recent email regarding the Horizon computer system.
“Over 70 million transactions are carried out each and every week at post offices all over the UK and I can assure you that we have only a handful of people who claim the system is [systematically] faulty. If the Horizon system was [systematically] faulty we would have tens of thousands of complaints each and every year. The NFSP continues to believe that the Horizon … system is accurate, robust and fit for purpose and we believe that the external review of Horizon will come to the same conclusion.”
Now, we saw in those minutes earlier, you saying that, “If anyone has a problem, I’ll take it on, I’ll take it to the highest levels of the Post Office”. That’s not what’s happening here, is it? You’re providing a standard statement about the number of people using the system and the lack of complaints about the system?
George Thomson: Was that the admin reversal one? Was that the admin reversal that caused the error?
Mr Blake: I’ve shown you the complaint.
George Thomson: Yeah. Was that the small admin – was that the 130 – British Telecom –
Mr Blake: We –
George Thomson: I’m trying to recall. I can’t recall. I’m just trying to remember if it was an admin reversal.
Mr Blake: I will take you to a response from Mr Taylor. It’s page 2, that might assist your memory. He responds as follows:
“You can keep repeating you are confident that your Horizon system is robust but that doesn’t make it true. There is a reoccurring error which is resulting in the Horizon system not balancing transactions to sum of money taken, be it by cash, card or cheque.
“This may be a Horizon error, this may be human error, but there is an error. This should be a very simple problem to pinpoint as all transactions can be printed centrally to find an anomaly. I personally do not understand why this is taking such a long time to resolve.
“My concern is a sub post office is experiencing a problem balancing the system which the Post Office own and manage and there seems to be no Area Manager, no systems manager, no one to support the sub post office. If such people do exist then why hasn’t this resolved by now?
“The monitor screens at Thorney Post Office are 10 inches when modern day working standards clearly state it should be 14 inches. So why have they not been updated in twelve years? Again, who is managing the hardware?”
That’s the substance of the complaint. Did you raise that at the highest levels of the Post Office?
George Thomson: I have to recall who dealt with it, if it came into Amanda, if it was dealt with Marilyn, Lynda, Sharon or myself. Again, I don’t know if it was a small amount of money. If it was a small amount of money, I almost certainly wouldn’t have dealt with it but I can’t remember, to be honest with you, because it was about –
Mr Blake: I can assist you because you did, in fact, raise this particular issue with Paula Vennells. You forward the –
George Thomson: I’m saying I can’t remember. It was – about 12/13, years ago.
Mr Blake: Let me assist you. It’s POL00143243. If we start on page 3 we can see the complaint. The bottom of page 3, we can see this is the email. If we scroll up, please, over to the middle of page 2, we can see an email from you to Paula Vennells, 22 June. You say:
“Paula
“Sending an example of 6 or 7 people who have contacted us in the last 2 days. Not good.”
Is that “Very best, George”?
George Thomson: Mm-hm.
Mr Blake: So there were 6 or 7 people around the same time raising issues with you?
George Thomson: And was that to do with any programme on TV that I can’t recall. It just rings a bell, it –
Mr Blake: Mr Taylor had sent you the article on the BBC News –
George Thomson: That’s why there were six or seven people, that’s the point I’m making.
Mr Blake: If we scroll over to the first page, there’s a response from Alwen Lyons at the bottom:
“George I am currently on a train so can’t speak. I’ll be off it in about an hour so will call then.
“Thanks, Alwen.”
Then we see above your comment. You say:
“Alwen, who in [the Post Office] had the idea to have a review into Horizon. Given my strong support for the integrity of the Horizon system over 5 years, I am disappointed that my views on this cores of action were not sought. I am also surprised that after leaving emerges with [the Post Office] no one has picked up the phone to talk through this contentious decision.”
So what you’re doing there is you’ve received a complaint from a subpostmaster and you are absolutely raising it with the Chief Executive of the Post Office but the circumstances of you raising it with the Post Office aren’t about “Please look into this problem”, the circumstances are you are there complaining that they’re even looking in a these issues through Second Sight, aren’t you?
George Thomson: I gave you my answer to Second Sight five minutes ago, and the reason for my annoyance at the decision, because it took no account and gave us no input into the decision or the logic behind it. And I’ve explained that already. So, you know, I will repeat myself again. That was the logic.
Mr Blake: But you have received six or seven complaints from people –
George Thomson: Yeah, based on what was – yeah, on the TV. Yeah, I just said that.
Mr Blake: – you’re getting in touch with the Post Office but you’re not saying, “Please investigate these problems”. You’re saying, “I’m very disappointed that there is an independent review going on into Horizon”?
George Thomson: I’ve explained why I was disappointed because we should have been in the loop on the decision and the rationale for the decision. And, again, I make no apologies that I am, and I was, a supporter of the Horizon system. And the very fact the Horizon system is still in situ and going to be used for another four or five years and it’s doing about £3.5 billion a month of banking transaction shows the reason why I’m very supportive of the systemic robustness of Horizon.
Mr Blake: Mr Taylor’s 63-year-old mother, who had previously worked in a bank, was filling the discrepancies with her own money. Why weren’t you asking them to investigate that case?
George Thomson: It depends how much money was missing. I cannot recall how much money was missing but the bigger the loss, the more likely we would get involved because, the bigger the loss and the postmaster has got to make it good, the more potential impact that’s going to have on the subpostmaster’s life. Marilyn would probably deal with something that was £160/£200. We would try and investigate it. But, at the end of the day, it’s part of the contract the postmaster is liable for losses and overages, and they always have been for a long, long time.
Mr Blake: Can we turn to POL00143305, still in June 2012. If we could start on the bottom of the page, please. This is another complaint, from somebody called Steve Hibberd:
“I have information that may potentially be of use regarding the above.”
That’s a potential class action brought by subpostmasters.
“The following incident suggests to me that the Post Office may be regularly placing the blame for internal errors at the door of the subpostmaster rather than accepting responsibility.”
He says:
“I have an Instant Saver Post Office account into which cash is regularly paid by my tenants via a local sub post office.”
He explains the issue there. If we scroll down, he says:
“As I am aware of the class action being taken by the subpostmasters against the Post Office via Shoosmiths, I felt that this may be useful evidence of blame perhaps being inappropriately laid at the door of the subpostmasters, when there is in fact a fault with the Post Office’s own system.”
If we, please, turn to page 1, that is exactly the same response that had been given to Mr Taylor on 21 June, exactly the same response as we saw before.
Can we please turn to POL00108106. If we could start on page 5. Do you recall the complaints that were coming in towards the end of June 2012? They were substantive complaints, they weren’t just “I’ve seen this television programme”; they were giving some detail or a fair few of them were giving detail of specific problems with the Horizon system, or allegations, specific allegations relating to the Horizon system?
George Thomson: Well, I recall more of them now because, obviously, I’ve got all the paperwork from the Inquiry but these things were 10/11 years ago, maybe longer.
Mr Blake: If we look at the bottom of page 5 into page 6, please, this is an email from Mr Bishop. He says:
“We note that the Post Office has commissioned a review of the Horizon system in a small number of cases where serious misaccounting was alleged and the former subpostmaster disputes this. We wondered if the NFSP is taking a view on this as we also have concerns about Horizon and wondered how widespread these misgivings are.
“Although we won an A fart this year for Best Agency Branch in the small branch category at the National Network Sales Awards, we have been blighted by a series of three unexplained losses in December, January and April. These occurred at the end of our trading periods and in total have added up to £1,376 since 1 January this year. They are not related to cash handling or stock management. The branch was audited last year and was found to be in good order. They tend to be the kind of issue which appears only when you get to the point of rolling over the account, when a message appears saying that losses need to be made good in order to complete the roll over and these then appear as an unexplained item in our branch accounts for the trading period.
“Because the branch reopened under new management on 31 August 2010 we put our early losses down to our own inexperience and, at first, such losses as did occur were clearly due to staff errors – [for example] using the wrong exchange rates when purchasing foreign currency from the customer or, on one occasion, remming the cheques out twice! However, we cannot find any good explanation for the losses that have happened this year and our staff are now becoming vastly more experienced in carrying out transactions and using the Horizon system. When they make mistakes, they after usually able to spot them almost immediately and get them resolved. We have asked the NBSC helpline and the Regional Agency Support Team for advice but we have no satisfactory comeback.
“We are wondering whether other sub post offices have reported similar experiences and whether, therefore, Post Office Limited are being asked to broaden the scope of their investigation. Our post office is owned by a charitable company and, as you can imagine, the trustees are getting quite concerned. There is even a suggestion that staff might be guilty of malpractice, although there is no evidence that this is the case. When they saw the news reports about the external review the trustees account us to enquire about its scope and whether it might address the sort of issue we have experienced.”
If we scroll up to page 5, please, we can see your response. Again, stock answer provided in your name about 70 million transactions being carried out.
This is then followed up, if we look at page 4, halfway through page 4, please. Mr Bishop says:
“No worries. I am pleased to hear that you don’t get lots of complaints about Horizon, but clearly we will have to look again at our own systems as we have had three unexplained shortfalls in the last seven months.”
Now, that’s in 2012. This chain actually continues into 2013. Can we look at the bottom of page 2 into page 3:
“Dear Amanda,
“I would welcome your thoughts on the following. Further to our previous correspondence (please see below), we continue to have occasional unexplained shortfalls so we noted with considerable concern news reports that more than 100 sub post offices are now reporting unexplained discrepancies in their Horizon balances and that Post Office Limited has conceded that it is theoretically possible for Horizon to arrive at an incorrect balance.”
So this is about the Second Sight Interim Report. I will get to that shortly. So I’m jumping ahead of time and I’ll have to go back, but I’ll stick with this chain because it’s all on one chain:
“The Interim Report seems to imply that there could be a ‘small system problem’ with the hardware linked to a branch, although it finds that it is more likely that mistakes happen because the system is over complicated and because staff are not following best practice when using the system and need more training to minimise the risks of not planning correctly.
“In our case, I don’t think any of us feel confident in tracing a problem once it occurs. Sometimes we can find mistakes quickly but more often we cannot find anything wrong at all and the shortfall, or less frequently the surplus, comes as a complete surprise when we press the ‘rollover’ tab on the screen at the end of the [trading period]. That is to say, cash and stock have appeared to balance correctly up until that point, so that it becomes a ‘fingers crossed’ moment each month.”
Now, they are there reporting, not just a discrepancy but also, on occasion, a surplus. So you might think that that sounds like quite an honest person; do you recall reading this email?
George Thomson: I can’t recall, no.
Mr Blake: If we go to page 2, please, halfway down. There is a response from your PA:
“Good afternoon Neil and thank you for your email.
“Having studied the Interim Report, the NFSP report that the findings are suggesting that the system fundamentally robust, however there have been a few glitches that have subsequently been corrected and the necessary adjustments made. The report is also suggesting that, as the NFSP have told [the Post Office] for many years, the training and back-up for Horizon is somewhat lacking.
“However, if you have any specific instances you [would like] to be investigated”, and then Paula Vennells’ direct contact details are provided.
There is a further response on page 1. Mr Bishop says:
“You suggested that I send the evidence next time we had a problem with getting Horizon to balance and unfortunately it wasn’t too long before this happened. On Saturday we had a new member of staff – who only began work in August – working alongside an experienced staff member. Saturday is usually a quiet day but this was busier than most.
“At the start of the day we were running a loss for the trading period of around [£77], which was itself cause for concern but we usually find that discrepancies of this size often rectify themselves when the coin [stacks] are checked. However, by the end of the session the loss had increased to [around £1,000] and every effort to track the cause of the problem has been unsuccessful.”
Mr Bishop attaches further information, printed remittance. He says, as follows:
“We can’t see any obvious errors. Short of the staff taking £1,000 out of the till and splitting it between them – which we consider most unlikely – we cannot explain where the money has gone. Can you see or suggest anything that we might have missed?
“The stock response from the helpline in these circumstances is that everything will come good when we balance at the end of the next [trading period] but invariably we find that is not the case.”
So we’ve had the Second Sight Report by this stage. Now, the Second Sight Report went into detail about two bugs, one of them affected over 60 branches, created discrepancies. It also refers to a third bug in that report, so you are now on notice of bugs in the Horizon system causing discrepancies. You have a specific issue raised by Mr Bishop here, detail, evidence.
Your evidence earlier, after originally saying that you would have tried to employ a computer expert, you then said you would at least have grilled the Post Office.
What did you do to grill the Post Office in relation to this case?
George Thomson: We were always grilling them about bugs, or backdoor entries, or remote reversals or admin reversals whatever you want to call them. But I can’t remember the specifics but what I will say is we had a very competent team at Shoreham and Marilyn dealt with most of the Horizon complaints – a very good officer – Lynda Willoughby and Sharon. Obviously my day job was doing everything – new work, subsidy, compensation levels, all these things. But I was aware of most of the Horizon stuff, absolutely.
And again, the reality is that postmasters have always had overages and shortages. Obviously, you hear more about the shortages than overages, for obvious reasons. But one of the easiest ways you could make a mistake on the Horizon terminal is, let’s say, Mrs Smith was getting £130 from her pension. So it’s in the stack and you’re meant to finish the transaction but you don’t finish – you’re maybe really busy or you’re on your own, and you’ve got a lot of things to do and, rather than clearing that off the stack, you leave it on. So the next customer, if you’re not paying attention – and this does happen, I’ve done it myself, most of them you can get the money back but sometimes you don’t – if you left the £130 in, and let’s say it was another pensioner or a Child Allowance at the time, Child Benefit, then if they were getting £100 automatically that would be added to the £130 so the stack was now showing you £230. So if you paid out that £230 because you didn’t notice, then that’s £130 that’s went missing.
It’s not because you’re dishonest in any way; it’s because you or your staff have made a mistake, and the reality is that more customers will take an overage than will come back about a shortage, rather than an overage. Some will come back. Good customers will come back.
Mr Blake: Mr Thomson, did you dismiss the concerns of subpostmasters, just like the one we’ve just been reading, in exactly the same way when they complained: user error, your fault?
George Thomson: Well, we believed that postmasters were responsible for losses and overages in the branches, and that small shortages are – were quite a common thing, yes.
Mr Blake: Thank you, sir. That might be an appropriate moment to take our second break of the morning. Can we come back at 12.10, please.
Sir Wyn Williams: Yes, certainly.
(12.00 noon)
(A short break)
(12.10 pm)
Mr Blake: Thank you, Mr Thomson, we had a small excursion into 2013 but I’m going to go back to 2012. Can we please start with NFSP000005473. This 25 June 2012, 25 to 27 June, and it’s a meeting of the National Executive Council. Can we please turn to page 5. We can see there that you are in attendance as General Secretary. Can we please turn to page 9. There is a section on Horizon. This is before the Second Sight Report has been published.
If we scroll down, “Horizon”, “The NC”; what would “NC” be a reference to?
George Thomson: Negotiating Committee.
Mr Blake: “The [Negotiating Committee] will have a meeting at Fujitsu at Bracknell in July to ascertain why the system falls over and what can be done to solve problems.
“Need to ascertain what detections are in place when failures occur.
“The [Negotiating Committee] will report back to the [Executive Committee] on what improvements will be made.
“[Post Office] has called for a full, external forensic accountants [Second Sight], review into the Horizon system. This is because pressure had been put upon Paula Vennells by MPs who are challenging that the system is flawed. This has emanated from 10 cases where people have contacted their MPs after audits had taken place and losses found. Some of these have had their contracts terminated and some have been to court. [The Post Office] are only reviewing the 10 cases.
“The Federation has never been consulted on the review.
“The NFSP has always defended the robustness of the accountancy of the system.
“There are 70 million transactions conducted on the Horizon system every week.”
Looking at those last two bullet points, it seems as though they are related to your concerns about the review in that it’s still your position that: Horizon is robust, no need for a review.
George Thomson: No, I mentioned there, we were not consulted. My main angst is we were not consulted on such a fundamental policy.
Mr Blake: Why would it then be necessary to have those last two bullet points?
George Thomson: Because it’s –
Mr Blake: What would the point be, at the time that the Post Office has called forensic accountants to look into the robustness of the system, to reiterate that the NFSP has always defended the robustness and that 70 million transactions are conducted every week?
George Thomson: We’re defending the systemic robustness of the system, as I’ve done all morning. The system is systemically robust; that’s a fact. Now, bugs can occur. We know that now. We know that – all the other things I’ve mentioned this morning. We were not told about that. We were not told by the Post Office management about these other things that would have opened their eyes to some of these issues that were going on. And I find it quite remarkable that the Post Office were prosecuting people, given they knew that their witnesses and their teams knew this was an issue. So they were going into court on a pack of lies, and that’s unforgivable. But robust, the system is.
Mr Blake: Why, after email, after email, after email that we’ve already seen this morning, would you not simply be welcoming an external independent review of the Horizon system?
George Thomson: We put out – we put out a – I think, a press release or we put something out which was basically reinforcing our belief that the system was systemically faulty (sic) and we were doing two things there – not ignoring the postmasters caught up in it but doing two things: protecting the brand but protecting the reputation of all the postmasters who were actually in situ as well. And, again, as I’ve mentioned all morning, these were a tiny, tiny fraction of the transactions that were taking place and no doubt the Inquiry has probably done some work on that. You could show me how small the percentage is, if you wanted to.
Mr Blake: Could we please turn to POL00004486, 27 June 2012, this is a news article:
“Post Office hires firm to investigate Horizon IT systems”, so it’s an article about Second Sight being appointed.
If we turn to the second page, we can see the announcement that you’re mentioning just now. It says:
“Meanwhile, George Thomson, General Secretary of the National Federation of SubPostmasters, backed the Post Office: ‘We continue to have complete confidence in the Horizon system which carries out hundreds of millions of transactions every week at 11,500 Post Office outlets across the country.
“‘The NFSP has seen no evidence to suggest that Horizon has been at fault and we believe it to be robust’.”
You had received those emails that I took you to raising concerns: a lady who had previously worked in a bank was experiencing problems, filling up discrepancies with her own money; another complaint, another complaint. Wouldn’t it have been pretty straightforward at this stage to say, “We welcome an independent investigation”?
George Thomson: If I knew what the Post Office did at that stage I probably would’ve, but I was not aware – as I’ve reiterated five or six times this morning, I was not aware of some of these major issues, particularly the issues that were – I’d imagine remote access seems to have been done on almost an industrial scale that we were not aware of. So I may have nuanced it slightly different but I would have still stipulated that it was a robust system, and it still is.
Mr Blake: How are you so confident that remote access took place on an “industrial scale”, as you say?
George Thomson: Well, it’s – what I’ve heard in the last few months, it would suggest maybe it has.
Mr Blake: Why were you so willing to accept that and not accept that there were serious problems with the Horizon system?
George Thomson: Because there’s not. There is not serious systemic problems with the Horizon system, and the reason I’ll say that, and I’ll say here quite clearly, is because the volumes concerned, we would have been snowed under. We would not have been able to do any other work with the Government, with the Post Office, anything at all. Billions of transactions, and if a tiny fraction of them – if it had been systemic, we’d have been snowed under. It has not been systemic.
It is operating and still is operating well. But there is issues, and you’ve identified them to the Post Office in the last four or five weeks, as – because I’ve been watching more of the Inquiry than I used to, obviously.
Mr Blake: Mr Thomson, you said, if you knew what the Post Office knew, you’d have welcomed the independent investigation.
George Thomson: No, I said my views would have been different. It would have been a lot more nuanced. A lot more nuanced, yeah. But I would have still stipulated that systemically it was a robust system because – what I didn’t want –
Mr Blake: If I can stop you there. What is the point of an independent investigation if the conclusion has already been reached that there were no systemic problems?
George Thomson: Well, that’s why I was so annoyed at the Post Office not bringing me in to their decision to bring Second Sight in because, if they had given me their reasoning, then we will have accepted that that was the need for it.
Mr Blake: Can we, please turn to POL00184392. If we start at the bottom of the page, an email from Alan Bates, now Sir Alan Bates, 20 December 2012:
“Dear Mr Thomson.
“So close to Christmas and with delays in the mail, I have attached a pdf of a letter to you which is self-explanatory about a forthcoming investigation into the Post Office Horizon system which I believe will benefit your members. If you so wish, it could be published in the SubPostmaster Magazine.
“Once January arrives there will be significant press coverage about this investigation in order to ensure the widest possible audience is reached.
“If you have any questions about this, please do not hesitate to contact me.”
If we scroll up, it’s an email from you to Nick Beal, Paula Vennells, Kevin Gilliland, so sending it to the Post Office:
“I have just received this rubbish from [the Justice for Subpostmasters Alliance], obviously I’ll tell him that Horizon is secure and robust and to go away. Just keeping [Post Office] in the loop.”
The Post Office had announced an independent investigation to look into the reliability of the Horizon system. Why were you so quick to dismiss this as rubbish from the Justice for Subpostmasters Alliance?
George Thomson: As far as I’m concerned, Alan Bates has always implied that the Horizon system is systemically faulty. I’ve always disagreed with that point of view. He’s basically said Post Office is not fit for purpose, as well, and that it should be done away with and I disagree with him on that as well.
That was my concern with everything that Justice for Subpostmasters Alliance did, that they basically were making out the whole Horizon system was systemically broken and that, basically, you couldn’t trust anything it did, and I fundamentally disagreed with that. So not having a nuance – it’s a bit like getting asked about shortages under the computerised system. I’ve got in my witness statement that these things happened under the old manual system but it doesn’t suit the narrative that Horizon is systemically faulty and every complaint could be about Horizon.
Mr Blake: He wasn’t saying Horizon was systemically faulty, though, was he –
George Thomson: Oh –
Mr Blake: If we scroll down, what he’s saying to you is that an independent investigation is being carried out and it might be of interest to your subpostmasters. It says, “I believe will benefit to your members”. He’s talking there about the investigation.
I’ll take you to the actual letter itself. It’s POL00184393. This is the letter that was attached to his email. He said as follows:
“I am writing to you to offer the members of the NFSP an opportunity to engage with the investigation into the reports of faults with the Horizon system.”
He’s not saying there it is a robust system, he’s saying your members can engage with the investigation into reports of faults with the Horizon system:
“It has taken a number of months for all parties involved (Post Office, Second Sight, the firm undertaking the investigation and ourselves, Justice for Subpostmasters Alliance) to agree a document which provides a safe and secure route for people to raise issues without fear of any comeback because of having done so. As ex-subpostmasters we are only too aware of the problems involved with a serving subpostmaster trying to raise Horizon issues, and I can assure your membership that we would not have accepted anything less than a guarantee of total protection.”
“The agreement which is in place not only covers serving subpostmasters but also applies to all [Post Office] employees, contractors”, et cetera.
If we scroll down, please:
“The investigation wants to obtain information and supporting documentation about unexplained Horizon problems that subpostmasters have noticed or have suffered from, especially those that are current. This investigation does not replace the normal route for dealing with problems, it is there to investigate historic issues where there is supporting documentation and live problems that cannot be explained.
“I hope you will take this opportunity to inform your membership of the forthcoming opening for them to raise their concerns with the Horizon in an environment that has been created to alleviate any concerns they may have about retaliation from [the Post Office], as it may be the only chance they ever have to do so.”
All he seems to be doing there is asking you to notify your members to take part in an independent investigation that had been commissioned by the Post Office. Why would you send that to the Post Office saying:
“I have just received this rubbish from the JSA, obviously I’ll tell them Horizon is secure and robust, and to go away …”
George Thomson: I’ve already given my answer on that. As far as I’m concerned, Alan Bates’ whole narrative over the last so many years has been that the Horizon system is basically kaput, and that, basically, everything that goes wrong in the Post Office is based on Horizon. So I make no apologies for that. And, again, he also basically mentioned evidence here that the Post Office Network isn’t fit for purpose it should be scrapped. I totally disagree with that as well. So I’ve got fundamental disagreements with Sir Alan Bates.
Mr Blake: Where does it say that in this letter?
George Thomson: I’m talking about in general, not just this letter, his whole demeanour.
Mr Blake: You’re referring to this being rubbish. What in this letter is rubbish?
George Thomson: That was my opinion at the time and much of what Alan has said since then I disagree with.
Mr Blake: Let’s zoom out a little bit so you can see the whole letter. Can you point us to the part of this letter that is rubbish?
George Thomson: It’s my words at the time.
Mr Blake: But what in this letter is rubbish? You were describing in the letter as rubbish. Your response was “It’s robust, it’s all fine”. What’s rubbish here?
George Thomson: It wasn’t just about the letter, it was obviously my understanding and my views on what Alan Bates stood for at that particular time. And, again, if you fast forward that up to date, I’ve got major issues about what he thinks about the Post Office Network.
Mr Blake: The Post Office had commissioned an independent investigation into the Horizon system. Why would it need for you to go back to Alan Bates and say, “Horizon is secure and robust and go away”? Why was that your job?
George Thomson: I’ve just answered – well, I’ve answered you. I’ve answered you about three times. I’ll keep saying it if you want me to. I disagreed with him on the robustness of Horizon and always have done, and I disagree with him right up to date now about the comments that he made that the Post Office should basically be scrapped and done away with, not fit for purpose, and all these things. And, again, I disagree with him and that was just recently as well, so that doesn’t bother me.
Mr Blake: Moving on, NFSP00000680. We’re now moving onto the summer of 2013, 8 July 2013, and this is an email from Matt Adams to Paul Hook. Matt Adams seems to have worked at a PR agency?
George Thomson: Yeah, we use Cobb PR.
Mr Blake: Was that an agency that the National Federation instructed to assist them with –
George Thomson: We used them for many years, yes.
Mr Blake: “Hi Paul,
“Below is a very brief draft statement which George may want to add to. Just to recap, I think there is a danger of the NFSP appearing to be slightly misaligned now from [the Post Office] on this issue so I think the second part is important.”
This is the proposed statement:
“George Thomson, General Secretary of the NFSP, said: ‘While we have never been presented with clear evidence that the Horizon system had failed to meet its primary purpose, we are nonetheless reassured that the system has been found to be robust in an independent survey, and we continue to have confidence in it.
“‘We are also encouraged to see that Post Office Limited does concede that there is always room for improvement and scope for learning and we look forward to hearing from our members that support levels have increased as they continue to use Horizon’.”
Do you recall being involved in this statement?
George Thomson: Well, if it was in my name, of course I would be, yeah.
Mr Blake: What would be the process of drafting? He says it’s a draft statement for you, you may want to add to it; was there typically a toing and froing between the two of you to finalise a statement?
George Thomson: Sometimes, I would say, yeah. Other times, no.
Mr Blake: Okay, well, this was 8 July 2013, at 3.41. Can we, please, turn to NFSP00000681. Thank you. We now have an email from Mark Davies from the Post Office, the same day, but approximately an hour later. He says:
“Hi Paul
“Here is the statement.
“Will forward report shortly.”
Then he sets out the Post Office’s response to the Second Sight Report. If we scroll up, we can see that Mr Hook has forwarded it to you and others.
It looks, from this email, as though where he says, “We will forward the report shortly” that, by this stage, you hadn’t yet received the Second Sight Report; do you recall that?
George Thomson: I can’t recall, no, but, as I said earlier on, we represented agents who had contracts for services, a franchise, if you like, and we worked closely with the Post Office to make that franchise as beneficial as we could for everyone concerned.
Mr Blake: What it looks like is that you have drafted an announcement in respect of the Second Sight Report without, in fact, having received the report itself, prior to receiving the report.
George Thomson: I couldn’t give you a definite. As I said, it’s a long time ago.
Mr Blake: You’re reassured the system has been found to be robust in an independent survey; is it likely that you hadn’t actually read the report by the time that that announcement was being drafted?
George Thomson: I probably have read it but I couldn’t say, it’s 12/13 years ago. I mean, I’ve read it a good few times but –
Mr Blake: Mark Davies is here forwarding the report. Did you ultimately read the Second Sight Report?
George Thomson: Yeah, of course I did, yeah.
Mr Blake: Could we, please, turn to NFSP00000682. Thank you. This is an email with the actual ultimate statement that was made on behalf of the NFSP. This is the next day, 9 July:
“Dear Executive Officer
“George has asked me to follow up his earlier email by resending the report, which it appears a few people are having difficulty opening. Please find attached”, and the report is circulated on 9 July.
“In addition, please see below the statement placed this morning on the NFSP website …”
This the final statement that was uploaded onto the NFSP’s website:
“The NFSP has responded to the publication of an independent … report on Horizon, the Post Office IT system.
“George Thomson, NFSP General Secretary, said: ‘While we have never been presented with clear evidence that the Horizon system had failed to meet its primary purpose, we are nonetheless reassured that the system has been found to be robust in an independent survey and we continue to have confidence in it.’
“He added: ‘We are also encouraged to see that Post Office concedes that there is scope for improvement [so these are the words we saw earlier] – issues which the NFSP has raised repeatedly with [the Post Office]. We look forward to working with members and with [the Post Office] in the coming months to increase those support levels’.
“Post Office has also issued a statement on the report’s findings.”
Could we now, please, turn to UKGI00001839. We’re still going chronologically. The bottom of page 1, please. You’re contacted by a lead commercial litigation lawyer within Anderson Strathern. Were they the NFSP’s lawyers at the time?
George Thomson: We used them on a semi-regular basis and one particular case was some postmasters were being held liable for fraudulent Green Giros, welfare benefit cheques, and we used Anderson Strathern and we got a good result and Post Office had to reimburse many subpostmasters the money. So we were aware of them and we used them for a few things, yes.
Mr Blake: So he’s getting in touch with you, and he says:
“I have seen/heard/read the detail of the computer system fallout.
“Do you need any advice on the legals here? I would be pleased to assist/advise as appropriate.”
You then forward that email to Paula Vennells if we scroll up, and you say:
“Hi Folks
“This is the type of mess we have created with the Horizon debacle.
“Our tactics were totally misguided.”
You’re not copied into the top email but this is Mike Whitehead from the Shareholder Executive saying:
“Ambulance chasing lawyers circling!”
You say “the type of mess we have created”. What is that, the mess you –
George Thomson: I believe that the company we used, Anderson Strathern were very good, that obviously the Federation tactics were wrong if they actually thought that we were wanting them to take the Post Office to court.
Mr Blake: Was “the mess you created” or that “we created” the instruction of Second Sight?
George Thomson: No, not –
Mr Blake: – and their report because this comes just after the publication of their report?
George Thomson: The mess we created was basically giving our lawyers the actual thoughts in their head that they thought we would engage them to take some kind of action against the Post Office.
Mr Blake: What’s the “Horizon debacle”, though? This is shortly after publication of the Second Sight Report.
George Thomson: The whole situation.
Mr Blake: Are you there referring to the fact that the Second Sight Report has identified issues with the Horizon system?
George Thomson: No, the Federation’s tactics, in my opinion, are the Horizon debacle for us, that lawyers that we’re using for other things actually would think that we were coming from another direction from where we were, which was systemic – that the Horizon system was systemic and robust.
Mr Blake: Sticking with July 2013, can we please turn to POL00173773, and we start on page 2, please. At the bottom of this page there’s an email from Mr Hook to yourself, and he says:
“Hi both – Matt has been contacted by a producer at BBC Panorama … which is considering running a programme on the Horizon/Justice for Subpostmasters issue.
“To inform their decision on whether to run with the programme or not, he’s keen to talk to someone at the NFSP in more detail about our take on the issue, and about our experience of Horizon more broadly.
“I don’t feel confident enough in my knowledge of the system to do this. Therefore, would one of you be willing to talk to him?”
If we see above, you sent it to Paula Vennells and others, and you say:
“Please see email below [for your information].”
So Panorama are considering running a programme, you’re being asked for a comment, and your reaction to that is to forward it within 11 minutes to Paula Vennells and others.
George Thomson: As I’ve mentioned on numerous occasions today, our members were franchise holders, small business people. We worked closely with the brand that we worked for. I make no apologies for that. And the reason where I’m quite hard line about things like Panorama is it didn’t try – and ITV programmes – they didn’t try and give a rounded picture about the volumes being done correctly, they didn’t try to give a rounded picture regarding that we had problems with balancing under the old manual ledger system.
Now, all of this is in my witness statement and I’m a bit concerned that you’ve virtually paid no attention to my witness statement because it doesn’t suit the narrative.
Mr Blake: Mr Thomson, your witness statement is in evidence, it’s going to be uploaded to the Inquiry’s website, the Chair has read your witness statement and considered it. We are dealing with things additional to your witness statement today and I’m taking you through a number of documents to ask you questions about them.
George Thomson: But my witness statement answered quite about a lot of the things you’ve been asking again.
Mr Blake: Can we please turn to page 1, the bottom of page 1, please. Mark Davies, the Communications Director at the Post Office says:
“George
“Many thanks for forwarding this. As you can see it was sent on to me.
“I’d like to contact Panorama. Are you okay with me doing so?”
Then your response was as follows:
“Mark
“If you contact Panorama, would it not be apparent to them that I had passed on their details, would look bad.
“I will speak to them tomorrow, I will be very clear that the system is robust, but that we need to be better and more consistent when responding to claims of Horizon faults. In addition I will say better training is required.
“If we are not careful these Horizon shenanigans will turn into a cottage industry.”
Earlier, I asked you, if bugs were brought to your attention, what would you do? Your answer was, at the very least, you would have grilled the Post Office. This is days after the Second Sight Interim Report where it mentions bugs, errors and defects; it mentions issues affecting branch accounting; it mentions three bugs. It doesn’t look very much like, on 11 July, you are giving the Post Office much of a grilling, are you?
George Thomson: We worked closely with the Post Office as well but, when evidence came up, I would raise it with them, yes, but I make no apologies for working with the Post Office on publicity regarding the brand. None at all. And, again, as I mentioned two minutes ago, that there was – it was always about just the Horizon errors. It was never about the volume going through the system that was being done correct and it was never about that we had problems under the old manual system as well and people were suspended under the old manual system, people lost their houses under the old manual system, nothing really changed moving from manual to Horizon.
Mr Blake: Can we please turn to NFSP00001385. You’re emailed the day after, 12 July, by somebody called Keith Richards. He says:
“Hi George
“Don’t know whether this has been sent to you already. It stinks of so much misinformation and untruths which is not unusual from someone who does not know the full picture.”
It’s an email that has been sent from somebody called Chris Neill. It’s an open letter to the Executive Committee. He says as follows:
“You may all be aware of certain threads on the NFSP forum regarding recent events. It was suggested that members should write to their …”
Is that Executive Officers, “EOs”?
George Thomson: Yes, that would be Executive Officers.
Mr Blake: “… [Executive Officers] and express their feelings and concerns. I have taken the step of copying this email to all the [Executive Council] with published email addresses (please copy to those who I have missed) in the hope that the message might actually get through. I have also published this as an open letter on the forum.”
George Thomson: Yeah, Keith Richards is a – he still works for the Federation, he is a very good officer of the Federation. He still works there.
Mr Blake: The open letter says as follows:
“Out here there is a lot of bad feeling towards the Post Office and we all feel helpless and in some cases abandoned by our General Secretary and Executive Council who fail to communicate with us at any meaningful level. The General Secretary could almost be accused of complicity with [the Post Office] and has a habit of seemingly announcing and changing NFSP policy via Twitter. No one likes being treated like a mushroom but that is how we are feeling at the moment with our destiny being controlled by [the Post Office] and an [Executive Committee] that has secretive meetings and fails to communicate and respond to our needs or wishes.”
If we scroll over the page, please, there’s a section there on the Horizon investigation. He says as follows:
“The Federation’s response to this report is appalling and makes it look like we did not even bother to read it at all and just accepted [the Post Office] press release and the first conclusion.”
The first conclusion being the interim finding that there were no systemic problems:
“The report highlights many failings within [the Post Office] regarding its dealings with subpostmasters as well as admitting to bugs in the software. The GS …”
That’s you, is it?
George Thomson: Yeah, it will be.
Mr Blake: “ … said ‘… we are nonetheless reassured that the system has been found to be robust in an independent survey, and we continue to have confidence in it’. This is totally out of step with most people’s and the press reach to the report.
“Ken Parsons, Chief Executive of the Rural Shops Alliance, said: ‘The fundamental problem is that Horizon does not have sufficient failsafe or backup facilities to cope when these inevitable but rare problems occur. And, unfortunately, even a few system errors a year can wreck the lives of the subpostmasters involved’. This is the very least I would have expected our own union to have said.”
Let’s just pause there. There has been a common theme throughout your evidence today that it worked overwhelmingly for a large number of people, the number of errors must have been very, very small. What do you say about the announcement from the Chief Executive of the Rural Shop Alliance, who said that the problem is that, even if they are rare, unfortunately, even a few system errors a year can wreck the lives of the subpostmasters involved; what is your view on that?
George Thomson: Is that Ken Parsons?
Mr Blake: I’m not asking about the individual, although it is from him, I’m asking about the announcement he has made that, even if there were only a few errors a year, it can wreck the lives of postmasters?
George Thomson: Making a mistake can wreck their lives. Ken can tell to people what he wanted, he was representing his organisation and I was representing our organisation. And you’ve went over this a few times: billions and billions of transactions, with a tiny volume of mistakes.
Mr Blake: Why weren’t you looking out for those tiny volume of people, who – as Mr Parsons has said – potentially their lives have been ruined? Why didn’t you see it as part of your job, even if it was only a small number, to look out for that small number?
George Thomson: Probably because of defending both postmasters’ reputations and the new work we were trying to get as well. So I was careful not to be seen to be crying wolf.
Mr Blake: What about the reputations of that small number? What about their lives?
George Thomson: Well, their lives, obviously, have been – some of them have been dramatically destroyed, I accept that. But again, as I’ve reiterated time after time, if you have Government directors on the Board and you have a Chief Executive tell you one thing, then it’s very hard to change.
Mr Blake: “Post Office has admitted to past ‘bugs’ in Horizon and the authors of the report stated there is problems with the hardware and communications. The authors also indicated there is a lack of information provided to subpostmasters to adequately defend themselves. These are our colleagues who have lost everything as a result. The fact that [the Post Office] do not keep their records for longer than 7 years and failed to supply the investigators with proof of their guilt seems to have completely been disregarded in our response. All these issues are ones that should be and perhaps should have been taken up by the Federation.
“It is interesting to note that the NFSP was not mentioned at all in the report and perhaps that is because the Federation took the stance of complete and blind trust in Horizon without full and proper investigation and support on behalf of the affected subpostmasters. If the convictions of these individuals are found to be unsafe at a later date this stance may come back to haunt us.”
That’s quite prescient, isn’t it?
George Thomson: Well, I think, looking from where we are now and given what I know about the Post Office and what they were saying, yeah, we were probably much too trusting of the Post Office, yes, that’s probably the case.
Mr Blake: You received this communication on 12 July. Why didn’t you do something about it?
George Thomson: I can’t recall what happened to it. I’m not –
Mr Blake: Why don’t we see a single statement from yourself that is similar to that that was made by Ken Parsons?
George Thomson: Well, I’ve just made a point that we were probably, given what we know now, too trusting of the Post Office, yes.
Mr Blake: NFSP00000536. This is a meeting of the National Executive Committee on 3 September 2013. If we look at, please, page 11. We spoke first thing this morning about the stages of the negotiations with the Post Office. There’s a section here on Horizon.
“Horizon
“The Post Office Interim Report on Horizon had concluded that there was nothing fundamentally wrong with the Horizon system, however it highlighted the fact that training and support for subpostmasters was not all it could be. [Post Office] are in discussions with the Negotiating Committee on providing training and support.
“Wendy Burke reported that there has been an issue with the prompts on one of her screens in relation to postage not being consistent. The Horizon system helpline were aware of this issue. Ian Park will raise this although it did not affect any balancing on the system.
“Believed there was no systemic problem with Horizon.”
It says this:
“People are jumping on the bandwagon and blaming losses on the Horizon system.
“Since the report was published Shoreham HQ have advised those that blame Horizon to write to Paula Vennells, Post Office Limited.
“Bad publicity could prevent some customers using Post Office and affecting the future of the Network.”
Was that one of your big concerns, that bad publicity could stop people from coming to the Post Office?
George Thomson: Well, part of it was that but, also, I had two phone calls from – one was a postmistress, one was a postmaster, one who was in 1996 and one in ‘97, and they were both blaming Horizon for losses that they had when they were in the Post Office. And, obviously, that’s the kind of situation they were in because I had to explain to them that, you know, Horizon wasn’t in place in 1996 or ‘97.
So I was – I was aware of that and it was on the back, also, of a situation in Scotland where there was a £100,000 shortage in one branch, and the – it was – the son admitted that he had a gambling problem and he had taken it. The father knew nothing about it. So that was happening about the time when I was talking about jumping on the – that every single error or mistake gets blamed on Horizon being faulty, and that was always the danger in a system that’s dealing with tens of billions of pounds in short periods.
Mr Blake: We see below, “Trade Union Status”, and we discussed that this morning:
“The General Secretary reported that recent paperwork received had been circulated.
“The NFSP had been a trade union for some 70-80 years …
“The NFSP is at present an unincorporated association …
“The Certification Office was set up”, and then it gives the date:
“It is believed that disaffected ex-members with the backing of the CWU, had questioned the NFSP’s status with the Certification Officer.
“The [Certification Office] intends to delist the Federation on 4 October 2013. Will no longer be a trade union within the next two months but will still remain as an unincorporated association.
“Currently have 6,100 real members of whom all are self-employed.”
If we scroll over the page, if we go down three quarters of the way, please. There’s an entry there that, by this time, it says:
“Believed joining with the CWU will not be an option as they represent Crown Offices etc and the NFSP believes that these are not viable to the network.”
If we scroll down, the bottom two bullet points:
“Questioned if the NFSP’s funds would need to be paired back to members.
“Suggested to try and extend the date of 4 October for the NFSP being delisted as trade union. Confident will have influence with [the Post Office] for the next year because of [Network Transformation].”
Over the page, please:
“Possibly realise the ambition of representing all subpostmasters and operators through auto enrolment once the NFSP is not longer a trade union because there would no longer be the threat of being a closed shop.”
Then we have:
“Bhavna Desai [the third from bottom bullet point] asked if any letter to members could be sent sooner rather than later as she believed there would be motions to say all the assets will have to be dissolved and the members will not see any of the money.”
So it seems as though, at the very time when you are dealing with the fallout from the Second Sight Report, there are also some serious concerns about the future funding of the National Federation; do you agree with that?
George Thomson: Not in particular, but there was discussions regarding did the Federation have a long-term future? Did it have enough resources to go on and, as I said to you earlier on today, I had a meeting with the – well, a lot more than one – with Philip Bloor, the Finance Director, where I said would we be able to go on independent for about a year and a half, and Philip quite categorically said to pay – “to wind everything down, George, people, when they’ve got their money back, there will be no money left because the staff will have been looked after” and, because we’d been around a long time and all the staff in Shoreham had been around a long time, I made sure we changed the contracts and every member of staff who was in Head Office, if we had ended up folding, were – an extra year’s compensation was put in for them, if they was – if they were going to be sacked or made redundant, whatever you want to call it.
So, again, the money wouldn’t have lasted very long. There wasn’t very much. I was making sure that the staff, some that had been there 20/30 years, were all going to be looked after if we ended up having to call it a day.
Mr Blake: The suggestion, though, that may be made is that it was very important for you at that time to keep the Post Office on side to ensure that they could fund the future of the NFSP?
George Thomson: You see, I disagree with that because my support of Horizon has – I know in some of the evidence – I think Mark Baker said something that my support for Horizon was stronger than, when we were in the mutualisation, trying to get that. That’s not the case because I’ve always supported Horizon. I’ve made that quite clear.
I was told today to do the opposite of what I’ve done, “Just come along, George, blame the Post Office for everything, sorry, sorry, sorry, sorry”, but I’m too open for that. The reality is that we did not change our view on Horizon because we were looking at our future and we were going to go absolutely not. And I probably support the Horizon system as much now as I did then. Obviously, I’m furious about the shenanigans of the Post Office, the holding back of all this information but, more importantly, I’m furious at the Post Office for taking people to court and people giving professional expert witness statements, knowing that people could access your computer. That’s scandalous.
But in terms of, as I said before, it being systemically robust, it is. The Post Office were crazy to take people to court knowing that they were lying on a regular basis about being able to get into the Horizon system. Quite bizarre.
Mr Blake: Mr Thomson, you said that you were furious at the Post Office for withholding information. But now, July 2013, you had information. You that the Second Sight Interim Report, which, in fact, raised bugs that talked about discrepancies. Why at this stage were you still promoting the Horizon system?
George Thomson: As being systemically robust, yes, because having bugs in the system does not show the Horizon system was not systemically robust because what you’d been doing now is saying the same thing even now.
Mr Blake: Can we turn to UKGI00005002, and it’s page 2 I’d like to look at. We’re going to move on now in time quite considerably to 2015. If we scroll down, please. Your PA is writing to George Freeman, who I think was a minister at the time. She says:
“I write on behalf of George Thomson, leader of the organisation representing the subpostmasters in the UK. He would very much like to meet with you to explain exactly why, as an organisation, we believe the Post Office Horizon compute is robust, secure and accurate.”
Why, as late as 2015, did you feel the need to have to promote to a minister that the Horizon computer system is robust, secure and accurate?
George Thomson: I’ve answered you loads of times but I’ll do it again for the benefit of doubt: because I’ve always believed that the Post Office Horizon system and EPOS system is a robust system. Now, having bugs in the system, the postmaster should have been told about and they should have been rectified, I agree with that, but having some bugs in the system does not stop it being a systemically robust system. In fact, the Second Sight Report makes that point, yet you’re trying to imply it does.
Mr Blake: You’ve used the word “accurate” there as well. You’re not just saying it’s robust, you’re saying it is both also secure and accurate; does that make a difference?
George Thomson: It’s what I said at the time, yes, so I’m not going to dance on a pinhead about that.
Mr Blake: Can we please turn to POL00152986. This is the final document we’ll go to before lunch. We’re still in the summer of 2015, can we start on page 4, please. If we look halfway down page 4. There’s a Panorama programme in 2015, August 2015. If we scroll down, you say:
“Our reply will be consistent, Horizon is robust, last night’s programme was bullshit.
“George.”
Page 3, please, bottom of page 3., from you to Mark Davies – well, Mark Davies responds:
“Good to see George. I was surprised they didn’t at least reflect your view in the programme as representative of most postmasters.”
You respond:
“Hi Mark
“Similar to requests for Paula to resign, I have had two subpostmasters so far demanding my resignation, any attempt to now soften both our instances on Horizon would be catastrophic for the Network and company.”
If we scroll up, please. We have Mr McConnell on page 2 emailing Mark Davies, and he says:
“Hi Mark,
“We have issued the statement below to members – we remain firm on Horizon, you’ll appreciate too we need to remain the ‘critical friend’ stance.”
If we scroll down, this is a statement that you put out following that Panorama programme in 2015. If we scroll down the page and over to the next page, there’s just one paragraph I’ll read to you there:
“Put simply, the NFSP has not received calls from subpostmasters querying Horizon and alleging systematic failings. If there were a widespread problem, our subpostmasters would have made us aware of it. As a result, we have no choice but to conclude that Horizon is a fundamentally sound and safe system.”
Now, Mr Thomson, we saw those complaints. We saw them go to your inbox in 2013. We saw quite a number of quite detailed complaints. How is it you felt comfortable, following that Panorama programme, to say that you’ve not received calls from subpostmasters querying Horizon and alleging systematic failings and that, if there were, the subpostmasters would have made you aware of it? You had, in fact, received –
George Thomson: I don’t believe these were querying systematic failings. They were sent on individual cases. I think the only people that were claiming, in my opinion, that there were systemic failures were people like Alan Bates and probably people like Mark Baker and Helen Baker who were querying it. The vast majority of subpostmasters never queried it had systemic – there’s a lot more now – systemic failures.
Mr Blake: I will actually take you to one more document before we break for lunch because you’ve mentioned Mark Baker. Could we please turn to CWU00000013. This is the press release from the CWU of the same time, 17 August 2015:
“Dear Colleague.
“Post Office: Panorama Programme on Horizon Issues
“I’d like to advise branches and members that the BBC’s ‘Panorama’ programme … will highlight the issues faced by many postmasters in relation to alleged problems with Horizon system.”
So their acknowledgement there is that there are issues faced by many postmasters in relation to alleged problems with the Horizon system.
The announcement then sets out the synopsis of the programme, and then it quotes from Andrew Bridgen. If we scroll down, it says:
“The subject was also raised during Prime Minister’s Questions on 1 July 2015, when Andrew Bridgen … asked the following:
“‘Owing to ongoing issues with the Post Office’s Horizon software accounting system, I believe that many honest, decent, hard working subpostmasters and subpostmistresses have lost their reputations, their livelihoods, their savings and, in the worst cases, their liberty. This is a national disgrace. Will my Right Honourable friend consider the request from Members across the House for a judicial inquiry into this matter and bring it to a conclusion?’”
It has below the Prime Minister’s response acknowledging the service that Mr Bridgen had carried out in campaigning tirelessly on the issue.
Why couldn’t NFSP announcements be as balanced as this announcement?
George Thomson: Because we were closer to the issues than the CWU and, again, the CWU had – over 200 members were convicted, and I don’t know what the CWU did about that in terms of courts, or anything like that, or – what’s the phrase – put the money where their mouth is and did something about that, I’m not sure. About 200 staff were convicted over that period, and –
Mr Blake: What they don’t do, though, at any stage in these – certainly not in any documents that we have, is an announcement that says that Horizon is a fundamentally sound and safe system, like you did, after the Panorama programme. Why is there such a difference between yourselves and the CWU on this?
George Thomson: Well, I think it is sound, systemically sound, but also I believe that – and that’s when I should have used the word “nonsense” rather than “BS” on a few things but it’s about the lack of balance and – ie there’s nothing in any of these programmes or ought the ITV documentary, there’s nothing at all that mentions that problems that happened before Horizon, the old manual system, many, many of them, and the sheer volume of transactions that were going through the Network that were spot on, the overwhelming majority.
So that’s all the programmes that have come out I’ve always been very critical of because they haven’t given a balance. It’s been one side of this system is rubbish, you know, we’ve all been let down with it, and part of the let down by it is true, of course, because of the Post Office’s actions, but there has never been a balance explaining that, yes, we had as suspensions under the old manual system, we had people going to jail under the manual system, we had people losing their houses under the manual system and, God forbid, in the old days as well, there were some suicides as well. I understand that and that is heartbreaking but there was no balance it’s almost like all these problems began, the losses, when Horizon came along, and that’s simply not the case.
Mr Blake: Sir, I think that’s an appropriate moment for us to take our lunch break.
Sir Wyn Williams: Yes.
Mr Blake: Could we come back slightly before 2.00, could we perhaps come back at 1.55?
Sir Wyn Williams: Certainly. As you know, Mr Blake, our normal finishing time on a Friday is 3.00 and, as it happens, for personal reasons, I can’t go beyond 3.00 today. Are we still likely to finish this witness in that period or may we need to think about –
Mr Blake: No, sir, we will finish. I only have five or ten minutes, and questions from –
Sir Wyn Williams: Right. All right. Well, 1.55 then, that’s fine.
Mr Blake: Thank you very much.
(1.04 pm)
(The Short Adjournment)
(1.55 pm)
Mr Blake: Good afternoon, sir.
Sir Wyn Williams: Good afternoon.
Mr Blake: Can we please move to NFSP00000500, we’re now moving on to the summer of 2016, June 2016, and a meeting of the council. If we scroll over the page, please, over to page 5, we can see that, by this time you are Chief Executive Officer, I think, did the title change over time?
George Thomson: Yes, it did.
Mr Blake: Could we now turn to page 22. There is a section on “Any Other Business”. If we scroll down, we have there:
“Peter Montgomery asked what the policy of the NFSP was in regard to Freeths Solicitors who are asking subpostmasters that they believe suffered losses as a result of Horizon to allow Freeths to work on their behalf and take the Post Office to court.
“The CEO [that’s you] explained that Freeths are basically ambulance chasers. Freeths are desperate to get subpostmasters to engage with them.
“Freeths also maintain that subpostmasters contract is unfair with regard to the subpostmaster being responsible for losses.
“It is up to the individual to decide whether they wish to sign a contract or not.
“Legally a contract does not have to be fair.”
So is that your view as expressed at that meeting?
George Thomson: Yes, but we’d been told – we’d actually taken advice about the contracts some years before and we were told that – we engaged solicitors in London – that a contract doesn’t have to be fair because, you know, if you sign it, it doesn’t – it has been unfair. I think everybody feels for a long time that the contract has been too one-sided towards the Post Office and members expressed that on regular occasions, yeah.
Mr Blake: Were you upset with Freeths because they were undermining the position of the NFSP at this stage?
George Thomson: Well, we’d never had much engagement with Freeths whatsoever but I do – you know, the – when I say ambulance chasers, they did end up – if it wasn’t for Government intervention, the subpostmasters that had the case ended up getting very little money, you know, and I think what little money there was was swallowed up in costs, wasn’t it?
Mr Blake: At the bottom:
“The NFSP’s policy has always been that it is a robust system and we have full confidence in it.”
That was the policy that you explained earlier.
If we scroll over, please:
“Do not believe that the system is systemically faulty.
“Most people that blame Horizon for losses are overinflating their cash declarations, false accounting.”
Where did you get that from?
George Thomson: The reality is, is there some people that have lost money because of Horizon bugs and faults and the Post Office’s stance are criminal cases? Absolutely, there has been. However, and I’ve not been given – you’ve been very careful in not allowing me to say this, but this has always been the case: postmasters – everything has always been kept in-house within the Post Office industry, same with Royal Mail, and I’ve been at cases over the years even when it was the old manual system, where errors are sometimes mentioned on the stack, just – in the old days you had to do things with pencil, you had to add up two pensions, if you got that wrong you could lose money.
So there’s always been mistakes made. Most of the errors that postmasters have are genuine mistakes by them or their staff. That goes for the old manual system, the ledger system, and the Horizon system. The vast majority of complaints about Horizon were nothing to do with Horizon. They were basically just things being done wrong, not by intention, but by mistake.
Mr Blake: How did you form the opinion that most people that blame Horizon for losses are overinflating their cash declarations? How did you come to that conclusion?
George Thomson: One of the key red flags the Post Office used to use, they couldn’t do it so much under manual system, but it was about cash declarations. Under the old manual system you are meant to put your cash declarations in every night as well but lots of people didn’t put them in. No one really checked the old ledgers until Auditors came out, so you might have had a situation where you hadn’t put the overnight cash holding in for ages and you do the balance once a week or once a month but, with Horizon, you had to make your cash declaration every night, so a lot of the times – and I remember an office, who were claiming extra fivers all the time and, when Auditors went out, instead of having 8,000 or 9,000 fivers in the branch, there were none at all.
And the reality is that the vast majority postmasters and the vast majority of claimants on the Horizon Inquiry are decent, honourable, honest people. I won’t dispute that for a minute. But it’s a franchise that’s been struggling for – even before the Horizon, and people – that’s why we used to encourage people to take the compensation and leave with the restructuring programmes. So yes, so the Post Office were aware, when – and it was a red flag – when it seemed to be the money they needed for running the branch, they were ordering more in than what the cash declarations would suggest. So if your cash declaration said you had –
Mr Blake: Mr Thomson, we need to move on.
George Thomson: Well, you’ve asked – I have to give a bit of background and, you know –
Mr Blake: We don’t have time for the level of detail that you’re going into right now, in respect of a simple question, which is how you personally formed the opinion most people –
George Thomson: Well, I’m giving you that background of why I formed that opinion.
Mr Blake: Let’s move on to the next bullet point:
“Subpostmasters take money sometimes and members of staff also take money.
“Reminded that members of the Council should adhere to collective cabinet responsibility.”
Is that, in effect, saying that all members needed to tow the line in respect of the line regarding the Horizon system?
George Thomson: Well, you make a collective decision and it is like the British cabinet, or it should have been like the British cabinet. You make a collective decision and that becomes the policy of the organisation, yes, that’s correct.
Mr Blake: Can we please turn to POL00248962. Moving now to 2017, 27 April, page 5, please. If we start on the bottom of page 5, there is an email from Andrew Parsons, who was an external lawyer advising the Post Office. If we scroll down, please. He is emailing Thomas Moran and Rodric Williams at the Post Office. He says:
“Please see attached a letter from Freeths [regarding] advertising the GLO. Most of this is just process points which we will deal with in due course, however in the penultimate para they ask for [the Post Office’s] consent to place an advert in SubPostmaster Magazine.”
He says, in the final paragraph:
“Are the NFSP still generally supportive of [the Post Office] and Horizon? If so, it would be quite a powerful message if Freeths approached the NFSP and the NFSP refused to allow the advert on the grounds they thought the litigation was meritless. This type of message would have to be reported up to Freeths’ insurers and funders, and it would perhaps knock their confidence if a key ‘Union’ was standing by [the Post Office] rather than the Claimants.”
If we scroll up to page 4, please, the middle of page 4., Mr Moran responds to Mr Parsons, and he says:
“Thanks. George is very negative about Freeths’ approach and I do not think will accept this in his publication. It is not our decision.
“For the avoidance of doubt, we have no direct control over the magazine which is edited independently by the NFSP. So the obvious approach would be to inform them of that and redirect them to contact the NFSP direct. In the meantime, I would inform George of the [possibility] by forwarding the letter, which I’ll do now.”
Scrolling up, Mr Parsons then advises the Post Office, he says:
“Tom – be careful about emailing George. Your email may not be privileged. Keep it neutral.”
Mr Moran responds:
“Nick Beal will be speaking to George on a planned call later today so will note this to him. He’s absolutely confirmed that the magazine is entirely NFSP so our letter should simply make that clear and redirect to them.”
If we scroll up to page 2, Mr Parsons responds and he says:
“A call with George is better than an email – no audit trail to disclose.”
If we turn to the first page, please, Mr Moran reports back after having had a conversation. He says:
“I can confirm that we have made George Thomson at NFSP aware, and the response should be as advised to redirect Freeths to NFSP directly as we have no control over the publication.”
Do you recall a conversation with the Post Office regarding the approach from Freeths to advertise in the NFSP magazine?
George Thomson: I think we did discuss it. We worked – as I said before, I make no apology, we worked very closely with the Post Office on behalf of the franchise holders and that’s quite common. If you have a franchise, you work with the company that gives you the franchise. That’s common behaviour.
Mr Blake: Did you refuse to advertise the Group Litigation in the magazine?
George Thomson: Well, this is where I’m not sure. I don’t know what – I’ve got a feeling that – I’ve got a feeling it went in but I’m not 100 per cent. I really can’t recall but I’ve got a feeling they maybe did get an advert in the Subpostmaster but I’m not 100 per cent. I could be wrong on that.
Mr Blake: Can we turn to POL00162362. I’m now going back in time slightly to 2015. I just want to ask you a few questions very briefly about the relationship between yourselves and the Post Office’s Communications Team and their senior executive. This is 2015, in relation to the Mediation Scheme. If we scroll down, there is an email from Angela van den Bogerd to Mark Davies at the Post Office, and it’s a paragraph that I’d just like – it’s that middle – the bottom paragraph now, the final sentence. She says to Mark Davies, in relation to this particular issue, she says:
“I have discussed this issue with George Thomson and we are to agree an approach using the [SubPostmaster] Magazine to try to rebuild the confidence in Horizon.”
Do you recall a conversation with Angela van den Bogerd about using the SubPostmaster Magazine to try to rebuild the confidence in Horizon?
George Thomson: I don’t recall it but, given my strong support for the systemic nature of Horizon, it wouldn’t surprise me, no. But I can’t recall it but I’d imagine it’s correct.
Mr Blake: Can we turn to POL00314729. 19 April 2015, Mr Davies emails you:
“Hi George
“BBC planning to go to town on Second Sight Report tomorrow, really attacking Post Office.
“The journos dealing with it are”, and he gives their details.
“Up to you of course if you want to get involve but wanted to let you know.”
Did Mark Davies see you as a convenient voice in favour of the Horizon system?
George Thomson: I’ve got a lot of time for Mark Davies. We worked closely and, again, I make no apologies, not just on Horizon, that’s one of the things that I’ve got in my witness statement. We have to work closely with the Post Office on Government work, Network restructuring, all the issues. So we were used to dealing with it. In fact, one of the – I think it was David McConnell, he had – the Post Office were cutting back staff and we had a vacancy in our Communications Team and David McConnell, because he knew the Post Office inside out because he was working there, David McConnell joined us as one of the – I think he was press officer, I think. So, you know, that was a close tie. We had good working relationships with the Post Office and, again, as I said, as a franchise – as an organisation who represents the franchise holders, who have all got lots of money invested in the company, we obviously have to work closely with the company. That’s common sense.
Mr Blake: If we turn to POL00315623. If we look at the bottom email on that page, 29 April 2015, there is an email to you:
“Hi George,
“Roland Gribben at The Telegraph is enquiring about whether there is an update about Horizon (see below).
“I haven’t spoken to him yet. Is there anything further to say at the moment …”
If we scroll up, you respond to the Post Office and you say:
“Hi Guys
“Are we still battening down the hatches.
“[Very best], George.”
Mark Davies responds:
“Hi George
“We are being pretty robust in pushing back to be honest – not necessarily always reported!
“Not really sure what he is getting at here?”
Was this a typical –
George Thomson: Was this after Paula and Angela van den Bogerd gave evidence to the Select Committee in 2015, was that after it or before it? Was that after it?
Mr Blake: I can show you. If you turn to the second page, there’s a little more detail.
George Thomson: I’m not 100 per cent but –
Mr Blake: It says, “Here’s the statement we received after the Select Committee”?
George Thomson: To be honest with you, within Post Office Limited, I was up at meetings, you know, a couple of days after the Select Committee. My view was quite clear and I expressed it very strongly, that the performance of Angela and Paula – and I’m not decrying them, they’ve got a job to do, but they should have been open and honest with these committees and the Inquiry. I thought it was a car crash of a performance and that was well shared by many people at senior level, and that’s – I think that “batten down the hatches” was the feedback from that.
When I went in – and this is truthful – I was so concerned with how it – how they didn’t have a grip of it, that I said they should basically – anybody who had something in the system for a claim, they should settle the claim and get this brought to a head, get this brought to a close because it was so damaging for the brand and these people who were genuinely making these claims should be just settled and get it brought to a conclusion, get it done. And if they’d done that eight or nine years ago, it probably would have been better for everybody, including people who were affected with it.
That’s how bad – that’s what – that’s what – I’m pretty certain that’s what – 90 per cent certain that’s what it refers to, battening down the hatches –
Mr Blake: Can we please turn to POL000228278, the next month, 10 May, halfway down the first page, please, an email from Mark Davies. He says:
“Our media relationships with George and team are very good at present – he has been tipping us off, privately, about people sniffing around Horizon and I genuinely don’t see this as coming from him.”
It is in relation to a negative article. Were you tipping off the Post Office privately about people sniffing around Horizon?
George Thomson: I’ve made the point, time after time today, that Horizon is a robust system and that working with the Post Office as of – as an organisation that represents postmasters with the franchises and having a lot of money invested in the branch, I worked closely with the post office. But I’ve told you that about seven times or eight times today, so it shouldnae come as a surprise.
Mr Blake: Can we please turn to POL00162628. If we start on page 2, please. 19 August 2015, an email from Calum Greenhow who was, at that point, NFSP Branch Secretary South of Scotland Branch. If we scroll down, he says:
“George,
“I have received the BSC from you yesterday in response to the recent programmes aired by the BBC on the Post Office.”
He addresses the Panorama programme.
Can we scroll over the page, I’ll read to you three paragraphs from his email. He says at the top here:
“Imagine for a moment if what was highlighted through the programme was true? Where would that leave those subpostmasters affected, where would it leave [the Post Office] and where would it leave the NFSP?”
If we scroll down to the final two paragraphs, he’s highlighting there the developments over time, and he says:
“There are just too many impartial experts that cast doubt on [the Post Office’s] and subsequently the NFSP’s position. It’s the criminal justice expert, the computer expert, the forensic accountant, the computer programmer and of course 144 MPs. The NFSP should be echoing the Prime Minister in calling for every assistance to get to the bottom of this issue to ensure once and for all on behalf of all members, past, present and future, that there categorically is no issue now, nor has there ever been a problem with Horizon.
“It would be encouraging if the NFSP showed support for those 20 subpostmasters that are currently having their cases reviewed. None of us would wish any innocent individual to have their reputations, livelihood and liberty ruined incorrectly. Sometimes things go wrong and let’s face it we’ve been around the Post Office long enough to know it often does.”
Your response to Mr Greenhow is on the previous page. You say as follows:
“Thank you for sending me your individual thoughts on Horizon and sharing further individual thoughts on our forum. My statement, comments over the last 12 years on Horizon have been on behalf of the Executive Council, both as an Executive Officer and then General Secretary, my comments however are on behalf of Executive Council, I can assure you that the [Executive Council] still believe that the Horizon system is robust and safe.
“Once again thank you for contacting me on this important subject.”
A strong rebuttal to Mr Greenhow there.
George Thomson: Well, can I – do you want me to answer that?
Mr Blake: Yes.
George Thomson: I’ll come onto that in a minute but Calum actually was – words are cheap, actions are difficult. Calum was in place for over a year and a bit before Justice Fraser, and the Federations position, so when he was in a position to change anything, he didn’t. Basically, he was in a position for a year and a half to change the Federation’s support on Horizon, and he didn’t.
Now, turning to the email, it was always believed by many of the officers on the Executive Council, that Calum, at that particular time, was close to a few people around about the CWU postmaster section and we believe that he obviously spoke to other people, and that they were not necessarily coming direct from Calum but on behalf of a small group around of the CWU.
Mr Blake: Isn’t it reasonable, what he’s suggesting to you there, that all the NFSP really needed to do was show support for a small number of subpostmasters who were currently having their cases reviewed?
George Thomson: I’ve answered the question. The question was that Calum, at that time, we believed, was quite supportive of some of the people who joined the CWU and that was in the background of that answer as well.
Mr Blake: What we see at page 1, at the bottom of page 1, is what you did with that information. You sent it to David McConnell and Mark Davies at the Post Office, “For your information”. Why would you send that email from Calum Greenhow and your response to the Post Office Communications Director?
George Thomson: I’ve made the point many times today. Our job was to protect subpostmasters’ franchises, make them as valuable as we could. There was a small amount of postmasters who claimed to have problems with Horizon in comparison to the billions of transactions and, working with the owners of the brand that you worked for, is what I would expect a good trade association to be doing. We never seen them as the opposition, as the enemy. Sometimes unions may see it that way.
We always worked with them and, now and again, there would be spats, and I’d have fallouts with Paula but we worked with the company that held the franchise of our members and there’s absolutely nothing wrong with that because the better you can make a franchise, the theory is, the more – the better rewarded your members will be.
Mr Blake: Did you see Mr Greenhow as the enemy?
George Thomson: Not in particular because I was a supporter of Calum becoming the Chief Executive after I left. So not particularly. People can have views, people can change their views and, as I said, Calum was part of the team and, when I left, there was no change at all to the Federation’s position until I believe they got a – they got quite a rough – well, they weren’t invited but Justice Fraser gave the Federation a bit of – I believe a bit of a kicking.
I wasn’t there at the time and I think that’s when the Federation’s position changed to basically, you know, it’s all the Post Office’s fault, which it is, and sorry, sorry, sorry, sorry. But I’m try and to give it more nuance. There was more going on than just the Post Office making a Horlicks of taking people to court on duff evidence where they knew people were lying. I mean, I could sit here all day and just repeat that: it was their fault, you know, it was their fault, it was their fault; and it was but it’s more nuanced because losses and suspensions happened long before Horizon. The volumes are massive, and you show eight or nine emails at me. We were dealing with billions of transactions: billions of transactions.
Mr Blake: Mr Thomson is it just a coincidence that these emails of the very close relationship between yourself and the Post Office’s Communications Team, is it a coincidence that they were occurring around the time that you were negotiating these significant sums of money –
George Thomson: Absolutely not. I’ve said to you before, countless times, my support for Horizon didn’t get worse or better at the time of these discussions. It never changed. And I’ve been as big a supporter, and – what you don’t get from this is that yous cannae answer why Horizon now is doing 3.5 billion pounds of banking transactions a month for a system that has been rubbished and kicked to hell over the last seven, eight years and, in particular, the last three years.
Mr Blake: Thank you, sir. Those are all the questions that I have.
Sir Wyn Williams: Thank you.
Mr Blake: We have some questions from Mr Stein, followed by Ms Page, followed by Ms Watt.
Sir Wyn Williams: Right. I take it, ladies and gentlemen, that you can accommodate my timetable this afternoon.
Mr Stein: (Off microphone)
Sir Wyn Williams: You’re on now, Mr Stein.
Mr Stein: I’m afraid, we can’t hear you.
Sir Wyn Williams: You can’t hear me? Right. Well, then, just ask the questions –
Mr Stein: We still can’t hear you, sir.
Sir Wyn Williams: Well, that’s very strange.
Mr Stein: Sir, can you hear me?
Sir Wyn Williams: Yes, clearly.
Mr Stein: We can how hear you, sir.
Sir Wyn Williams: If I’ve learned one thing about the world in this Inquiry it’s that, occasionally, there are glitches, Mr Stein.
Mr Stein: Perhaps that’s a surprise to Mr Thomson.
Questioned by Mr Stein
Mr Stein: Mr Thomson, many of our clients have been watching your evidence today and are of the view that you got into the Post Office bed with Paula Vennells and did whatever she wanted you to do; is that a fair description of what was going on?
George Thomson: No, it’s nonsense.
Mr Stein: You’ve given evidence and you’ve spoken about the fact that – and I quote, this is about 12.38 today – “We had problems under the old manual system as well”, you said, “People were suspended under the old manual system. People lost their houses under the old manual system. Nothing really changed.”
George Thomson: Yes.
Mr Stein: I see. So that’s something you were aware of when you went into the post at the National Federation of SubPostmasters, is it?
George Thomson: Of course it was, yes.
Mr Stein: What did you do to try to change that position under the old system, so that people did not lose their houses, did not lose their livelihoods, Mr Thomson?
George Thomson: No one ever wants someone to get in that position, however, cash is a tool of the trade of the Post Office industry and we used to do billions of pounds of value transactions a month, just for the DWP alone. So the difference between our owners and, say, a shopkeeper or a newsagent was there was always significant sums of cash around and the vast majority of postmasters – the vast majority of postmasters – were straight as a die. Mistakes could be made before, of course, as I said before, people adding things up, but you were responsible for it.
I could give you so many cases, for example the Federation would send someone along, say, on a Thursday morning, on a Friday morning? The Auditors would phone, we would go along and we would try and get a resolution but, depending on the kind of money that was missing, that’s when it could have life changing implications, both under the old system and the new system.
Mr Stein: Right. Well, can you try answering my question.
George Thomson: I was answering your question.
Mr Stein: Now, what I asked was this: that you were aware under the old system that people lost their houses, under the old manual system. Your evidence is that that continued under the Horizon system, that’s what you’re saying?
George Thomson: Absolutely, yes.
Mr Stein: What did you, when you were at the National Federation of SubPostmasters, do about that, Mr Thomson?
George Thomson: Well, when we were – for example, when we were changing to Horizon Online, I sent an email out to our members reminding them that the Auditors were coming and, when you were changing from the first stage of Horizon to the second stage of Horizon, there would be a full cash and stock declaration. That was me warning them to make sure it was right, and it goes back to when it was manual.
We always told members, “You have to make sure that the cash in stock that you have there is correct because your contract is liable for it”.
And to be honest with you, given the volumes of business we were doing, particularly for the Government, the Government knew it was – Auditors were a deterrent, it was a deterrent for postmasters not to borrow or take Post Office money, and every year, there was two or three – it’s just a fact of life, I know you’re shaking your heads – 200 or 300 people under the old manual system were suspended, not prosecuted. Some were prosecuted, 200 or 300 were suspended. It was ongoing, and it was the same with postmen. Now, we tried to keep that as in-house as much as we can because it’s not just about protecting the brand, it was about protecting postmasters standing in their community but you always get – postmasters that are decent people but, if your circumstances change and let’s say someone lost their job or you were going to lose your house –
There was a case of an old postmistress in Scotland, under the manual system, they did an audit and she was £6,000 short and she to admitted to them that the postal salary had become so low and unaffordable that she had been paying her electricity bill and gas bill for the last five years and she said she always intended to put it back – she never got prosecuted, I may add – always intended to put the back “but I could never afford to do it” so this I part of what – there’s no balance to the thing. It’s almost like the Post Office problems and balancing problems only started with Horizon; that’s an absolute nonsense.
Mr Stein: Now, Mr Thomson, we need to finish by 3.00, can we have a go at that?
George Thomson: I’ll come back if I have to.
Mr Stein: The position in relation to subpostmasters, are you trying to say that the ones that fell foul of the system under the old manual system and the Horizon system, are you trying to say they’re collateral losses, like you’re a World War I general ordering the troops over the Somme; is that what you’re trying to say –
George Thomson: No, it’s a fact of life, if you use Post Office and Government money, either taking it for yourself or staff take it, you’re liable for it. Now, if you didn’t have that, the Government used to pre-fund the benefits to the tune of hundreds of millions of pounds a month. If you didn’t have that kind of deterrent, then you couldn’t have run your company, for obvious reasons. But that money is a tool of the trade and the money is still a tool of the trade. And that’s what concerns me going forward because, at the moment in time, the Post Office, basically, have got a company that, if it wasn’t owned by the Government, would be bankrupt, as we speak, and that would be collateral damage.
Mr Stein: So your view and your evidence is that the contract and the interpretation of the contract by the Post Office, which is that subpostmasters must pay up, regardless, of fault, your view –
George Thomson: No, I never said “regardless of fault”, I never said that. Don’t put words in my mouth, please!
Mr Stein: Well, I was going to put the words back into your mouth by repeating what you said, which is that it was a deterrent, the system was a deterrent, putting the onus, it seemed to be, what you’re talking about regarding audits, on the subpostmaster; was that your view?
George Thomson: Having an audit, having Auditors was a deterrent, yes, it was well known, and it was – I joined the Post Office at 18 and I knew from the age of 19 that the Post Office done private prosecutions. Royal Mail still do some private prosecutions, as we speak, but that’s mostly against dog owners that have been warned and warned about their dogs biting postmen. So I knew from 19 years old, 18/19 years old, that we done private prosecutions because we had hundreds and millions of pounds of Government money sloshing about in Post Office safes. Now, that’s a fact.
Now, in an ideal world, in an ideal world, we want nobody to take it but, when you get to cases where you turn up, and postmasters are met, “You’re should have £60,000 cash, why you got £30,000?” This was before Horizon –
Mr Stein: Mr –
George Thomson: Wait a minute, let me finish –
Mr Stein: We need to make progress, Mr Thomson. I think even you know that. Can we go to a document please, can POL00189165, page 3 of that document, please.
If we go to page 3, and scroll down, please. Right. Thank you. That’s ideal. Okay.
Now, this relates to a subpostmistress called Jennifer O’Dell and we can see the dates that we’re concerned with in 2009. I’m just going to point out couple of examples but all of the examples, essentially, are very similar. So this is Mrs O’Dell talking to the Post Office helpline, and these are notes that are made by a Post Office Investigator. Okay? All right.
So, let’s look at the 5 November entries, as examples. 5 November 2009:
“Spoke to Mrs O’Dell today.”
Now, this is talking about the helpline, the Post Office helpline; do you understand that, Mr Thomson?
George Thomson: Yeah.
Mr Stein: Okay:
“Spoke to Mrs O’Dell today. Office has a loss of £7,000. She has been carrying the loss since May. Explaining to [postmistress] that this also should have been made good when she’s been rolling her TP but she refuses to make it good as she said the loss is not hers.”
Then the second, 5 November:
“[Subpostmaster] reports having £1,000 loss a month since May now totalling £7,000+ that she refuses to make good as she blames the system for the losses.”
All right? So we can see what’s happening here, Mrs O’Dell is phoning up the Post Office helpline and saying, “Look the system, I don’t know what’s wrong, there’s something wrong with the system, it’s adding up, keeps on building up, to substantial losses of thousands of pounds, as you can see.”
Do you understand that’s what she’s saying? Do you understand that, Mr Thomson?
George Thomson: Yeah, I do.
Mr Stein: Okay. She’s being told, as we can see by the helpline “Look you need to make up for these losses”. Did you know that that was what was going on with the Post Office helpline?
George Thomson: Postmasters were responsible – I did –
Mr Stein: Did you know that was going on with the helpline organised by the Post Office?
George Thomson: I’m not sure.
Mr Stein: Well, it’s a bit of a black or white answer, isn’t it? You either did or you didn’t, Mr Thomson. Did you know that the Post Office helpline was deterring people by saying, “You pay up for shortfalls, it’s up to you to pay”; did you know that?
George Thomson: I probably did, yeah, but can I just come back on that point? It was in the contract, it’s – people make – people make mistakes. The attitude – the questions you’re giving is that every single mistake that was made and every single shortage that a postmaster had, and you started off manually and you’ve now onto Horizon, must have been because of the Horizon system. That’s fundamentally incorrect, what you’re saying there.
Sir Wyn Williams: Well, I don’t think that’s what Mr Stein is saying but the question is simply this: were you aware, Mr Thomson, that, generally speaking, if a postmaster rang up the helpline and said, “I’ve got this problem and the result is I’ve got a shortage of £6,000”, the stock answer from the helpline would be “Well it’s your responsibility to make that good”?
George Thomson: Myself or some of the team would be aware of that without a doubt, yeah.
Sir Wyn Williams: Fine. Thank you.
Mr Stein: So the situation that you accept was that subpostmasters were being told to pay up, despite the fact, as Mrs O’Dell did, she was saying, “Look I don’t know what’s going on it’s not my fault, it’s the system”. You knew that; is that right?
George Thomson: Anybody could blame Horizon on a mistake that they made or their staff could make and, in fact, I think there was over 200 subpostmasters’ staff were actually prosecuted not the postmasters, not the CWU members, but their staff. So staff can take money as well, of course, they can. But what’s coming across is that every single mistake that was made or every single claim mistake was down to Horizon and, again, that is wrong.
Mr Stein: Do you now accept, Mr Thomson, that there were a number of bugs, errors and defects in the Horizon system that had the potential to affect and did affect the integrity of Post Office branch accounts; do you now accept that?
George Thomson: I now accept that all the prosecutions that took place were unsafe because the Post Office were aware of the things that you are saying, yeah.
Mr Stein: Do you now accept the –
Sir Wyn Williams: That’s not Mr Stein’s question, Mr Thomson.
If I tell you that, in this Inquiry, both the Post Office and Fujitsu have formally admitted that there existed bugs, errors and defects which had the capability to cause balancing losses, do you dispute what they admit?
George Thomson: No, I’m not disputing that.
Sir Wyn Williams: Fine. Thank you.
Mr Stein: Because, in fact, I was reading a quote from Fujitsu, the people that run the system, that owned the system. They accept that those types of bugs, errors and defects existed within the system.
George Thomson: But the point you make is that any single – regardless of what you said there, any single mistake that was made, even if it wasn’t Horizon, as long as it was blamed on a potential bug or a potential glitch in the system, would be down to the system’s fault. That means that the company couldn’t run, even now. If every single mistake was blamed on a glitch in Horizon, and everybody blamed that, then, quite frankly, why would you not be tempted?
Mr Stein: The Post Office and the NFSP were tied together, weren’t they? The survival of the Post Office meant the survival of the NFSP but without the Post Office, the NFSP couldn’t survive?
George Thomson: Well, I’ve already said –
Mr Stein: You agree with that?
George Thomson: I’ve already said that because we lost that many members, we did the right thing for the network, we got about 8,000 members out with big chunks of compensation, so they got their investment protected, right, some people had had Horizon problems as well. We got – we got a temporary in there or got them reinstated, so they could get out of money. So, yes, after the three closure programmes or three restructuring programmes whatever you want to call them, yes, our organisation basically either had to do a deal with the Post Office or merge into the CWU or –
Mr Stein: That deal, Mr Thomson, that deal included contractually accepting that the NFSP should not do anything to criticise or undermine the Post Office. You essentially betrayed your own membership, didn’t you, Mr Thomson?
George Thomson: I don’t accept that for a minute. My position on Horizon changed not one jot with any work we did on a deal with the Post Office but, as I said earlier on, I did realise that it was forcing us to pull our teeth in other directions, on paying things and, actually, for me, I no longer wanted to do it.
Mr Stein: Did you tell the membership of the NFSP that a deal had been struck, in exchange for the Post Office shilling, that you would be gagged from criticising and undermining the Post Office? Were they told about the details of that deal?
George Thomson: We weren’t gagged and it was passed at the –
Mr Stein: Did you tell them the details?
George Thomson: We weren’t gagged and it was passed at the special conference by the membership. That’s the reality. It wasn’t George Thomson that passed it, it wasn’t the Executive Council, it was the membership that passed it, at a special conference.
Mr Stein: Now, you’ve demonstrated, Mr Thomson, in your evidence, that you’re aggressive, you’re belligerent and that your work on behalf of the Post Office, it seems, ignored the very subpostmasters that you represented through the union of which you were a member; do you accept that?
George Thomson: I dispute that and, you know, to be called belligerent by yourself is a bit strange.
Sir Wyn Williams: All right.
Mr Stein: One last question, sir.
Sir Wyn Williams: Right, yes.
Mr Stein: Do you think if you turned your aggressiveness and belligerence on the Post Office, actually, you might have done some good for subpostmasters?
George Thomson: I don’t accept your question. It’s a nonsense.
Mr Stein: Thank you, sir.
Sir Wyn Williams: Thank you.
Questioned by Ms Page
Ms Page: Do you know an NFSP representative called Norman Bradbrook?
George Thomson: Yeah, for long time. Norman was – yeah, he’s a good age now. Yeah – or he was – it was a long time ago, yeah.
Ms Page: Did you say – did I catch that right – that he was a good agent?
George Thomson: Age, sorry.
Ms Page: Oh, good age?
George Thomson: Yeah, he was quite a lot older than most of the team.
Ms Page: Right. What sort of a person was he, from your point of view? Did you like him? Did he fit in at the NFSP?
George Thomson: I’ve not really got a view on that. I knew of him. I knew he could be seen as being a bit – not eccentric, he was a nice old guy.
Ms Page: All right. Well, in July 2001, one of my clients, Mr Parmod Kalia, he was a member of the NFSP and he sought assistance from the NFSP when he was being investigated over a shortage. The representative who attended his interview was Norman Bradbrook. At that time, 2001, you’d have still been Area Secretary; is that right, you weren’t yet on the Executive?
George Thomson: Yes, I was Area Secretary for Scotland, yes. That’s correct.
Ms Page: Mr Colin Baker was General Secretary; is that right?
George Thomson: Yeah, Colin would have been General Secretary then, yeah.
Ms Page: The NFSP was already clear, under his leadership, that Horizon was a good thing; is that fair?
George Thomson: That is correct.
Ms Page: Now, bear in mind Mr Kalia that been a postmaster for 11 years at that point without any difficulty, and this was 2001, so not long after Horizon was rolled out.
Mr Bradbrook attended Mr Kalia’s interview and gave him this advice. He said:
“Mr Kalia, you should admit that you’ve stolen the money. That’s the best way of keeping your office and keeping out of being prosecuted. Admit you’ve stolen the money. Give them a story. Pay the money back.”
Was that the sort of advice that you might have given, as an Area Secretary, to anyone who sought your assistance?
George Thomson: No, we would tell people to come clean about it and we would try and get a solution to that. And most of the time it was – depending on the money but most of the time it was – you’d get a hardship payment to pay it back. In other words, get it deducted every month from your salary and, that way, you kept your position. In particular, when people were going to leave under Network Restructuring, under Network Reinvention and Network Change, Network Transformation, we would always try and help them make sure they could get out with their compensation, if possible.
Ms Page: All right but, in this instance, you’re saying that, perhaps, if somebody comes clean, that’s the right thing, you think, is it?
George Thomson: Only if they did it, yeah.
Ms Page: Only if they did it. All right. Well, do you accept that sort of advice is pretty helpful to Post Office Investigators?
George Thomson: Well, I don’t know; I didn’t give it. You’re asking me something that happened six – you know, I was the Area Secretary. Colin Baker was the General Secretary.
Ms Page: No, no, that sort of advice. That sort of “Come clean” advice; “Tell them you did it” advice. Helpful to the Investigators, no?
George Thomson: Only tell them you did it if you did it. You know, what kind of justice would that be, telling somebody to do it if they didn’t do it? Sometimes it was – I mean, I gave the example in Scotland. It was the father – the father was absolutely wonderful – about £100,000, and he said, “I haven’t taken £100,000”, and he hadn’t. It was his son and it was found out his son had a gambling problem.
These things happen, and this is why, in my statement, I’ve tried to give a lot of nuance and I haven’t been allowed to obviously go on to it because that’s not the narrative. But the reality is that, when money is there, there’s a temptation. The vast majority of subpostmasters didn’t succumb to temptation but some did, because the franchise was struggling. That’s why we needed three restructuring programmes.
People couldn’t make a living. They couldn’t pay their bills. That example I gave in Scotland of the old lady up north.
Ms Page: Mr Thomson, can you accept that, if you gave advice for somebody to make an admission, that was helpful to the Investigators? Can you accept that, or not?
George Thomson: Not necessary – it would depend on the circumstances if it was helpful or not. Telling the truth is the best help you can give somebody if they’re due the Post Office a lot of money.
Ms Page: All right. You see, on the one hand, it can leave somebody like Mr Kalia high and dry, yes? Because he goes to prison, he’s disgraced, his family savings are gone. But, on the other hand, Mr Bradbrook’s presence in the interview, it gives the Investigators cover, doesn’t it, because it gives the appearance of being fair, doesn’t it; do you see that?
George Thomson: I can see that but, you know, this is what I found difficult to accept. People say, well, for example, “I was £30,000 short. How could that happen if it wasn’t Horizon?” It could easily happen. If there’s £60,000 in my safe and I’m desperate, and I take £30,000 and I keep it and I spend it – almost like the questions I’ve been asked here – all of a sudden, it has to be Horizon because money can’t disappear. Well, I’m sorry; that money didn’t disappear: it was taken.
Ms Page: Well, Mr Thomson, the issues around what happened to the money are perhaps for other people. Let’s just come back to the role of the NFSP as representatives in interviews.
George Thomson: Well, I wasn’t the General Secretary in 2001, so you’re finished with that question.
Ms Page: How about, then, this: your role as General Secretary was pretty much the same but writ large, wasn’t it? You provided cover for the Post Office leadership because, on the one hand, you left the subpostmasters who’d been wronged high and dry but, on the other hand, you gave the impression for the Post Office leadership that they were being fair, that they were listening, that they were doing everything that they could to make sure that the subpostmasters were looked after, whilst actually riding roughshod over them, Mr Thomson?
George Thomson: No, I don’t accept that and I was advised that I should come on here and just blame it on the Post Office: apologise, apologise, apologise. I’m trying to give it more nuance. And, in fact, I believe, because the Federation thought I was going to be more robust, that they refused for me to have a lawyer here today. They refused to help me with the legal costs here today because they knew I was going to be more robust.
So I’ve come here today without a solicitor because the National Federation of SubPostmasters didn’t like the fact that I was going to be robust and tell the truth, not just come along and apologise for the sake of apologising. And, as I said before, the NFSP had a year and a half after I left to change their policy about Horizon and they didn’t do it.
So I’ll have no – I won’t be talked to by the Federation about my position. Their position didn’t change for a year and a half when it could have changed.
Ms Page: Thank you, sir. Those are my questions.
Sir Wyn Williams: Right.
Ms Watt, please.
Questioned by Ms Watt
Ms Watt: Thank you, sir.
Mr Thomson, I appear for the NFSP. The organisation of today has some questions for you, which I’m going to put. So I’m just going to start by summarising and then I’ll have a couple of questions after that.
As we’ve seen and heard in the evidence, you had received numerous complaints about Horizon across the years. People such as Lee Castleton and Sir Alan Bates wrote to you not about their cases but to alert you, as the General Secretary of the NFSP, to Horizon and the many issues. What you did was forward Sir Alan’s email to Paula Vennells within a very short space of time and describe it as “rubbish”. There were questions from your own members asking if there is not something that needs to be looked at. Mark Baker and others tried to raise issues before eventually leaving the organisation. Everyone is shut down.
So the question is, as the General Secretary of the membership organisation, how could you have done that instead of ask yourself the question, “Is there not something in this”, and do something about it to help your members and others?
George Thomson: Well, first off, I can take the Mark Baker part there. Mark Baker was more concerned – I think Mark had some issues with Horizon but Mark’s biggest concern on why we left was he felt that the Network Transformation was wrong for the Network and there was more arguments about that. But, again, I’ve reiterated my point time after time. Our members were franchise holders who had invested significant sums of money and we worked closely with Post Office Limited. And I make no apology for that. Why would the membership organisation of the franchise holders not be working with the company to make the brand the best they could?
It’s common sense and that’s what we did. And I make no apology for that.
Ms Watt: Mr Thomson, it was all there in front of you but you would not see it; isn’t that so?
George Thomson: Well, I worked with the Executive Council, all the Area Officers, the Branch Secretaries, the Executive Council – it’s not just a one-man show – the Executive Council, and I took on the mantle from Colin Baker. The policy and the position never changed. It never changed. Colin was a big supporter of Horizon because, like myself, he realised that, if we didn’t get Horizon, the network would have collapsed. 400 million of Government funding would have left straightaway as pensions were put into the bank. So we’ve always been big supporters of the Horizon system.
But again, the point I’ve said before already, the Federation had a year and a half after I left to – and it only moved its position when Justice Fraser, I believe, said some remarks. So, for a year and a half, you could easily have changed your position. But, of course, it’s just George Thomson. Well, of course the Fed existed after me and it had, as I said before, a year and a half to do something about it before Lord Justice Fraser and did nothing about it.
Ms Watt: Mr Thomson, will you not accept that, under the time you were the General Secretary, that, in relation to Horizon, your members didn’t get the help that they needed?
George Thomson: Again, I’ll reiterate the point. The billions and billions of transactions, a tiny – and I’m sorry if it’s the truth but that’s the reality. And I wonder if the Inquiry has done any work about what percentage of transactions – the billions of transactions that ended up with claims against it, we had a small, small fraction. And over 100,000 people have used the Horizon system since it came in.
Ms Watt: Thank you, Mr Thomson.
Sir Wyn Williams: Thank you.
Now, Mr Thomson, you’ve mentioned your witness statement on a number of occasions. Can I assure you that I have read it twice recently and once when I first saw it, so I’m very familiar with its contents. Further, if it has not already been published, it will soon be published for everyone who is interested to read it. So the points which you have made in your witness statement but which you may not have been asked direct questions about during the course of today will be well known to anyone who wants to familiarise themselves with it. All right? In particular, I am fully familiar with it.
The Witness: It would have been nice to be asked some of these questions that I’ve got in my witness statement today but it doesn’t serve the narrative.
Sir Wyn Williams: That’s as may be. The plain fact is that, ultimately, all of your evidence, written and oral, will be taken into account by me when I make my report.
That said, if, in the course of the next few minutes, you wish to say to me anything that you think you need to cover orally, I will allow you to speak to me for five minutes or so to make those points, Mr Thomson.
The Witness: Here? Open here? Yeah.
Sir Wyn Williams: Now. Yes, now.
Statement by The Witness
The Witness: That’s good. Just to repeat what I’ve said on numerous occasions, my problem always has been that was there some bad justice handed out with the Post Office? Yes, there was. Was there some stupidity on steroids management where you would take people to court and ruin their lives and prosecute them, when you actually knew that your witnesses were lying? That’s stupidity. That’s absolute stupidity, right.
And it would have been easy just to come here today and stick to that script, and everything else was “I’m not sure” or “I can’t recall”.
But there’s more nuance than that, and the Inquiry is not taking any real account into the fact that you had all these problems before Horizon. You had hundreds of postmasters suspended every year. You had people going to prison before it. And some of the questions it’s asked, it would mean like you cannae just have no consequences if you make mistakes genuinely or you take money. There has to be consequences or a business wouldnae be viable. So that’s the second thing, right?
So they’ve got some things wrong, absolutely. They prosecuted, which is quite outrageous, based on lies. But there has to be a recognition that these problems did not start with Horizon. You know, I was in the – three or four years, when I first started in the ’90s, I was at a postman’s house, because there was a raid with the security branch. He had, in today’s money, £50,000 of parcels and money out of letters. Obviously that was in the ’90s.
I was at a Crown Office where a member of staff had had losses on a regular basis. The auditors wanted to go into a locker up the stairs and she wouldn’t let them, and I was almost fighting with them. But when they did get in her locker, she had £1,000 bag in £20 notes that had been done to send to the remittance unit and she had kept it.
We had a small village post office that my staff ran until the postmasters could sell it, who admitted – he had bought it for £60,000, it didn’t make enough money, he had been there three years – he had taken £30,000. This was in the mid-’90s. So, for me, you know, it’s not Alice in Wonderland no one ever, ever would take money or make mistakes. That’s Alice in Wonderland stuff.
What I’m saying quite clearly, it has to be more nuanced than what you’re being and that’s why the kind of comments I’ve made regarding some of the organisations, some of the witnesses, is because it takes no cognisance of that – and some of the TV programmes. You look at – for example, you take the ITV documentary. No background, in the sense that these kind of things – people had losses and it affected their life before we had Horizon. Nothing about that. Nothing about the sheer volumes of transactions.
And, again, one of the issues, I would say, about this Horizon Inquiry, have yous actually tried to find out the kind of billions of volumes that were done and the percentage of people claiming there was a mistake? It will be probably less than 1 per cent but yous havenae done any of that.
So that’s all I want to say: that I think there has to be better balanced and better judgement than where we’ve ended up.
Sir Wyn Williams: Right.
Thank you very much for making your witness statement. Thank you very much for giving oral evidence during the course of today.
So that brings today’s proceedings to a close.
We will resume again on Tuesday morning at 9.45 with, I think, Mr Gareth Jenkins. Is that correct, Mr Blake?
Mr Blake: That’s correct, sir. Thank you very much.
Sir Wyn Williams: Thank you very much.
(2.52 pm)
(The hearing adjourned until 9.45 am on Tuesday, 25 June 2024)