30 July 2024 – Susannah Storey
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(10.00 am)
Sir Wyn Williams: Morning, everyone.
Mr Blake?
Mr Blake: Morning, sir. This morning we’re going to hear from Ms Storey.
Susannah Storey
SUSANNAH JEMIMA STOREY (affirmed).
Questioned by Mr Blake
Mr Blake: Thank you very much. Can you give your full name please.
Susannah Storey: Susannah Jemima story.
Mr Blake: Ms Storey, you should have in front of you a witness statement dated 23 May this year?
Susannah Storey: Yes.
Mr Blake: Can I ask you to turn to the final substantive page, that’s page 102. Can you confirm that that is your signature?
Susannah Storey: That is my signature.
Mr Blake: Thank you, is that statement true to the best of your knowledge and belief?
Susannah Storey: It is, although, as we discussed, there are some small changes I wanted to make.
Mr Blake: Thank you very much. Perhaps we could bring the statement on to screen. It’s WITN00920100.
Sir Wyn Williams: Can everyone hear because I’m actually slightly struggling, whether it’s just me, I don’t know. But is the system working properly? Fine it’s just me, obviously.
Mr Blake: Perhaps if you could sit slightly further forward, it would assist.
From Floor: It’s not just you.
Sir Wyn Williams: Right. Good.
The Witness: Let me know, is that better? Maybe I was a bit too far from the microphone, my apologies.
Mr Blake: There are a few changes you would like to make. Can we start with the first. Which paragraph?
Susannah Storey: Paragraph 21.
Mr Blake: Paragraph 21 is page 10.
Susannah Storey: Page 10, yes. In the sentence “I do not recall any significant concerns”, which is about halfway down that paragraph, two lines down, it says, “My tenure as Director” I would like to insert “RMPS” before “Director” to make clear I wasn’t a director of the Post Office at that time. That was a title in my Civil Service role.
Mr Blake: Thank you very much.
Susannah Storey: The next one is paragraph 110, page 49. In the first line, I would like to delete “single issue”.
Mr Blake: Thank you.
Susannah Storey: Then over the page in paragraph 111, I’d like to insert “substantial” after the “only” so it would read “the only substantial item of business”.
Mr Blake: Thank you very much.
Susannah Storey: And, sorry, lastly, paragraph 201 I realised was missing a word.
Mr Blake: That’s page 90.
Susannah Storey: Page 90, yes. In the final sentence of the paragraph, it says, “I obtained significant relating”. I think it needs to read “I obtained significant information relating”.
Mr Blake: Thank you. Subject to those changes, is the statement true to the best of your knowledge and belief?
Susannah Storey: It is.
Mr Blake: Thank you very much. That witness statement will be uploaded onto the Inquiry’s website in due course.
Ms Storey, you’re currently Permanent Secretary of the Department for Culture, Media and Sport; is that correct?
Susannah Storey: That is correct.
Mr Blake: You started life as an investment banker between 1995 and 2006?
Susannah Storey: That’s right.
Mr Blake: Relevant for today’s purpose, you worked at ShEx between 2006 and 2013, initially on a secondment; is that correct?
Susannah Storey: That’s correct.
Mr Blake: Between March 2011 and March 2012, you were Director of ShEx’s Royal Mail and Postal Services team –
Susannah Storey: Yes.
Mr Blake: – and I think that’s the correction you just made in that paragraph?
Susannah Storey: (The witness nodded)
Mr Blake: You were then the first Shareholder Non-Executive of the Post Office between April 2012 and March 2014; is that correct?
Susannah Storey: That is correct.
Mr Blake: That was upon separation from Royal Mail Group?
Susannah Storey: Yes.
Mr Blake: Can you assist us with how you were selected for that role as Non-Executive Director?
Susannah Storey: So the Shareholder Executive looked after a number of different government-owned entities and, in some instances, there would be a Board member from the relevant team. I was most recently, as you were just saying, from March 2011 the Director of the Royal Mail and Postal Services team, and once the Government decided it wanted to have a representative on the Board of the Post Office on separation, it was the working assumption, I think, that, as the Director, that would be me.
I’ve set out in my statement some of the further background in case helpful, so I obviously knew the Postal Services space well, having worked for a number of years on the Royal Mail side as a civil servant and I’d also experience working with boards when I was an investment banker.
Mr Blake: Did you have any prior experience of being on a board?
Susannah Storey: No, I hadn’t been on a board before.
Mr Blake: Were you provided with any training before you took up the post, specific to that role of Non-Executive Director?
Susannah Storey: No.
Mr Blake: I want to ask you about your location and also the support that was provided to you during your time as Non-Executive Director. You became a Non-Executive Director when on maternity leave, which was between March 2012 and March 2013. When you came back, you were based at the Department for Energy and Climate Change, at that time an entirely separate department; is that correct?
Susannah Storey: That’s correct. So when – could I give a couple of moments for context is that’s okay?
Mr Blake: Absolutely.
Susannah Storey: So during 2011 the Government had a hugely ambitious agenda for these two companies, which including the separation, the Postal Services Act 2011 was passed to enable all of that, we were tying to help stabilise the pension scheme, change the regulation, and so on. And so I – during the course of that process, as I was just saying, it became clear that we wanted a shareholder representative.
I was pregnant during that year and, by the time I started on the Board, which was the April Board meeting, 2012, I had started my maternity leave, which began on 14 March 2012. When you go on maternity leave, you don’t generally know how long you’re going to go for, and my expectation at that time was that I would have come back to the Shareholder Executive but, during the course of the year, I ended up getting a different role at the Department of Energy and Climate Change.
So I just want to be clear, for the record, I don’t think it was envisaged in 2012 that this was exactly how it would play out. In the end, it was how it played out.
Mr Blake: Absolutely. So throughout that period, from really the beginning to the end, you weren’t physically present at what we know as ShEx; is that correct?
Susannah Storey: My last day in the office was 14 March 2012, and I was never sitting at desks with those people, I was never in that team again. And as I’ve said in my statement, I also was required by the Department to hand back all of my IT, so my phone and my computer, which is why, in a lot of the disclosed documents, you’ll see me using a personal email address.
Mr Blake: Thank you. The role itself wasn’t a paid role or separately paid role in any way; is that correct?
Susannah Storey: No, I received no remuneration for being the shareholder representative Board member, although of course I was getting a salary and, during maternity leave, you’re paid for some months. And then when I was at the Department of Energy and Climate Change from March 2013, I was being paid a salary by them to do that job. So in a sense, as a civil servant, I was getting remuneration. There was no additional remuneration, nor would I have expected it.
Mr Blake: When you were at the Department for Energy and Climate Change, you were managing an entirely different portfolio?
Susannah Storey: That’s right. I was Strategy Director there, thinking about the Climate Change Act and all of the things we needed to do to decarbonise the country.
Mr Blake: Were those logistical issues discussed with you before you took on the position?
Susannah Storey: Not particularly. I mean, I think, as I was saying, the sort of set of things we were doing through 2011 to March 2012 – I mean, in the course of my career, I think that’s one of the single-most complex set of transactions that I’ve ever done, and I had a career as an investment banker doing transactions, so the critical path to March 2012 was highly complex and I don’t think we were getting into the weeds of my personal logistics at that time.
Mr Blake: Not just personal logistics but in fact, actually, physical location and relationship with the Shareholder Executive team, for example?
Susannah Storey: The relationship with the Shareholder Executive team we did discuss because, obviously, before I joined the Board, I was getting up to speed on aspects of the Post Office with the Post Office team within the shareholder team. So we absolutely discussed that. Sorry, I had thought you meant physical logistics.
Mr Blake: In terms of the role of Non-Executive Director, it has been described by some witnesses as having a dual function: one of those functions being exercising governance over the assets, so the normal Non-Executive Director role; but also communicating the day-to-day Government perspective. I think that’s how Patrick O’Sullivan has described it. Is that a description that you would agree with?
Susannah Storey: I didn’t particularly think of it as an asset. My view of the Non-Executive Director role is as set out in the Companies Act 2006. As a shareholder representative, I had some additional things I needed to do, which the others didn’t need to do. That was the way I thought about it.
Mr Blake: Was that additional role communicating the day-to-day Government perspective or some other witnesses have said that it involved communicating the Post Office’s perspective to Government, so the other way round. Which, if either of those, did you see it as?
Susannah Storey: My view was that the Secretary of State, in his letter to the Chairman in January 2012, set out very clearly what he thought the objectives for the Post Office were, on separation, and I thought it was my role to make sure, on top of the ordinary Non-Executive Director responsibilities, that whenever the appropriate moment arose at the Board table, you know, I could help make sure those things were happening.
And that was my real priority when I went on to that Board: to really focus on areas like the financial stability, the mutualisation, the pension separation and the sustainability of that company because, as I think many people have said, at the time that was far from certain.
Mr Blake: So you have the letter from the Secretary of State that sets out an annual objective?
Susannah Storey: The letter to the Chairman.
Mr Blake: The letter to the Chairman.
Susannah Storey: Yeah.
Mr Blake: Outside of pursuing that, did you see your role as in any way involving liaison with the Civil Service, with ShEx, with Government?
Susannah Storey: Absolutely, absolutely, yes. So I saw my role at the Board table in the way I’ve just described it, and perhaps we’ll come on to it, but I was always clear which hat I was wearing, in terms of being the shareholder representative or the Post Office Non-Executive Director. But, in addition, there’d been quite a complicated history with these companies with the Government and I think there was a strong sense that we wanted a reset at separation.
So part of what I was there for was to get in that room and understand what they were actually doing. We’d found it very difficult to get information from them before, and so, as you’ll see in my witness statement and from many of the disclosed documents, a lot of the time I was then, before and after Board meetings, liaising with the shareholder team to say, “Well this is my take on what happened, what’s your sense of where things are?” So it was a really, really strong two-way dialogue all the way through.
Mr Blake: Paragraph 50 of your witness statement, you say:
“I was also conscious of the fact that my position as a newly appointed Shareholder NED was a novel one, and there was some uncertainty as to the nature and extent of my remit at the outset.”
Can you assist us with what you mean by that?
Susannah Storey: Yes, so as I said, there hadn’t been a Shareholder Non-Executive Director, shareholder representative on the Board of either of these companies and, from April 2012 when they were separated, you had two sister companies, the Royal Mail Group and the Post Office: one had a shareholder representative and one didn’t. There was no blueprint for that, these companies had never had a shareholder representative before, so what I was trying to do was kind of get my foot in the door, start this process but, also, critically, really critically, build trust with that Board of Directors. So they were all new, relatively new, at the non-executive level.
I didn’t know any of them. I felt they didn’t trust me, so part of what I was doing at that May 2012 Board meeting was explaining my role as a Shareholder Non-Executive Director.
Mr Blake: So we’ll get to the May Board meeting but I’m going to take you back in time and the first document I’d like to take you to is actually a 2010 document. That is UKGI00000062. This is a ministerial submission from Mike Whitehead. It’s before your time. Was Mike Whitehead somebody who you worked with?
Susannah Storey: Yes, absolutely. He was in the Shareholder Post Office Team for a long time.
Mr Blake: The purpose is set out there. It’s a:
“… meeting with Alan Bates on Thursday, 7 October at his request to discuss the Justice for Subpostmasters claims that endemic flaws in [the Post Office] Horizon system have resulted in a number of subpostmasters having their contracts wrongly terminated by [the Post Office] and in many cases prosecuted for false accounting.”
Were these kinds of concerns matters that you were aware of when you became Non-Executive Director, or prior to becoming Non-Executive Director?
Susannah Storey: So in October 2010, I was in the Royal Mail team, and I wasn’t doing anything to do with Post Office. So I’m not sure I would have known about this at that time. By the time I became a Director in April 2012, I did have a kind of background awareness, I would call it, and I had been, for example, copied, in later 2011, on a document in relation to the BBC’s Inside Out programme. But I don’t recall – if you had asked me in April 2012, “What are the top ten issues on your mind?”, unfortunately, I don’t think this would have been one of them at the time.
Mr Blake: Broadly speaking, you were aware of the issues raised by the Justice for Subpostmasters Alliance?
Susannah Storey: Not in October 2010, I don’t recall that, but yes, broadly speaking, broadly speaking.
Mr Blake: By April 2012?
Susannah Storey: I’m not sure if I would have, at the time, have thought of it as Sir Alan Bates and the JFSA, per se. I think I would have had a general awareness.
Mr Blake: Thank you could we turn now to UKGI00048174. This is a document that’s been prepared by UKGI, it’s a “looking back” exercise. I’m just going to read to you a few passages. The “Purpose” is described there at 1.1, it says:
“The purpose of this document is to provide a preliminary view of the key facts relating to the involvement of the Shareholder Executive and UK Government Investments Limited in matters relating to the Post Office Limited’s Horizon IT system, and in particular the events leading to the commencement of the subpostmasters’ litigation which was settled in December 2019.”
There’s a passage, it’s at page 7, that addresses your role, paragraph 2.16. It describes it as follows:
“In April 2012, the first Shareholder [Non-Executive Director], Susannah Storey, was appointed to the [Post Office] Board (and in contrast to the position today, was not on the Audit and Risk or Remuneration Committees).”
Is that right?
Susannah Storey: That’s incorrect.
Mr Blake: Because I think you were I think on the Audit and Risk Committee initially?
Susannah Storey: I was, I had never seen this document until a couple of weeks ago.
Mr Blake: It then says:
“Unlike the subsequent Shareholder [Non-Executives] (from 2014 onwards), Susannah was, by design, not part of the Shareholder Team …”
Can you assist us with that? Is that correct, that there was an intentional design that you weren’t part of the Shareholder Team?
Susannah Storey: I’m not sure I would phrase it like that but I’m assuming it’s getting at the point that you were making earlier: that, structurally, I was separate, initially because I was on maternity leave and then because I was undertaking the role from a different Department, and when I did – when I went on the Board from April 2012, the whole Shareholder Team was refilled. So my role was backfilled by Roger Lowe and the team beneath were there. So in a way, I was kind of bonus person on that Board. The team existed as a whole without me.
So the essence, I think, of what I was saying, I would agree with. I don’t particularly recall it being deliberately designed that way.
Mr Blake: So the suggestion here, as we’ll read on, is not that it was anything personal to you and your circumstances but, in fact, they intentionally wanted somebody who wasn’t part of the Shareholder Team. It continues there:
“… at the time of the appointment in 2012, the Shareholder Team was in the process of negotiating the Funding Agreement with [Post Office] and we understand that there was, therefore, resistance from [the Post Office] to having a member of the Shareholder Team also sitting on the [Post Office] Board (where [the Post Office’s] approach to those negotiations would be discussed). This meant that the Shareholder [Non-Executive Director], while a representative of ShEx and performing a key role in terms of bringing Government experience and perspective to the [Post Office] Board, was purposely detached from the Shareholder Team; a clear illustration of this being the fact that Board papers received by the Shareholder [Non-Executive Director] were not shared with the Shareholder Team.”
We will come on to look at what was and wasn’t shared but certainly from this document – and you can assist us whether that’s right or wrong – it seems to suggest that, in fact, the very role was designed so that it was separate from those people who were, for example, carrying out funding negotiations?
Susannah Storey: There was a real nervousness on the part of the company and the Chair, which I think you’re saying we’re going to come on to, about having a Shareholder Non-Executive Director and the kind of concern area, in particular, was the funding because, whilst the Government had put in £1.34 billion in 2010, plus the debt agreement, at the time I arrived on the Board, the Post Office was trying to agree a new funding agreement with the shareholder.
So that certainly is true that there was concern about that and the kind of conflict of interest concern was, to my recollection, one of the reasons why I didn’t share the Board papers.
So I think paragraph 2.16 here is broadly correct. Of course, when it concerns you, you often want to make fine detail changes.
Mr Blake: Who did the Shareholder Team report to within the Department?
Susannah Storey: Within the Department, the Shareholder Team was led at Director, so after I’d gone on maternity leave, that was Roger Lowe, he reported in to Mark Russell, the Director General – well, Stephen Lovegrove, actually, in 2012 and then Mark Russell, and they reported – that role reported into the Permanent Secretary of the Department for – what’s now the Department for Business, it’s had a number of names.
Mr Blake: How about yourself?
Susannah Storey: I reported into the DG of ShEx, so Stephen Lovegrove and then Mark Russell in terms of this role. Obviously, when I was at the Energy and Climate Change Department I had a separate line for my day job.
Mr Blake: So you had two lines of reporting?
Susannah Storey: Absolutely.
Mr Blake: Can I take you to paragraph 54 of your witness statement, please. Perhaps we could bring it up on to screen it’s WITN00920100., it’s paragraph 54. Just whilst we wait for that to come up, did the reporting lines change when Richard Callard took over from you as Non-Executive Director?
Susannah Storey: Richard Callard was – my recollection is – obviously I wasn’t in the team, but my recollection is that Richard replaced Will Gibson, so he would have been reporting into Anthony Odgers, who was then the Director of the Royal Mail and Postal Services team, and then into Mark Russell because that was later in 2013.
Mr Blake: Thank you. Paragraph 54, it says as follows:
“As I was not part of the Shareholder Team directly and was not involved in the day-to-day interaction between Shareholder Team and ministers in this period, I did not routinely take part in the drafting of submissions to ministers on [Post Office] related issues or their sign-off; nor did I assist with the preparation of ministerial statements or answers to Parliamentary questions.”
We will see here a number of ministerial submissions. Am I right in saying that they weren’t shared with you?
Susannah Storey: No, my recollection is I wasn’t on the IT system. Had I been on the IT system, I’m sure I would have been cc’d on a lot of things. But because I was separate outside the building, outside the office, I didn’t routinely see any of these interactions with ministers, nor was I part of them.
Mr Blake: So, in your view, it was intended that you would see them but, as it happened, due to the technical issues and your location, et cetera, it didn’t happen or –
Susannah Storey: No, I wouldn’t put it like that. I think that once it was clear that I would be taking this role on my maternity leave, then I was in a separate system, as it were, and my role was backfilled. So that was the team in the Shareholder Executive advising ministers, and I was in a separate swim lane, if I could put it like that.
Mr Blake: I want to move on to your initial period as Non-Executive Director, and could we please turn to POL00046944. This is a letter you didn’t see at the time. Again, this is going back in time to August 2011, but it may assist in matters that we will be shortly turning to. This is one of the letters from Shoosmiths on behalf of Julian Wilson that was sent to the Post Office. If we scroll down, we can see the way that his claim has been described, about halfway down that large paragraph, it says:
“However, like other [subpostmasters] he found the Horizon system extremely difficult in operation. He had no effective way of monitoring or correcting transactions that were input ed incorrectly. He observed regularly discrepancies in the reports which he considered were caused by the system itself. He kept records of the discrepancies. He noted a number of occasions when the extent of discrepancies would actually change whilst the store was closed.”
It follows on to refer to a concern about remote access.
If we scroll over the page, please, we see there that they say that it is denied, at (c), that the Post Office had grounds to prosecute Mr Wilson.
It goes on to describe various breaches of obligations, if we scroll over the page, please, the letter explains, over the page again. So there:
“The Horizon system suffers with inherent defects and/or an unfair system of operation”, and it goes on to set that out.
I’m drawing that to your attention because we’ll move on shortly to the way the Shoosmiths litigation was brought to the attention of the Board. Can we turn first to your first Board meeting, and that is POL00021506. Your first Board meeting was 18 April 2012. We see there that you are listed. At that time there are only two Non-Executive Directors; is that correct?
Susannah Storey: That’s not correct. There was also Neil McCausland, who’d already joined but Virginia and I were, in effect, getting appointed at roughly the same time. So, by then, you had three Non-Executive Directors and a Non-Executive Chairman.
Mr Blake: Thank you very much. If we scroll down, we can see there at POLB12/44 the Chairman welcomed Virginia Holmes and you to the Board.
If we scroll over the page, please, to page 4, halfway down page 4, it there notes your appointment. Slightly up, sorry. Thank you very much.
Then over the page, we can see a number of noting papers and one of them is the Significant Litigation Report.
Susannah Storey: Yes.
Mr Blake: Does anything stand out for you in terms of this initial meeting? I mean, it looks from the papers to be relatively brief, quite straightforward; is that a fair summary or is it more complicated?
Susannah Storey: I’ve got quite clear memories of this meeting because it was my first one. So we were obviously in the Post Office offices. It was the first meeting after separation, which was a fairly significant moment in the company’s history. In terms of the Board itself, no, I think it was orderly. Obviously, I was both trying to contribute but also trying to navigate the environment. I wanted to see how Alice chaired it. I’d never met these other Non-Executive Directors before, I wanted to see how the Executive performed. So no, to my recollection, it was fairly orderly.
Mr Blake: Let’s have a look at that Significant Litigation Report. That can be found at UKGI00018251.
This is the first Significant Litigation Report that you will have received. There’s a section there for claims over £500,000 or those of a sensitive nature. It’s here that it addresses the Shoosmiths claim. It says:
“The Post Office has received notification of a total of five claims from former subpostmasters.
“Each alleges wrongful termination of contract (based on (a) alleged defects in Post Office’s internal processes and (b) alleged defects with Horizon). Each are seeking damages in the sum of circa £150,000.
“Four of the five claims remain at the pre-action stage …”
A fifth has been struck the out. It says:
“Shoosmiths assert that they have consulted on a further 85 cases, which are likely to raise similar legal issues.”
We saw that was a noting paper. Was there any discussion whatsoever about that at that stage?
Susannah Storey: I don’t recall any discussion of this paper at that meeting and just, if it’s helpful to give colour, Board papers in those days were hard copy so we would have a lever arch file with all of them in and they’d follow the chronological order of the meeting and these noting papers were right at the back. We obviously would have read them all before but, to my memory at this meeting, this paper was in amongst some others around health and safety at work, those kinds of issues. I don’t recall it being discussed at that meeting, I’m sorry to say.
Mr Blake: Having noted that it was at the back, is that – are we to understand that it was quite low down the list of priorities?
Susannah Storey: I think noting papers by their nature come after the papers that are for discussion.
Mr Blake: Being at the back of the noting papers, is there anything we can read into that or is that just how it occurred?
Susannah Storey: I – I mean, I didn’t mean it like that per se. I think the Chairman and the Company Secretary would have ordered the papers. I’m simply saying that was how I received it.
Mr Blake: Thank you. Can we please turn to POL000 –
Sir Wyn Williams: Before we do, is that it, one page, or can I just see the whole document?
Mr Blake: Absolutely. If we scroll over the page, there is one other entry that is redacted and, if we scroll over, we can see there’s nothing else.
Sir Wyn Williams: Right. Okay, thank you. Yeah.
Mr Blake: If we turn to POL00021507, this is a 23 May 2012 Board meeting. By now, Alasdair Marnoch is actually named there as present and I know that you said that at the earlier meeting, he had already been appointed, or –
Susannah Storey: I was referring to Neil McCausland.
Mr Blake: Ah, sorry.
Susannah Storey: Yeah, who actually joined, I think in Q4-2011, alongside Alice. I think perhaps you didn’t pick him up because he’s down as Senior Independent Director but, obviously, he’s a Non-Executive Director.
Mr Blake: Yes, well, now we have another Non-Executive Director, Alasdair Marnoch. If we scroll down, we can see the Chairman welcomed Alasdair Marnoch to the Board as Non-Executive Director and the Chairman of the Audit, Risk and Compliance Subcommittee.
Could we please turn to page 4, and I think this is the section that you referred to earlier about concerns about the role of the ShEx Non-Executive Director. It says there:
“Susannah Storey outlined the reasons for representation of ShEx on the Board of [the Post Office]. She confirmed that ShEx representatives would have exactly the same legal responsibilities as other directors and, like all members of the Board, would be acting to promote the success of [the Post Office]. She clarified that she would not be sharing the Board papers with colleagues in ShEx.”
Whose decision was that, not to share Board papers; was that yours or somebody else’s?
Susannah Storey: I covered this in my witness statement and I tried to be as fulsome there as I could recollect. The documents unfortunately don’t really help me with exactly when this was discussed and how it was decided but my sort of reflection now, I guess, is that, given the nervousness of the Chairman about having a shareholder representative at all and about the conflict of interest around the funding review, I would have been mindful of that, and I think I was – and again, I’m overlaying this now, I can’t recall exactly how it happened but I think I would have been very keen to ensure that we didn’t end up with a sort of two-tier Board.
So my worry was that, because they were so nervous about documents and interfaces with the shareholder, the worst of all worlds for this new April 2012 moment would have been if the Board had sort of had two rooms, one where they discussed all the contentious things and then a very vanilla Board that I was, such that they felt the papers could be shared.
So I think it must have been an agreement between Alice and I that I wouldn’t share and I guess I was also mindful of the fact, in practical terms, I wasn’t quite sure how I would share those hard copy papers at that time.
Mr Blake: Thank you. You’ve said concerns from the Chairman. Was it just Alice Perkins that had a concern about the role of the Non-Executive Director representing ShEx, or were there others?
Susannah Storey: There are papers noting a meeting between Alice Perkins and Martin Donnelly, who was the Permanent Secretary at the Department for Business in the autumn of 2011, where she is reported to have set out her concerns, and, in those papers, she says that one of the other non-executives wouldn’t serve on a Board with a shareholder representative. I knew that, I knew that had been reported, because there was a bit of a debate with the ministers and, obviously, Vince Cable ended up sending his Chairman’s letters to her in January 2012 to make clear that the Government would require a shareholder representative.
But I didn’t know whether those concerns were more widely held or exactly who held them. I did discuss it with Alice and, actually, you know, going forward in the chronology, even after I’d said this, there was still some serious concern that carried on for a long time. In May 2012, she proposes a separate funding conversation of a subcommittee of the Board that I wouldn’t be on, and I pushed back on that. In November 2012, she expressed discontent that I was talking to Will Gibson about what was happening at the Board meeting, and I note that, even when Richard Callard became the shareholder representative in April 2014, the whole Shareholder Team, I understand, was required to sign non-disclosure agreements to receive those papers.
So there was a deep-seated concern from this company about the shareholder and access to information.
Mr Blake: You said “she, she, she” but then you said “the company”. Was it in particular the Chairman or was it more broadly?
Susannah Storey: I think the reason I described it like that was because my conversations would have been the Chairman at the time, and all the way thorough on this issue. I don’t think it was only her but, if you were to ask me exactly who else, I don’t have particular basis to say a list of people. I do know from my work with the Royal Mail before that there was a sort of institutional concern about the shareholder on some matters.
Mr Blake: It then says:
“The Board discussed possible conflicts. Susannah Storey believed that the areas of possible conflict should be easy to anticipate, funding being a good example.
“The Chairman thanked Susannah Storey for clarifying the role of the Director appointed to represent ShEx and asked members of the Board to flag up any concerns, either at the time of the meeting or to her separately if they were more comfortable.”
Could we now turn to the bottom of page 7 and into page 8. I think this is the first mention in the substantive Board minutes, at the bottom of this page and over to the next, of matters relating to the Horizon issues, as we know them, and it’s a section there under “Any Other Business” and it says:
“Paula Vennells and the Chairman updated the Board on the meeting with James Arbuthnot MP and Oliver Letwin MP, taking them through their constituency cases which, they believed, that challenged the integrity of the Horizon system. The meeting had been a success and James Arbuthnot had now agreed to facilitate another meeting with the other MPs who also had cases in their constituencies. The business had also agreed to use forensic accountant to investigate the system and give further comfort to those concerned about these cases.”
This is under “Any Other Business”. Was it a matter of discussion, do you recall?
Susannah Storey: It’s obviously very difficult to separate out hindsight and all the other documents that I’ve now read and, you know, all of the awful things that have happened when I look back at this but I do reflect that there was a conversation about this, even though it was under “Any Other Business”. It was quite unusual for – well, it was only the second Board, so – but it was, I guess, interesting that the Chairman and Paula were updating us together. So I would have noted it, yeah, and I think there was a bit of a discussion but I can’t recall all of the ins and outs of what were debated.
Mr Blake: What did you mean by “interesting”?
Susannah Storey: Interesting in relation to the Chairman and the Chief Executive?
Mr Blake: Yes.
Susannah Storey: Well, because mostly papers were presented by Executive Directors or members of the Executive Team and, in this instance, it is both the Chairman and the Chief Executive who had met these two MPs and then were proposing the forensic accountant to be brought in to investigate the system.
Mr Blake: Is it something that you would have expected a paper to have been produced beforehand, or is it appropriate, in your view, for that to have been raised under “Any Other Business”?
Susannah Storey: Well, clearly now I would have a very strong preference for a whole set of different events on this issue. I think at the time, as my second Board meeting, I was still navigating this company and this environment. I don’t particularly recall thinking that at that time. But it obviously is, as we all know now, a very significant thing that they were telling us about. So, yes, perhaps not best placed in “Any Other Business”.
Mr Blake: Could we please turn to UKGI00000065. This is another ministerial submission, new minister, from Mr Whitehead. It says as follows:
“Meeting with Alan Bates [so this is another meeting with Mr Bates, Sir Alan now] at his request to discuss the JFSA’s claims its members are victims of endemic flaws in Post Office’s Horizon system which, over the last 10 years or so have resulted in a number of subpostmasters having their contracts wrongly terminated by [the Post Office], with many also prosecuted for false accounting.”
Then it lists the attendees. We have Sir Alan Bates, and then we have Issy Hogg:
“… a partner at Coomber Rich (Basingstoke based solicitors who have defended a number of subpostmasters who have been prosecuted by [the Post Office] in recent years).”
This submission details the various background to the meeting. If we scroll down, we can see the penultimate paragraph:
“A further development of which we have become aware since this meeting was fixed is that Shoosmiths, the solicitors acting for a number of JFSA ex-subpostmaster members in current legal action against [the Post Office] submitted written evidence to the BIS Select Committee purportedly in the context of Network Transformation, but which is solely focused on Horizon and related contractual and training issues.”
It then says:
“Following previous lobbying of BERR/BIS ministers over an extended period, Alan Bates met with Ed Davey in autumn 2010 [and that was the letter that we saw]. This was in the context of reports that Channel 4 were planning to run a news item … The JFSA had also mounted a substantial lobbying campaign with MPs, several of whom … wrote … on behalf of constituents …”
Then if we scroll over to page 7, we have the letter from Sir Alan Bates. Were you aware of these issues at this time being raised within the Department in which you were formerly based?
Susannah Storey: I wouldn’t routinely have known about the meeting between whatever meeting Norman Lamb – whatever meetings he was doing nor particularly about this one. But it is possible it would have come up in my conversations with Will Gibson, either before and (sic) after the May meeting. The reason why I say that also is because this submission references, I think, the Select Committee –
Mr Blake: Yes.
Susannah Storey: – that had happened in May 2012, which was also referenced in those Board minutes because – I think the chairman drew to our attention because Paula herself – Paula Vennells had given evidence at that. So I wouldn’t routinely have known but I can’t rule out the fact Will would have mentioned this to me.
Mr Blake: We discussed earlier the issue of ministerial submissions and I think it was your evidence that you didn’t see them –
Susannah Storey: No.
Mr Blake: – so you wouldn’t have seen this particular document?
Susannah Storey: No, sorry, I more meant would I have been aware that the Minister for Postal Services was meeting Sir Alan Bates, possibly. I certainly wouldn’t have seen this submission.
Mr Blake: So you had side conversations with, or meetings with, was it the head of the relevant team in ShEx –
Susannah Storey: That’s right.
Mr Blake: – prior to Board meetings, regularly, occasionally?
Susannah Storey: All of the above. So I would have reached out to him before and after Board meetings. If there was anything ad hoc that occurred to him or occurred to me that we thought was relevant to the other, we would have absolutely passed it on. We had a very regular dialogue and, in a way, that was the corollary of the fact that I was out of the office. So it was to seek to ensure that what I understood to be happening at the Board and what he understood to be going on in the Government’s mind about Post Office we could, to the best extent possible, noting the structural obstacles, we could share that information.
Mr Blake: Were there any formal chance set up or any formal processes set up for the sharing of information with you?
Susannah Storey: Do you mean formally from the Shareholder Team or the Government to –
Mr Blake: From – exactly, both. Either.
Susannah Storey: No, not formal per se, in the way of saying right on a Monday this will happen but it was regular, the conversations between us. So I didn’t feel at the beginning that I wasn’t clear about what was going on. I think it’s fair to say that, over time, that did become more difficult, not least because obviously I was less current in terms of the information and obviously, by this stage, the Postal Services Minister was Norman Lamb, then when it changed to Jo Swinson, I didn’t know her and I hadn’t worked with her.
Mr Blake: Thank you. Can we please turn to POL0002158, taking you to another Board meeting, this time 4 July 2012. We can see that you were present at that meeting. If we turn, please, to page 6, we can see there reference to James Arbuthnot and it says:
“The Chairman updated the Board on the meeting taking place on 4 July between James Arbuthnot and Second Sight, Forensic Accountants. She promised to keep them informed.”
Do you recall at this Board meeting there being any significant discussion of that issue?
Susannah Storey: I recall this Board meeting because it was at the Gatwick Mail Centre, which was unusual. So that was one – we used to try to go to different places to do the Board meeting. I don’t recall this particularly. I note now, of course, that it was the Chairman updating it – us, as a Board.
Mr Blake: What’s the significance of it being from the Chairman?
Susannah Storey: It’s the point I was making that, if you look through the papers, the way it would normally work would be the Chief Executive would be telling us. So I would have, I think, been reassured that this was being taken seriously and the Chairman herself was engaging in the meetings with Mr Arbuthnot.
Mr Blake: If we turn, please, over the page, we can see that there’s another Significant Litigation Report being noted and we can see, again, that Significant Litigation Report at POL00096747. Similar information to that first report but now updated. I think it says:
“A third party fraud investigator is to be appointed (following consultation with various MPs) to review up to 10 cases where Horizon is alleged to have caused the losses. It is anticipated that no further court action will be taken, pending the outcome of that investigation.”
Then there is one other matter noted on that Significant Litigation Report. Am I to take it again that that was simply noted, rather than something that was discussed?
Susannah Storey: That’s my recollection, yes.
Mr Blake: Could we please turn to POL00295498. Moving now to August 2012. This is a meeting between Paula Vennells and Will Gibson, who was the ShEx Royal Mail Postal Services team lead. There’s a number of matters being discussed and, over the page, please, the bottom of page 2, there’s a section on what’s described as “Arbuthnot activity”:
“… arrangements have been made with James Arbuthnot’s office to refer through cases suggested by MPs for review to him – which would then be sent to Second Sight. It is not yet clear how many cases will be involved but we believe that it currently remains in single figures (although it may yet grow).”
Do you recall having any discussions with Mr Gibson or either before or after this meeting?
Susannah Storey: I don’t particularly recall exactly when I would have spoken to him but, as I was saying, I would have spoken to him regularly. If he had meetings with Paula, that might have been the sort of thing he would update me on and this – based on this note of the meeting, it obviously covers a wide range of areas. I’m not quite sure why the “Arbuthnot activity”, as described here, is under the Select Committee heading, but no.
So I don’t particularly recall this but I think it is interesting, for me reading this now, that Paula was giving presumably fairly regular updates to the Shareholder Team.
Mr Blake: Yes. But there was no formal structure for you, for example, to have a prior meeting with Mr Gibson before he met with Ms Vennells or afterwards?
Susannah Storey: No, not necessarily. I mean, the Shareholder Team would be meeting the Post Office team all the time, very, very regularly. Sometimes they’d be going to their offices, they’d be meeting on a whole range of things. So that in itself wouldn’t have triggered a specific meeting but the way I tried to manage my time was to meet him before or after Boards, or before or after some committee or other meeting I was having with the Post Office. He would have been in a very regular interaction, I would have thought, with the Post Office.
Mr Blake: Was it always verbal briefings between himself and yourself or did they produce, for example, packs of information for you, updating you, from time to time?
Susannah Storey: No, I don’t remember any packs of information coming from them. I think it was – it would always have been us speaking on the telephone or meeting to discuss. We did have some emails but often that was logistics, setting up a meeting.
Mr Blake: Could we please turn to POL00103348. Moving on to the 19 September 2012 Board meeting. Can we please turn to page 90. This is a whole pack. This is something that you’ve addressed in your witness statement. It’s the Significant Litigation Report, as at September 2012. So this is now separated out between Part (A), which is “Civil Claims”, and Part (B), which is on page 93, which is “Criminal Cases”. Thank you. It says, “Criminal Cases Brought by Post Office Limited”.
First of all, it looks as though these reports are slightly more sophisticated than the earlier ones. Was that your recollection?
Susannah Storey: They were getting slightly longer and more detailed, yes.
Mr Blake: Do you recall any discussion about the reasons for that?
Susannah Storey: No, I don’t recall a discussion. I mean, obviously by September 2012, the forensic accountants had been appointed and were undertaking their work, so my assumption was that was the vehicle through which we would hopefully learn more about this.
Mr Blake: Although Part (B) describes it as “Principal … Cases Brought by Post Office Limited”, I think you’ve said in your witness statement that you weren’t aware that Post Office Limited was itself bringing prosecutions?
Susannah Storey: That’s right. I had a sort of layman’s understanding, I suppose. I didn’t fully appreciate until the July 2013 conversations exactly what the Post Office was doing. My experience, generally, is companies do things sometimes with bespoke statutory obligations that enable them to do these kinds of things. I didn’t have any recollection of this prosecution issue coming up when we were doing the Postal Services 2011 Act work. I didn’t recall it particularly being an issue from the separation work because my team had led a lot of that. So no, at this stage, I didn’t read it like that.
Mr Blake: Again, am I right to say that this was simply a paper for noting at the Board?
Susannah Storey: Yes.
Mr Blake: Yes. Looking at it now, do you think that there was a lack of curiosity at Board level when it came to these Significant Litigation Reports: the fact, for example, that they are just noting papers?
Susannah Storey: Looking at all of this now, and I’ve tried to be very reflective in my witness statement, I think there’s lots of things that could have been done differently and, of course, you know, when you see these words on the page now, and you know what happened, absolutely. I wish they’d been the first item on the agenda. And I think, when you go through chronology, once we had the Second Sight Interim Report, every single Board after that, there was a discussion of these issues. But at this time, in the autumn of 2012, unfortunately that wasn’t the case.
Mr Blake: If we draw the threads together from all of the documents that we’ve just been looking at this morning, we started with the Shoosmiths Letter of Claim relating to Horizon issues mentioning prosecutions. We then have the Significant Litigation Reports that refer to the Shoosmiths claim, although not in that level of detail, and refer to, for example, 85 potential cases. You then now have a litigation report that, in fact, mentions criminal cases being brought by the Post Office. We have reports of meetings with James Arbuthnot and we saw a letter to the Minister that referred to the attendance of a solicitor who represented people in Post Office prosecutions.
Why do you think it is that nobody at Board level was drawing those various dots together?
Susannah Storey: I think it is – by way of explanation, I think it is important to put yourselves in the shoes of us in April 2012 onwards. So the Shoosmiths letter of the autumn of 2011, presumably that came to somebody in the Executive Team of the Post Office, the Board was not constituted then, that I was on, we didn’t see it. The meeting with Norman Lamb and Sir Alan Bates, the Shareholder Team would have seen it but we, the Board, didn’t see it. And I think the Board felt – speaking for myself, I felt that from May 2012, when we knew the Second Sight work was happening, that was the kind of frontline of this issue.
I think when you look at this issue now, with everything we know, you can see these jigsaw pieces and wonder why you didn’t see the picture on the front of the box. But, at the time, from what we saw, we’d seen a much smaller set of information than even the documents you’re just outlining.
Mr Blake: Was it ever suggested to you that you should, for example, meet with Second Sight or meet with James Arbuthnot?
Susannah Storey: No, unfortunately not and, as I’ve set out in my reflections to my statement, that is one of the things that I regret. Sir Alan Bates and James Arbuthnot were meeting really quite a few MPs, they were meeting our ministers and they were meeting the Chairman and the Chief Executive. We, the Board, didn’t meet them and I guess, as I was saying, because Alice Perkins and Paula Vennells were giving us updates, we took some comfort from that.
Mr Blake: I think in your witness statement you’ve said that you received an unequivocal message that the Executive had complete confidence in the accuracy, integrity and robustness of the Horizon system. Was that at this stage?
Susannah Storey: That was really all the way thorough. I mean, I mention in my statement that, even attached to the lines around the BBC Inside Out programme in 2011, there was a kind of press notice or public comments from the Post Office very unequivocal. My recollection of really all the conversations at this stage were “robust system, nothing to see here”, that kind of sentiment. Yes, absolutely.
Mr Blake: As the person on the Board who had a link to the Government or a link to the Civil Service, do you think that, at that point in time, you should have been probing more on those issues?
Susannah Storey: I think – I suspect all of the NEDs feel, whatever the hats they were wearing, and I certainly feel now, on reflection, of course, I wish that we had, from the beginning, done a series of things in a different way. I did expect, and I’ve now seen documents to illustrate, that the Shareholder Team from 2010, when Ed Davey was asking, 2011, they were going back and forth to the Post Office on this issue, and they were continuing to get those unequivocal messages and they were getting more detail that the Post Office was saying supported those things.
Mr Blake: By March 2013, you had returned full time to your day job at the Department for Energy and Climate Change, your new role. I think you’ve described it in your witness statement as a demanding role; is that fair?
Susannah Storey: I think anybody finishing maternity leave finds their new jobs reasonably demanding but, yes, it was a demanding job. I was doing a job share, we were Strategy Director at that Department.
Mr Blake: Was it at that time that you stepped back from the Audit and Risk Committee?
Susannah Storey: Yes, that’s my recollection, yes. So in March 2013.
Mr Blake: Looking back at it now, do you think that that was a particularly important committee for somebody with those Government links or ShEx links to have been sitting on?
Susannah Storey: Well, the – if we go back to that 2012 letter to the Chairman, the pensions issue was really very front of mind, so when we separated the company and the Government had taken on these huge liabilities, we were worried to ensure that the pension remained sustainable. So I personally was quite worried about that issue because I knew it was in the Government’s mind. In a general sense, yeah, I think Audit and Risk is an important Board committee.
Mr Blake: Did anybody step in to fill that role?
Susannah Storey: The Audit and Risk Committee was Chaired by Alasdair Marnoch and had other non-executive members and obviously the Finance Director. Nobody from the Shareholder Team would have done that but, constitutionally, I’m not sure how that could have worked.
Sir Wyn Williams: Before we move on, could we have that litigation report back on the screen, so that I can see the next page.
Mr Blake: Absolutely, sir. It’s POL00103348, page 90. The section with the criminal cases is page 93.
Sir Wyn Williams: Yes, just the next page, please. So we’ve got four criminal cases under Part (B) on that, and then it goes on. That’s what I wanted to see. Yes.
Mr Blake: I think that’s the final page of –
Sir Wyn Williams: Yes. I understand that this paper was for noting but, for the first time, as I understand it, the Board is being given information about completed and ongoing criminal cases, yes? Just glancing at them, some of them are very significant. Someone has pleaded guilty to stealing over £100,000 on the page we are looking at; two brothers are accused of fraudulently obtaining or stealing over £200,000.
Forgive me if I’m a little surprised that nobody thought to discuss these things but that appears to be the case.
Susannah Storey: Well, I agree with you and, you know, when you look at this page now, absolutely. I can’t recall the discussion but it’s actually hard for me to recall –
Sir Wyn Williams: I’m not for a minute suggesting you should remember the words spoken but the impression I get from you – so now is your chance to correct it – that because this paper was to be noted, there was literally no discussion of it and, you know, I’m not hiding it, I’m expressing my surprise that a Board, for the first time confronted with this sort of detail, doesn’t discuss it at all.
Susannah Storey: Yeah, and I mean I agree with you and I don’t recall a discussion. I also don’t recall anybody highlighting it to us either. But I totally take your point.
Sir Wyn Williams: Yes, sorry, Mr Blake.
Mr Blake: Sir, that might be an appropriate moment to take our first break of the morning.
Sir Wyn Williams: Very good.
Mr Blake: Can we come back at 11.15?
Sir Wyn Williams: Yes.
Mr Blake: Thank you.
(11.06 am)
(A short break)
(11.18 am)
Sir Wyn Williams: Yes, Mr Blake?
Mr Blake: Sticking with the agenda for 19 September 2012, that’s POL00103348, we see there, for example, item 11 is discussion of the British Postal Museum and archive funding. Is it odd that something like the Postal Museum might be an item for discussion but the prosecution that led to, for example, imprisonment for two years, sentencing to 20 months, et cetera, that’s outlined in the Significant Litigation Report, wasn’t more of a discussion at Board level.
Susannah Storey: Of course, and I think it would be impossible not to take that few now, looking at this. At the time, as I think I said in my witness statement and is normal with all corporate governance, the agendas, the rhythm of meetings would be set by the Chairman and we as the Non-Executive Directors, would follow that.
Mr Blake: Did you ever have the opportunity to input into what would be on the agenda?
Susannah Storey: Not routinely. I think, if – for example, I am assuming if one of the committee chairs, say Alasdair Marnoch, who Chaired the Audit and Risk Committee, or Virginia Holmes, who chaired the Pension Committee, if they felt there was an issue of sufficient materiality, it would – they could put it as an item on a future meeting.
And we would look at the forward look, perhaps, for a year ahead but not – I don’t remember shaping the agenda myself.
Mr Blake: Moving now to June 2013, could we please turn to POL00167917. The June/July period 2013 was a particularly busy time in matters relating to the Horizon system, and I think that was also a particularly busy time for you in your ordinary day job; is that correct?
Susannah Storey: Not June and July no, in my day job. That was only a particular issue in October/November 2013. So this period, it was just ordinary day job.
Mr Blake: Thank you. If we scroll down, we can see an email there from Martin Edwards, the Chief of Staff to Paula Vennells, emailing the ShEx team to arrange a meeting for Alwen and I think either Martin Edwards or possibly Paula Vennells, with Will, Mike and Peter, and the topic being the “[Post Office]/BIS meeting on Second Sight investigation”.
Is that something you would have been updated on by the ShEx team?
Susannah Storey: I don’t recall being updated on this issue on 28 June because on 1 July, when we did have that Board call, that was a surprise to us as a Board. 1 July was a Monday, so it’s possible this was late the previous week and, therefore, I hadn’t had a chance to talk to Will Gibson. Also this is setting up a meeting, isn’t it, rather than actually discussing the issue.
Mr Blake: And if we please turn to UKGI00001656, we see another email from Mr Edwards in the middle of that page, please, emailing, again, the ShEx team in relation to the James Arbuthnot meeting:
“We thought it might be helpful for you to see this brief which we prepared for the meeting with Arbuthnot this morning, to give you a clearer picture of both the facts and handling issues at play …
“Obviously strictly [private and confidential] but happy for you to share some or all of it with Jo [I think that’s Jo Swinson, the then Minister] if you believe that would be helpful – I’ll let you judge (useful to know ahead of Paula’s call with her so she knows what she’s sighted on).”
If we scroll over the page, we can see a copy of the briefing. Perhaps we could look at page 4 and 5 quickly. We have looked at this with other witnesses. This is a briefing note on – prior to the meeting with now Lord Arbuthnot. We can see at the bottom of page 4, “Additional point if needed”:
“Depending on the note of the meeting, it may be appropriate to address head on [James Arbuthnot’s] apparent annoyance at the issues around prosecutions and systems ‘exceptions’.”
Just pausing there on the word “exceptions”; were you aware around this time of the use of terminology within the Post Office referring to, for example, bugs as “exceptions” or “anomalies”?
Susannah Storey: No, I wasn’t familiar with any of that and I don’t think, as a Board, we had even particularly focused on this issue of bugs that obviously came out in the Second Sight Interim Report.
Mr Blake: If we scroll down, there’s a section there on “Current prosecutions”. If we scroll down, we can see a further entry on “Historical convictions”, and it is there we’ve addressed with other witnesses. It says:
“Nothing has emerged from the interim findings given to us by [Second Sight] which would point to specific convictions being unsafe.”
Then it addresses “System exceptions”.
So we’ve seen that this briefing has been copied to ShEx but was that the kind of thing that would be shared with you?
Susannah Storey: No, and I mean this particular week from Monday, 1 July 2013, onwards, was obviously very intense in a number of layers but, having now seen a lot more of the information, my perspective is that the least informed group at this point were the Board. So we had had a call on 1 July. This is, I think, a briefing for Paula Vennells to meet Lord Arbuthnot, which is then being shared with the Shareholder Team, and the Post Office team are sharing quite a lot of information with the Shareholder Team that week.
We, the Board, at this stage, hadn’t had this – well, we never got this document, as far as I know.
Mr Blake: Is this an example where it might have been better for you in your role to have been based at the Department, or within ShEx, or within the broader Department?
Susannah Storey: I have set out in my statement that one of the reasons, when I decided to resign a year early from the Board, in part it was because I thought it was actually difficult to do the job of Shareholder Non-Executive Director and not be in the team, and I thought it was better that my successor, there was just one line, that individual was in the Board and they were completely immersed in the Shareholder Team, the advice to ministers, and all of those things. And this is an example to where the Shareholder Team knew more than the Board.
Mr Blake: Thank you. Moving to the Second Sight Report and receipt of the report, can we please turn to POL00145185. We’re now on 4 July. Paula Vennells does send the Board an update, and I’m going to read to you just a few passages from this update. It begins:
“I wanted to send you a brief email to update you on where we are with the Second Sight investigation.”
Second paragraph, around halfway through, it says as follows:
“In line with our discussion on Monday’s Board call, we understand that they have not found any evidence yet of systemic issues with the Horizon system (and it should be noted that this is based on a detailed review of the four ‘best’ cases in terms of compelling evidence). However, as expected, they do intend to draw attention to wider failings in the training and support provided to subpostmasters, with the implication that this was the root cause of some of the problems related to Horizon.”
There’s reference there to the “Monday Board call” and also “on receipt of this”. What was your understanding at this point of the likely finding of the Second Sight Report?
Susannah Storey: My recollection is, at this stage on 4 July, all I knew was what we’d been told on 1 July. We hadn’t seen any draft document, we didn’t actually see that until the following week. So everything we knew was as reported to us by Paula Vennells.
Mr Blake: What was your understanding? We see there, for example, reference to “no evidence yet of systemic issues”; were you aware that the Second Sight Report was an interim report, for example?
Susannah Storey: Yeah, I think we did know that from the Monday night call, although, as I say, we hadn’t actually seen the document itself at that point. On the Monday night call, we had been, my recollection is, really quite surprised that this forensic accountants’ work, that had been going on for over a year, was suddenly coming and we hadn’t seen it. But, in terms of the findings of that Interim Report, all we knew was these kinds of lines, which were what Paula Vennells was also saying on Monday, no evidence of systemic issues.
But I’m assuming on 3 July the Executive also wouldn’t have seen the final Interim Report.
Mr Blake: If we look at the next paragraph, around halfway through that paragraph, it says:
“They shared with us today the introductory sections of the report, which gave some cause for concern in relation to the overall professionalism of the drafting and the widespread use of subjective (and at times somewhat emotional) statements of opinion rather than more neutral or evidence-based insights.”
Second Sight had been appointed as independent investigators. Did you have any view at this stage with regard to the way that their report was being described?
Susannah Storey: No, we could only know what we were being told at that point. They’d been doing this work, there’d obviously been interfaces between them and the company and, on the Monday night, Paula had updated us, and then here she’s sending us a further email. We didn’t have any other information and, as I’m sure we’ll come on to, we were quite irritated.
Mr Blake: We see in the next paragraph:
“We are focusing heavily on our media and stakeholder handling strategy.”
Were you aware of a particular strategy in respect of the media and stakeholders that was being pursued at that time?
Susannah Storey: Not particularly in relation to this issue, I would have expected, if there was any report, information, action the company was taking that it was going to have a public face, somebody in the company would have been thinking about this but I wouldn’t have read this in this email as particularly unusual.
Mr Blake: Can we please turn to POL00099121. If we start on the second page, please, moving now to 6 July. The Board are emailed again by Paula Vennells, “A quick further update”. She says:
“I have had two further very constructive telephone conversations with Alan Bates of the JFSA, which confirmed his willingness to work collaboratively with us in taking forward our response to the review.”
Second paragraph:
“It is worth emphasising that Alan Bates’ main issue is not ‘the computer’ but the human aspect: how in his view Post Office failed to support and help vulnerable and ‘muddle headed’ [subpostmasters].”
Next paragraph:
“He also raised the idea of setting up a new independent third party that [subpostmasters] can approach if they are facing issues with Horizon …”
If we scroll down, please, it says:
“Alwen and I then had a further meeting with James Arbuthnot yesterday afternoon which was also positive.”
If we scroll over the page, please, I’m just going to read to you those final two bullet points. It says:
“One of the main reputational and potentially financial risks arising from the review relates to possible attempts to reopen past prosecutions based on the findings. James Arbuthnot was certainly focused on this. We had a stronger exchange on this point. It is not clear that any new evidence has emerged. If it does, then as I pointed out to James, legal routes to appeal already exist. Susan and the Legal Team are working with our external lawyers to consider whether there are any implications arising from the report for past cases, and we can provide a further update on this work next week.”
Now, having looked at all those documents that we saw this morning, in particular the updated version of the Significant Litigation Report, which identified a number of people being sentenced to significant terms of imprisonment, did this paragraph strike you at all?
Susannah Storey: I think the whole email struck me. So on the Monday night, we’d had this Board call, which had been difficult, and we were being told about this Interim Report coming. Then we’d had an update on Thursday, this is now the Saturday morning. There’s a whole load of information in here that I think I would have been very uncomfortable about. This – can I just check, this was the Saturday morning, the 6th, was it –
Mr Blake: It was the 6th.
Susannah Storey: – because I thought I saw at the top the 8th, but that was – it’s just a forward document, was it?
Mr Blake: Yes, we’ll go to the email of the 8th as well.
Susannah Storey: Okay.
Mr Blake: Perhaps let’s turn to the first page and that is the 8th. I don’t need to take anybody to it but we also have a copy of this at POL00297468. But sticking with this version, we then have an email from Sarah Paddison, so presumably on behalf of Paula Vennells, which says:
“As promised in my previous email, here’s a copy of the final draft of the [Second Sight] Report … They took on board the majority of our comments over the weekend, but not all of them. The second attachment is an internal note detailing the remaining aspects of the note which we believe are misleading or factually inaccurate.”
Is that something you recall receiving?
Susannah Storey: Yes, there was a whole series of emails, as I said, through the previous week and then into this week and, obviously, the Board was very keen to get its hands on the Interim Report.
Mr Blake: Can we please turn to POL00297469, and this is an attached statement. So this is the media statement that was attached in that –
Sorry, actually, if we go to the previous email that’s POL00099121. We see there, below that email that I just took you to with the report, there is another email from Paula Vennells of the same day and she attaches a draft media statement.
Susannah Storey: This is Monday, the 8th?
Mr Blake: Yes, sorry, if we turn back to POL00099121, so we see below that, if we scroll down, we can see that is another email from Paula Vennells saying, “I’m attaching the latest draft of our media statement”, and that’s the document that I’m just going to be taking you to.
Sticking with this email, though, if we look at the final paragraph, it says about halfway down that final paragraph:
“The most significant remaining concern relates to his continued determination for us to review past prosecutions in light of the findings of the report …”
That’s a reference to James Arbuthnot being concerned about those past prosecutions.
Did the issue of past prosecutions feature heavily for you on 8 July?
Susannah Storey: As I say, I think, on 8 July, the first thing I would have done when I received this email was read the Second Sight Interim Report. So all of the issues I wanted to try – I would have wanted to try and understand and, in the email that was sent to us the week before and also in the call on 1 July, my recollection is it felt as if we were being told a series of rather conflicting things: there was this report coming, it was interim, it had factual inaccuracies, the business was trying to correct them, there were no systemic failures but there were some very serious issues in it.
So this issue, they were all – I think they would all have been in my mind at the time and, obviously, as we might come on to, the 16 July Board meeting attempted to get the Board to draw together its sense of all of these things and the very, very urgent actions it wanted taken.
Mr Blake: If we scroll up to the top email, that’s your receipt of the final draft of the Second Sight Report, and you have said you read that report. Can you recall when you read that report?
Susannah Storey: I can’t recall the time of day, if you mean that. But I would have – and I also can’t tell from this redacted document if that email address for me, it looks like it was my Energy and Climate Change email address, so it would have been coming to me at work. So I might have read it really very quickly but I can’t recall. The other thing that would have been in my mind because, as we have briefly discussed, the Shareholder Team was getting information and, as we now know, the next day the Minister ended up giving a statement in the House, so I would have been very keen to understand what was going on with Will Gibson, Roger Lowe and that team in relation to the Minister.
Mr Blake: So as at 8 July, you would have read the Second Sight Report?
Susannah Storey: I can’t think why I wouldn’t have. As I say, it is difficult, 12 years ago, or whatever it is, 11 years ago, to say the time of day when I would have read it.
Mr Blake: I would just like to take you to the attachments to those emails. If we could first look at POL00297469. This is the media statement that was attached to the second email on that page. About halfway down, it says there:
“The Post Office is committed to supporting its people and improving the way we do so. The interim review makes clear that the Horizon computer system and its supporting processes function effectively across our network. As the review notes, it is used by around 68,000 people in more than 11,500 branches, successfully processing more than six million transactions every day. The review underlines our cause for confidence in the overall system.
“It does however raise questions about the training outputs we have offered to some subpostmasters and we are determined to address these issues.”
Having read the Second Sight Report, do you consider that to have been an accurate reflection of the report?
Susannah Storey: I don’t know, at the time on that Monday, how much I would have been looking at this press statement. I think I would have been more likely to be reading the Second Sight Interim Report to try to understand what it was saying and I do have a memory of being concerned by what it was saying and, in particular, thinking about this point on training and support, and helplines. So I don’t think I would have particularly been thinking does this draft press notice exactly accurately reflect what was in the report on that day, but these –
Mr Blake: But having read the ultimate press reports in the press itself, did you have a view as to whether the Post Office was being accurate in its summary of the Second Sight Report?
Susannah Storey: I can’t recall particularly thinking about the Post Office’s press reports at the time. I think the lines we see here are reasonably consistent with what we had often heard from the Post Office and then, even after the Interim Report, what we continued to hear around, you know, the sort of – and I’m summarising – but broadly the system working, and then there being questions and issues around training and support.
Mr Blake: Can we turn to POL00297470. This is another attachment. This is the “Post Office Horizon [Question and Answers]”. Would you have read this attachment at the time? Sorry, it’s not on screen yet. Do you recall this document?
Susannah Storey: Well, I’ve seen now it was attached to an email. I don’t particularly recall this and I’m not sure at the time that I would have been most focused on Q&A and press releases. I would have been much more likely to be worrying about how the Board had been blindsided and what this report said and what we were going to do about it, and what was the Minister going to say.
Mr Blake: I’m just going to read to you a few passages from this document. The second paragraph says:
“We cannot comment on any individual cases but of course all cases were fully tested in court and no evidence found to suggest the Horizon system is at fault.”
Another question posed is:
“Are you saying you are going to review all these cases?”
It says:
“The review has raised some concerns regarding or training and support processes. Of course it is only right that a review should be undertaken of any cases where we feel the findings of this interim review might have any bearing.”
If we scroll down, there’s a question:
“I’ve heard there is evidence of faults with the system?”
It says:
“As the review stresses, the Horizon system has around 68,000 users and processes more than six million transactions every day. While we take every case very seriously, the total number of cases accepted by the external reviewers for this review was 47, less than 0.1 per cent of the total number of users of the Horizon system.
“With a system of this scale, of course there may be exceptions whether this is as a result of a power cut or through operator error. We have systems in place to identify and rectify these as quickly as possible (check against findings in report).”
Then:
“Whenever reconciliation issues arise in the system, we contact branches to inform them that reconciliation is required, either by Post Office or branch.”
If we scroll over the page, there’s a section there:
“Why have you destroyed documents relating to criminal investigations?”
It says:
“In line with industry standards we operate a seven-year document retention policy.”
If we keep on turning over the page, please, to page 7, penultimate page, “Why are you able to run your own prosecutions? This can’t be fair?”
It says:
“As with HMRC and other bodies which safeguard public money (need to check the accuracy of this), the Post Office has investigation and prosecuting authorities in its own right.”
Then there’s a question:
“Will you reconsider investigating and prosecuting cases yourself instead of handing these functions to the police and Crown Prosecution Service?”
I know you said you don’t recall paying much attention to these particular attachments, rather than the report itself but were you, at this time, aware of public lines being taken by the Post Office that were different to what you had read in the report?
Susannah Storey: I don’t think I would have been on that day, Monday, 8 July, and I don’t recall particularly seeing this Q&A document. This looks like a draft but I’m assuming there was a final one that was similar, so –
Mr Blake: This was the attachment to –
Susannah Storey: To that email.
Mr Blake: – that email, the second email on that page, sent to you by Sarah Paddison on behalf of Paula Vennells.
Susannah Storey: I think, if I – I obviously appreciate why you’re asking it the way you’re asking but, if you put yourself in the shoes of an individual who has been, as a Board member, waiting for this report, slightly surprised it’s coming in a rush, getting conflicting messages, I think the thing that would have been on my mind would have been what is in this report and what are we going to do about it? I just don’t think I would have been comparing public lines and Q&A at that point.
Mr Blake: Do you recall at that point having any discussions with anybody at ShEx about the report?
Susannah Storey: I can’t, in my memory, recall the to and fro with ShEx but I know that I would have because this was such a significant issue. On my time, on the Board, I think I’m right that the Minister only gave two oral statements, and one ended up being on Tuesday, 9 July 2013. So that would have been a significant thing for them and, as I’ve now been able to see, there was a lot of to and fro between them and the Post Office getting ready to brief Jo Swinson, and she also has been to this Inquiry.
Mr Blake: Do you think that there was insufficient sharing of information from the ShEx team to yourself on issues relating to the Second Sight Report?
Susannah Storey: I mean, I haven’t thought about it – I didn’t think about it like that at the time. Now I’ve seen all of the to and fro, I think one of my observations would be that what was so unusual about this issue was that the Chairman and Chief Executive were having the interface with Sir Alan Bates and the JFSA and James Arbuthnot. MPs were raising things with ministers through Parliamentary Questions, correspondence. There was a to and fro between the Post Office and the shareholder and I think in this week, it seems to me now, with everything I’ve seen, the Board were the least informed of all.
Mr Blake: As the Government representative on the Board, was there a problem there in the communication from those who were working on behalf of the Government?
Susannah Storey: I didn’t – I wouldn’t put if it like that but, and I don’t think there was a problem. I’ve described the way in which we worked during this period. I think we would have been very regularly discussing. I think, of course, now when you look back, everybody would have wished, and I certainly wished I had a whole load more information at a number of points, and this one included.
Mr Blake: Was it lines of communication, was it individual personalities: what was it that interrupted the flow of information relating to the Second Sight Report?
Susannah Storey: I don’t think I did say that the flow was interrupted. It was more that there was a set of events playing out very fast in realtime and so I imagine the Shareholder Team’s priority, rightly, was to brief the Minister. My priority was to get the information as a Board member, and we would have been communicating between us.
Mr Blake: Let’s turn to the Board meeting. Can we please look at POL00021516. That’s the 16 July 2013 Board meeting. It’s a meeting that the Inquiry has looked at on a number of occasions.
We note there, in terms of those who are present, that Susan Crichton was not present. Did you understand why Susan Crichton wasn’t present?
Susannah Storey: No, no. A lot of the issues around that that have been brought out in this Inquiry, I was not aware of on that day.
Mr Blake: Did you attend a pre-meeting to the Board meeting in a restaurant?
Susannah Storey: There was a breakfast that morning. In fact, when I wrote my statement I couldn’t identify if it definitely was that morning, but I think now it was that morning, and that, my recollection is, was with the Chairman and those Non-Executive Directors who were there; Neil McCausland had given apologies that day.
But yeah, I do have a recollection of a conversation of just the non-executives and the Chairman with a lot of discontent being expressed about the way this set of events had unfolded.
Mr Blake: Was that directed at a particular individual?
Susannah Storey: My own view was the Executive had mishandled the interface between the Board and the whole of this Second Sight Interim Report, and I held Paula Vennells responsible for that, as the Chief Executive.
Mr Blake: That was your own view. What were the views of others, just as expressed at that breakfast meeting?
Susannah Storey: Again, it’s – I can’t recall the ins and outs of all of the conversation but I think there was a kind of – my recollection is there was a sort of groundswell of discontent.
Mr Blake: Aimed simply at the Executive Team or at others?
Susannah Storey: When you’re a Non-Executive Director, your role really is to provide oversight, but the Executive Team and, in particular, the Executive Directors, are the engine room of the business. They are the people who are responsible for running that business, for undertaking with appropriate care and diligence all of their tasks, and I think we felt frustrated that, after over a year of work, there was suddenly this very rushed week, the report had been published and, you know, I would have felt that the Minister had been put in a difficult position, having to make a statement to Parliament.
Mr Blake: Were there any individuals specifically named during those discussions that stand out?
Susannah Storey: I don’t recall that. I think this was part of where some of my concerns about the Chief Executive were starting to crystallise.
Mr Blake: What were those concerns?
Susannah Storey: It’s really hard to talk about somebody’s performance in this context now, with everybody reflecting with such a spotlight, and in my experience of Executive Teams, performance can change, people can be stronger and weaker on different things. I think I felt, though, that this particular issue hadn’t been well handled by the Executive Team and, despite the rush of communications, some late-night emails, some weekend emails, it just didn’t feel orderly and, as a Non-Executive Director, the things that you take comfort from are that the organisation is orderly, thoughtful, no surprises.
No surprises is a really big thing. I still think of that and use it a lot today. You know, I have 42 arm’s-length bodies in the Department I’m responsible for, you do not want to be surprised. And I think, at that time I felt that it hadn’t been well handled and I think that comes out in the minutes for the subsequent board that day, where we went on to say we didn’t want to be blindsided and a whole load of actions were put in train.
Mr Blake: We mentioned just before the absence of Susan Crichton. That was explained by Alice Perkins in her evidence, if I am to summarise, that events overtook her, and I think it was along the lines of the thought didn’t come into her head to invite her back in. Were you even aware of Susan Crichton sitting outside that meeting?
Susannah Storey: I don’t recall anything to do with her sitting outside. Obviously because some of the papers we looked at that day – there was a paper from Susan written on 12 July, it was from her – yeah, I suppose I might have thought why was this being presented by Paula Vennells, but I don’t remember now a big focus on that. And I suppose I also would have thought that, if the General Counsel wanted or thought she should be in the room, she would have been in the room. It wouldn’t really have occurred to me that somebody would stay outside a room.
Mr Blake: Was the atmosphere in the room such that matters were happening very quickly, it was a particularly rushed or particularly packed Board meeting or not?
Susannah Storey: I don’t recall that. I mean, as – you know, the Board agendas for this company through these years, when I was a Non-Executive Director, were hugely full because there was so much business to be done on very difficult and important issues. I don’t particularly recall this one being more or less packed than any other.
Mr Blake: Thank you. If we go through a few passages from the minutes, we see at the bottom of this page:
“The Board discussed the papers received from the Executive Committee members and agreed that in future the content of the papers would not be presented at the Board meeting so as to free up time for discussion. The papers needed to be clear, not overly optimistic, and commercially focused so questions of fact would not be necessary. They should also arrive in good time. The Chairman asked the Board to contact the ExCo member responsible for a paper before the meeting if they were unclear or didn’t have the necessary detail. The Board also asked for earlier warning when risks and issues arise to ensure they were not blindsided.”
Can you assist us with that passage, please?
Susannah Storey: Well, I think we had been blindsided the week before, and we were irritated, and my reflection is, in any situation in any company, or if something starts to go wrong, those are the times that you want to get into more detail. I think we felt that we’d been bounced by the Second Sight Interim Report and so I think that’s why we were saying, “Please give us early warning of risks, please tell us about risks, please do not blindside us”.
The minutes, as you know, are quite mild in their phrasing, quite anodyne. A word like “blindsided” I think was probably a direct quote.
Mr Blake: If we could turn to page 6, there’s a section on the “Horizon Update”. I won’t spend much time on it because this is something we’ve seen a lot of but at (b) it says:
“The Board were concerned that the review opened the business up to claims of wrongful prosecution. The Board asked if Susan Crichton, as General Counsel, was in any way implicated in the prosecutions.”
At (c):
“The Board expressed strong views that the Business had not managed the Second Sight review well and stressed the need for better management and cost control going forward.”
There’s a reference there to “the business”. Can you recall specific names being mentioned?
Susannah Storey: I don’t recall particular names but, you know, I think the day-to-day interface would have been between Paula Vennells and, as we’ve discussed, she gave a number of the updates, and also Susan Crichton.
Mr Blake: “The Board accepted this was an independent review and therefore things could happen that were beyond the control of the business.
“However, the things that could be managed by the Business needed to be well managed with strong leadership and the Board asked the CEO if she had considered changing the person leading for the Business.”
What did that mean?
Susannah Storey: I think it was – there was this sense, and it’s quite hard to disaggregate now specifically which meeting different considerations came up and were then discussed and acted on, but there had been a sense, increasingly, I think, that the Second Sight Interim Report and Second Sight, they were independent, the Board itself hadn’t had particular control of the terms of reference. If you remember back to the May meeting, we were just told in AOB that this was happening and we thought it was a good thing to do.
But I’m assuming there was a sense at the time that we wanted – because now we’d seen the report, there were a load of actions being discussed to be taken forward, we wanted a kind of programme of work with clear leadership and if you’re a Board, a Non-Executive Director, what you want is to be confident that they’ll be people leading that who have got the capacity and capability to do it and will get whatever the work is done.
Mr Blake: If we scroll over the page, please, there’s one final passage that I’d like to take you to and that’s:
“The CFO was asked what the insurance position was. He promised the Board a note on this. He was also asked to ensure that both [Royal Mail Group] and business insurers were given notice of the review findings.”
Do you recall the insurance position being raised at that meeting?
Susannah Storey: I have a sort of vague recollection. I can’t recall who it was. It may have been Alasdair Marnoch in his position as Audit Committee Chair because, often in businesses, if a risk profile changes, regardless of whether or not it manifests, you need to notify the insurers. So it may have been that. The other thing is that the – as part of the separation of the two businesses, the Royal Mail Group, I think, had been the named party on some of the insurance contracts, so – and we were trying to finish the transitional services, such that the Post Office stood on its own, so it could have related to that. But I don’t – I can’t – I’ve sort of wondered about this and I can’t really recall much more.
Mr Blake: I’ll take you to some of the insurance related emails shortly. If that could come down, please. At paragraph 127 of your witness statement you say that this was the first time you became aware that the Post Office was able to act and was acting as a prosecuting authority, and you’ve described your feeling as being uncomfortable by that. Now, what did you mean by uncomfortable?
Susannah Storey: I think, as I said earlier, I’d obviously seen the SLRs which had talked about legal situations. It just – I don’t recall it having occurred to me, before I read the papers for this 16 July Board meeting, that – specifically, what the Post Office itself was doing, and that made me feel uncomfortable. I was surprised by it.
Mr Blake: Did it suggest something quite fundamentally wrong with the levels of information that was going to the Board?
Susannah Storey: I don’t think I was necessarily thinking that because, as a non-executive Board member, consistent with governance codes and best practice, you do not expect to see the vast majority of information. What you expect is that the responsibilities are clearly defined, the delegations are working, you’ve got first and second line assurance to sort of double-check. So I don’t think I would have been thinking particularly that point.
I just had a discomfort because a year into the business and, having seen the Second Sight Interim Report, it made me feel uncomfortable.
Mr Blake: Can we turn back to your witness statement, please, page 100. It’s page 100, paragraph 218. If we scroll down, you say in paragraph 218:
“I do continue to think we were robust in our scrutiny and challenged the [Executive Team] when we had the information to enable us to do so. And while there were numerous proactive steps that I have detailed in this document my view now is that it is impossible not to feel now that more should have been done, even if the signs at the time did not point us to that place given the assurances we were being given.”
Looking at this moment in time, where you find out that the Post Office itself prosecutes people, do you think that you were sufficiently robust in scrutinising?
Susannah Storey: Would you mind if I just make a general comment about us as a Board before I come on to that point?
Mr Blake: Absolutely.
Susannah Storey: When I went onto the Board in April 2012, I was pleasantly surprised by the calibre, to my mind, of those Non-Executive Directors. They were extremely robust, to the point that sometimes I used to feel in meetings that it must have been quite difficult for the executive members or people presenting. People did not hold back in saying what they thought, what they were worried about and in challenging. So, as a general sense, I did think we were robust in our scrutiny and not for this Inquiry but, as you know, there was an array of things that we were trying to do with that business, most of which were not easy.
I think the point here is – and I wanted to reflect at length in my statement, because the situation has just been so catastrophic, you can’t help feeling, as a person I was responsible between April 2012 and March 2014 as the Shareholder Non-Executive Director, you can’t help feeling that we should have done more. So yes, now I think, on each of these areas, could we, should we, what would have happened if we had done more? I mean, I set out in paragraph 140 of my witness statement all of the actions we did take, and I think at the time, we thought we were being active and prudent. That’s how it felt. It was a very busy time after the Interim Report, a whole load of things happened. It’s a reflection, though, that, of course, you wonder if you could have/should have done more.
Mr Blake: Given the terms that were used at that Board meeting, “blindsided”, et cetera, do you think you took sufficient steps at Board level to scrutinise the whole way that the company was being run at that stage?
Susannah Storey: Yes, I mean, I think generally we had been and were at that stage, and continued to be for the period that I was on the Board, diligent in trying to ensure that the company was running with an appropriate control environment and in an appropriate way.
In relation to this issue, after and at that 16th Board meeting and in the following – 16 July Board meeting and in the following weeks and months, there were a range of things that happened and, yeah, at the time that did feel very active. As I have also put in my reflections, you know, whilst we had actions in terms of the Mediation Scheme, the various pieces of work and the follow-on with Second Sight, and later set up the Board committee, specifically on this, I do reflect now that we should have done more at that point and onwards on past prosecutions.
Mr Blake: Thank you, sir. That might be an appropriate moment to take our second morning break.
Sir Wyn Williams: Yes.
Mr Blake: If we could come back just after 12.15.
(12.06 pm)
(A short break)
(12.18 pm)
Mr Blake: Thank you.
Ms Storey, I said that we would address the issue of insurance and insurance notification, and that’s the issue that I’d like to address now. Could we please start by looking at POL00099330. So we’ve had the Board meeting of 16 July and there was that slightly ambiguous wording in the minutes that we looked at, relating to the insurance position. This is an email from Alwen Lyons to the Board, including you, we can see there – thank you very much – and Alwen Lyons says:
“On Tuesday the Board asked for information on three things this week:
“[First] A paper on Transitional Support Services …
“[Second] The impact of the Financial Services Junction insurance changes …
“[Third] The impact on Horizon/Second Sight on our insurance cover.”
Then there is a section/paragraph at the bottom. It says, “Insurance”:
“We discussed what impact the current Horizon issues might have on our insurance on which we are advised by our insurance broker Miller. Their view is that whilst other insurance policies may be impacted the most likely one is [Directors and Officers] – this has the added complication as it is the only policy we share with [Royal Mail] and was placed by their broker, JLT. The excess on this policy varies under different criteria but the main one is £25,000 on each and every claim. A meeting is being set up with JLT and Miller to ensure they are fully briefed on the issues before JLT engage with the insurers”.
Moving on to POL00099331.
Do you recall receiving that email?
Susannah Storey: The email that you’ve just been reading from?
Mr Blake: Yes.
Susannah Storey: Yes, I would have. I think, as it says, we had asked for things obviously very quickly. So that was coming three days after the Board meeting.
Mr Blake: Thank you. If we please turn to page 3 – bottom of page 2, and the top of page 3 – we see, if we scroll down slightly, Alasdair Marnoch responding to Chris Day, whose name is at the bottom of that previous email.
Slightly further down, sorry. Thank you very much.
He says:
“On the insurance [question] we were keen to know if we have currently got insurance cover for any claim arising? Don’t think your answer deals with this point – I’m sure Susan will know though.”
You’re not on this email chain. I’m just going to go through it just to provide some background and some context. If we scroll up, it seems as though this is an email from Mr Marnoch to Paula Vennells, and he says:
“No need to broadcast loudly but I don’t think C [I think that’s Chris Day] has understood the question on insurance (or I’ve misunderstood the answer). Either way a quick clarification will hopefully avoid more mails.”
If we scroll up, Mr Day responds internally and he says:
“Sorry if not clear; there are two points – firstly the D+O appears to be the policy which would cover this eventuality, and our understanding is the first 25,000 of any claim is not covered (this is being verified).
“Secondly, our broker (Miller) will meet with [Royal Mail’s] (JLT) to determine the best way to engage with D+O insurer/s which will enable us to understand the possible impact on this (and possibly other) policy premia going forward.
“The subtlety theory is that we need to inform existing insurers of a potential new risk (in hand) without ‘scaring the horses’ into immediately increasing future costs, and this process is made more complex by being a joint policy with [Royal Mail] (the only one that is configured in this way).
“Will provide a fuller update when we have established all the facts, next week.
“Charles – please confirm my understanding is correct.”
If we scroll up there is an email from Paula Vennells, forwarding that response to Alasdair Marnoch. She says:
“Hi Alasdair, did you get the clarification you asked for?
“I also left a message with Chris as his note on insurance cover raised two questions for me. Firstly, that there could be an impact re future costs across several policies. I understand D&O but which others – may be obvious to the experts but it isn’t to me. And secondly, his note seemed to imply we were going to check if we are covered – does that mean we may not be/we don’t know?
“Chris’ reply to my question is below. The line which bothers me slightly is ‘D&O appears to be the policy which would cover …’
“Am I being too hawkish? I would have preferred to read ‘D&O is the policy which (if needed) will cover …’
“Does Chris’ reply to you give more comfort? I don’t want to pile the pressure on Chris by going again unnecessarily.”
If we scroll up to the top, we have the response from Mr Marnoch. He says that he’s afraid Chris’ answer does not address the key question as to whether or not the Post Office have got cover:
“He dropped me a note which suggested we do but seems to suggest it would be under D&O cover. Like you I’m concerned that we believe this policy would cover us for this sort of issue – rather I’m sure we will have a PI policy which will cover us for this and any other like issue.
“The follow-on issue is that to avoid the underwriters rejecting our claim, we need to keep them abreast of developments and any possible claims (on this and any other issues). Experience tells me that keeping underwriters updated on this sort of developing issue can be very tricky getting the balance right in levels of disclosure. Normally I would have expected Chris to have been involved in discussions with Susan testing the thinking at each stage of the process.
“I’ve gone back to Chris for further clarification but I suggest it’s handled in a face-to-face conversation …
“The issues about any disclosure is that it will affect our premiums even if the underwriters don’t pay out. It’s a bit like having to report near misses when you’re driving as well as crashes. The result will be higher premiums, etc, etc. But turn the issue, hassle/cost) on its head and we can reverse this problem into a cost saving/process improvement opportunity by combining necessary reporting to underwriters with improvements on our own processes identifying mistakes and a tracking mechanisms to their resolution.”
I’m afraid I’m going through the chain of events so I am going to have to read a fair amount from this chain.
Almost a week goes by after that and then the Board is provided with an update on the work programme arising from the Horizon report. That can be found at POL00298004. There were two versions of this report that were sent to Board members; do you recall, in broad terms, this document?
Susannah Storey: I do recall it in broad terms.
Mr Blake: The document says:
“Further to the Board discussion on 16 July, this note provides an update on how we’re taking forward the programme of work …”
So this is essentially how we are taking forward the matters raised at that Board meeting.
We see, if we scroll down, there’s a section on completing the Second Sight reviews.
Over the page and on to page 3, the bottom of page 3, where we see there’s “Prosecution Case Review”, and it outlines that:
“Through our criminal law solicitors, Cartwright King, we are complying with this duty by reviewing past and present prosecutions to identify any cases where Second Sight Report ought to be disclosed.”
Scrolling over the page to paragraph 17, there’s reference there to Brian Altman’s review.
Can we go to paragraph 30, on page 7, please. Paragraph 30 says:
“The Board requested further information on the insurance position: a separate note is attached on this. Annexe A also provides further information Directors’ duties as they relate to this review.”
I’m going to just now take you to the covering email to that. That can be found at POL00145882. If we start on the bottom of page 3, we see Alwen Lyons emails and we’ll scroll up in a bit to see the group, but you are one of the recipients.
“Dear All
“Please find attached a detailed note from Paula providing an update on our programme of work in response to the Horizon investigation.”
If we scroll up, we can see copied to you a response from Alasdair Marnoch, at the bottom of that email. He says:
“Finally I seem to be missing the insurance update – could you please resend.”
That’s a reference to the insurance update that’s promised at page 30 of that document that I have just taken you to.
If we keep on scrolling up, please, Martin Edwards then responds and says:
“Apologies all, it should have been this version of the note attached to yesterday’s email, which incorporates the insurance information (at paragraph 31) rather than leave that in a standalone note.”
I’m going to take you to that updated version very shortly but, before I do that, if we could just have a look at the email from Alice Perkins. She emails, again, the Board, including yourself. She says:
“I had some thoughts which I want to put on record about the way ahead.
“First, while it is clear that we are committed to using [Second Sight] for the 47 cases which are already in the frame for their review, it is extremely important that we cap their involvement at that.”
This is a separate issue but I’d just like to pause there and ask you about that. Do you recall a movement towards capping Second Sight’s involvement at that stage?
Susannah Storey: I mean, I can obviously read the words on this page. I don’t recall thinking of it in that way at that time. I thought that, after the 16 July Board meeting, there were a whole load of actions and that included work for Second Sight.
Mr Blake: Because it follows in the next sentence:
“The moment they are involved in additional cases beyond these, we will have lost the ability to end the relationship with them …”
Were you aware of a desire to end the relationship with Second Sight at that stage?
Susannah Storey: I mean, this and all the other things you have just shown me are a series of emails that were coming in after the Board meeting. I would have read these words, noted that they’re from the Chair. I don’t particularly remember that issue to a greater extent than any of the others at this point.
Mr Blake: It being, I think, on your own evidence, quite a significant Board meeting of all the Board meetings that we’ve seen, would you have paid quite a lot of care and attention to the emails you were receiving at that stage?
Susannah Storey: You mean 16 July?
Mr Blake: Yes.
Susannah Storey: Yeah, absolutely. I mean, I think that, even in the ones you were just showing, I’m sure we’ll come back to the insurance question, but you can see emails coming out on 19 July which is after we would even have received the minutes, then emails to and fro, some of which I was not copied on through the weekend. But yeah, there was a whole series of actions and I would have been very focused on it because, going back to our conversation earlier, I was irritated about the handling.
Mr Blake: Reading on, she says:
“Second, we need to pin down and cap [Second Sight’s] costs …
“Third, we need a proper process of appointing the independent Chair of the Working Party.”
Then, “Finally”, she says:
“… I have asked Susan to keep the Board fully informed of future developments and to alert me of anything which she is unable to resolve which could get in the way of getting the job done in the way it needs to be done. She will be seeking conversations about all of this with all the [Non-Executive Directors] on an individual basis and will be in touch with you to arrange these.”
Moving on, please, to POL00006590, this is the updated version of the report that was circulated to the Board.
Susannah Storey: Sorry, is this – just to clarify, is this the one that you’re saying that Martin Edwards sent us –
Mr Blake: Exactly.
Susannah Storey: Okay.
Mr Blake: So Martin Edwards sent an email on Saturday, 27 July that said, “Apologies all, It should have been this version of the note”.
Susannah Storey: Okay.
Mr Blake: This is the updated version of that note. If we could turn, please, to paragraph 30 and 31, this is the insurance section. It’s page 8. Thank you very much.
So we see there a changed form of words. It’s an expanded form of words at paragraph 31, addressing the insurance position, and it says:
“The Board requested further clarification on their exposure as directors in relation to the review. As set out in more detail at Annexe A, it is highly unlikely that any individual director would have any personal liability in connection with this review …”
Then it refers to insurance being in place to cover their liabilities, and it gives the amount, and then at paragraph 32:
“In response to the Board’s request for a post mortem, internal audit has now been tasked with carrying out a review”, et cetera.
So there’s just a slight addition on paragraph 31 to what was previously in paragraph 30.
If we scroll down, we can see Annexe A, it sets out there the Directors’ duties, the focus being very much on individual liability of directors.
Could we please now turn to POL00193010, which is another exchange from Alasdair Marnoch at the bottom of the first page. Thank you. If we scroll down slightly, he says:
“I’m afraid the para on insurance does not answer the question which was about PI cover for the [Post Office] not D&O cover for the Directors.
“The key question is does the [Post Office] have insurance cover in the event of a material claim (or perhaps a ‘class action’ type claim)? Probably easiest if I pick it up directly with Chris.”
Irrespective of this particular email chain and whether you focused on this particular issue at this time or not, looking at it, is that a big issue for the Post Office, whether it has insurance cover in the event of, for example, a class action claim?
Susannah Storey: My recollection of the 16 July Board meeting was we wanted to make sure we were prudent in taking all the steps we thought needed to be taken, in light of our understanding at that time of what the Second Sight Interim Report was saying. So there was a whole raft of things. I took some personal comfort from the fact Alasdair Marnoch, as Chair of ARC, and who I found to be a very diligent individual, was going to take the lead on behalf of the Non-Executive Directors, I think in his capacity as Audit and Risk Committee Chair, for kind of leading some of these areas of work.
This issue and all the to and fro you’ve just shown me on insurance, some of which I wasn’t copied on, I don’t remember that being high in my list of worry areas. I wonder if it’s simply that Alasdair Marnoch being diligent, wanted to make sure if the risk profile of this set of issues – particularly I think we were worrying then about disclosure and some of the things that had been in Susan Crichton’s paper of 12 July, he may simply have felt they needed to be notified.
But I don’t remember particularly focusing on this issue, I’m afraid.
Mr Blake: We saw this morning the references to, for example, the Shoosmiths case and potentially 85 claimants. We’re now at a stage where we have the Second Sight Interim Report, potential class actions on the horizon. The notification to the insurers was presumably quite an important issue for Non-Executive Directors as a whole, wasn’t it?
Susannah Storey: All I’m saying is I personally don’t particularly remember that being high on my list. Alasdair perhaps had had experience of some other business where they had needed to notify the insurers. I also don’t remember particularly focusing on material claims. I think I was more focused on what are the steps we are taking around what became the Mediation Scheme, trying to improve the business processes because that was the single biggest kind of issue I had in front of mind, that if there were problems with helplines, or the way kind of interface with the system worked, that was a big issue and, of course, getting a more clear view of what the actual situation was.
Mr Blake: If we scroll up we can see a response from Chris Day internally to Charles Colquhoun. He says:
“Charles, please see if there’s a straightforward paragraph we can write on this (should go in my name) rather than giving them the whole insurance paper.”
If we scroll up, there’s again an internal discussion about this, and Charles Colquhoun says:
“Chris – I don’t think Alasdair saw the insurance paper and maybe the 2 points below (and in particular the second) covers his point? I’ll be in first thing tomorrow to discuss.”
Again, addressing Directors and Officers liability and professional indemnity, which refers to the limit of indemnity:
“This covers a breach of duty by [the Post Office] resulting in a third party loss”, et cetera.
Could we please turn now to POL00428835. There was reference before in one of the email chains we saw to Susan Crichton following up with all Non-Executive Directors at this time personally, and it is at this document, so it’s POL00428835. We’re now at the 7 August, and she is contacting you directly. If we scroll down, we can see that’s in response to the email that was in this chain, the Alice Perkins email. If we scroll up, we can see she says:
“Susannah – hope you are having a good break, please let me know if you would like to have a discussion as per Alice’s email, and I will organise a time to meet/talk.”
Did you speak to Susan Crichton at this point in time?
Susannah Storey: No, I don’t think I did because I’ve now seen an email or note later in September, I think, where Susan Crichton says she had spoken or exchanged emails with the other NEDs and not me. So, from that record, I’m inferring that I didn’t. I don’t know if, when we see here, it’s saying, “hope you are having a good break”, it is likely that, at that time, I was perhaps on a holiday from work, I don’t know.
But my – I drew real comfort from the fact Alasdair Marnoch was taking an active role in this work, as set out in 16 July.
Mr Blake: You were also at this time a Non-Executive Director at the Post Office.
Susannah Storey: (The witness nodded)
Mr Blake: Looking at it now, do you think that’s an email that you should have followed up on?
Susannah Storey: I don’t know if we know that I didn’t follow up. I know, based on the information that I’ve seen, that I didn’t meet her, so I don’t know if it was a logistical thing and, by the time she was updating in the autumn it hadn’t happened. Of course, I think now, when you look at it, it would have been good to speak to her, not least because I now know all of the things you’ve said about her not being in the room, and so on.
But, at the time, I felt there was a clear set of actions, the Non-Executive Director, Alasdair, was taking a lead. So I’m not sure, in my shoes at the time, I did feel strongly and, obviously, if I had, I would have done something different.
Mr Blake: We have seen all of those emails from Alasdair Marnoch about the insurance position and the lack of clarity on the issue that he is chasing down.
Did you have any discussion with Susan Crichton or anybody else at this time about the notification to the Post Office’s insurers?
Susannah Storey: No, not about the insurers. As I say, I’m pretty sure it wasn’t me who raised it at 16 July. I also wasn’t the person charged with following up. So I wouldn’t particularly – I would have seen some of these emails coming in and the next opportunity to discuss any of the actions from the 16 July Board meeting would have been at the September Board meeting as a group.
Mr Blake: Let’s have a quick look at the insurance notification itself. That’s at POL00112856. This is an email that we’ve seen a few times before:
“Please find attached details received of a new D&O matter for your consideration. The notice concerns challenges which have been made to the accounting system used in the Post Office Network …”
It says about halfway down that covering email:
“A review of the Horizon system was undertaken and whilst recommendations were made for improvements no systemic problems were revealed which would call into question the charges previously made against subpostmasters. It is of concern to Post Office that the expert of one prosecution witness, Dr Gareth Jenkins of Fujitsu, may have failed to disclose certain problems in the Horizon system potentially relevant to a case. In the event it is discovered that improper prosecution was undertaken, the risk exists of a claim being made against the Post Office and Directors and Officers for malicious prosecution [et cetera]. It is unclear at this time the extent of possible exposure … A copy of your slip is also attached …”
If we go over the page, we can see the note that was prepared by Bond Dickinson and we’ve addressed this with witnesses from Bond Dickinson. It’s over the page, please, there’s a section on “Prosecutions & Convictions”. Again, in similar words in relation to Mr Jenkins, it says:
“As noted above, where circumstances warrant, Post Office prosecutes subpostmasters … Post Office is reviewing prosecutions …
“Post Office has an obligation to consider whether further disclosure should be made to defendants. It is of concern to Post Office that the expert evidence of one prosecution witness, Dr Gareth Jenkins of Fujitsu, may have failed to disclose certain problems in the Horizon system potentially relevant to a case.”
What were you aware of in respect of Gareth Jenkins at this time?
Susannah Storey: I wasn’t aware, I don’t recall being aware of Gareth Jenkins until a long, long time later.
Mr Blake: Looking at this now, does this look to you to be a fair and accurate notification of the position?
Susannah Storey: I thought you showed on the emails earlier, Alasdair saying that there’d been a misunderstanding with Chris about whether it was D&O or which insurance. It feels as if somewhere underneath in the business, some people are instructing Bond Dickinson to write a note. They’re obviously making some assertions.
None of this, I think, came to us and it wasn’t something that we knew at the time, and I think you also showed an email where Chris Day is saying, “Don’t send the Board the whole note, just do a paragraph”.
Mr Blake: Is this note or is the information contained in this note the kind of information that you would expect to have been shared at Board level?
Susannah Storey: I can’t really comment on this note per se because I’ve only seen it for the first time a few days ago. I think the point I was trying to make before about not being blindsided, giving us early warning of risks and all of the areas that we discussed and are minuted in the 16 July Board meeting, to my mind, were the strongest signal we, as a group of Non-Executive Directors, could have sent at that time that this was now, we understood, to be a much more complicated issue, having received the Second Sight Interim Report, we wanted to see a series of actions and we wanted to be aware of what was going on.
So, of course, now that I see all of this other information that we didn’t see, I can’t understand why that wasn’t shared with the Board, having given such a strong signal at that time on this specific issue. This was not a general signal; this was specifically about all of the things that flowed from the Second Sight Interim Report.
Mr Blake: A concern that an expert witness had given unreliable evidence, whether it was in a case or many cases, would you have expected that to have been brought to your attention?
Susannah Storey: Yeah, I mean, I think, as I was saying, there was a lot of new news, certainly to me and I think to the other Non-Executive Directors, at that 16 July Board meeting. After that, if there’s any material risk, issue, concern, worry, in my experience of Boards, when you’re in a difficult phase, that’s when you want and expect people to be at their most open.
Mr Blake: In your view, why did that information not reach you, looking at what you know now?
Susannah Storey: I don’t know. I don’t know.
Mr Blake: Can we have look at the October Board meeting. That’s at POL00158089.
Thank you. It has you down as being present but only at items 13/97 to 13/99. If we scroll down, we see 13/97 is the “Introduction”. You then have a section on “Government Funding and Strategic Plan”. Over the page, please, “Role of the Board” – if we scroll down – “and Relationship with ShEx Post-Funding”. It says there:
“The Board noted that Will Gibson would soon be leaving ShEx and the Chairman agreed to discuss his replacement and the ShEx representative on the Board with Mark Russell, Chief Executive, ShEx.”
Then it says:
“Susannah Storey left the meeting.”
Can you recall why you were only present for those first few items at that particular meeting?
Susannah Storey: Yes, this is the issue that I mentioned in my witness statement, that in the autumn of 2013, the then Government decided it wanted to take £50 off everybody’s energy bill in the country, and the people tasked by the Cabinet Secretary to do that, lead that work, was my jobshare partner and I. So just at this precise time, it was very intense kind of conflict of roles, which meant I had to leave that meeting early.
Mr Blake: We see there at (b) it’s also a period of transition within ShEx itself; is that right?
Susannah Storey: My recollection is that Will Gibson was taking paternity leave and so would be leaving the Shareholder Executive team.
Mr Blake: So there are changes taking place in the Shareholder Executive team?
Susannah Storey: (The witness nodded)
Mr Blake: You yourself have described it as an exceptionally busy period of your career, outside of Post Office work; is that right?
Susannah Storey: That was an exceptionally busy period in that role. I’ve had many busy periods in my career.
Mr Blake: If we scroll down, we can see that, if we go over the page and over to another page, if we keep on scrolling down over to the next page, we have the “Chief Executives Report” and then we have at F, a section on “Project Sparrow”:
“Sir Anthony Hooper has now been appointed as Chairman of the Horizon Working Group. The business was working to prepare the team of people to work on the mediation and case information necessary, as there were likely to be up to 150 cases put to the Working Party for a decision on whether they progressed to the mediation process.”
You weren’t present at the Board during that discussion of Project Sparrow; is that right?
Susannah Storey: Yeah, the – I think – the minutes will be correct in terms of the chronology of when I left. I obviously would have read the papers, including the Chief Executive’s update and including this update.
Mr Blake: But there was no Government representative on the Board whilst this item was being discussed?
Susannah Storey: Well, I was on the Board. I wasn’t at the Board at this point. I think this is the meeting, as well, in October 2013 that Mark Russell, who was the Director General by then of the Shareholder Executive, I think he came but the written information doesn’t help me now work out whether he – which bits he came for.
Mr Blake: I think if we turn to the second page, there’s a mention of Mark Russell in relation to the changes that are taking place. If we scroll down, at (b) there’s a reference to Mark Russell but I don’t think he’s actually mentioned on the first page as being present or in attendance.
So you can’t say whether he was there for the discussion of Project Sparrow –
Susannah Storey: I can’t, I can’t.
Mr Blake: But what we can be sure of is that there was no Non-Executive Director who was representing the Government’s interests on that Board during that discussion at the Board?
Susannah Storey: That’s right.
Mr Blake: And if we turn to POL00027136, we see there this is the “Chief Executive’s Report”. If we turn to page 5, we can see there’s the section on Project Sparrow that’s then discussed at that Board meeting.
Isn’t this exactly the period of time when it was important to have a ShEx representative sitting at the Board and discussing Project Sparrow with the Board?
Susannah Storey: I mean, I think the reason why we put a shareholder representative on the Board after separation was because we felt all the issues that the Post Office were dealing with were difficult and important and, therefore, we generally wanted to increase visibility. Of course, I take your point, at this point, and at every Board after 16 July, there was a discussion about the issues that became known as Project Sparrow. Would it have been better if I was there? Yes. Did I have an irreconcilable conflict on that day? Yes. Was this part of the reason why I concluded I simply couldn’t keep doing this role in the way that I wanted to? Yes.
And that is why, at this point, I started my conversations with the Shareholder Executive to say that I wanted to resign a year early.
Mr Blake: Was there any discussion prior to that point when things started to become particularly busy in your other role, as to somebody to replace you or step in for you?
Susannah Storey: I have been clear that I – my other role was a job share, so I was working three days a week, and my jobshare partner was working three days a week, so in every week, there would be two days where I wasn’t working in the office, doing meetings for that employer, and, therefore, generally in that year, I felt I could give sufficient time to the Post Office, and in a way, the sort of variable of whether or not things happened was my time. So I would do the work as needed.
But I had a sort of growing feeling through this autumn that this was continuing to be a very complicated Board with a lot of difficult issues, not only this one because, in another swim lane, as it were, we were just about to announce the new funding, which was the thing we’d been working on to make the business sustainable for the last year and a half. That was announced I think, in November 2013.
So there was a lot going on, and yeah, that’s why I started my conversations with the Shareholder Executive.
Mr Blake: To summarise where we’re at: busy Board, dealing not just with Sparrow issues and Horizon issues but other issues; you personally had a lot going on in your other role; we’ve also discussed that you weren’t physically present at ShEx any more, not part of ShEx any more. Is that a combination of factors that caused real issues?
Susannah Storey: I have said in my witness statement that I thought the model that was adopted after I left was better. There were structural obstacles, as we’ve discussed, in relation to information sharing. I think, over time, I felt that I was simply getting more distant from the Government, and that – I found that personally difficult. I haven’t had any period of my career as a civil servant when I’ve seen ministers less on an issue than I did at this time. As I said in my statement, I only saw Jo Swinson once, in February 2013.
So yes, I didn’t think it was completely satisfactory. Was it still better having me than no one? Yes, I’m sure it was. But, you know, we could debate counterfactuals.
Mr Blake: Sir, that might be an appropriate moment to take our lunch break.
Sir Wyn Williams: All right. What time shall we resume?
Mr Blake: We can come back at 2.00.
Sir Wyn Williams: 2.00. Fine.
(12.58 pm)
(The Short Adjournment)
(2.02 pm)
Sir Wyn Williams: I see you’ve demoted Mr Beer, Mr Blake. Very good. Off you go.
Mr Blake: Thank you very much.
Before the break, we were looking at the 31 October 2013 Board meeting. I am now going to turn to the November Board meeting, and that can be found at POL00021520.
Thank you. These are the minutes and we can see there that you are not in attendance on that day and have provided your apologies. Again, is that because the work at the new department was very busy on that particular occasion?
Susannah Storey: Yes, it’s the same issue that was in those few weeks, yeah.
Mr Blake: On this occasion, if we scroll down, we can see there is a significant update on Horizon, the Board has noted the progress on Project Sparrow, there’s discussion of the Working Group.
If we go over the page, we see there at (c) past prosecutions being discussed; at (d) future prosecutions being discussed; there’s a request for a note from the General Counsel explaining who was named in past prosecutions and the liability for the business. If we go over to page 3, please, towards the bottom of page 3, we can see there at (g):
“The Board noted the update on Risk Management and the actions being taken as set out in [that] paper.”
I’d like to take you to the paper. It’s at POL00027483. It’s a paper prepared by Chris Aujard. If we have a look at 2.2, “Allegations relating to the integrity of the Horizon system”:
“There is a risk that the allegations relating to the integrity of the Horizon system, if not contained, could raise wider questions over the robustness of our core systems and our ability to operate, damaging (amongst other matters) current partnerships, new areas of expansion and public and government confidence.”
This meeting, would you accept, was an important Board meeting in the context of Horizon issues?
Susannah Storey: I think all the Boards, as I’ve said, after July, were important on this issue because each one took an update, yeah.
Mr Blake: Here we have the risk management update referring there to potential issues to do with Government confidence arising from Horizon. Wasn’t that an important moment to have the Government representative on the Board present at the Board meeting?
Susannah Storey: I’m not sure the paper and the moment, if you see what I mean, are the key thing. The bigger point you’re making is that I wasn’t present at that Board, which, as I’ve described, was because of my other role. I would have read the papers I would have been doing the follow-up around the edges, including with the Shareholder Team. It’s not totally clear to me whether that point on Government confidence is actually about the revenue lines from Government or more widely but, absolutely, I mean, this issue was extremely significant. We’d put in train all of these actions. It was high now on the Post Office’s risk register. So –
Mr Blake: If we can turn back to the minutes themselves it’s POL00021520. I mean, there was discussion at this meeting. This was the meeting where past prosecutions were discussed, future prosecutions were discussed.
Susannah Storey: Well, the Audit and Risk Committee had taken a discussion on the future prosecutions paper and hadn’t reached a decision, and then decided to come back in February, as we then see, including with the discussion at the full Board but yes, I mean, a whole series of important issues were being discussed at this and the other Board meetings.
Mr Blake: At this time, you also weren’t sitting on the Audit and Risk Committee any more?
Susannah Storey: I was not.
Mr Blake: Why not put in place an immediate replacement at this stage?
Susannah Storey: Well, when you’re appointed to a Board, there’s a whole series of things happen and, in order to be replaced, the Shareholder Team needed to find a replacement, the Post Office would have to accept that replacement and the steps would have to be taken. So I think I was flagging, at this stage, as I already said, to Mark Russell, who was my line manager and the Director General and responsible for the Shareholder Executive, that I had these concerns.
I don’t think it would have been very easy just to sub-in a person who wasn’t a Board member, as a sort of observer, if that’s what you mean. But I did feel – and that’s why I took the steps to step down from this Board because I felt whoever did it needed to be there and, as you know and as I’ve said in my statement, I was very clear to my successor, which in the end ended up being Richard Callard, that he needed, in my view, to be on both the Sparrow Subcommittee, which was the place where these issues were being principally addressed, and on the Audit and Risk Committee.
Mr Blake: Looking back at those two meetings that we’ve just been looking at, do you think there were missed opportunities there, where –
Susannah Storey: Um, I’ve – I’ve set out in my statement a series of reflections and missed opportunities. I didn’t particularly think these – this meeting and the one before fell into that but it’s obviously hard to say when I wasn’t at the meeting.
Mr Blake: Moving on to discussions regarding the Post Office’s prosecution role. You were party to some of those discussions in February 2014. By that stage, had matters moved on in your other role? Was it less work taking place on the £50 –
Susannah Storey: It was completed. It had been implemented and the customers who were getting that discount had got it. So yes, it was a short, intense period that just happened to coincide with this November Board meeting.
Mr Blake: Thank you. If that could come down, please.
By February 2014, there seemed to be three options on the table, Options A, B and C: Option A being preservation of the status quo; Option B focusing more on egregious conduct; and Option C being ceasing all prosecution conduct.
I’m going to turn to a few documents where those options are discussed, where you have contributed. Can we please start at POL00167751. It’s page 4, 7 February 2013.
Thank you. If we turn to page 4, we can see there is an email chain. Can you assist us, this is referring to an Audit and Risk Committee teleconference on the 11 February. You’re copied into or you’re a recipient of that email: can you assist us with why that would have been sent to you at that time?
Susannah Storey: So my understanding is that in November 2013, the Audit and Risk Committee had taken a paper on future prosecutions, which at the time had Options A to D. They asked for more information and, therefore, it was coming back to the following Audit and Risk Committee, which was in February 2014.
Although I wasn’t on the Audit and Risk Committee, I think the decision had been taken at the previous Audit and Risk Committee that the full Board should at least be able to provide their input on the options set out in the paper but the actual decision was going to be taken by the Audit and Risk Committee. So my understanding of this Friday, 7 February 2014 email is that that is that Audit and Risk Committee paper being sent to us.
Mr Blake: Thank you. At this period, if your diary had fewer commitments, was that an opportunity where you could have rejoined the Audit and Risk Committee?
Susannah Storey: When I took the decision at the beginning of March 2013 about the following year and which committees to sit on, I felt that was for the year. It was quite difficult, I think, to chop and change, in terms of committee membership.
Mr Blake: At this point, there was still not a Government representative on the Audit and Risk Committee?
Susannah Storey: No, nothing had changed in the sense that, from April 2013 until April 2014, there wasn’t a Government representative. At April 2014, when, in the end, Richard Callard took over from me, he was on the Audit and Risk Committee.
Mr Blake: Thank you. If we scroll up, please, to page 3. We see there Alice Perkins has contributed her view, that Option C has been dismissed “too summarily”. She says:
“I do of course understand that we couldn’t just throw our cases at the CPS and walk away at a moment’s notice. And I appreciate that we might find the CPS route less satisfactory in cases where we were convinced we should be prosecuting. But if it is the case that the banks and other financial institutions are content to live with this, why are we different?”
Could I please turn to UKGI00043711. We then have Paula Vennells’ contribution to this discussion, and she says:
“I thought it would be worth sharing my thoughts on why we are different; in my mind it relates to the operational nature of [Post Office] rather than product or services, where there is more commonality:
“The difference and perhaps not immediately obvious to our leading Counsel is scale. None of the businesses Brian Altman compared us to has a network the size of ours …”
If we scroll down, she says:
“We are more complex and operate without the ability to monitor our agents easily …
“This is an important area for the business and so I am particularly grateful to our [Non-Executive Directors] for your attention. We will do what we can to facilitate a good debate.”
At that point in time, can you recall what the different positions were amongst the Board?
Susannah Storey: You mean at 22.57 on Sunday night?
Mr Blake: Exactly. That weekend, over the course of that weekend.
Susannah Storey: Well, I think it’s, as just shown, the paper had come round, Alice had set out her position, Paula has just disclosed. There was actually a chain, I think, where everybody was replying and I replied on the Monday morning, just after 7.00 am.
Mr Blake: We have your reply at POL00138141. It’s the bottom of the first page, and you say:
“Thanks for copying me on these papers and given I am not on the [Audit and Risk Committee Audit], I am just passing my thoughts for information. But my read of the paper was similar to Alice’s. It doesn’t seem we had sufficient reasons for discard Option C and I think it would be interesting to explore further. It seems hard to imagine in 2014 [the Post Office] is so different from other organisations to necessitate this approach.
“As an aside, I also find the statistics for [the Post Office] surprising and I can’t help wondering if any other organisation, to the extent we could get comparable data, would have anything like this level of situations that need investigation. Either way, I would have thought any next steps must be accompanied by more focus on training and better support. But sure that’s ongoing anyway.”
Can you assist us with why you took the view you did, as opposed to the view that Paula Vennells has expressed in that previous email?
Susannah Storey: I mean, I think the – what I wrote here speaks for itself. I hadn’t been in the November 2013 ARC discussion nor would I therefore have seen the ARC paper which came in November 2013. So, notwithstanding the trail in on this issue, this was the first time that I’d seen it, and I think I would have had in my mind all of the things that we had set in train as actions, and the papers we’d read from the 12 July paper onwards, the year before, and I felt instinctively uncomfortable with prosecutions and I didn’t think the data was there in the paper to back it up.
Mr Blake: Had you discussed it with ShEx at all?
Susannah Storey: I don’t remember having discussed this ARC paper, bearing in mind we got it a few days before, at the time of my reply. This would be the sort of thing I was doing as a Board member with my Board hat on, so I wouldn’t routinely check with them before. I certainly would have been discussing it with them, though, because Richard Callard obviously was getting up to speed. He was the new Will Gibson, in my mind, and I certainly would have told him what I thought about this and, as you know, he came also to the February and to the March Board.
Mr Blake: Absolutely. Let’s have a look at those Board minutes, please. Can we please turn to POL00021522. This is the 26 February Board meeting. It lists you as being present and Mr Callard as being in attendance.
If we scroll down, we can see:
“… the Chairman opened the meeting and welcomed Richard Callard, Non-Executive Director designate, Shareholder Executive, who would be attending this and the March Board before taking over from Susannah Storey.”
Can we scroll down, please, to the bottom of page 2, “Review of the Current Prosecution Policy”, and then over the page we see that:
“The Board approved the implementation of Option B as a new prosecutions policy …”
Do you recall speaking up in favour of your preferred option, Option C?
Susannah Storey: I’d already expressed my views in the email chain and then this was being considered by the ARC. I can’t remember if, in the room, those of us who had a different view expressed it again but when you don’t chair a subcommittee, no one Board member has a veto. It’s – I’m not sure at this point I would have changed it but I can’t remember if I said anything in particular.
Mr Blake: Can we please turn to POL00021523, and this is the March meeting. This was your final Board meeting, was it?
Susannah Storey: It was.
Mr Blake: We have you down for items 14/31 to 14/38. Richard Callard present. Was there a particular reason why you were only present for part of that meeting?
Susannah Storey: I can’t recall now why that was.
Mr Blake: If we scroll down, we can see Project Sparrow is addressed:
“The CEO reminded the Board of the background to Sparrow and the Initial Complaint Review and Mediation Scheme, and introduced the work which Linklaters had been asked to undertake to clarify the Company’s legal position.”
So you were present for the discussion regarding Project Sparrow and Linklaters.
If we scroll down to page 8, please. At 14/43 we have the “Project Sparrow – Insurance” issue being raised, so that is a moment at which you’re not present at this particular Board. It says:
“The Board discussed the Professional Indemnity insurance and the Sparrow compensation risks. The CFO explained that [Professional Indemnity] insurance could only cover incidents for which the Business was legally responsible. Therefore any combination paid outside that legal requirement could not be covered by [Professional Indemnity] insurance.
“The Board asked the Business to consider enhancing its insurance expertise and to reconsider how it tracks events and near misses which should be reported to the insurers. The CFO was asked to provide an update for the next ARC on his proposal for [Professional Indemnity] insurance.”
So you can’t recall why it was that you weren’t present at this meeting for this discussion?
Susannah Storey: No.
Mr Blake: Again, looking at this now, does that seem like a relatively significant moment, the discussion of the insurance position relating to Project Sparrow?
Susannah Storey: No. My view on the insurance issue is as we’d already discussed earlier today. I think this would probably be the follow-up from all of the actions initiated in July, which Alasdair had been taking forward.
Mr Blake: Having looked at the way that the notification took place and the information that was in that notification, do you think it would have been helpful to have scrutinised the insurance notification more, at Board level?
Susannah Storey: I think the point you’re making is about information that was coming to the Board, which could have helped overall in this situation and, obviously, as I said before, if we had seen some of those papers, if the Executive had provided some of that information after we asked them not to blindside us and to be open with us, then of course that would have helped. Sorry, I wasn’t seeing it as a sort of insurance issue, per se.
You’re making the point if I had seen the Bond Dickinson note that mentioned Gareth Jenkins in the summer of 2013, would that have made the difference? My answer is yes.
Mr Blake: There’s reference in these Board minutes to the Linklaters advice. I’d very briefly like to take you to that. That’s at POL00030724. The Linklaters advice can be found at page 4. Do you recall that advice going to the Board.
Susannah Storey: Yes, I do, and the partner came to the Board.
Mr Blake: Was it unusual, in your experience, for legal advice of this nature to be shared at Board level?
Susannah Storey: As a general rule in all the Board conversations and situations I’ve seen, and, you know, even now, thinking about me as an executive with a Board of Non-Executive Directors, you don’t always share all of the underlying information but what you do expect is, if the underlying information is material, that it’s being accurately summarised and, if there’s something particular that would benefit the reader from seeing the whole paper, that you share the whole paper.
So I think me as the Board wanted that Linklaters advice. It was something we commissioned ourselves. So I think I found it helpful to see both the paper and the partner, as it were.
Mr Blake: If we scroll over the page, please, we can see the “Executive Summary”. The Linklaters advice, it says summarises:
“… our key conclusions on the legal analysis of the complaints made by [postmasters] about Horizon.”
At 1.3 it says:
“The key factual issue is whether and to what extent Horizon might be said to be reliable, what defects there may be in it and how any such defects might manifest themselves and translate into errors in the state of the account between an individual [subpostmaster] and the Post Office. Such relevant legal risks as exist arise only in the event that there are provable malfunctions in the Horizon system which are causative of losses on the part of the [subpostmaster].”
From your perspective, was it not important at this time to grapple urgently with whether the system was in fact reliable, which is something that wasn’t addressed by this advice?
Susannah Storey: Yeah, and I think that’s why, at this Board, and then afterwards, the Deloitte work was commissioned because the premise of this advice as set out was – and I’m summarising, these might not be the right words – but the system works. So I think what Linklaters were saying, which we agreed with, was you need to get some basis check that point.
Mr Blake: We’re now in March 2014.
Susannah Storey: (The witness nodded)
Mr Blake: Why, in your view, are things moving so slowly in that respect?
Susannah Storey: I think if you look at the long arc of this issue where, unfortunately, problems have been arising for over a decade, this to us at the time, to us as a Board, who’d had the Second Sight Interim Report in July 2013, actually felt that we’d taken a lot of actions, we were trying to uncover things, and move at pace. Of course, often with complex issues, each stone you lift, you find something more complicated, and I think we felt that, as well as all of the work described in paragraph 140 of my statement, we wanted then to have this Deloitte piece of work, which was a way of looking at the IT problems. This Linklaters piece of work was a question of legal issues and compensation, and so on.
Mr Blake: Wasn’t the functioning of the system quite an obvious and large stone to unturn, though?
Susannah Storey: Well, the Second Sight work had been looking at the system and related issues. The 8 July report, the Interim Report, as we’ve discussed, had a series of complicated and difficult messages: on the one hand the words “no systemic issues” but, on the other hand, it was very clear through the spot reviews that a combination of factors could create problems.
So, at the time, I think we felt taking the actions, including with the Mediation Scheme and the other steps, was a way to try and be prudent about this set of issues but we also, as a Board, hadn’t commissioned anything other than the Second Sight Interim Report. So I think this was – it felt at the time another important step.
Mr Blake: I’m going to turn to one final issue very briefly, and that’s risk reporting. Prior to becoming a Non-Executive Director, was there a system for reporting Post Office risks within ShEx that you were aware of?
Susannah Storey: So during my time in the Shareholder Executive, I joined in 2006, I worked on a few different situations and, in simple terms, I think the role of that team looking after a series of different situations, evolved and matured, including in relation to risk reporting.
So we used to have quarterly meetings in relation to the individual companies or projects, if it wasn’t a company, and the risk reporting was on a journey of improvement. I don’t remember thinking – it’s hard to think back now to all of the different iterations. I think it was broadly in line with best practice at the time, for example, when the Department or in the private sector. If you looked at it now, with a 2024 hat on, I think you’d think it was quite unsophisticated. But I don’t think we were particularly out of line.
Mr Blake: Did the system change while you were a Non-Executive Director in respect of your ability to report risks to ShEx?
Susannah Storey: When I was a Non-Executive Director, I would have been primarily interfacing with the Post Office’s risk practices and what we did as that Board through the Audit and Risk Committee to improve our risk management and to look at different areas of what I would call the control environment. As we’ve discussed, I would be giving reflection, views, commentary to the Shareholder Team. They were then responsible for what was in the risk registers that they were managing. So I wouldn’t have seen those risk registers that they had after the 14 March 2012, when I left the building.
Mr Blake: Thank you, sir, those are all the questions I have.
Questioned by Sir Wyn Williams
Sir Wyn Williams: Before CPs ask any questions, I have been musing about this debate that the Board had about Options B or C, in terms of Prosecution Policy, all right, and clearly there was a difference of view about it. But in the discussions which did take place, was there any acknowledgement or discussion that, in Scotland and Northern Ireland, nobody but for the CPS could prosecute and was that not considered as a material factor in terms of England and Wales?
Susannah Storey: I do have a background recollection of that but, now that you say it, I don’t know why it wasn’t in that paper. So I can’t recall – I can’t recall why. I just remember feeling myself uncomfortable.
Sir Wyn Williams: Yes, and I understand there was a difference of view, and I’m not necessarily expecting that you would have known personally –
Susannah Storey: No, no, I get your point.
Sir Wyn Williams: – but someone in that Board would have known –
Susannah Storey: Yeah.
Sir Wyn Williams: – that in Scotland and Northern Ireland –
Susannah Storey: Yeah, it was a different –
Sir Wyn Williams: – it had to be the Procurator Fiscal or the CPS version in Belfast –
Susannah Storey: Yeah.
Sir Wyn Williams: – so to speak.
Susannah Storey: Yeah.
Sir Wyn Williams: Okay.
Mr Blake: Thank you, sir. It’s Ms Page and then Mr Stein.
Questioned by Ms Page
Ms Page: Thank you.
In your statement, Ms Storey, you describe a critical moment in the summer of 2013 when the Board was deprived of the information it needed, and you say “at precisely the time when the Executive should have been at their most open with us”. The information you were talking about was the information that was within the Clarke Advice, that Gareth Jenkins had been acting as an expert witness and that he was “tainted”.
Susannah Storey: Yes.
Ms Page: On that issue, in your statement, you said that you didn’t feel able to say whether the Board was deliberately being kept in the dark by the Executive. That’s how you put it in your statement, not exactly those words, but broadly. What I’d like to do is show an email that the Inquiry has seen a few times to see if we can get any closer to an answer on that. So if we could look, please, at POL00382001, and this is the email which has come up a few times. It’s between Ms Vennells and Ms Perkins about an unsafe witness. It dates from November 2013, and hopefully you’ve seen it before.
Susannah Storey: Yeah, I’ve seen that one.
Ms Page: But I’d like to just zoom in on the important words. If we could scroll down a little to “My concern”, the email begins between Ms Vennells and Ms Perkins – or rather the paragraph within it. Yes.
So there we are at the bottom.
“My concern re Sparrow currently is our obligations of disclosure re an unsafe witness (the representative from Fujitsu made no statements about no bugs, which later could be seen to have been undermined by the SS report). We do not think it material but it could be high profile.”
So that actually very succinctly encapsulates what Mr Clarke enunciated much more fully in his Advice. Would you have wanted to know about this unsafe witness and the obligation to disclose the fact that he had made statements about there being no bugs; would you have wanted to know about that?
Susannah Storey: Of course. Of course.
Ms Page: Do you think that the Board’s discussions, in the months leading up to November, would have made it clear to Ms Vennells and Ms Perkins that the Board would want to know about that unsafe witness?
Susannah Storey: I do. I’ve hopefully tried to give a general sense that we were quite a difficult set of Non-Executive Directors and we wanted to know things and, when something goes wrong, yeah, I think those are the times when you need to be absolutely as open as you can. And in my preparation for this Inquiry, I’ve now seen a lot of documents that I didn’t see at the time, and I would say even since I wrote my witness statement my position on this issue has hardened.
Ms Page: When you say “hardened”, can you tell us exactly what you mean by that?
Susannah Storey: I mean that I’ve seen a number of things that I think were relative, contextual information that add to the weight of the issues being significant, which were then not reported to us as significant. So an example that I was reading about last week was that Shoosmiths did put written evidence to the 15 May Department of Business Select Committee. They didn’t appear at the hearing. Paula Vennells and George Thomson appeared. That’s an example of something. We then met as a Board the week later, that Select Committee is referenced. The Select Committee itself didn’t pick up that issue in its own response, but it makes me think there was quite a lot of information which was important and relevant.
Obviously, I’m applying hindsight, you know, I can’t put myself in the shoes of those people, which is why I phrased it in the way I did in my statement.
Ms Page: Mr McCausland told us yesterday, and obviously on the same page as you in this respect, that the Board did not know about the contents of the Clarke Advice, but he also said that he was told that there was a Fujitsu expert witness that could not be used any more but that person could not be used any more because they had moved on or they had retired or some such. He wasn’t given a name. The important point, perhaps, is that he was given the impression that there was an innocuous reason for that witness not to be used any more and therefore the taint was hidden. And he thought that that was perhaps some time in the latter half of 2013. Do you remember being told anything like that?
Susannah Storey: I do not. I heard what he said yesterday when I watched it last night. I don’t recall that.
Ms Page: No.
Susannah Storey: Bear in mind that Neil, as a Senior Independent Non-Executive Director, would have been in and around the business perhaps a bit more, so perhaps he had some other conversations.
Ms Page: And possibly also went to those Board meetings which you didn’t, in the latter half of 2013?
Susannah Storey: That’s true. That’s true.
Ms Page: That was, of course, at the same time or around the same time as the insurers were being informed and given the name Gareth Jenkins. So, again, coming back to this point, does this show that the Board was actually being kept in the dark, as it were? You were not being told about Gareth Jenkins but insurers were?
Susannah Storey: There was obviously a significant asymmetry of information between what we were getting, which you’ve seen – both the papers and the minutes – and what some other parties were aware of and were getting.
Ms Page: All right. Can we look, please, at another email. POL00296944. This is just going back a little bit to the 1 July telephone Board meeting and the reaction afterwards. This is Paula Vennells to Alice Perkins at 9.07 pm, so on the day but afterwards:
“Hi Alice, I’m looking forward to catching up properly tomorrow. I thought the Board were generous in their patience tonight over the SS discussion. It is helpful to know that they are supportive of the need to be robust. That said, I thought Alasdair’s intervention was good – it is why we haven’t been completely heavy-handed yet. We can discuss nuances and next steps tomorrow.”
Now, what do you recall of the meeting that would have led her to say that the Board were supportive of the need to be robust?
Susannah Storey: I can’t be sure because this is an email exchange between her and Alice. I am assuming – I’m just assuming – it could have related to the point she was making on that call about the need for factual accuracy and, obviously, we were being told that day that this report was going to go into the public domain, the executive were not happy with it, they were concerned about accuracy and they then went on to tell us about that. So it may be that she’s referencing the need to be robust with Second Sight about the need to be accurate and factual. But I can’t be sure.
Ms Page: Do you think that the Board was supportive of her view on that?
Susannah Storey: I think, yeah, I think the Board heard what Paula said on that call. We absolutely wouldn’t have wanted a document to go into the public domain that wasn’t factually accurate and we did trust the Executive. We had no reason not to. So yeah, there’s no reason, I think, that this would be incorrect. What she’s reporting is her view of what we thought, having been – sorry, that’s not a great sentence.
Ms Page: No, understood.
Then sort of counterposed with that, she says:
“That said [so, in other words ‘on the other hand’] I thought Alasdair’s intervention was good – it is why we haven’t been completely heavy-handed yet.”
Can you decode that for us at all; does that make any sense?
Susannah Storey: I don’t recall what specifically Alasdair said. I wonder if it’s to do with the interface with Second Sight and, you know, it’s plausible, isn’t it, because it was a debate later, that there was a concern about the scope and time their work was taking and the cost, the sort of desire to have some fixed parameters around it. So it may be that it was a reference to that and so Paula sort of implying that she might in due course need, in her words, to be heavy-handed with Second Sight. But I can’t be sure.
Ms Page: All right, well, it carries on:
“I caught up with Susan this evening after we finished. She had finished her meeting with [Second Sight] and [presumably this is ‘and was of the view’] that they do now understand the risk of being caught up in something bigger and more sensitive. She is hoping their report should be more balanced, should say they have found no evidence of systemic Horizon (computer) issues but will confirm shortcomings in support processes and systems, and that Post Office has already identified and corrected number of these. I hope when they speak to James tomorrow that they will confirm all this. They will also want to say their work is not finished and therefore still not conclusive.”
Then she says this:
“Not a final position by any means nor one that controls what they might say rather than write but sounding slightly better.”
Do you know that the business were making efforts to control what was written by Second Sight?
Susannah Storey: Not in that way as described there and it was an independent report, so no.
Ms Page: Then particularly she seems to be pleased, shall we say – or perhaps that’s inferring too much, but in any event she reports that Susan Crichton had told them about the risks of being “caught up in something bigger and more sensitive”. Again, I hope I’m not reading too much, but it’s sort of an implied threat, isn’t it? Did you know that the business was involved in sort of warning Second Sight of risks?
Susannah Storey: No, I don’t really know what that sentence means. I have to say, the end of it, the “something bigger and more sensitive”. I’ve obviously read this before today because I’ve seen it in the disclosure documents but I don’t know what that’s referring to.
Ms Page: No. So, again, perhaps some issues going on behind the scenes that the Board were being kept in the dark about. You’re nodding –
Susannah Storey: Yes.
Ms Page: – just for the transcript.
Susannah Storey: Sorry, yes. I am nodding. I agree.
Ms Page: Can list just have a look at this email, UKGI00045624. If we scroll down a bit, the email that we can perhaps look at is between Richard Callard and Tom Cooper in 2020, so considerably after the events we’re looking at. And, obviously, he’s reporting back on a conversation he had with you, and people no doubt have their own slightly different recollections of conversations. So you may wish to comment on various parts of this email. But there are couple of these bullet points that I wanted to focus upon. It’s about the “whole Sparrow thing”, as Richard Callard puts it. The second bullet point says:
“She does remember it becoming an increasing thing after joining. Remembers Paula indicating that there was nothing much to see here, it was a small number of subpostmasters, long time ago, the business was getting assurance etc …”
But then in the next bullet:
“NEDs and Alice increasingly worried at the seemingly slow pace of the execs’ response and Arbuthnot had started to fan the flames. The Board felt this was mischief making that was fanning the flames and was becoming a populist cause.”
If that’s the correct reporting of your conversation, where is this idea of mischief making, fanning the flames, a populist cause, coming from?
Susannah Storey: Yeah, I only saw this email very recently. I didn’t know – I did meet Richard Callard from time to time, I wanted to make sure he was getting the support he needed. I do recall having various conversations with him, including presumably one in March or April 2020. I didn’t know he was taking notes, I didn’t know he was recording it and I can’t say exactly where all of these things have come from. Obviously, what I’ve tried to do in a very open way is set out my recollections and my reflections in my witness statement, and that is after I’ve read all the documents. So, at this point in 2020, which would have been six years after I left, I’m not sure how much reliance can be put on this.
Ms Page: In other words, are you saying that you don’t believe that you said that there was mischief making or a populist cause?
Susannah Storey: I don’t remember those words. So, honestly, it’s hard to say.
Ms Page: Do you think that there was any propensity on the Board to be predisposed in that direction or was that something the Board was being steered towards by the Executive?
Susannah Storey: I think, from the beginning of our conversations as a Board about what became the Second Sight Interim Report, Alice was keenly aware, in the way she portrayed it to us, that there was a whole series of issues that had been going on for a long time, that understandably James Arbuthnot was very worried about, as was Sir Alan Bates. She wanted to get the work done, to look at it, and that’s what’s happened. That’s my recollection.
Ms Page: Well, can we look at the Second Sight relationship over a slightly longer time frame and, in broad terms, in 2020 – sorry, the email can come down unless there’s anything else you want to tell us about it while it’s up there?
Susannah Storey: No.
Ms Page: No. In 2012, the CEO announced the Second Sight Review to the Board as just a little bit of AOB, right; that is the first the Board gets to hear about it?
Susannah Storey: Yeah, it was in the AOB part of the discussion, I don’t think it was just a little bit, I wouldn’t use exactly those words but I understand of course the point you’re making. It didn’t come as a paper nor as a main agenda item.
Ms Page: No history, nothing about past prosecutions. The reasons that lay behind why Second Sight had been called in, in effect, the fact that over many, many years, people had been being prosecuted on the back of the Horizon evidence and that, therefore, there were multiple complaints to MPs about those prosecutions. That wasn’t part of the history that you heard about?
Susannah Storey: At that May 2012 Board meeting, no, it was nothing like the horrific extent of what I now understand. It was –
Ms Page: Or even what was understood at the time, in the sense that a number of MPs had made complaints, a number of newspaper articles had been written. There was a growing groundswell of people complaining about Horizon that required this to happen. That wasn’t made clear, was it?
Susannah Storey: No, not in the May 2012 “Any Other Business” discussion, no.
Ms Page: No. So then, following that, each month the Chair draws up the agenda and she puts the Significant Litigation Report below the line just for noting, not for discussion, month after month and, at the point where there’s Second Sight included as part of that, there’s kind of a couple of lines on Second Sight in those Significant Litigation Reports but not for discussion?
Susannah Storey: The – yes, I mean, you’re right. The May 2012 Board meeting was when Alice and Paula reported their meetings to us with James Arbuthnot and then the Second Sight work started, as well as the Significant Litigation Reports, which were in the papers every month and expanded over time in terms of their content.
There were, from time to time, updates, for example if one of Alice Perkins or Paula Vennells had met Lord Arbuthnot or Sir Alan Bates, they might update on that, and I think, from time to time, the Board said, “What happened on that work?” So there was a bit of to and fro but nothing like the volume and focus, as you’ll see from the 1 July 2013 until I left the Board in 2014.
Ms Page: Indeed, in May 2013, the Board did actually ask for a formal update –
Susannah Storey: That’s right.
Ms Page: – which you did not receive?
Susannah Storey: We did not, and the next sort of thing we got, which is why, as I’ve discussed, there was irritation, there was this 1 July –
Ms Page: Exactly, when you were blindsided?
Susannah Storey: Yeah.
Ms Page: So then even though you had asked in May for a proper update, you then get nothing until you’re blindsided and told there is an urgent need to deal with the report that’s about to be presented to Parliament. So, in effect, over that whole first year, the Board is not substantively updated on the work of Second Sight and, indeed, the agenda is managed in a way that everything about it is put sort of below the line, everything in the papers at least is put below the line just for noting, nothing for a proper discussion?
Susannah Storey: Yeah, that’s right. I mean, I know now from the papers I’ve read that there was quite a lot of to and fro between the company and Second Sight in the months that led up to the publication of the Interim Report but we were really getting very little colour on that, and as you say, the written papers that we were receiving were more as a sort of risk update, they’re positioned as there are these situations but not presented to us in the way that we then came to understand them.
Ms Page: Then we get to the July 2013 Board and, in the background to just a few more questions – and I don’t have many more – it’s just worth bearing in mind this: that they are – the July Board is a missed opportunity arising from the fact that Ms Crichton was not presenting her own paper, because she had received the Clarke Advice.
Susannah Storey: (The witness nodded)
Ms Page: She knew much more than the Board did about past and present prosecutions.
Susannah Storey: (The witness nodded)
Ms Page: The fact that she did not present her paper and become subject to questions from the Board means that her knowledge of the Clarke Advice stood no chance of being revealed to the Board?
Susannah Storey: (The witness nodded)
Ms Page: Ms Perkins gave an account to this Inquiry about why Ms Crichton didn’t come in to Board to present her paper. At the end of that, Mr Beer asked her “Why is none of that reflected in the Board minutes?”, and after a few false starts, her answer was, “I don’t know the answer to that question”.
Was it your experience of the minute taking at POL that important discussions were not reflected in the minutes?
Susannah Storey: My recollection was that Alwen Lyons was a diligent company secretary. The nature of minutes from any Board meeting, and frankly any other meeting, often doesn’t give the reader all of the to and fro and who said what, and might not include somebody having been expected to present a paper and then not. So I don’t think that in itself was unusual. I obviously appreciate how frustrating it is now and, you know, for me now as a reader, trying to jog my memory, of course I think we all wish there was a lot more colour on this issue but –
Ms Page: No, of course minutes don’t reflect everything but would you have experienced a case where there’s a discussion about something significant and it just doesn’t appear in the minutes?
Susannah Storey: Um … I mean, I can’t think of examples of that now, looking back. If we were contemporaneous, I’m sure it would be much easier to give you an example about that.
Sir Wyn Williams: Nothing about it sticks in your mind?
Susannah Storey: No, no.
Sir Wyn Williams: All right. Is that it Ms Page?
Ms Page: Just very briefly – if I may, sir – in your time on the Board, was Ms Perkins somebody you would have found or did you find her to be capable of leading and controlling Board discussions?
Susannah Storey: Alice had a lot of experience of Board interfaces because part of her day job was coaching people and coaching boards and my experience was she took this role really very seriously, she was very committed to it and, I think, wanted to make sure there was a good discussion of all of the issues across these difficult areas. I think, if people felt strongly about things, they would say them anyway. She probably was quite good at sometimes drawing a conversation to a close or asking us to pick it up offline. So I think she was rigorous.
Ms Page: Would you have said that the July board “kicked off” in any way?
Susannah Storey: “Kicked off” is not a sort of expression I would particularly use but, I mean, as we’ve discussed today and as I think the minutes reflect, it was an uncomfortable Board and we had a difficult discussion before the Board, just the NEDs who were there – Neil was not there that day, but for the NEDs and the Chair – the board meeting was difficult. “Kicked off” slightly implies uncontrollable. I wouldn’t say that.
Ms Page: It wasn’t uncontrollable; it was controlled, in effect?
Susannah Storey: Controlled in the sense of orderly. I don’t mean controlled to my memory in the sense of –
Ms Page: Steered? No –
Susannah Storey: Yeah.
Ms Page: – not steered but, in the sense that at no stage did Ms Perkins actually lose control of what was being said in the meeting?
Susannah Storey: I don’t recall that. She is quite a calm person. I don’t recall that.
Ms Page: No. Thank you, sir.
Sir Wyn Williams: Mr Stein?
Questioned by Mr Stein
Mr Stein: Sir, tempted as I am to say I’ve got a clear hour, I’ll be about 15 minutes –
Sir Wyn Williams: Tempted as I would have to say: no, you haven’t.
Mr Stein: I think about 15 minutes, if that suits both the panel and – yes, it does, I’m very grateful. Thank you.
Sir Wyn Williams: Well, I’ll be rigorous, Ms Page, and hold Mr Stein to 15 minutes, so I’ll look at Mr Page’s watch now.
Mr Stein: The time is on, Ms Storey.
Ms Storey, I represent a large group of subpostmasters, also people working in branches at the small branches that you’re familiar with right up and down the country.
Can I just take you to two passages in your statement to start off with, please. They’re parts of the statement whereby you refer to being reassured about the system, the Horizon system. So paragraph page 17, and I’m going to go page 8 of your statement, so I’d like it on the screen, please. So paragraph 17 but it’s actually page 8 of the statement and it’s the last, I suppose, few lines of that paragraph.
So if we go to page 8, and we look at that top paragraph, I’m very grateful. That’s ideal, thank you very much. So if you look above paragraph 18, the bit I’m after is just above there.
What you’re talking about there is that – you’re talking about POL had full confidence in the Horizon system, the system had been vigorously tested, full confidence in the accuracy and robustness of the system was shared by the NFSP:
“As I explain below, this was the consistent position adopted by the company in relation to Horizon throughout my tenure on the Board.”
Paragraph 21, at page 10 now, please, and the last few lines of paragraph 21. So very similar there.
“I referred above to the POL statement circulated November 2011 [then a Relatively reference] expressing full confidence in the accuracy and robustness of the system and I do not recall hearing or reading anything that was inconsistent with those assertions.”
So we can see from your statement that on two occasions you were referring to what you understood the position to be, having been informed by the Post Office that the system works fine.
Susannah Storey: Yes.
Mr Stein: Now, we then get, in terms of the order of things, we get a reference within your statement to another document I’d like to refer to, please, which is an SLR. I’ll ask this to go on the screen, please, UKGI00018251. Now, this may appear as a slightly faded document on the copy we’re about to look at but we’ll make our way through it.
Yes. On my screen it’s quite small, if that could be expanded slightly I would be very grateful, if that’s possible. If we work our way down, so if we hold it there for a second. So the SLR is referring, as you can see there, to the right-hand side as “Privileged and Confidential – claims over 500,000 or those of a sensitive nature”.
If we look at file name “Horizon claims”, and then reference to case holder, we then see a name that is very familiar to this Inquiry, Rod Ismay of POL. Now the significance of Mr Ismay to the Inquiry, you’ve been following the Inquiry clearly –
Susannah Storey: I have.
Mr Stein: – he wrote what within the Inquiry is called the whitewash report 2010 –
Susannah Storey: Yeah.
Mr Stein: – saying essentially “No bugs here”, okay?
Susannah Storey: Yeah, the Ismay Report that I think David Smith had asked him to produce.
Mr Stein: Yes. If we then have a look at what is going on, we see a reference – I know it’s very faded and slightly hard to see.
Susannah Storey: It’s okay, I can read it.
Mr Stein: Okay great. Look at the middle column under “Description”, we’ve got a reference to Shoosmiths, under the fourth paragraph:
“Shoosmiths assert that they have consulted on a further 85 cases which are all likely to raise similar legal issues.”
If you go up above that one, the third one, if you can do the yellow line trick above to the:
“Each alleges wrongful termination of contract (based upon (a) alleged defects in POL’s internal processes and (b) alleged defects with Horizon) …”
Okay? Then we’ll move across and again, names that are familiar to this Inquiry. Mr Darlington, it’s talking about his position, the claim rejected “on the basis that the SPMR admitted to and was convicted of false accounting”. Then “Response”, in relation to Shoosmiths, and then an update as to the position. Okay.
So we see that there are Shoosmiths setting out the fact that they’ve got 85 clients, plus the then five that are here, all setting out – this is the summary of the situation which is they’re all saying there are problems within the system.
Now, you referred to this document at paragraph 66 of your statement. That’s at page 32, paragraph 66. I want you to help us with what you mean by some of the terms that you’re using. So if we can now go to paragraph 66, page 32 of your statement.
So this is sent to you, this document. You refer to this as being part of the Board pack for your first Board meeting. Now, it might be said that, as it’s your first Board meeting, you may have read the lot, rather than having the ability to sift, but let’s see how we go:
“The SLR [the one we’ve just referred to] appears to have been included with the Board papers but ‘below the line’ and for noting (ie not for discussion by or at the Board). As I have explained, the Board papers would include papers that were intended to form the basis of discussion by the Board and papers which we were requested to note for information but not usually discussed.”
Help us translate the corporate speak here, if you don’t mind. When you’re saying, “Appears to have been included within the Board papers but below the line and for noting only, ie not for discussion by or at the Board”, what does that mean: “below the line”, nobody reads it at all or people are expected to read and raise something if they think about it? Help us.
Susannah Storey: Yes, so what I mean by that is that the Board agenda would set out each of the items that were going to be discussed at the Board, each one would have a timetable committed to it. That would basically take up the bulk of the day, if a Board meeting went from 9.00 until 4.00. And then, just at the end of the day, in my experience of the Post Office with these matters, there were items that were not being raised to the Board for discussion, but only to note, which means you needed to read it and agree that you had noted it, and that was the nature of these Significant Litigation Reports.
Mr Stein: Shoosmiths is saying they’ve got 90 people all saying that there are problems with the Horizon system. Was that something that came to your attention in terms of you thinking about it and saying, “Hang on, that’s a heck of a lot of people”? Did it come to your attention in that way.
Susannah Storey: I don’t recall it coming to my attention in that way at that Board meeting and, you know, that’s one of the things obviously that I’ve said I regret. My reflection is – and I understand why, you know, from your position this will sound odd but, in the shoes that I was in and as a Non-Executive Director Board member, we were getting quite strong assurances that the system is robust, nothing to see here. So I think I was trusting what the execs were saying. But I take your point.
Mr Stein: All right well let’s keep on going, you’re talking about shoes, I’m going to talk about Shoosmiths a bit more.
Susannah Storey: Yes.
Mr Stein: POL00141382. Now, you go away on maternity leave – I have this from your statement – is it March 2012 to March 2013?
Susannah Storey: No, I had the baby in March 2013, and I started on the Board in April – sorry, in March 2012, and I started on the Board in April 2012.
Mr Stein: Right. Okay, maybe I’ve misnoted it from your statement. So I’m not sure whether you’re around at the time of this particular document. We go to the end of the document, I think it’s July 2012. But let’s have look through. I want to go to particular paragraphs, paragraphs 2 to start off with, it’s a very good summary of the situation.
Paragraph 2. I’m going to summarise this because I’ve got a clock ticking. Access Legal from Shoosmiths, national firm, contacted by 100 SPMs. So you see the same numbers. The numbers, in fact, are going up by this point. They suffered losses, those losses can’t be explained. They had been subject to disciplinary measures, all adamant that they or their staff have not stolen any money. Horizon system is at fault, they say, the Post Office requires them to use it. The last three lines:
“They claim there has been no real investigation by POL as to the clause of the losses that have appeared – SPMs are expected to pay it back regardless of how it was caused.”
Can we go back to paragraphs 11 and 12 together. They appear, I think, close to each other.
Paragraph 11:
“POL will ask an SPM to repay all losses …”
I’ve used this document before in another context so I’m just going to go to a slightly different part to assist the Inquiry. Last line of paragraph 11 says:
“It is far from clear whether there is a loss in a sub post office that POL have actually lost any money.”
So it’s far from clear as to whether any money has ever gone missing. Then 12, again I will summarise:
If the loss not repaid, POL will prosecute the SPM for false accounting and then people are being advised to plead guilty to false accounting. In the circumstances, many were charged with theft or fraud but these charges are typically dropped and SPMs have been imprisoned for false accounting.
These are serious and quite complex issues that are being raised. Lastly 14 and 16.
14: the contract is old, this is what it is saying. It goes back to 1994. It was designed for a paper system, no good for a digital system. That’s what 14 is saying.
Then 16, just finishing. Faults with Horizon, loads of ways, this is saying, there could have been problems with Horizon: system errors, human errors, faults with cross-system communications, electrical faults. It doesn’t matter, it goes on to say, how they’re occurring, it’s happening.
So you’ve got complicated detailed submissions being made by Shoosmiths in relation to the Network Transformation consultation. That’s what’s going on here –
Susannah Storey: Yes.
Mr Stein: – saying look there are real problems, lots of people we’ve got all having difficulties in the same way.
Now, first question, it relates to this: if I’m right in thinking about the timing of when you were away, was this brought to your attention, if I’ve got the timing right, when you came back from maternity leave or at you in any way familiar with this document at the time – at the time?
Susannah Storey: So just firstly, I never was away on my maternity leave. So I had the baby and then started on the Board. So I was on the Board when I was on my maternity leave – (unclear – simultaneous speakers) – doesn’t matter.
Mr Stein: Are you familiar with this document?
Susannah Storey: This document I am now, it’s a written submission, as you’re saying, to the Department of Business Select Committee.
Mr Stein: Correct.
Susannah Storey: The hearing was in May 2012 and it was on Network Transformation. Shoosmiths made the submission, it was a written submission, it’s in the papers, and Paula Vennells appeared at that hearing, it’s the one that I was referring to earlier. She appeared on 15 May and –
Mr Stein: At the time of these sorts of matters, around this period of time, forgive me for summarising your position –
Susannah Storey: Yes, sorry –
Mr Stein: – were you familiar with what was going long in these submissions? Was it –
Susannah Storey: I had not seen this submission, no, no. But the point I was making before was, when we were given the update, for example, at the Board on the BEIS Select Committee that the Chief Executive had just appeared at, this particular submission wasn’t referenced and it actually would have been extremely important to see it at the time.
Mr Stein: Because one of the simple ways through this would have been for somebody on the Board, or Ms Vennells, somebody, to start speaking to the subpostmasters because rapidly what would have happened is that would have resulted in being told “Look every time we phone up the damn helpline they just tell us to pay because of the contracts”.
Susannah Storey: I appreciate that –
Mr Stein: That’s masking people masking complaints about the system, “they keep on telling us to pay and I’m trying to say look there’s a problem”.
Susannah Storey: I appreciate that and –
Mr Stein: If that had been looked into?
Susannah Storey: Yes, and also the Parliamentary Committee didn’t pick up this issue – I think in the hearing Caroline Dinenage MP asked one question which George Thomson took but it wasn’t even referred to in the committee’s –
Mr Stein: No, we have a slight problem with Parliamentary privilege, so therefore –
Sir Wyn Williams: Anyway, just on this, can I just be clear, there was no attempt by the Post Office Executives to bring this sort of detail – however it came into being, there’d been no attempt to bring this sort of detail to the Board?
Susannah Storey: No.
Sir Wyn Williams: Right.
Mr Stein: We then get through – and you have been asked a lot of questions about it by Mr Blake and some of them have been looked at them afterwards. So just to finish, you get to the stage whereby you read and you’re aware of the contents of the Second Sight Interim Report.
Susannah Storey: Yes.
Mr Stein: Okay. Now, we don’t need to go to it but one of the most significant things about that report is saying that there’s bugs in the system, a couple of bugs –
Susannah Storey: (The witness nodded)
Mr Stein: – one which is the mismatch bug –
Susannah Storey: (The witness nodded)
Mr Stein: – could really cause problems to people. Okay? So let’s go back to where I started with my questions. You’re being told: system robust, no bugs, no problems with it. Then later on, 2.13, you’re told that there are bugs.
Susannah Storey: (The witness nodded)
Mr Stein: Right. Did Ms Vennells, at this juncture, when you get the Second Sight Report and the discussions at the Board about it, did she say to the Board, or you individually, “One of the things that’s really peculiar about this is that I’ve been reassured, reassured and reassured there are no bugs in the system, and then, quite surprisingly, or perhaps using other words, I’ve now learnt through Second Sight and details before that there are bugs in the system, and we really ought to look into this as to why we weren’t told about this before”.
Did she ever say something like that because I might feel a bit misled in that situation, if I were in her shoes.
Susannah Storey: No, she –
Mr Stein: Right.
Susannah Storey: Not in –
Mr Stein: What about you and the other people on the Board? You’re in a similar position. You agreed with Ms Page and Mr Blake that you feel as though the Board was left in a bit of a vacuum on information. But the one thing that you’ve been told at the beginning is no bugs in the system and yet, in 2013, you’re told about bugs that well affect branch accounts. Did you ever get or was there any discussion at the Board “Why on earth are we being told that there were no bugs in the system? Who’s been making this up? What’s going on?” Did you ever get to that because, as an example, Mr Ismay, who I referred to right at the beginning, he learnt in 2011 about the mismatch bug.
So it’s been going on for years, the Post Office has known about these things.
Susannah Storey: Yeah, I can’t speak to the sort of pre-2012 period, although obviously I know that when I started on that Board we had none of the long history from the Royal Mail Group, we were not getting any concerns flagged by internal – or any material concerns from internal or external audit.
To your point, when it came to the Second Sight Interim Report, it did flag those issues from the spot reviews very clearly. It also said there were no systemic issues. It also flagged some serious concerns that we needed to look at and, at the time in 2013, those were the steps that we thought we were taking.
Mr Stein: Forgive me for interrupting, as again I’m slightly thinking about the seconds ticking –
Sir Wyn Williams: They’ve ticked but carry on, yes.
Mr Stein: They’ve well ticked but did you think to yourself or did the Board think to itself, “Well, hang on we ought to look into why we’ve been reassured about something that ain’t true”?
Susannah Storey: Well, I think at the time, we did have various elements of discontent that we expressed to the Executive and then we set about a series of actions that we felt we could control, to try to get to the bottom of these things.
Mr Stein: And that one?
Sir Wyn Williams: Well, I think the answer to the question is that you didn’t enquire, as Mr Stein suggested you should. What you did, by the look of it, is to accept the explanation you were given, namely there had been two bugs but they’d been cured. That’s what happened, isn’t it?
Susannah Storey: Yeah, I think we took what the – the Executive were clear about their view. At that point in July 2013, we had no particular basis to think anything different and then we started to take a series of steps and then, as I said earlier to Mr Blake, part of the point from my perspective of the Deloitte report was to try to get under the skin of the IT –
Mr Stein: Outward facing from this, going into then the question of – it doesn’t matter who is prosecuting, whether it’s the CPS in Northern Ireland, whether it’s the Procurator Fiscal in Scotland, whether it’s Post Office in England. We know that prosecutions continued.
I’ve referred to Ms Falcon who was prosecuted at the beginning of 2015, using data from the Horizon system. The prosecutions continued using Horizon data. Didn’t the Board say to itself, “Well, hang on, haven’t we got to make sure what on earth is going on with this. If there are bugs in the system, like are being set out in the report, we, the Board, have to be responsible for making sure we stop it right now”?
Susannah Storey: Well, I can only speak to the Board until I stepped down in 2014.
Sir Wyn Williams: Well, I think that’s really a speech, not a question. So I think we’ll call it a day there, Mr Stein.
Mr Stein: Thank you, sir.
Sir Wyn Williams: Thank you.
Mr Blake: Thank you, sir. Those are all the questions for Ms Storey.
Sir Wyn Williams: Right, we’re not quite at the end of the session because Mr Beer wants to make one or two announcements but that does conclude your evidence, Ms Storey. So you’re very welcome to sit there and listen to Mr Beer for a couple of minutes, or you can disappear, as you prefer.
But for certain, I’d like to thank you for making your witness statement, which is a very detailed one and for answering questions for the greater part of today, so thank you very much.
If you’d like to leave, now is your chance, otherwise Mr Beer is going to start.
Mr Beer: I won’t take offence at all.
The Witness: No, it’s fine.
Announcements by Mr Beer
Mr Beer: Sir, as we’ve come to the end of phases 5 and 6 –
Sir Wyn Williams: Well, is that true?
Mr Beer: – at least the principal part of the evidence taking of Phases 5 and 6, I thought it might assist to firstly draw the threads together in terms of the nature and extent of the evidence that you’ve heard, secondly to read some statements into the record, in fact, those statements received in the course of these phases but which relate to other phases of the Inquiry, Phases 2, 3 and 4, and then thirdly to say something quite short about the independent surveys that are being conducted for the purposes of Phase 7 of the Inquiry.
So, firstly, the evidence heard in Phases 5 and 6.
Over the course of 16 weeks, sir, you’ve heard evidence from people at the highest level within the Post Office and Government paying careful attention to the three questions which run through every stage of this Inquiry: who knew what and when, about the issues with Horizon. Since April of this year, you have heard oral evidence from 66 witnesses. You will hear evidence from a small number of witnesses on Phase 5 and 6 issues in the course of Phase 7. Their evidence could not be taken during the course of the last 16 weeks, for one reason or another.
As in other phases of the Inquiry, the oral evidence that you have heard is not the entirety of the evidence that you will be considering. Aside from the huge volume of documentary evidence, there are the statements of witnesses who will be read into the record. I’m not going to do that now for Phases 5 and 6, ie Phase 5 and 6 witnesses, and, instead, I’ll do that in the course of Phase 7, when all or nearly all of the Phase 5 and 6 written evidence is available to the Inquiry.
Owing to the scale of Phases 5 and 6, your Inquiry Team will continue to seek evidence and issue Rule 9 requests throughout August, and further evidence will be disclosed to Core Participants and then to the public in due course.
Reading in of statements from Phases 2, 3 and 4.
Today the Inquiry will be publishing statements from witnesses about Phase 2, 3 and 4 issues. Those statements will be admitted into evidence and treated as having been read into the record. The witness statements will be uploaded shortly to the Inquiry’s website.
The witnesses who fall into those categories are described in a PowerPoint presentation that I’d ask to be displayed. INQ00002022. If we look at page 2, please. The names of the witnesses that are going to be read into the record by the act of displaying this document are listed on the left-hand side for Phase 2. There are seven witnesses and eight statements because Mr Folkes has got two statements relating to Phase 2 issues, and the URNs are displayed in the right-hand column.
Over the page, please, to Phase 3. On this page and the next, there are 11 witnesses – Mr Folkes being the first of them, his fourth witness statement – who give evidence in relation to Phase 3 issues: names listed on the left; URNs, which I’m not going to read out, on the right.
Over the page, please, that’s the balance of the Phase 3 witnesses.
Then the last page, please, there are four witnesses who give evidence about Phase 4 issues, names on the left, URNs on the right.
That can come down.
The work of your Inquiry so far has covered a period of over 20 years. It has heard evidence through oral witnesses from 267 individuals. We had published the written evidence from a further 229, including those listed on that PowerPoint presentation. Your Inquiry has disclosed to Core Participants almost 250,000 documents totalling just under 2 million pages of documents. I’m told, for those wishing to visualise that number, if stacked up it would be the length of two football pitches.
Can we turn, lastly, then to Phase 7 of the Inquiry.
As we move on to the final phase of oral evidence, the Inquiry will turn its focus to the current practice and the current procedures within the Post Office and within Government, in relation to the Post Office. Phase 7 will include evidence from current and former senior officials and executives within the Post Office and Government. We will also return to looking at the effectiveness of the compensation schemes and the redress schemes, building on your Interim Report published last year.
Work on this phase has been going on in the background for many months now. Those following the Inquiry will be aware that you have commissioned independent research and data analytics from a firm called YouGov, in particular to conduct two surveys to gather views from all current subpostmasters and all applicants to the Horizon Shortfall Scheme.
Those two surveys are ongoing. They’re live at the moment. By way of update to you and for others, I understand that, so far, over 2,000 recipients have either started to complete or have completed and returned the survey. We’re surveying 16,000 people, so that is a response rate of around 12.5 per cent, which I am told is a promising start at this point of a research project.
So, sir, that’s all from me today. I would like to end by encouraging those, everyone who has received a link to the surveys, to complete them. It’s vital from the Inquiry’s perspective that we enter Phase 7 with as full a body of evidence about the current position as is possible.
Thank you, sir.
Statement by Sir Wyn Williams
Sir Wyn Williams: Thank you, Mr Beer.
Well, those who have had the grave misfortune of following what I do will know that I am not very keen on repetition but, on this occasion, I do wish to repeat the appeal which Mr Beer has made for continued participation in the two surveys. I am obviously heartened by what he has had to say about the numbers of participants to date but it is crucial that I get as full a response as possible to these surveys because we have looked long at the past, but now I’m coming up to date, so to speak, and I want to know about the present, both in terms of subpostmasters’ reactions to the present regime – survey number 1 – and postmasters’ reactions to the compensation scheme HSS in particular.
I think I am now brave enough to say that I have stretched my terms of reference on compensation to, and perhaps beyond, breaking point. It’s something I am very keen to say as much about as I reasonably can. So I need as much help as possible from those who are claiming compensation in order to make proper conclusions about what has happened and whether it lives up to the mantra of being full and fair.
I want to stress that the surveys are not connected to the Post Office. I said that, I think, some weeks ago when they were first introduced but I want to stress that, because I can’t help but think that there will be lurking in some people’s minds “Do we really want to get involved with this? Is the Post Office somehow behind it?”
The Post Office is not, this is for the benefit of the Inquiry. So if you find it difficult to speak about challenges which you still face, you people out there whom I am addressing, please be assured that these surveys are for the benefit of the Inquiry and therefore ultimately for the benefit of me writing a sensible report about the information they will contain.
Let me just say something about Phase 7. I think – in fact, I’m 95 per cent sure – that this will begin in the week commencing 23 September. There are significant issues to examine. I don’t want to rush it. So what I expect is that hearings will run into November. Quite how far into November we’ll have to see because I have decided that you all deserve a break in the middle of this Phase 7, so that there won’t be sittings in the last week of October and the first week in November, ie the potential half term weeks when people may want to take a break.
A witness timetable for these sessions will be published as soon as we can reasonably do that.
All that will be left after the Phase 7 evidence is closing submissions and I want to tell you what I have in mind, and I’m telling you this now so that if anybody violently objects, they’ll have a chance to register their objection. What I want is that the substance of closing submissions are in writing. I do not want anyone to get the impression that I am going to sit here, or on screen, for a number of weeks listening to oral submissions because I’m not.
What I will allow are reasonably short oral submissions so that the advocates can demonstrate their oratorical skills and treat me as I’m a jury in the Old Bailey, even though I’m not, but it will allow there to be some human impact to those oral submissions. So I would expect that oral submissions will last for, say, up to two days but the bulk of it has to be done in writing, not least because that’s the best way that I can ultimately digest what is being said.
With a fair wind, all that will be completed for all you to go off and enjoy your Christmas holidays, and for me to think “Oh, my goodness, what comes next?”
Can I thank you all for participating as you have done in this phase of the Inquiry.
Mr Beer, with his usual understatement, has reduced 66 witnesses and goodness knows how many documents he mentioned, as if it was an everyday occurrence. With the cooperation of all of you, we have got through an enormous amount of work in a very short period of time and, for that, I am eternally grateful for every single person who participates in this Inquiry.
You’ve heard me praise my team up to the sky is the limit, but all you – and I’m looking past Mr Beer because Mr Chapman hides in the corner there and I can never see him – but every CP in this room deserves credit, together with their legal teams, for facilitating my work.
So thank you all very much. I am going to retreat back to Wales shortly and escape the heat of London but I’ll see you again in the autumn.
Mr Beer: Thank you, sir.
Sir Wyn Williams: Right. There we are.
(3.29 pm)
(The hearing adjourned until September 2024)