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To: Baroness Neville-Rolfe
From: Laura Thompson,
Date 13 July 2015
Meeting purpose: You are chairing a meeting between Andrew Bridgen MP and 2-3
other MPs along with senior officials from Post Office Limited (POL), to follow up on
the commitment made during the recent House of Commons adjournment debate on
the Horizon system.
Meeting attendees:
e Andrew Bridgen MP (North West Leicestershire, Conservative)
Kevan Jones MP (North Durham, Labour) may attend
lain Wright MP (Hartlepool, Labour) (BIS Select Committee Chair) may attend
Ranil Jayawardena MP (North East Hampshire, Conservative) may attend
Mark Davies, Communications Director, POL
Patrick Bourke, Programme Director, Complaint Review and Mediation
Scheme, POL
e Laura Thompson from the ShEx team will also attend
Proposed handling
1. This is likely to be a challenging meeting and will require careful chairmanship. In
particular, it will be important to ensure that all parties in the meeting accept the
terms of the meeting, specifically that individual case details are not to be
discussed, and that the meeting must not prejudice the work of the Criminal Cases
Review Commission (CCRC) in this area.
2. It is also important to maintain the position that this matter is independent of
Government — it is a commercial matter for the Post Office. The Government is
convening this meeting but is not opining on the allegations raised.
3. Post Office have responded to these allegations on many occasions, but MPs
continue to raise them. A reasonable outcome of this meeting would be that the
MPs will have heard clearly the position from Post Office on these claims. We
cannot, however, expect this meeting to resolve the claims that MPs are pursuing.
4. A proposed agenda and speaking note is provided at Annex A.
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Background
5. Andrew Bridgen MP called an adjournment debate in the Commons on Monday
29 June on the Post Office Horizon system, and asked the Government to launch a
judicial inquiry into claims that people have been wrongfully prosecuted. George
Freeman, responding for the Government, offered to convene a meeting between
MPs and POL to discuss the matter.
6. You are leading on the meeting as the Minister for Post Office. You agreed that
this should be a private meeting between MPs and POL, and that it is important
that individual cases are not discussed (because the Criminal Cases Review
Commission have received around 20 applications to review some of these cases).
7. MPs have been extremely critical of POL’s approach to dealing with this matter,
despite the fact that POL have fully reinvestigated all the cases raised in the
mediation scheme, have funded independent investigations of both the Horizon
system in general and each individual’s case, and have made significant efforts to
engage with MPs including offering to meet any MP with a case in the scheme to
discuss in confidence the individual circumstances.
8. Despite over three years of independent investigation, during which no evidence
has come to light that there are flaws in the Horizon system or that any criminal
convictions are unsafe, the allegations against Post Office continue. Realistically,
we do not consider there to be much chance that this meeting will change the MPs’
position and we expect that they will still press for a judicial inquiry.
9. We maintain that a judicial inquiry is neither necessary nor appropriate:
e There remains no evidence that there are any flaws in the system
e During three years’ worth of investigation, POL have found no reason to
conclude that any convictions are unsafe. (POL have a legal duty to disclose
any new information that comes to light which could undermine a conviction)
e An individual who feels their conviction is unsafe can apply to the Criminal
Cases Review Commission (CCRC). Post Office cannot overturn convictions,
nor can the mediation process. Around 20 individuals have raised cases with
the CCRC and those investigations must be allowed to complete.
Briefing contents
A. Speaking note
B. Biographies of attendees
C. Recent letters
D. Relevant Hansard
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ANNEX A: SPEAKING NOTE
OPENING REMARKS
1. Welcome, ask attendees to introduce themselves
2. As the Prime Minister said in the House, it is important to get to the bottom of this
issue, and that is why we are all here today. I know that you [MPs] have raised a
number of concerns, and I know that Post Office would like to address as many as
they can.
3. I must first of all reiterate the terms of this meeting, as I set out in my letter to you.
4. We have been quite clear that the mediation scheme is independent of Government
and the details of individual cases are confidential. As the Minister, I am here to act
as an honest broker, and I hope we can have a helpful discussion that will resolve
some of your main concerns.
5. As I made clear in my letter, we cannot get into the details of individual cases — we
must respect confidentiality. If you [MPs] would like to discuss the details of your
individual cases then I strongly recommend you arrange a meeting to discuss this
with Post Office in confidence, if your constituent gives consent for you to do so.
6. The Government is also very clear that the independent work of the Criminal Cases
Review Commission must not be undermined, while they carry out their
investigations into a small number of these cases. That is the correct route for
investigating miscarriages of justice and it must be allowed to continue.
7. I hope everyone here can agree to that. Now, I am aware that you [MPs] have
raised a number of allegations against Post Office on their handling of this matter. I
do not expect we will be able to cover every issue, but I hope that both parties can
come to a better understanding of each other’s position. I also hope that some
misunderstandings can be rectified.
8. Since we only have an hour, we should focus on issues relating to the Horizon
system and the mediation scheme, please.
9. Any questions? If not, invite MPs to start.
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DURING THE DISCUSSION
e@ Maintain that this matter is independent of Government ~ it is a commercial
matter for Post Office
e Ensure that the discussion remains focused on the Horizon system and
associated issues, and does not go into details of individual cases.
e Repeat that individuals in the scheme should take up the offer of mediation, or if
they have convictions, that the CCRC is the avenue to consider whether there
have been miscarriages of justice
e Ifnecessary, remind MPs that they have a responsibility as public servants to
act fairly, and listen to the Post Office’s side of the story
CLOSING REMARKS
10.We need to bring this to a close. Thank you all for taking part today.
11.1 know this matter has been going on for longer than anyone envisaged. Individuals
need an end in sight, so I hope that you [MPs] will encourage any individuals who
haven’t yet taken up the offer of mediation to do so. If mediation is not an option,
and people wish to pursue a civil claim, or appeal their conviction, or take their
case to the CCRC, they should do so. People should use the options available.
12.1 would also strongly encourage those of you who haven’t done so to meet with
Post Office to discuss your individual case, and to encourage your colleagues to do
so as well.
13.1 hope you feel this meeting has been useful. I am sure if there are any further
points you [MPs] want to raise with Post Office, you can do so directly. I hope you
are reassured, as I am, that we can get to the bottom of these unfortunate cases in a
constructive way.
14.[If asked, we recommend that you do not offer any further meeting on this matter,
particularly involving subpostmasters. You should reiterate that individual cases
can be raised directly with Post Office and that is what people should do]
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ANNEX B: MEETING ATTENDEES
Andrew Bridgen MP
(North West Leicestershire, Conservative)
Parliamentary career:
Career history: a
MP for North West Leicestershire since May 2010
Member of Regulatory Reform Select Committee (2010-2015)
Business man (family-owned produce business “AB Produce”,
employs around 230 staff)
Former Royal Marines officer
Mr Bridgen has a constituent, Mr Michael Rudkin, in the Post Office’s mediation
scheme.
Mr Bridgen has spoken about Michael Rudkin’s case in Parliament so we have
some details on the record. However, Government is not privy to the full details of
the case as individual cases in the scheme are confidential.
Mr Rudkin was a subpostmaster and formerly a senior member of the National
Federation of Subpostmasters
Mr Rudkin’s wife was prosecuted for £44,000 of false accounting in 2008
Mr Rudkin claims to have unearther malicious remote access of the Horizon
system in the Fujutsu offices in Bracknell by POL, tampering with accounts
Andrew Bridgen has met Post Office previously — he was part of a group of MPs
who met with Paula Vennells (CEO) and Alice Perkins (Chair) in 2012, together
with James Arbuthnot. This has been reported as a difficult meeting.
We have had no Ministerial correspondence with Mr Bridgen on this matter and he
has not asked any Parliamentary Questions (oral or written)
Post Office have written to Andrew Bridgen on more than one occasion to offer a
meeting to discuss his constituent’s case. They repeated this offer before and after
the Adjournment debate on 29 June, but he continues to decline.
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Kevan Jones MP (possible attendee)
(North Durham, Labour)
Parliamentary career:
Career history:
MP for North Durham since 2001 -
Shadow Defence Minister since 2010
Former Parliamentary Under Secretary for Defence
(Veterans) 2008-2010
Councillor in Newcastle-upon-Tyne from 1990-2001
Formerly an elected officer of the GMB Union
Mr Jones has a constituent in the scheme, Mr Tom Brown.
Mr Brown was suspended and accused of false accounting and theft of £85,000
from his Post Office branch in North Kenton in 2008
In 2013 Post Office dropped the case against Mr Brown deciding it was no
longer in the public interest to prosecute. Mr Brown blames the shortfall in his
accounts on problems with Horizon and is reported in the media as having lost
£300,000 in property including his home, and has declared himself bankrupt
Mr Jones has said that Post Office have made false allegations against Mr
Brown, that he has had his name dragged through the mud and deserves
compensation.
Mr Jones agreed to take over the “lead” of the small group of MPs campaigning
on this matter, after former lead James Arbuthnot (North East Hampshire, Con)
stepped down at the 2015 election.
Mr Jones has described this as a “national scandal”, alleges that Post Office are
“out of control” and that POL have caused people to be sent to prison “when
they are clearly innocent”.
Mr Jones is very critical of the mediation scheme, describing it as a “sham”. He
states that his constituent Mr Brown has been through mediation but a
resolution was not reached.
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Ranil Jayawardena MP (possible attendee)
(North East Hampshire, Conservative)
Parliamentary career:
MP for North East Hampshire since May 2015
Member of the Home Affairs Committee ‘
His seat was previously held by James Arbuthnot a as
Career history:
Former Councillor for Bramley and Sherfield in
Hampshire, and was also Deputy Leader of the Council in
Basingstoke & Deane
Has worked for Lloyds Banking Group
Mr Jayawardena has a constituent in the mediation scheme, Mrs Jo Hamilton
Mrs Hamilton’s case has been raised previously by James Arbuthnot. Mrs
Hamilton ran a post office in Hampshire and was prosecuted in 2008 after an
audit at her branch revealed a £36,000 shortfall.
Mrs Hamilton pleaded guilty to 14 counts of false accounting, but claims she
did so as she was “fearful of going to prison if convicted”. She claims POL
“offered to drop the allegation of theft if she admitted false accounting and paid
the missing money back”.
Mrs Hamilton has applied to the Criminal Cases Review Commission
Mr Jayawardena spoke in the Adournment Debate on 29 June, where he stated
that the CCRC should be “given powers to obtain all the papers that it needs
from private sector organisations, and full access to to all Post Office files”.
(The CCRC actually have the power to obtain information from any prosecuting
authority, which includes Post Office.)
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lain Wright MP (possible attendee)
(Hartlepool, Labour)
Parliamentary career:
e MP for Hartlepool since 2004
¢ BIS Select Committee Chair since 2015
¢ Previously a shadow BIS Minister (2011-15)
e Former Parliamentary Under-Secretary in DfE (2009-10)
and DCLG (2007-09)
Career history:
¢ Councillor for Hartlepool Borough Council 2002-04
e Chartered accountant, worked for Deloitte 1996-2003
¢ We understand that Mr Wright has one constituent in the scheme, but we are not
aware that he has raised his constituent’s case with Government or with Post
Office Limited.
e Weare unsure if he will attend or not, given his role as Select Committee Chair.
The Justice for Subpostmasters Alliance are lobbying the BIS Select Committee
to investigate this matter.
e The previous BIS Select Committee under the last Parliament held a one-off
evidence session into this matter, and wrote to the then-Secretary of State with
some short findings. Government was not asked to give evidence. Note that Mr
Wright was not a member of the Committee at the time.
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Other attendees:
Mark Davies
Communications and Corporate Affairs Director, POL
Mark joined Post Office as Communications Director in July 2012
after two years as Communications and Campaigns Director for the
charity Rethink Mental Illness. Prior to that he spent five years as
Special Adviser to the Rt Hon Jack Straw MP, working in the
Foreign and Commonwealth Office, the House of Commons and the
Ministry of Justice. He worked as Special Adviser to Baroness Amos,
then Leader of the House of Lords, for 18 months in 2004-05. Mark
began his career in journalism in 1990 and during 13 years asa
reporter, writer and editor he worked for the Liverpool Echo, the
Liverpool Daily Post, CNN and the BBC.
Patrick Bourke
Programme Director, Complaint Review and Mediation Scheme,
POL
Patrick leads the team within Post Office handling the 136
applications to the mediation scheme.
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ANNEX: Hansard
The Prime Minister said on 1 July:
Andrew Bridgen (North West Leicestershire) (Con):
Owing to ongoing issues with the Post Office’s Horizon software accounting system, I
believe that many honest, decent, hard-working sub-postmasters and sub-
postmistresses have lost their reputations, their livelihoods, their savings and, in the
worst cases, their liberty. This is a national disgrace. Will my right hon. Friend
consider the requests from Members across the House for a judicial inquiry into this
matter and bring it to a conclusion?
The Prime Minister:
My hon. Friend has done a real service in campaigning tirelessly on this issue, and I
know that he has led a debate in the House on it as well. The Post Office’s answer is to
say that it set up an independent inquiry which has not found evidence of wrongdoing,
but, clearly, that has not satisfied many Members on both sides of the House who have
seen individual constituency cases and want better answers.
What I think needs to happen next is for the Under-Secretary of State for Business,
Innovation and Skills, my hon. Friend the Member for Mid Norfolk (George
Freeman), to convene a meeting involving Members of the House, the Post Office and
representatives of sub-postmasters to discuss their concerns and see what should
happen next. I would hope that it would not be necessary to have a full independent
judicial inquiry to get to the bottom of this issue, but get to the bottom of it we must.
Also attached:
e Adjournment debate
e Andrew Bridgen’s previous speech in the Commons on his constituent Mr
Rudkin’ss situation
e George Thomson’s (NFSP) description of Mr Rudkin’s situation
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Full transcript of adjournment debate:
29 Jun 2015 : Column 1306
Post Office Horizon System
Motion made, and Question proposed, That this House do now adjourn —(Kris Hopkins.)
11.2 pm
Andrew Bridgen (North West Leicestershire) (Con): I pay tribute to the work carried out on this
issue by James Arbuthnot, the former Member for North East Hampshire, and Mike Wood, the
former Member for Batley and Spen, both of whom I worked with for more than two years in a
working party in search of a fair settlement on this matter. Unfortunately, throughout the process we
all lost faith and trust in the Post Office’s willingness to investigate the issue properly and
thoroughly.
To give some background on how the Post Office has let down sub-postmasters and Members of this
House throughout this process, let us consider how it has dealt with the matter from the outset. The
Horizon accounting system used by sub-postmasters was introduced some 15 years ago. Almost
immediately, a spate of discrepancies began to appear as sub-postmasters attempted to balance their
accounts at the end of the day. From that time forward, there has been failing after failing on the part
of the Post Office.
The Post Office has finally acknowledged that its help system for the Horizon software was
completely inadequate, but even with that admission the Post Office continues in its failure to
demonstrate any appetite to deal with issues arising from the Horizon system in a fair and transparent
way.
Jim Shannon (Strangford) (DUP): Is there not something disgraceful in the fact that criminal
charges were pressed against these sub-postmasters and sub-postmistresses when the fault lay with
the Post Office, yet nearly two years after the investigations those charges have not been lifted? The
shadow hanging over their heads has not been lifted either. Does the hon. Gentleman not feel that it
is time to bring that to an end?
Andrew Bridgen: The hon. Gentleman tells a tale which has been told too long to the working
group. We need to bring matters to a head and I hope the debate tonight will give us an opportunity
to do so.
The mediation scheme that was set up to handle disputes about the software system has not delivered
what Members of this House had understood was agreed at its inception. It was flawed in a number
of ways, the most significant being that it excluded those who had pleaded guilty.
Mr Ranil Jayawardena (North East Hampshire) (Con): My constituent, Jo Hamilton, has her
case in front of the Criminal Cases Review Commission. Does my hon. Friend agree that for those
who pleaded guilty, the CCRC should be given powers to obtain all the papers that it needs from
private sector organisations and full access to all Post Office files?
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Andrew Bridgen: My hon. Friend makes a good point and he is right. Many people pleaded guilty
on advice from lawyers or out of fear of losing their liberty in a lengthy and expensive court battle
with the Post Office.
29 Jun 2015 : Column 1307
The House should know that the Horizon system has no adequate suspense account function, so it
pushes the sub-postmaster who wants to balance his books when the books actually do not balance.
This is false accounting and a criminal offence. However, I have seen correspondence that shows
that the Post Office has advised sub-postmasters to keep any surplus balances that they discover at
the close of business in their safe so that they can put them back when they have a shortage. That is
also false accounting and is also a criminal offence.
A further flaw is the fact that issues of concern to the forensic accountants Second Sight, appointed
by the Post Office at the request of the working group to assess independently the mediation cases,
have been specifically excluded from mediation—for example, the absence or the ignorance on the
part of the sub-postmaster of the contract they were under, and the failure of audits and
investigation—despite the agreement of Post Office Ltd with Members of this House that the scheme
would cover all these issues. This is resulting in what I believe to be 90% of the cases in dispute
being excluded from the mediation scheme. This mediation has proven to be a shadow of what was
agreed with Members.
I first became involved in this matter several years ago when my constituent Michael Rudkin brought
his case to me. My constituent had 15 years’ experience as a postmaster and served as a senior
member of the national executive. Indeed, he was chairman of the negotiating committee, the most
senior post within the National Federation of SubPostmasters, responsible for national negotiations
with Post Office Ltd and Royal Mail Group. In short, my constituent knew his job and the
organisation inside out. He knew the organisation to the extent that on a visit to the Post Office
headquarters in Bracknell, he was shown in error a room where operatives had remote access to the
Horizon software and it was demonstrated to him how postmasters’ accounts could be altered
remotely. The House should know that the Post Office has always maintained that it is not possible
to alter accounts in a sub-post office remotely. However, it has recently admitted that this was not the
truth.
In a debate in December I went into the details of Mr Rudkin’s case. To summarise, his post office
branch had a loss in the accounts in excess of £44,000. He was absolved of any knowledge of this
loss by Post Office Ltd but ordered to pay back the money at £1,000 per month from his salary. After
he had paid back £13,000, Post Office Ltd started proceedings against Mr Rudkin’s wife for theft and
false accounting. It also applied for a confiscation order to be placed on all his property and had his
bank accounts frozen using the Proceeds of Crime Act 2002. This all occurred after my constituent
had witnessed the operatives in Post Office headquarters demonstrating their remote access to the
Horizon system.
My constituent has gone through the mediation scheme and his experience is that the professional
advisers, Aver Ltd, Bill Cleghorn and Emma Porter, are very good. Second Sight has been extremely
fair, professional and accurate in its analysis of both systemic and thematic issues within Post Office
Ltd. However, the same cannot be said of the Post Office itself. I and my constituent have no faith in
its ability to resolve the matter. It is said that justice delayed is justice denied, and this matter has
29 Jun 2015 : Column 1308
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simply dragged on for too long, with the Post Office seemingly looking for ever more reasons to
delay the truth of the matter coming out.
Peter Heaton-Jones (North Devon) (Con): In the past five days I have been alerted to a case in my
constituency. Very briefly, the sub-postmistress emailed me to say:
“My post office has been audited today and has been closed due to financial discrepancies as a result,
I believe, of the inadequacies of the Horizon system.”
That has left the village without a post office service, and obviously it is also putting an intolerable
strain on my constituent. I would be grateful if my hon. Friend and the Minister would consider the
impact that that is having.
Andrew Bridgen: My hon. Friend is quite right. When we hear a Post Office spokesperson stating,
“T am really sorry if people have faced lifestyle problems as a result of their having been working in
Post Office branches”,
we have to wonder whether the organisation is even aware of the misery it has caused. The fact that
Post Office Ltd believes that honest, decent, hard-working people losing their homes, their
businesses, their savings, their reputation and, worst of all, in some cases their liberty can be
quantified as a “lifestyle change” only serves to show that the organisation is not fit to conduct an
inquiry into the matter.
The Post Office mediation scheme has proven to be a sham, Second Sight has proven to be far too
independent for the Post Office to stand, and the disdain that has been shown to Members of this
House and to sub-postmasters is a disgrace.
Matt Warman (Boston and Skegness) (Con): Does my hon. Friend agree with my constituents Mr
and Mrs Hedges, who are sub-postmasters, that in this case the Post Office has treated not only them
but this House with contempt?
Andrew Bridgen: Indeed. When we look at the cross-section of Members who have raised the
matter, many of whom have served at the highest levels of Government, and who all believe that
their constituents have been wronged, how can the Post Office believe that it can continue to sweep
the matter under the carpet?
It is most interesting that after two years in which the Post Office has consistently claimed that its
Horizon system software is robust and 100% reliable, I now have in my position an email clearly
showing that the Post Office is now urgently seeking a replacement software system from IBM. I am
sure that the Minister can draw his own conclusion from the happy coincidence that the investigation
is now closed. It appears to me that it is indeed now sunset for the Horizon system.
It is therefore my belief, and the view of many Members across the House, that the matter must now
be taken away from the Post Office and a judicial inquiry set up. The Post Office has abused its
privileged position and sought to cover up its failings by way of a wholly non-transparent approach
to the mediation process.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab): Concerns about the Horizon system are
clearly of long standing. In the few weeks that I have been here I have
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29 Jun 2015 : Column 1309
heard from at least three constituents who have long-standing concerns about the Horizon system,
and there are huge problems that are historic. I understand from one constituent that an injunction
has been taken out against her for the sale of a property—
Madam Deputy Speaker (Natascha Engel): Order. That intervention has been slightly too long.
Andrew Bridgen: I am not surprised to hear that from the hon. Gentleman. The management style
of the senior management at the Post Office is Dickensian, and they have an almost feudal
relationship with their sub-postmasters. This is now a national scandal. The Post Office has
demonstrated that it is incapable of putting its own house in order, so it falls to this House and to this
Government to do so for it. I therefore respectfully ask the Minister for a full judicial review into the
Post Office Horizon system and the way in which the Post Office contracts with is sub-postmasters
and sub-postmistresses.
11.14 pm
Mr Kevan Jones (North Durham) (Lab): I congratulate the hon. Member for North West
Leicestershire (Andrew Bridgen) on securing this debate.
My constituent Tom Brown, a postmaster for 30 years, had a post office in Newcastle. In 2008, he
informed the Post Office that there was a problem with his Horizon system, and it took away one of
his base units to change it. He was told by the helpline—a euphemism because it has not been very
helpful to many sub-postmistresses and sub-postmasters and has actually got them into more
trouble—that the system would rectify itself. It did not. The next audit said that his figures were
down by £85,000. He was arrested by Northumbria police, and his car and home were searched.
Subsequently, the police dropped all charges as there was no evidence against him. Then, for some
unknown reason, the Post Office took out a prosecution against him to take him to court for false
accounting. That process took until July 2013, when he finally appeared in court for the third time.
No evidence was put forward to the court, and after that the case was dropped.
This man has lost his home, his livelihood and his good reputation. He is one of the individuals who
have gone through the mediation system, even though, as the hon. Gentleman outlined, the system is
a sham. He was given four different dates that were all delayed. He described this to me as six hours
of wasted time. The Post Office employed top lawyers from Newcastle to represent it. It again went
through what it said was the evidence, and made no offer at all. The system is a sham. As the hon.
Gentleman outlined, it has been a way of delaying decisions on these cases.
Mrs Emma Lewell-Buck (South Shields) (Lab): Does my hon. Friend agree that the Post Office
has failed to be transparent about this process? My constituent, Mrs Carter, a sub-postmistress, asked
the Post Office to audit her branch to get to the bottom of the problem, but it refused to do so.
Mr Jones: I will go further than that. It has not only not been transparent; it has gone out of its way
to delay cases and hide evidence.
29 Jun 2015 : Column 1310
My concern about the work done by Second Sight is that it suggests that if information is returned to
the Post Office, evidence will go missing. That is why I totally agree with the hon. Member for
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North West Leicestershire that there needs to be an independent judicial inquiry into this—as he
described it—national scandal. I am pleased that my hon. Friend the Member for Hartlepool (Mr
Wright), the new Chair of the Business, Innovation and Skills Committee, is present for this debate. I
urge him and his Committee to look at this as a matter of urgency.
The fundamental point is this: who controls the Post Office? This organisation is out of control. It
has led to people’s lives being ruined and, as we have heard, in some cases to people being given
prison sentences when clearly they are innocent. It is important that we get to the bottom of this.
Without a judicial inquiry, I fear that this national scandal will continue and these people’s
reputations will continue to be blackened.
11.17 pm
The Parliamentary Under-Secretary of State for Life Sciences (George Freeman): I congratulate
my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) on securing this
debate. I commend him and other hon. Members across the House for raising here and elsewhere the
concerns of their constituents—sub-postmasters who face problems. I echo the tributes paid to the
former Members for North East Hampshire and for Batley and Spen for their work on this issue.
They, my hon. Friend and others can take a great deal of credit for raising this issue and encouraging
the Post Office to take action to address sub-postmasters’ concerns and to improve business for the
thousands of sub-postmasters and staff working in the network today. My hon. Friend kindly
informed me before the debate of the points he wanted to raise, and I will try to deal with all his
questions, but I want first to set out a little background.
Hon. Members do not need me to wax lyrical about the important role that post offices play in
communities in providing access to essential mail, financial and Government services. I am sure that
we all agree on and understand that. The Post Office is undergoing a very significant transformation
programme to remove central costs, grow new revenue streams and modernise its extensive branch
network. Already, more than half of eligible sub-postmasters have benefited from investment in their
branches or have signed up to do so. These changes will help the post office network to survive in
the digital age. The way we live and communicate is changing, and post offices need to adapt to that.
The Government are supporting and investing in the Post Office to ensure that it can become
sustainable for the long term and reduce its reliance on taxpayer subsidy. The network is now at its
most stable for a generation. Having halted the closure programmes we saw under previous
Governments, we are committed to securing the future of 3,000 branches that are the last shop in a
local community.
The Government are, of course, the shareholder of Post Office Ltd, and in that role we make sure
that there is a wide network of branches across the whole country, and we provide subsidy for the
Post Office to do so. We also recognise, however, that it is a commercial business
29 Jun 2015 : Column 1311
and we allow it to operate as such. Furthermore, as I am sure most hon. Members are aware, the vast
majority of post office branches are operated not by Post Office Ltd, but by sub-postmasters. They
are independent businesspeople who choose to contract with Post Office Ltd to provide post office
services, usually from a small business such as a shop.
Small businesses are the lifeblood of the local economy in so many communities, and Post Office
Ltd needs to ensure that it supports its sub-postmasters properly. I am pleased that the Post Office
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takes that role very seriously and that it has made significant improvements to the way in which it
works with its sub-postmasters, not least following many of the cases that hon. Members have raised.
The Post Office already ensures that new sub-postmasters receive full training on all aspects of their
role, including the Horizon system, through both classroom and in-branch training. There is also a
dedicated helpline available to sub-postmasters to help resolve any issues they are having.
Wayne David (Caerphilly) (Lab): I am listening carefully to the Minister, but surely he accepts that
there is a fundamental problem with the Horizon system, because we have heard complaints right
across the country from all sections of the population, as well as from the sub-postmasters
themselves.
George Freeman: I will come to the quality of the system. It is difficult on the face of it to
characterise either the training or the helpline as having been inadequate. The vast majority of people
who use or have used the Horizon system since it was introduced 15 years ago have in fact done so
successfully. However, there is always room for improvement and the Post Office has implemented a
business support programme to that end, including improvements to training, with both classroom
and new online training available 24/7; improvements to the Post Office’s support helpline, including
new ways of identifying and proactively supporting branches in difficulty; and new processes to help
sub-postmasters manage their branch and protect against fraud.
Inow come to some of the points that have been made about the Horizon IT system. It is used by
tens of thousands of people working in the post office network, performing more than 6 million
transactions every working day in branches up and down the country, so it is essential that it
functions correctly. Like any large IT system, it is subject to rigorous testing, independent audit and
industry accreditation. Nevertheless, in the light of the concems raised about serious glitches in the
Horizon system, the Post Office commissioned an independent firm of forensic accountants, Second
Sight, to investigate.
Second Sight produced two independent reports—one in 2013 and the other earlier this year—both
of which found there was no evidence of systemic flaws in the system. That is an important point
that I would like to reiterate in response to the shadow Minister’s point: there is no evidence of
systemic flaws in the system. Second Sight’s reports have, rightly, pointed out some areas where the
Post Office could have improved how it
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operates, particularly on the training and support that it provided in some individual cases. As I said
earlier, the Post Office is acting on those points.
The general secretary of the National Federation of SubPostmasters, George Thomson, told the
Business, Innovation and Skills Committee in the last Parliament that the NFSP
“represent 7,000 sub-postmasters...If there was a systemic problem...we would be absolutely
inundated.”
He went on to say:
“Over the 15 years, the Horizon system has been fantastically robust.”
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As well as improvements to training and support, the Post Office also launched a mediation scheme
so that any current or former sub-postmaster who felt they had problems with the Horizon system
could bring forward an application. They would have their cases thoroughly reinvestigated both by
the Post Office and by Second Sight, and, if appropriate, proceed to mediation to seek to resolve any
issues.
It is important to understand that the mediation scheme is independent of the Government. That is
the right approach for something that is a contractual matter between two independent businesses,
and we should remember that sub-postmasters are independent businesspeople who have contracts
with Post Office Ltd.
Mediation is, of course, a voluntary process. Both parties need to consent to it, and for it to be
successful there needs to be a reasonable chance of coming to a common understanding. Sometimes
mediation will not be appropriate or will not succeed, but it is important to note that mediation
cannot overturn a criminal conviction. I will come back to that point.
My hon. Friend the Member for North West Leicestershire and others have been critical of the
mediation scheme and how it is progressing. He mentioned that 90% of cases are being excluded
from mediation, but that statistic is not borne out by the information provided by the Centre for
Effective Dispute Resolution, which oversees the mediation scheme and is independent.
Carolyn Harris (Swansea East) (Lab): Given the number of postmasters and postmistresses who
have been attending MPs’ surgeries to discuss this matter, does not the Minister agree that one
miscarriage of justice is one too many and that the Post Office has to be accountable for this system?
George Freeman: I absolutely accept that the Post Office must be accountable for any miscarriages
and I will make a suggestion at the end about how we might address that.
My hon. Friend the Member for North West Leicestershire raised the case of his constituent Mr
Rudkin. As he will understand, I cannot comment on that or any other individual case, because their
details are rightly confidential, but I reiterate an offer that has been made to all hon. Members who
have a constituent in the scheme: Post Office Ltd has offered to meet to discuss individual cases in
detail, provided the applicant gives their consent. I am aware that Post Office Ltd has repeated that
offer to my hon. Friend in the last fortnight,
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and I hope that he and others will take up that offer. I would be delighted to convene the meeting in
my office in the Department if that helps.
I will move on to the points that my hon. Friend made about whether there may have been
miscarriages of justice where sub-postmasters have been prosecuted and convicted. The Post Office
handles large amounts of public money every day and operates a trusted role in communities, so it is
vital that it has processes in place to protect that money and guard against fraud or theft. The Post
Office can bring prosecutions against an individual, but it is down to the courts to determine whether
they are guilty.
If an individual has been convicted and feels that their conviction is unsafe, they should explore the
legal avenues open to them. They should seek advice on whether they can appeal their conviction, or
raise their case with the Criminal Cases Review Commission. That is the correct way to deal with
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these issues if people believe there have been miscarriages of justice. The House cannot overturn a
court ruling; nor, indeed, can mediation.
Alex Chalk (Cheltenham) (Con): It is of course for individuals to decide whether they plead guilty
and there is of course an avenue of appeal. Is it not important to note, however, that for many of
these people the time for an appeal will be long past, so they remain the victims of a grave injustice?
George Freeman: As I say, if any individuals feel that their conviction is unsafe, they can always
explore the legal avenues open to them. Where large numbers feel that that is the case, as is alleged,
it is perfectly possible for them to bring a class action together. I do not accept that there is a
fundamental injustice in the process that prevents people from bringing claims. I accept, however,
that it is absolutely vital, where there is a legitimate claim against the Post Office about how it has
treated its sub-postmasters, that those claims must be looked at properly.
In the limited time available, I want to move on to the Post Office’s approach. Both tonight and
elsewhere, my hon. Friend the Member for North West Leicestershire and others have raised the very
serious dissatisfaction felt about the way in which the Post Office has handled relations with its sub-
postmasters. When this debate was called, I spoke to the Post Office to understand the situation. I
have received a letter from its chief executive, Paula Vennells, which I shall send to my hon. Friend
and others who have spoken and place in the Library. The letter sets out just how seriously the Post
Office has taken this matter. Ms Vennells says:
“We have gone to great lengths...because I was determined that, if there were problems with the
Horizon system, these had to be identified and resolved.”
I will happily pick up any issues that my hon. Friend or others feel are not addressed in the letter.
As Ihave already said, the mediation scheme is rightly independent of the Government. It was
established jointly by the Post Office and the Justice for Subpostmasters Alliance, working with
Second Sight, and it is overseen by an independent chair, a former Court of Appeal
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judge. It is right that the details of individual cases should be confidential and that the Post Office
respects that.
Andrew Bridgen: The Minister should be aware that one of the criteria given by the Post Office for
removing cases from mediation was if a very large claim was involved. Those sub-postmasters who
have suffered the greatest loss and the greatest injustice were therefore immediately excluded from
the mediation system.
George Freeman: That is a very interesting point, which I will be happy to take up with my hon.
Friend, perhaps in the context of what I am about to suggest.
Although it remains the case that there is no evidence that the Horizon system is flawed, if any
individual feels that their conviction is unsafe, they can pursue the legal avenues available to them. I
do not see any reason for the Government to intervene in this matter by instigating a full judicial
inquiry. However, I am struck by the extent of the concern expressed tonight by Members from both
sides of the House and during the lead-up to this debate, including some of the specific testimony
heard tonight. I will be happy to convene a meeting in the Department, perhaps led by my hon.
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Friend, with the support of others from across the House—to deal with the point he has just made
and one or two others that have been made this evening—and to invite the Post Office to come to
that meeting with representatives of sub-postmasters to try to iron out the issues.
My hon. Friend has raised other points that are a matter for the Post Office, rather than for the
Government. I have no doubt that the Post Office has listened closely to this debate and will be in
touch with him to answer his questions. I agree with him that this matter has gone on for far longer
than anyone would wish and, for whatever reason, has been the cause of huge difficulties, trial and
unnecessary hardship for a number of the sub-postmasters who have been affected.
The important thing now is for the final cases in the mediation scheme to progress to mediation, and
I urge all the parties involved to continue to work together to make that happen. That will help the
individuals with cases remaining in the scheme to reach resolution, and it will mean that the Post
Office can, working closely and collaboratively with its sub-postmasters, carry on with its essential
tole of serving communities.
I repeat that some of the points made tonight in the House merit investigation. I will happily convene
a meeting in the Department to put those specific points to Post Office Ltd. The system may have
generally worked well for the vast majority of users, but that in itself is no reason not to ensure that
those who have been legitimately unable to deal with the system should not be penalised unfairly.
They certainly should not be made the victim of criminal judgments when their crime is nothing
more than being unable to cope with a new IT system. I look forward to raising those points with the
Post Office.
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Mr Bridgen’s previous speech on his constituent Mr Rudkin
Westminster Hall debate 17 December 2014 [col. 535WH-537WH]
The issue first came to my attention because of the plight of a constituent, Mr Michael
Rudkin. For 15 years, he was a sub-postmaster. He served as the most senior member
on the national executive of the National Federation of SubPostmasters and as the
chairman of the federation’s negotiating committee. He was responsible for
negotiations with Post Office Ltd and Royal Mail Group, so he is an experienced sub-
postmaster. I would like to share with Members his experience of the problems with
the Horizon system, which demonstrates that significant questions need to be asked of
the Post Office, although it is reluctant to answer them.
Mr Rudkin’s story starts on Tuesday 19 August 2008. In his official capacity as a
negotiator on behalf of sub-postmasters, he was invited to a meeting at the Fujitsu/Post
Office Ltd offices in Bracknell to discuss problems with the Horizon system. If Mr
Rudkin is telling the truth, which I have no doubt he is, this sequence of events raises
questions about the system, which the Post Office must answer.
On arrival that morning, my constituent signed the visitors’ book in reception and
waited for his chaperone, a Mr Martin Rolfe. Mr Rolfe took him to the second/third
floor, and they entered a suite where Mr Rudkin recognised Horizon equipment on the
benches. There was only one other person in the room—a male of approximately 30 to
35 who was reluctant to engage in conversation with Mr Rudkin or Mr Rolfe.
Mr Rolfe asked Mr Rudkin to follow him through a number of pass card-protected
security doors to some stairs. They went down to the ground floor and then entered the
boiler room. Mr Rudkin states that a number of men dressed in casual office wear
were standing around the doorway. They became very uncomfortable about Mr
Rudkin’s presence and left.
Having entered the boiler room, Mr Rudkin instantly recognised two Horizon
terminals. There were data on both screens, and an operative was sitting in front of one
of them, on which the pure feed for the Horizon system came into the building. Mr
Rudkin asked if what he could see were real-time data available on the system. Mr
Rolfe said, “Yes. I can actually alter a bureau de change figure to demonstrate that this
is live”’—he was going to alter a figure in a sub-postmaster’s account. He then laughed
and said, “I'll have to put it back. Otherwise, the sub-postmaster’s account will be
short tonight.” Mr Rudkin expressed deep concern, because he had been told that no
one had remote access to a sub-postmaster’s account. At that point, he was politely but
speedily taken to reception, and he was told to leave the building.
Mysteriously, the next day, Wednesday 20 August 2008, a Post Office Ltd auditor—a
gentleman Mr Rudkin knew, by the name of Paul Fields—arrived at Mr Rudkin’s sub-
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post office. He proceeded to tell Mr Rudkin that his branch had a loss of £44,000.
Interestingly, Mr Rudkin maintains that the investigator knew the size of the loss
before he even entered the premises.
Mr Rudkin was absolved of all knowledge of the loss by Post Office Ltd, but he was
ordered to pay the money back at the rate of £1,000 a month from his salary. As we
have heard, the sub-postmaster is completely liable under the contract for all losses.
As Mr Rudkin points out, why would someone steal money from themselves when
they know that?
After Mr Rudkin had paid £13,000 back to Post Office Ltd, the Post Office started
proceedings against Mr Rudkin’s wife for false accounting. It also applied for a
confiscation order on all his property and had his bank account frozen under the
Proceeds of Crime Act 2002. Mr Rudkin has since cleared all his debts to Post Office
Ltd. In the process, he has lost his business, his reputation, his position as a magistrate,
some property and his good name, and he has been unable to work since.
Second Sight—the team of independent investigators appointed by the Post Office to
look into the matter—questioned the Post Office about Mr Rudkin’s allegations and
his visit. Initially, Post Office Ltd consistently denied the visit had ever taken place—
until Mr Rudkin produced an e-mail from Mr Rolfe from the day before the visit,
which invited Mr Rudkin to visit and said that Mr Rolfe would meet him in reception,
at which point the Post Office did admit that the meeting had taken place.
Second Sight has repeatedly requested e-mail data from before, during and after Mr
Rudkin’s visit, as well as a copy of the visitor’s book, but all those things have been
withheld or are, we are told, now missing. That raises serious questions about the Post
Office.
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George Thomson (NFSP) evidence to BIS Select Committee on Mr Rudkin’s case
3 February 2015
George Thomson: In fairness to the Post Office as well, when you look at some of
these cases, they are very complicated and the facts do not stack up. If you will bear
with me, I will give you a perfect example of how difficult a particular case is. I will
name someone, because they were talked about in a Westminster Hall debate in
December. I made the point before that some people are absolutely genuine and
believe that the money had to be Horizon and it was staff error. But there are some
people who, quite frankly, are spinning a yarn here.
Michael Rudkin is one of those who was talked about time after time. This is where it
is difficult for me, because we do our best and we helped Michael Rudkin as well.
Michael Rudkin was initially suspended in 2008, and this comes up in Brian’s point.
We got him reinstated because his wife admitted that the discrepancy—Michael
Rudkin never said it was Horizon in 2008—was because she had taken the £44,000
and did not tell her husband. So we got Michael reinstated. This is important, because
he claims that it is Horizon now. His wife stole £44,000, and she admitted that. He
was then reinstated because of the work that I and others from the federation did. He
was subsequently audited again in 2010, and he was £6,500 short. It is only in the last
year and a half that I have heard that he is now blaming it on Horizon—never at the
time.
The point that I would like to finish on is that Mr Rudkin must be uniquely
unfortunate when it comes to new technology, because there was a robbery in his
office in 2005, when £50,000 went missing, and his CCTV camera happened to be
broken. He is very unfortunate with new technology. I support genuine people, but
some people are chancing their luck. Just to finish on that point—
Q38 Chair: You are quoting an individual case, and that individual is not in a position
to rebut anything. I think, quite frankly, it is totally out of order. I would check on the
legal implications of what you have just said.
George Thomson: It is true.
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