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To: Baroness Neville-Rolfe
From: Laura Thompson, Shareholder Executive (—
Date: 1 October 2015
Purpose: Advice following your meeting with James Arbuthnot on 17 September,
covering Mr Arbuthnot’s ask that you meet Second Sight and Sir Anthony Hooper.
This note also updates on other next steps and the latest on this matter.
Recommendation: That you:
A. Decide whether you would like to meet Second Sight (paras 3-8), and/or Sir
Anthony Hooper (paras 9-11), possibly attempting to meet Sir Anthony first
before deciding on Second Sight
B. Agree the draft letter to Sir Anthony Hooper at Annex A
C. Agree to send a short note to Mr Arbuthnot, and write further once you have
met Second Sight (should you choose to do so) (paras 12-13 and Annex B)
D. Note the latest update on the mediation scheme and other activity on this
matter (paras 14-17 and Annex C)
Timing: We suggest you write to Mr Arbuthnot in the next few days.
Summary
1. You met James Arbuthnot on 17 September to discuss the Post Office Horizon
matter, on the recommendation of Andrew Bridgen MP. We have already
prepared a note of that meeting to be shared with Oliver Letwin’s office, and
have a letter to Mr Bridgen ready to send shortly.
2. Mr Arbuthnot’s main ask of you at your meeting was that you consider meeting
Second Sight, the firm of forensic accountants who were engaged by Post Office
to investigate the complaints about the Horizon IT system. In your discussion
with Mr Arbuthnot he also asked you to consider engaging Sir Anthony Hooper,
who was the former Court of Appeal judge appointed to chair the Working
Group which established and ran the mediation scheme — Mr Arbuthnot felt that
Sir Anthony would be a suitable individual to review this matter for
Government.
Meeting with Second Sight
3. Mr Arbuthnot argued that, since you had received briefing from Post Office on
this matter, it was only fair that you should meet Second Sight and hear their
side of the story. He invited you to judge for yourself whether Second Sight
1
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were as “biased and unprofessional” as he felt they had been depicted by Post
Office. We discussed after the meeting that the decision to meet Second Sight
would be finely balanced and said that we would reflect and provide advice.
4. The advantages of agreeing to meet Second Sight would be:
a) Doing so would demonstrate that the Government is listening to the
concerns of all parties on this matter, and deflect criticism that Government
is only receiving briefing from Post Office Limited. These criticisms could
be amplified if campaigners were to learn that Government had refused to
meet Second Sight.
b) Mr Arbuthnot was an architect of the mediation scheme being established, is
an influential Parliamentarian and has spoken publicly on this matter (and
will do so again) — agreeing to his request may help maintain a positive
relationship with him and mitigate future criticisms (although note that Mr
Arbuthnot is strongly convinced that this issue will not go away)
c) Second Sight are claiming that their findings are being misrepresented —
meeting them would demonstrate that they are not, and would also give
Government a chance to understand why they feel the Horizon system is still
flawed despite having advanced no evidence to support this.
d) Our position is that no Government action is necessary since the CCRC are
considering cases, mediation is ongoing, and Tim Parker is considering this
matter with a fresh pair of eyes. This position will be stronger if you can say
that you have met Mr Bridgen, Mr Arbuthnot and Second Sight and remain
of that view.
5. There are however significant risks in agreeing to a meeting:
a) The Government’s position is that this is an operational matter for Post
Office and Government is not involved. Meeting Second Sight could
undermine that position. There is also the possibility that, having met
Second Sight, you will come under pressure to meet campaign groups and
by implication, individuals who have raised cases with Post Office, further
removing us from our position of independence.
b) Related to that point, by meeting more stakeholders, campaigners might
have a reasonable expectation that Government will opine on the merits of
this issue and start to intervene in the process. This could be a confusing
signal for individuals who have cases in the mediation scheme, and lead
them to reject the offer of mediation because they believe that Government
is preparing to launch an independent inquiry.
c) There is a risk also that your meeting Second Sight will be briefed to the
media, giving another hook for this story to be repeated.
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6. This is clearly a difficult judgement and one where you will need to be satisfied
on the balance of risks to the Government. Our view is that on balance you
should offer a meeting to Second Sight. The risks of doing so are significant, but
we believe they can be handled if we are careful and robust in our messaging.
Frankly, the campaign will escalate whether you decide to meet Second Sight or
not, and we assess that your having met Second Sight will put Government in a
marginally stronger position than if you refused. It will also allow you to
understand some of the arguments against Post Office better yourself.
7. Post Office have very strong concerns about the prospect of you meeting Second
Sight, for the reasons set out above. They are concerned in particular about
people withdrawing from the mediation process, having gone to considerable
effort to arrange mediations with the vast majority of remaining cases (see
paragraph 14 below). If you do decide to meet Second Sight then Paula Vennells
will request a phone call with you beforehand and we recommend you do so,
before you communicate your decision to meet to Second Sight or James
Arbuthnot.
8. If you do decide to meet Second Sight we suggest a low key approach, with an
email from your office to Mr Ron Warmington, Managing Director (who has
contacted you previously).
Meeting with Sir Anthony Hooper
9. Sir Anthony Hooper is a former Court of Appeal judge in England and Wales,
and was appointed in October 2013 to be the independent Chair of the Working
Group overseeing the mediation scheme on this matter. He performed that role
until the Working Group closed in March 2015. Mr Arbuthnot was
complimentary about Sir Anthony’s approach and experience, and suggested he
would be a good person to review this matter for Government.
10. We have previously considered whether you should write to Sir Anthony
seeking a meeting on this matter, noting that Sir Anthony has previously refused
to meet Ministers (or indeed Mr Arbuthnot) while he was in post. Nevertheless
we recommend you write to Sir Anthony requesting a meeting to hear his
thoughts on this matter, and attach a draft letter (Annex A) for your approval.
11. A “compromise position” could be to meet Sir Anthony first (if he accepts), and
reserve judgement on meeting Second Sight until you have met (or until he has
declined to meet). This would allow you to accede to one of Mr Arbuthnot’s
requests, whilst allowing you to make a more informed judgement on the other.
Writing to James Arbuthnot
12. You may wish to write to Mr Arbuthnot following up on the points raised in
your meeting. We suggest a short note to be sent in the next few days which
thanks Mr Arbuthnot for the meeting, that you will reflect on the points he has
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raised and respond substantively in due course. You could include in that note
your decision whether to meet Second Sight.
. As you know, Mr Arbuthnot stated his intention to make this matter the subject
of his maiden speech in the Lords. Note that his introduction is scheduled for
Monday 20 October. Your note to Mr Arbuthnot could request some warning of
his speech, so that Government can respond as constructively as possible. Annex
B contains some suggested text for a note for your consideration.
Further updates
14.
15.
16.
17.
Mediation: We previously advised that Post Office set a date of 4 September
for individuals offered mediation to decide whether they would accept the offer.
Post Office have advised us that, of the cases where mediation had been offered
but not accepted, 8 have decided to reject the offer and 3 have not responded.
The remaining (44) cases have dates agreed between now and end January for
mediation to take place and Post Office are prioritising this.
Tim Parker has now (Thursday) taken up his role as Chair of Post Office
Limited and will be considering this matter as you have requested. We
understand that Mr Parker is considering the best approach and is likely to
appoint an external lawyer (QC) to advise him, as well as offer meetings to both
Second Sight and Mr Arbuthnot. We recommend you arrange to meet Mr Parker
towards the end of this calendar year to hear his thoughts on the matter, along
with his initial impressions of the business more widely, and we will provide a
separate note on this.
There is an Early Day Motion in the Commons, tabled by Kate Hoey MP
(Vauxhall, Lab), which is attached at Annex C. To date the EDM has received
28 signatures: that number may change once Parliament returns on 12 October.
The list of signatories is also attached; note that only one Government
backbencher is a signatory, the remainder are predominantly Labour or SNP.
Post Office are writing to each MP who signs the EDM to offer a meeting. One
MP from that list has, having met with Post Office, written to them stating that
they would withdraw their name from the EDM.
When we spoke after your meeting with Mr Arbuthnot, we mentioned the
possibility that, if Government considered it necessary to look into this matter,
we would need professional advice in order to do so: a firm such as Deloitte
could be appointed to look into a sample of cases, or to review Second Sight’s
reports and Post Office’s responses for a more considered view than that of
officials. This would be a significant step, with budgetary implications, and if
done with the knowledge of Post Office could cause them significant concern.
We maintain our recommendation that such a review is unnecessary at this time
given the lack of evidence found by Second Sight (who have been openly hostile
to Post Office), and because other routes to resolve the issue have yet to run
their course.
Annexes:
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A. Draft letter to Sir Anthony Hooper
B. Suggested responses to Mr Arbuthnot
C. Early Day Motion text and signatories
Copied to: Ministers’ offices, SpAds, Perm Sec, Mark Russell, Justin Manson,
Patrick Kilgarriff, ShEx POL team, Matt Barker, Claire French
Advice received from:
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SpAds
Press
Legal
Analysts
No
In parallel
No
No
No
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Annex: Letter to Sir Anthony Hooper
Dear Sir Anthony
I am writing to you as Minister responsible for the Post Office in connection with
the Complaint Review and Mediation Scheme established in 2013. I understand that
you were the independent Chair of the Working Group overseeing that Scheme from
October 2013 until the Working Group was closed in March of this year.
I am sure you are aware that concerns continue to be raised about this matter, and
that some individuals (including some Members of Parliament) are dissatisfied with
the way the Scheme has operated and are asking the Government to intervene by
establishing an independent inquiry.
Your role as part of that Scheme will have given you a unique insight into this
matter, and I would be very interested to hear your thoughts on the conduct and
operation of the Scheme. I would therefore like to invite you to meet with me on
this matter, at a time and date convenient to you.
I understand that in the past you declined to meet with my predecessor, but I would
hope that with the schemes subsequent closure you would be able to meet me, on a
confidential basis should you so wish. I would like to emphasise that the
Government fully respects the confidentiality of individual cases in the Scheme and
would not wish to discuss the merits of individual cases.
If you would be agreeable to this, please contact my diary secretary.
Yours etc.
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Annex: Note to James Arbuthnot
Dear Mr Arbuthnot
Thank you for coming to meet me on 17 September to discuss the Post Office. I am
grateful to you for taking the time to set out your experience of the matter, and it
was a very useful discussion.
Zam considering the points you raised during our discussion and will respond to
you substantively on those matters shortly.
AND/OR
You suggested that I should meet with Second Sight and I have written to Mr Ron
Warmington to offer a meeting, should they choose to do so.
OR
You suggested that I should meet with Second Sight. I am afraid my diary does not
permit me to do so at present, but I have asked Tim Parker, the new Chair of Post
Office Limited, to extend an invitation to Second Sight to meet as part of his review
into this matter. I am sure he will also extend a similar invitation to you.
AND/OR
You suggested that I should meet with Sir Anthony Hooper, and I have extended an
invitation to him to do so.
I am aware of how instrumental you have been in championing the cases of
subpostmasters who have raised concerns about Post Office, and I hope that we can
continue to work constructively on this to ensure that the right outcome is reached
for all parties involved. To that end, if any further matters arise of which you think I
should be aware then I would invite you to contact my office.
You also mentioned that you intended to make this matter the focus of your Maiden
Speech in the Lords. If you are able to inform my office of when you plan to speak,
I hope the Government will be able to respond as constructively as possible.
Yours etc.
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Annex: EDM text and signatories
That this House notes with concern that a number of postmasters have been forced
to pay back thousands of pounds, or have been prosecuted or imprisoned, solely on
the basis of questionable data indicating cash shortfalls from the Post Office
Horizon computer system introduced in 2000; further notes that the BBC Panorama
investigation on 17 August 2015, entitled Trouble at the Post Office, demonstrated
the damaging effect this has had on the lives of the postmasters involved;
acknowledges that the report by forensic accountants Second Sight into claims many
sub-postmasters were wrongly accused raises serious questions about the integrity
of the Horizon system; expresses disappointment with the dismissive response from
the Post Office to the findings of the Second Sight report; notes the concerns raised
by the Business, Innovation and Skills Committee in the last Parliament in a letter to
the Secretary of State for Business, Innovation and Skills, dated 17 March 2015,
about the approach of the Post Office to the subsequent mediation scheme; notes the
Prime Minister's comment on 1 July 2015, Official Report, column 1477, that the
internal inquiry by the Post Office has not satisfied many hon. Members on both
sides of the House; commends the work of the former hon. Member for North
Hampshire, James Arbuthnot, for consistently raising this important issue in the last
Parliament; and urges the Government to establish a full independent judicial
inquiry.
Signatories: 28
Tasmina Ahmend-Shekih, SNP Margaret Ritchie, SDLP
Richard Arkless, SNP Jim Shannon, DUP
Kirsty Blackman, SNP David Simpson, DUP
Peter Bottomley, Conservative Dennis Skinner, Labour
Ann Clwyd, Labour Christopher Stephens, SNP
Jim Cunningham, Labour Alison Thewliss, SNP
Mark Durkan, SDLP Gareth Thomas, Labour
Paul Flynn, Labour Valerie Vaz, Labour
Roger Godsiff, Labour Mike Weir, SNP
Drew Hendry, SNP Mark Williams, Lib Dem
Kate Hoey, Labour
Kelvin Hopkins, Labour
Chris Law, SNP
Gordon Marsden, Labour
Rachael Maskell, Labour
Chris Matheson, Labour
Grahame M Morris, Labour
Albert Owen, Labour