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Business and Trade Committee
Oral evidence: Post Office and Horizon -
Compensation: follow-up, HC 477
Tuesday 27 February 2024
Ordered by the House of Commons to be published on 27 February 2024.
Watch the meeting
Members present: Liam Byrne (Chair); Douglas Chapman; Jonathan Gullis;
Antony Higginbotham; Ian Lavery; Julie Marson; Andy McDonald; Charlotte
Nichols; Mark Pawsey.
Questions 452-604
Witnesses
IV: Nick Read, CEO, Post Office; Ben Tidswell, Chair of the Remediation
Committee, Post Office; Simon Recaldin, Remediation Matters Director, Post
Office; Simon Oldnall, Horizon and GLO IT Director, Post Office.
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Examination of witnesses
Witnesses: Nick Read, Ben Tidswell, Simon Recaldin and Simon Oldnall.
Chair: Welcome to this panel of the Business and Trade Committee
inquiry into how we accelerate redress in a way that is faster and fairer for
the victims of the biggest miscarriage of justice in British legal history.
As the witnesses have been informed in advance, we have a procedure in
Parliament for witnesses to take the oath. We do not use it in ordinary
circumstances, but given the context of this oral evidence session, we
have decided that we will require the witnesses on this panel to take the
oath today. I remind witnesses that they are obliged to tell the whole truth
to the Committee, and that any failure to do so will be considered a
contempt of Parliament and a potential perjury. Will the Clerk of the
Committee please administer the oath?
Nick Read: I swear by almighty God that the evidence I shall give before
this Committee shall be the truth, the whole truth and nothing but the
truth, so help me God.
Simon Recaldin: 1 do solemnly, sincerely and truly declare and affirm
that the evidence I shall give before this Committee shall be the truth, the
whole truth and nothing but the truth.
Simon Oldnall: 1 swear by almighty God that the evidence I shall give
before this Committee shall be the truth, the whole truth and nothing but
the truth, so help me God.
Ben Tidswell: I swear by almighty God that the evidence I shall give
before this Committee shall be the truth, the whole truth and nothing but
the truth, so help me God.
Q452 Chair: Thank you very much indeed. Mr Read, have you been dragging
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your feet in paying redress to the victims of this injustice?
Nick Read: No, I don’t think we have. I think we have had some success
in terms of the speed at which we have paid, particularly with the HSS. I
have heard many comments today about the HSS, but from our
perspective, certainly, we believe that we have completed the first
tranche, which was the 2,417 of the original applicants to the HSS. We
have made offers to them all, and I think in the region of 62% have
already been settled. On the OC, I would agree that it is slower than we
would want it to be—no question about that. I will ask Mr Recaldin to bring
a bit more colour to that, but it is certainly slower than we would hope.
Chair: In a moment, I think. The former chairman of the Post Office has
made allegations in public that he received either direct instructions or by
a nod and a wink orders, in effect, to try and slow the process down so
that “the Tories could limp into the next election”, minimising financial
liabilities. Do you believe that your chairman did receive such a message?
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Nick Read: I don’t believe that to be the case. I can categorically say that
nobody in my team or I have received any instruction from the
Government about slowing down compensation.
Chair: Do you believe the former chairman is lying?
Nick Read: Well, I don’t believe it’s true. I do not believe that that is the
case. I think he has misinterpreted or perhaps misunderstood the
conversation that he had with Ms Munby. If I look at the data that I
provided to him before he had that briefing, at no stage was compensation
mentioned. It was absolutely a conversation about the long-term future
and funding of the Post Office. I do not believe that it had anything to do
with compensation. He might have been mistaken.
Chair: Is it possible that the former chairman came away from that
conversation, as you just said, having misinterpreted what was said to
him?
Nick Read: I don't believe it is. We have had no conversations at all about
the mixing of funding between the compensation schemes and the overall
funding of the Post Office per se. I don’t think that that in any way comes
through in his notes.
Chair: I have the email from Mr Staunton to you dated 6 January 2023.
He reported to you that Ms Munby had said to him there was no appetite
to “rip off the band-aid... Now was not the time for dealing with long term
issues”, and the Post Office needed a plan to “hobble” up to the election.
Mr Staunton goes on to say, “I said the funding issues revolved around
poor decisions made many years ago with Horizon and related legal
issues.” So let me ask again: is it possible that the former chairman
misinterpreted what the permanent secretary told him?
Nick Read: It is possible. You will have to ask Mr Staunton whether he
misinterpreted. I don’t believe that to be the case. We have been very
consistent that compensation, as I said, was not mentioned in the briefing
that he received before he went to see Ms Munby. In the notes that he has
suggested, there is no mention of compensation, so I do not believe that
to be the case at all.
Chair: Did the former chairman relay anything else either verbally or in
any other way to you following that conversation?
Nick Read: Not that I recall.
Chair: Not that you recall. Do you think there may be?
Nick Read: No, I don’t. I understand where you are going with this in
terms of—
Chair: I am looking for the whole truth.
Nick Read: I completely understand that. I don’t believe—I have been
quite categoric—that that is the case.
Chair: So you believe that this email that Mr Staunton sent to you is the
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only communication, the only read-out, that you have from Mr Staunton
about that conversation.
Nick Read: I believe that is the case, yes.
Chair: In the Secretary of State’s letter to me late last week, she points
out that she took four months to issue a priorities letter to Mr Staunton
that was dated 29 June 2023. In that letter, the Secretary of State says
that she told Mr Staunton to “inject pace” into delivering compensation for
overturned convictions. Have you had any other instructions to “inject
pace” into the delivery of the other redress schemes?
Nick Read: Instructions? I think we are all acutely conscious that the
schemes are not as quick as they need to be and the balance between
fairness, redress and managing public money and the level of bureaucracy
is not where we want it to be.
Chair: How did this letter that was sent to the chairman with these
instructions show up on your desk? How was that translated into targets
for you?
Nick Read: The chairman’s letter fulfils a very specific purpose. We have
a quarterly shareholder meeting, which is attended by colleagues from the
Department and from UKGI, as well as the chairman and myself, and on a
quarterly basis we review. The start point for that conversation is the
priorities letter that the chairman receives on a yearly basis, so it is part of
that process.
Chair: So there was a board-level discussion about this priorities letter.
Nick Read: As I say, the letter itself is discussed on a quarterly basis.
That would have been shared, I am sure—I cannot specifically say—with
his board colleagues. I am sure he would have forwarded it to his board
colleagues. He certainly sent a copy to me.
Chair: So there should be four discussions about this a year.
Nick Read: Four discussions a year with the shareholder, UKGI, the
management team and myself, and he and I would attend that
shareholder meeting.
Chair: The striking thing about this letter is what it does not say. It does
not say that the Post Office is to “inject pace” into any of the redress
schemes other than the scheme for overturned convictions. I am trying to
understand where the written paper trail is from the Secretary of State to
a Minister to the board of the Post Office that basically says, “Speed up.”
Nick Read: 1 do not think it is a paper trail per se, but those are
conversations that obviously I have on a quarterly basis at the shareholder
meeting. They will be conversations that I have on a regular basis with the
Minister. I meet him on a monthly basis, and we talk about the issues that
are going on in the Post Office. The speeding up of compensation is a
conversation that we would have on a monthly basis.
Chair: I cannot see in the board minutes that you have released to us any
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discussion about a ministerial instruction to speed up the pace in redress
schemes, so I come back to the question: have you had written
instructions from the Department to speed up the processing of redress
schemes?
Nick Read: As I said at the very start, I do not think I have written
instruction, but these are conversations that clearly we would have with
the Department on a regular basis.
Chair: I think the Committee is pretty surprised that you have not had
written instructions to speed up the resolution of redress in one of the
biggest miscarriages of justice in British history.
Nick Read: I think it is an absolute given that that is what we are trying
to do. We are all acutely conscious—I have said it here in this room to the
Select Committee.
Chair: You say you are acutely conscious that it is what we are trying to
do, but I am looking at the budget for overall redress of just over £1
billion, which you set out in your letter to me. Only 20% of that money
has been paid out; 80% of the money has not been paid out. I am trying
to understand how acutely conscious you are of the need to get the money
out the door.
Nick Read: Very, is the short answer to that.
Chair: But you have no written ministerial instructions to that effect.
Nick Read: Correct.
Chair: Have you had a conversation with the Secretary of State about the
need to accelerate redress schemes?
Nick Read: No, I have not.
Chair: Have you had a conversation with the Minister about the need?
Nick Read: Yes. The Minister and I meet on a monthly basis, and we
discuss this as part of our agenda.
Chair: If we are looking for a paper trail of instructions from the
Department to you about speeding up the process, would we be able to
find that?
Nick Read: I do not think that it is going to be that easy to articulate very
specifically where that is.
Chair: So it is unclear.
Nick Read: It is unlikely.
Chair: What about the UKGI rep on your board? Has the UKGI rep on your
board ever underlined the importance of speeding up the redress system?
Nick Read: She is very clear that the primary objective of the
organisation must be to address the underlying issues of compensation, as
well as supporting the inquiry and driving cultural and operational change.
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I think we are all consistently clear that those are the core drivers of the
business.
Chair: But that is different from an explicit instruction and explicit
pressure on you to speed up what you are doing to pay out redress. We all
understand that “addressing the underlying issues” is management speak.
What I am talking about is an explicit instruction—
Nick Read: I have not had an explicit instruction.
Chair: Right. So the Secretary of State has not had an explicit
conversation with you, nor has the UKGI rep on the board, but the
Minister—thank God—has.
Nick Read: Yes.
Chair: Are you happy with the pace of the redress schemes to date?
Nick Read: No, I am not. I have said that on many occasions when I have
been here, which is that we are very clear that the postmasters who have
been in this appalling scandal need closure quickly. I am also very clear
that to modernise and move the Post Office forward, we need to ensure
that redress is completed. I have said in this forum as well that we cannot
do that until such time as compensation and redress have been settled for
those involved in the scandal.
Chair: Are there any management bonuses tied to the speed of redress?
Nick Read: No, there are not.
Chair: Are there any incentives on you?
Nick Read: No, there are not.
Chair: So there is no written instruction to deliver, no bonuses and no
incentives—just a general urging of good will from the Minister, by the
sound of it.
Nick Read: Correct.
Chair: He nodded, for the record.
We have heard today from the lawyers who have given us evidence that it
may take one to two years to complete the process of providing redress.
Do you share that assessment of the timetable?
Nick Read: I might ask Mr Recaldin to be specific about that. I think that
he might have a view on how long it is going to take. In fact, may I ask
that Mr Recaldin speaks to that?
Chair indicated assent.
Simon Recaldin: Thank you. I want to start, if I may, by saying that Iam
very conscious that I will probably quote a lot of numbers. This is my job;
my job in Post Office is to deliver compensation as speedily as possible—
Chair: Believe me, as a former Chief Secretary to the Treasury, I like
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numbers.
Simon Recaldin: 1 am grateful. I am, however, much more conscious
that behind every number I quote is a person, and that person has
suffered significantly, not only from the original scandal but in terms of the
journey that we have made them go through to receive their
compensation, and the way that that journey has been managed. I want
to apologise for that. That is my opening statement, if I may. This journey
to get compensation is not good, and it is too bureaucratic. We are
listening because it needs to be faster—and it will be.
Chair: Thank you. And you are going to tell us what your estimate is of
how long it is going to take to complete the process of providing redress.
Simon Recaldin: 1 would also like to, if I may—it is part of the answer to
the question—talk about Mr Creswell’s evidence around the GLO
disclosure, because I think he might be doing himself a bit of a disservice,
and therefore this might be better news for the Committee, because—
Chair: Why don’t you start with your estimate of how long it is going to
take to provide redress, and then we'll unpack it?
Simon Recaldin: —because I think that this will improve that evidence.
But in terms of my estimate, I have two schemes. The closure date of the
HSS was potentially looming until the excellent ITV series, after which we
have had more than 1,000 new claims in—which I think is fantastic, by the
way, because my job is to pay out fair compensation. So for you to now
ask me to put a timescale on that is going to be challenging, because I
had already dealt with 2,500 claims and I had made the offers for 2,500
claims, and we were going through the process of resolving any disputes
in that. Therefore I had a trajectory to close all those down towards the
end of March next year. Now, with another 1,000 cases in there, I have to
reassess that plan—I am sure you understand that—in terms of how I
deliver those.
In terms of late applications in the HSS, which were received by the end of
September, I will deliver 95% of those offers by the end of March next
year, but then I have the new claims coming in. I think it is very
reasonable and sensible for bodies such as this to challenge me to put a
timescale on those, and I believe that we will put in a target on how
quickly we will turn those around. I see no reason why we cannot replicate
what they have in the GLO scheme on this.
Chair: So the initial timeframe for the HSS was March next year, but now
it is going to take a bit longer because you have just got a load of new
claims?
Simon Recaldin: Correct.
Chair: Okay. What about the GLO scheme?
Simon Recaldin: In the GLO scheme, my only responsibility is disclosure.
Chair: Okay, but what is your guess? I mean, we have just we have just
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heard that—
Simon Recaldin: I'm not going to guess.
Q485 Chair: Okay, let me put the question this way: we have just heard that
45% of the disclosures have not been made. When will those disclosures
be made?
Simon Recaldin: That is what I tried to start to answer, Chairman. The
knock-on effect of the excellent idea of putting £75,000 as a minimum
payment in the GLO scheme is that less disclosure has to be made, so I
can now take some of those out of my work stack of disclosure, which
makes that 55% more. What we are finding—I am happy to share this
with the Select Committee when we have actually done the numbers when
I get back to the office—
Q486 Chair: You haven't brought those numbers here?
Simon Recaldin: Well, because 55% was last week and now Freeths and
DBT have supplied us, “In your work stack, Mr Recaldin, we don’t need
disclosure on these cases,” so I can now discount those, and I believe now
that that 55% is actually nearer 64%—
Chair: 64%?
Simon Recaldin: Yes, 64%, which will hopefully help in terms of the
Minister’s ambition to deliver these offers out by 7 August.
Q487 Chair: Okay. For the remaining cases, is there any view about how long it
will take to issue disclosures?
Simon Recaldin: Because we have now reduced the numbers of
disclosures required, my original plan that was set for July—to complete
disclosure in July—will now move to the left. I do not know by how long
because I am redoing that plan as we speak—it is live—because we have
only just been told how many of that cohort will be taken out by the
excellent idea about the £75,000.
Q488 Chair: Are we likely to have the GLO scheme concluded by early August?
Simon Recaldin: In terms of disclosure?
Chair: No, in terms of all done and dusted.
Simon Recaldin: You will have to ask the Government and Freeths.
Chair: I did, and they were unclear.
Simon Recaldin: 1 am responsible for disclosure. I will absolutely provide
the disclosure in a timely fashion, as I have laid out.
Q489 Mark Pawsey: Mr Read, you appeared before the Committee on 20 June
and were challenged by the Chairman about the overpayment of bonuses
to board members. Can we take it that that matter has been entirely dealt
with now?
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Nick Read: It has.
Mark Pawsey: In your evidence you mentioned on many occasions that
the Post Office is unable to move on “until such time as we have
addressed the issues of the past”.
Nick Read: Correct.
Mark Pawsey: The Chairman has challenged you about written
instructions from Ministers or from the Department, but as a management
team you have your own imperative to get this business sorted, yet we
hear that there are still two years to do that. Why is it taking so long?
Nick Read: It is immensely frustrating. I agree with you. It is stressful
and distressing for the victims as well. Clearly, it is extraordinarily
complex. Mr Recaldin has just pointed out that we have had 3,560
claimants come forward as applicants, and we have had an additional
tranche that have come forward as a consequence of the drama. It is
difficult; there is no question about that. There are multiple schemes, and
there is no question that that is complicated. I am acutely aware that
there is an issue of trust associated with the Post Office. We have to inject
into the schemes some independence to give people confidence that this
process is independent and independently managed, so that this level of
trust can in some way be mitigated. That is the reason it is taking so long.
Mark Pawsey: Eight months have passed since you gave evidence to the
Committee. As far as we can see, not a great deal has happened apart
from a TV documentary.
Nick Read: 1 would challenge that. We have finished the HSS, and we
have started the OC scheme. There was the Secretary of State’s
introduction in the autumn of the £600,000 option for overturned
convictions as well as today. There is movement, so I would challenge
your view that nothing has happened since then.
Mark Pawsey: Addressing the issues of the past is also about the
relationship between the Post Office and postmasters—
Nick Read: Existing postmasters?
Mark Pawsey: Existing and former. You were in the room when we heard
evidence that there remains what I would describe as a toxic culture,
institutional mistrust, and a complete lack of trust between the
organisation and postmasters. What are you doing to address that?
Nick Read: I was disappointed to hear that, no question about that. I
would probably point to a datapoint. We do an annual survey in the
autumn with our postmasters, and the scores on support and rebuilding
the relationship have improved markedly as a consequence of the work we
have been doing in the organisation. I can give some examples of the type
of activity we have done. We have introduced new field teams to support
postmasters. We have introduced new schemes to support existing
postmasters who are going through difficulties in their branches. We have
new engagement and communication processes with our postmasters. We
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have two postmasters on the board, as you know. We have a new
postmaster director. In terms of the culture in my central teams, every
senior leader has an area that they go out to on a quarterly basis. We
have the “A week in the life of a postmaster” training, which every
employee must go through to understand. We are about to introduce more
training around the inquiry and compensation. We are working hard to
change perceptions internally and certainly the perceptions that have been
expressed in this room today. We want to try to change those perceptions.
Mark Pawsey: Are you satisfied that the postmasters who have suffered
harm are going to be appropriately compensated for that harm? We heard
some pretty harrowing experiences just now. Are you confident that that
will be dealt with?
Nick Read: I believe it will be. We are very clear—certainly within the
administration of the schemes, which Mr Recaldin looks after and Mr
Tidswell oversees—that we need to inject independence to give people the
trust and belief that they are getting a fair deal. The reality is always that
people are going to be frustrated, and that is something we are deeply
concerned about. Therefore, we are continuing to try to lower the
evidential bar so that people can and will put their claims in and ensure
they get the right compensation.
Mark Pawsey: One of the things that we heard from the former
postmasters is that many of them simply want closure. They want rid of
this horrible period of their lives. Do you accept that many have accepted
less than they are entitled to in order to make this problem go away?
Nick Read: It must be possible. I agree with you, Mr Pawsey. I have met
with many of the victims. Myself and Mr Recaldin do this regularly and
have done, and it is very harrowing. We understand the trauma that
people are experiencing. We do understand the difficulties that many,
many of our victims have gone through, and that is very challenging.
Mark Pawsey: And how might those people be more accurately
compensated, Mr Read—those who have accepted less than they are
entitled to?
Nick Read: We are very keen, and have had this conversation with
Government, around an appeals process. We recognise that, certainly
when we initiated the scheme, at the very start, there may well have been
bureaucratic delays and problems with the scheme, so we do want to have
an appeals process. We do think that is the right way to go forward.
Chair: I am just looking at some of the statistics. Please correct me if I
have got these wrong. In your letter to me of 5 February, you said the
budget for the HSS is £233 million. The public statistic is that about £98
million has been paid out. That is only just over 40% of the budget.
Nick Read: This is for the historical shortfall scheme.
Chair: Yes.
Nick Read: Yes. Just about £100 million has been out.
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Chair: On the GLO scheme, I don’t think we know what the budget is. It is
certainly not disclosed. About £127 million has been paid out. On the
overturned convictions scheme, £35 million has been paid out. That is 4%
of the £780-million budget.
If we put these numbers together and compare it with the £1.2 billion that
you wrote to me about earlier in the year, the best-case scenario is that
perhaps 40% of the budget for redress has been paid out.
Nick Read: Correct.
Chair: You can’t be satisfied with that level.
Nick Read: I'm not. No, I’m not satisfied with that. The core driver is the
number of overturned convictions victims who have not come forward—
who we anticipated would come forward but have not come forward. That
is at the root of the stats that you have just described.
Chair: What is the position on the pre-Horizon cases—the Capture cases?
Are you anticipating further claims to come from problems with the
Capture system?
Nick Read: 1 will let Mr Recaldin go into the detail of this. We are very
thankful for Kevan Jones coming forward with his eight particular victims
of the Capture system. We have obviously spent the last five weeks
working hard on it.
Mr Recaldin will give you some detail and some numbers behind what we
think we have discovered that occurred between 1992 and the launch of
the Horizon system, and the number of individuals who may well have
been involved in Capture. It is still a work in progress, but we will give you
a very clear breakdown of those numbers. It is in excess of 1,000.
Simon Recaldin: 1 concur with Nick Read’s comments about Kevan Jones.
I put on record our thanks—my thanks—for bringing this matter to our
attention.
There are eight cases that have been brought to our attention, which have
alleged issues with this Capture system. More concerning is that there is
evidence from the individuals that four of those eight actually included
convictions. That helps us in our investigations because we can go to
those courts and try to find evidence around it. This is stuff that happened
30 years ago, and the records are very, very, very thin. So we are doing
that. We have mandated our criminal lawyers to go and find some
evidence and some disclosure on these cases.
We know from our records that the Capture system was a floppy disk,
effectively. It wasn’t networked. It wasn’t connected or anything. It was a
glorified spreadsheet that helped postmasters settle every week, and it did
that job. We also recognise that there were issues with it, because we
have seen correspondence. Again, thank you to Kevan Jones MP, whom
we are grateful to for the supply of that.
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There is evidence that the Post Office wrote out to postmasters who used
it, to say, “By the way, we got that coding a bit wrong, and therefore
there might be an issue; please reboot” and so on. There were errors in
the system. We recognise that.
Chair: So there may be further cases that emerge.
Simon Recaldin: There may be. We are in an investigatory stage. It is
important that we know the facts around this. We are well into that. We
will conclude. We haven‘t concluded yet whether there is any detriment,
but if any detriment has occurred as a result of Capture, then obviously
we need to do the right thing.
Chair: And you are happy to update the Committee with your discoveries?
Simon Recaldin: Absolutely.
Chair: Okay, thank you.
When people apply to the Horizon shortfall scheme, they obviously do not
know what information you know, so in a sense they are applying
blindfold. Do you think that is a problem?
Simon Recaldin: Our evidential bar is deliberately very low on this. That
means that if the postmaster says something happened, it happened. Do
we look for evidence? Yes, we do look for evidence. But if we cannot find
evidence, we take their statement as the evidence. That is pretty clear in
terms of our principles.
Chair: You ask people to fill in a 14-page form, which I have read, and
which is very complicated. Have you read that form?
Simon Recaldin: Yes.
Chair: Do you think it is simple enough?
Simon Recaldin: No.
Chair: What are you planning to do to simplify it?
Simon Recaldin: This is very much part of the proposal we have pulled
together. If I may, there are a number of issues with this. First is the
clumsiness, the bureaucracy and the legalese in that application form, in
particular at the time it was issued. If you think about the age profile of
the people it was issued to, there are some challenges around that. People
had to print things off, sign things, re-scan them and send them back.
That process can and should be challenged. Mr Hudgell already put it very
well: legal representation is only offered at the point of offer, rather than
to help people to fill in that form—they might think, “What does that
mean, ‘in terms of fair compensation’? I don’t know what that means.” Sir
Wyn—the inquiry—has picked that up as well. There is also potentially an
issue around consequential loss guidance after the issuance of the
scheme. So there are a number of things it is right to look at and
challenge. At the end of the original 2,417 cohort, it is right to assure what
you have done, and that is exactly what Post Office has done.
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Chair: That is quite a self-critique. When did these revelations dawn on
you?
Simon Recaldin: Because we are listening. We are listening to people like
you. We are listening to the advisory board. We are listening to the
Minister. We are listening to the postmasters. Therefore, based on those
issues, we are recommending that there should be an appeals process
around this, and the advisory board is supportive of that.
Chair: I am holding an example of an offer letter. There is quite a simple
table on page 2 that sets out the different heads of loss. If somebody is
presented with these numbers, I do not think there is any real explanation
of how they were arrived at. Do you think that is fair?
Simon Recaldin: If they receive an offer letter, they are absolutely
entitled to appropriate legal advice. By the way, it is not limited to £1,200;
it is reasonable legal fees.
Chair: What is the cap on reasonable legal fees?
Simon Recaldin: There isn’t—whatever is reasonable.
Chair: Is it uncapped?
Simon Recaldin: It is not £1,200. It was £1,200, and because we are
listening, that changed.
Chair: When did that change?
Simon Recaldin: Forgive me; I can’t recall. I am happy to provide that
information, but it has changed.
Chair: Was it this year? Last year?
Simon Recaldin: It is certainly since I have been at the Post Office, which
is since 2022.
Andy McDonald: Let’s get this right. We have had evidence that it was
£1,200—that those were the fees. We need to have clarity here. So it was
£1,200?
Simon Recaldin: It was £1,200, and we have made it very clear that we
have changed it to reasonable fees. We have put that on the website and
communicated it.
Andy McDonald: You have introduced the lower bar as a concept. We
have heard evidence from witness after witness saying that it is anything
other than a low bar. One of our postmasters allegedly used money to pay
off a mortgage that the Post Office had invented. How is that a low bar?
We heard from Dr Hudgell that there are self-evident issues. If this has
happened to you, your reputation is down the toilet. You don’t need to
have that bottomed out—you know that has happened. How is that
consistent with you telling this Committee that there is a low bar?
Simon Recaldin: 1 am very sorry to hear that feedback. We are listening.
This is not defensive—please do not take this as defensive; it is not meant
to be—but I would say that it is a process. The process might be wrong,
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but all these decisions in HSS have been made by an independent panel.
So on the point around causation of bankruptcy, that is not a Post Office
decision. That decision has been made by an independent panel of KCs
looking at what they have been presented. I encourage Mr Hudgell to
bring whatever he can, including witness statements, for the panel to
reconsider that decision. This is an independent panel making the call.
Chair: Would you mind, at your convenience, letting the Committee know
when the cap on legal aid was taken off?
Simon Recaldin: Of course.
Chair: I have not heard any sub-postmasters who are aware of it. I have
heard sub-postmasters telling me that they are fighting against Herbert
Smith Freehills, one of the biggest law firms in the country, with such
inequality of arms that they are unlikely to win. If we look at claims that
were settled between 2020 and 2022, I think at that stage it was not clear
that people could take 80% of the offer and continue to press their case.
Simon Recaldin: That is correct, Chair.
Chair: Does that mean that claims settled between 2020 and 2022 need
to be re-examined?
Simon Recaldin: If they are settled, then—
Chair: They settled, often because they could not afford to fight on. Since
then, they have been able to take 80% of the claim in order to put food on
the table—
Simon Recaldin: 1 see. That is another very good reason why there
should be an appeals process—correct.
Chair: Right, so we may need to re-look at these claims.
Simon Recaldin: If they have settled—some of them with legal advisers,
but most of them without—and they feel they have not had a fair
outcome, our recommendation, which the advisory board has made to the
Minister and which the Minister recognised in the House the other day, is
absolutely to have an appeals process.
Chair: At the moment there is no standard tariff for calculating things
such as reputational damage or distress and inconvenience. That makes it
very difficult for sub-postmasters to put a claim together. How are we
going to resolve that? Are you able to publish a standard tariff, or a guide
to how people can construct the right number to apply for?
Simon Recaldin: We rely on expertise, because this is principle-based; it
is all built on principles. The people who make those calls are people who
make those decisions all the time. They are eminent KCs on the
independent panel.
Chair: But the people applying are not eminent KCs, and therefore they
need a standard tariff to understand what they should be applying for.
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Simon Recaldin: That is fine, and I understand that. What we do not
want is a tariff to be restrictive in any way.
Chair: No, but a tariff none the less would help people to get their claim
numbers in the right place, would it not?
Simon Recaldin: Yes, it would.
Chair: If it would, will you undertake to produce one?
Simon Recaldin: I can.
Chair: Thank you very much indeed. Have you been told at any stage, by
anybody, to try to bear down on the value of claims?
Simon Recaldin: Never.
Jonathan Gullis: Mr Read, do you believe you have changed the culture
of the Post Office since taking on the role?
Nick Read: 1 think we have made a lot of progress, and there is plenty
still to do.
Jonathan Gullis: You will have heard from the witnesses earlier that the
Post Office is still the Post Office—that was not said in a flattering tone.
Nick Read: No, it wasn’t.
Jonathan Gullis: The Chair, in the House yesterday, quoted from board
minutes from March 2023 that said, “board members lamented that the
board was tired and constantly distracted by historical issues and short-
term crises.” That does not really sound as though the board has learned
the lessons of the past, does it?
Nick Read: I think the specific point that was being referenced in that
minute was that the board were keen to get the right balance between the
strategic direction of the business and compensation. We had 64 board
meetings in 2022, which is why perhaps the comment around tiredness
might have come in—
Jonathan Gullis: With the greatest respect, Mr Read, 64 board meetings
does not make up for people who spent seven months in prison, or years
where—
Nick Read: Of course.
Jonathan Gullis: One of our previous witnesses—Mr Downey, I think, if I
got his surname correctly—literally had to flee the country to protect his
family and himself. He then came back to seek a claim, only to face some
bogus, as Mr McDonald has pointed out, £100,000 mortgage payment.
Someone must have got that figure from somewhere, so if the Post Office
is investigating someone who is now putting in a claim, that is a question I
would have. If so, where have this figure and idea come from? It seems
either mythical and made-up, or as though someone is trying to dig up dirt
on people who have already been victims of this process. You say you are
tired. I don’t care if it is 64 board meetings—I suspect it should have been
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364 board meetings in a year; maybe give yourself Christmas day off as a
treat—to come up with answers for these people who have suffered more
than they should have and are still waiting, as the Chair has pointed out,
for some form of redress. That, by the way, is what we should all be
calling it from now on, and no longer compensation, as Mr Bates rightly
pointed out. Henry Staunton, the former Post Office chair, said that the
management culture at the Post Office is—these are his words—a “mess”,
“toxic” and “mistrustful” of sub-postmasters. Were his remarks accurate?
Nick Read: No, I don’t believe they are.
Jonathan Gullis: Why do you disagree with him on this point?
Nick Read: Because I think we have made a lot of progress, certainly
since 2019, to try and change the culture of the organisation. Don’t get
me wrong, this is a scandal that has gone on for 25 years. There was an
enormous amount to change, and it won't be changed overnight, but we
have made progress. Postmasters have told us that we have made
progress—existing postmasters, in the network today—and I think we
have made progress, as can be seen from the performance of the network
and our postmasters during the crisis of covid, and indeed as we have
come out of that. There is no question about the Post Office and its role in
the infrastructure of our country—no question at all.
Jonathan Gullis: On mistrust, you were advised by an external legal
adviser, Nick Vamos, that the vast majority of convicted people are,
among other things, “guilty as charged” and were “safely convicted.” Why
did he write this letter to you?
Nick Read: We did a number of things 18 months ago, and it is important
that I set the record straight here. Eighteen months ago, we were
struggling to understand why postmasters weren’t coming forward. We
had a trace system; we had involved the CCRC; we had written out to
postmasters. We had expressed a real desire for people to come forward,
and 18 months ago we asked Peters & Peters, two eminent KCs, to do a
desktop exercise to ask whether there was any way we could proactively
and pre-emptively go out to victims and say, “Do you know what? We're
not going to stand in your way. We’re going to ensure that your conviction
is overturned. We do not need to stand in the way.”
Jonathan Gullis: I think you will appreciate, Mr Read, that the reason
people mistrust the Post Office is because they have been privately
convicted. They have had, obviously, spurious claims made against them
about where money has gone. They themselves have funded the shortfalls
in many cases, leading them to bankruptcy, and then the Post Office
themselves admitted to losing the money, as you confessed the last time
you were before us. Since 2005, we do not know where that money has
gone—it could well have gone towards bonuses of board executives.
Then, on top of that, when people are having to spend years fighting to
get convictions overturned and, as the Chair has pointed out, years to
process the paperwork and submit some of these forms, I don’t blame
people for not coming forward. Then I read letters like this, where Nick
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Vamos is writing to you saying, “Guilty as charged,” and then your letter
to the Secretary of State for Justice, the Lord Chancellor Alex Chalk, where
you draw attention to what you call a “significant” number of prosecutions,
which “raises acute political, judicial, and communications
challenges...against...by-passing the normal appeals process.” Reading that
letter, it feels like you are lobbying the Government—I am happy for you
to correct the record if I am wrong—to not go through with this legislation
in order to get rid of convictions.
Nick Read: Not at all.
Jonathan Gullis: Because I can’t read that letter any other way. I am not
a legal expert—I will be interested to hear from Mr McDonald, because I
am sure he has an opinion on it as well—but if that is not your intention,
as I am sure you are about to lay out, why on earth would you send this
letter to the Lord Chancellor?
Nick Read: I have an obligation to ensure that, when decisions are being
made by the Government, they are being made with the full information,
and that is the full information that we have, the evidence that we have,
and the work that we have done. Mr Vamos was very clear. I am not a
lawyer, but I could see that this was of significant note, and it was
important that the Ministry of Justice had that information.
I was very clear in that letter—and you can read the letter—that we are
making no value judgments here, and I have been very clear when I’ve
been here. I want people to get through this process, and if mass
exoneration is the right thing, then let’s make sure that we get the right
legislation in place to deliver mass exoneration.
Chair: Did you commission the letter from Peters & Peters?
Nick Read: No.
Chair: They just sent it to you off their own bat?
Nick Read: They did. It was unsolicited, it came through—
Chair: It just arrived in the post one day?
Nick Read: It did, and I know Mr Vamos is quite happy to come and
explain that—to write to the Department as to why he did that—but as I
say—
Chair: But in your letter, why did you say you would be “bound” to oppose
an appeal?
Nick Read: Because in the Hamilton judgment, we have an obligation to
the courts not to concede unless the Hamilton principles are involved. As a
lawyer, Mr Tidswell is better placed to explain the detail, but it is very
clear that that is an obligation that we have. When this letter arrived, I am
also very clear that it is of significance, and it was important, therefore,
that the Ministry of Justice were aware of that. But if I go back—
Chair: So you wrote—
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Nick Read: If I may, Mr Byrne, we shared this information with the
advisory board back in July and again in September, and with the
Department, so this is not new information that has just emerged.
Chair: No, I think people are surprised by the way you put it.
Nick Read: I see. Okay, I understand.
Chair: But your answer to us today is that you were following a court-
sanctioned judgment when you said, “We are bound to oppose an appeal.”
Nick Read: Yes.
Jonathan Gullis: Mr Tidswell, we heard from Mr Creswell earlier that you
made a phone call to him about Henry Staunton as chair and that,
allegedly, in that conversation—I will let you clarify the record—you said
there were board members willing to go if Mr Staunton remained in place.
Is that an accurate representation of the phone call you had with Mr
Creswell?
Ben Tidswell: Yes, it is. I spoke with Mr Creswell and I explained to him
concerns that I had heard from board members and from senior
executives about Mr Staunton’s behaviour. I passed that information on to
him, as the senior independent director of the company.
Jonathan Gullis: You will understand that it will be hard to understand
how the Post Office culture has changed if its chairman was engaging in
such behaviour that you felt the need to contact Mr Creswell to say that
board members were on the verge of quitting if Mr Staunton remained in
his position as chair.
Ben Tidswell: 1 completely disagree with that. I think it is the other way
around. If somebody, no matter how senior they are, is misbehaving, or
not behaving in a way that is consistent with their role, that will be dealt
with, and the Post Office is big enough to be able to deal with that. It is
highly unfortunate, and it causes, I am sure, an enormous amount of
concern to all of you and to everybody who watches the Post Office and
who wants to see it succeed or at least do what it should be doing. I am
acutely conscious of that, but let us be in no doubt that, in circumstances
in which a very senior individual was doing something they should not
have been doing, the system worked, and that information was conveyed
as it should have been.
Jonathan Gullis: Can you give details as to what the allegations were
against Mr Staunton, or is there still an investigation?
Ben Tidswell: As you heard from Mr Creswell, there is an investigation
under way, and I am not going to comment on it, because it is a
confidential investigation. But I can tell you what I told Mr Creswell, which
was what he told you: there were a number of concerns, the most
significant of which were that Mr Staunton was obstructing investigations,
and particularly the whistleblowing investigation into him, and had taken
steps to circumvent the shareholder’s position in relation to the
appointment of my replacement.
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Jonathan Gullis: This is the final question from me. Mr Read, you said
you have, alongside Mr Recaldin, been meeting a number of victims. Do
you have a specific number for how many you have met so far?
Nick Read: I think it is 33 that I have met. I think Mr Recaldin has met
more like 50.
Simon Recaldin: Forty-nine.
Jonathan Gullis: How regularly are those meetings taking place, or how
often are you sending out invitations to come and meet you?
Nick Read: We have been very clear that we are open for any victim to
come forward and meet us, and we have done that. We have said that
consistently over the last 18 months. I have been to Scotland, to Ireland,
to Wales—all over the country—to meet individuals. Even in this building, I
have met victims on a one-to-one basis with Mr Recaldin. So it is
something that I extend to people, and I am very keen that my leadership
team and members of the board also do that, because it is important that
people understand the trauma that people have gone through and what
they have experienced. I think that will make us a better business
culturally and a better business in terms of understanding the postmasters
and the trauma.
Chair: You wrote in your letter to me earlier this year that improvements
had been made in the culture, but reading the emails that we released
yesterday, I saw that Mr Staunton’s email included the view expressed by
one of the sub-postmasters on the board that “the views expressed by
Richard Taylor, and previously by management and even members of the
Board, still persisted—that those PMs who had not come forward to be
exonerated were ‘guilty as charged.’ It is a view deep in the culture of the
organisation...that Post Masters are not to be trusted.” It does not sound
like the culture has been improved in quite the way this Committee would
hope.
Nick Read: That is a very disappointing email. There is no question that
the release of that documentation was deeply troubling to all of us. We
met as a board last Wednesday, and the individuals involved in that email
refuted the characterisation and the way that it was written, which was
pleasing to hear.
Notwithstanding that, we know we have a lot more to do. We know there
is a lot more that we need to do as an organisation to improve. But one of
the things that I am very clear about is that there must be opportunity for
members in the board to have disagreements. That is why we have invited
postmaster directors on to the board to challenge us and to make sure
that we make the right calls to postmasters and that, operationally, we are
doing the right things, and that can be uncomfortable. I was very acutely
aware that, when I suggested to the Secretary of State that we have
postmasters on the board, that would inject discomfort. The reason we did
that, clearly, is that we needed to get the board and the business closer to
the operation and to what postmasters are thinking.
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Chair: But there is prima facie evidence that the culture is not yet in the
right place.
Nick Read: As I say, it is a work in progress; we have been very clear
that it is a work in progress. It is deeply worrying and distressing that we
are not making the speed of progress that we would like to. However, as I
say, at the board we were united in our purpose last Wednesday. All the
board members on the call were very clear that we have a direction of
travel and that we are going in the right direction.
Chair: So the cultural problem is “work in progress”, not “job done”.
Nick Read: Correct.
Ian Lavery: Who are the untouchables, Mr Read?
Nick Read: That is not an expression that I am aware is used in the
organisation—not an expression that I recall using. I think there is a
misunderstanding in the way that expression has been used. It is referred
to as 40 untouchables. I am very, very clear that we have done two pieces
of work. One, we have been through all the past roles in the organisation
for the last 30 years and we have identified that there are five individuals
who have “investigator” or “investigating manager” in their job titles. None
of those individuals is involved in any activity to do with investigation
today.
We also—I think this is where the 40 number comes up—have 43 cases
that have been opened up as a consequence of the meetings that Mr
Recaldin and I have done with former postmasters, identifying where there
are names that have come up in those private meetings and also from the
human impact evidence that we have heard in the public inquiry. We are
looking into those 43 cases—that is not 43 people, but 43 cases. So this
notion of untouchables is not an expression that is used in our
organisation. I don’t know where it comes from.
Ian Lavery: You recognise the term “untouchables” and recognise where
it comes from. Explain that, because other people have got a different
view. They are called the untouchables due to the power they wield, their
aggressive nature and the fact that they act like “mafia gangsters”—those
are not my words, but the words of sub-postmasters at the Sir Wyn
inquiry. It has been stated that they operated under a dire culture that still
considered that the wrongly convicted postmasters were guilty and on the
take. To be quite honest, this reads like a badly scripted gangster movie.
You have got a group of investigators turning up at post offices and
basically wielding so much power, and frightening the wits—
Nick Read: Well, let me—
Ian Lavery: Hang on. They frightened the wits out of individual sub-
postmasters, postmasters, employees—closing them down at will and
calling them everything. Like we have heard this morning, they were
causing people to actually leave the country and their place of
employment—where they have lived—and not return.
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Nick Read: Well, that is not happening today. We have not investigated
or prosecuted anybody since 2015.
Ian Lavery: I am not saying today; I am saying it did happen.
Nick Read: This may well have happened in the past. The reason we are
acting on the cases that have come up in the human impact evidence
gathering in the inquiry, and the names that come to Mr Recaldin and I
when we meet individually with people, is that we want to build evidence
to make sure that no one—no one—is above the law at the Post Office,
from the top to the bottom. We will do that. The only way we can regain
any form of trust is to be totally transparent and absolutely clear that no
one is above the law. That is absolutely the case.
Ian Lavery: Do you believe that, at the time, they acted in the manner
described?
Nick Read: Yes, I have heard those stories. I have heard those narratives
and I have heard very traumatic descriptions from individuals that Mr
Recaldin and I have met—harrowing stories. So I do believe that that is
the case and that, where there are individuals, we are investigating them.
However, what I also want to be really clear about is that we do not want
to repeat the mistakes of the past. We do not want to just prejudge people
in a way that clearly happened to postmasters historically. We will go
through due process. If there are individuals who have been involved in
activity that is either aggressive or has been unacceptable, then we will
explore that. That is what we are doing with the 43 cases.
Ian Lavery: Are there any original investigators from that time still active
in investigating current postmasters?
Nick Read: As I say, we have five individuals who were investigators or
who had “investigation manager” in their job titles still in the organisation.
I am not going to describe what process we are doing, but we are looking
into allegations that have been made against those, so there are
investigations that are ongoing as a consequence of the 43 casework that
I described to you just a second ago.
Ian Lavery: Just for clarity, people who have been categorised by sub-
postmasters as mafia, gangsters—
Nick Read: Are in an investigation.
Ian Lavery: Whether they are under investigation is not the point. They
are still employed by the Post Office, making investigations into current
postmasters.
Nick Read: No.
Ian Lavery: So that is not the case.
Nick Read: No—not the case.
Ian Lavery: So none of them is employed.
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Nick Read: Not in investigative roles at all. As I say, there are five
individuals—
Ian Lavery: Just tell me, instead of me trying to quiz you. Are they
working for the Post Office?
Nick Read: We have five people working for the Post Office who had
“investigation” and “investigation manager”—
Ian Lavery: What did you not just say that for?
Nick Read: That is what I just said.
Ian Lavery: It’s not. You’re trying to hide it, man!
Chair: Why are they still employed?
Nick Read: Because these are individuals who have come up during the
human impact sessions or during meetings that Mr Recaldin and I have
had with victims. To ensure that we have due process, we will investigate
these individuals. People know that investigations take time. We want to
assess the allegations. We have been out to individuals that Simon
Recaldin and I spoke to and have asked them the question—we have
followed up. That is what we are doing at the moment, and we will go
through a due process. I will ensure that people have the right to reply.
That is important. I want to make sure that we have a proper process.
Ian Lavery: Is the Horizon data still being used to support new
prosecutions?
Nick Read: We are not prosecuting anybody. We have not prosecuted
anybody in the Post Office since 2015.
Ian Lavery: On the Project Pineapple email exchange—I am sure you
understand that—
Nick Read: Yes, I understand that.
Ian Lavery: One non-executive director talked about so-called
“pathclearing” efforts in the Post Office to settle new financial
discrepancies, which have “echoes of the past”, and the responsibility of a
man who “constantly reinforces the mantra of ‘all PMs’”—postmasters—
are on the take’.” Do you know what that refers to?
Nick Read: Pathclearing—it is colloquially referred to as pathclearing—is
an exercise that we will need to do when we move off the Horizon platform
in one, two, three years’ time, whenever that moment is. We will have to
go branch by branch and post office by post office to ensure that we
manage to migrate from one system to the other. The pathclearing
exercise is, “How are we going to go into the branches to make sure that
they are fit and ready to accept the new Horizon system?”
Iam not sure what he was aiming at with that comment. It hasn’t started.
It hasn’t even been planned. We don’t have a delivery mechanism yet in
place. But the colloquial term refers to how we will need to ensure that
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everybody is fit for purpose, ready to go, and the branch is ready. That is
what pathclearing is: how do we help and support postmasters to be ready
to accept the new system when we migrate away from Horizon?
Ian Lavery: Mr Read, Mr Recaldin, Mr Oldnall and Mr Tidswell, are you
untouchable?
Ben Tidswell: Absolutely not. If people are not complying with their
duties, then they are accountable. You see that most clearly with the
departed chairman. I certainly expect everybody in the organisation to be
accountable. At the moment, in the absence of a chairman, I suppose I
lead the board, but I can absolutely tell you that every member of the
board believes that as well.
Simon Oldnall: 1 echo that point. I expect to be held to account in my
role by my leadership team—absolutely.
Simon Recaldin: 1 can echo that and I can tell you that I am challenged
regularly. I am very touchable.
Nick Read: So am I.
Ian Lavery: You didn’t seem too convinced there, mind, Mr Read.
[Laughter.]
Chair: Can I check something, Mr Read? You wrote to me on 23 February
to say that you do not recognise the 40 investigators remark, but I am
looking at the email from Elliot Jacobs of Wednesday 24 January that
says: “The culture that PMs are ‘guilty’ and ‘on the take’ is embedded in
this company and whilst we continue to employ 40+ people who ensured
innocent people were found guilty and who continue to believe that
mantra, this will never change.” I am trying to understand why you don’t
recognise the 40—
Nick Read: It is inaccurate.
Chair: —but Elliot Jacobs, who sits on your board, or did sit on your
board, does.
Nick Read: He did. It is inaccurate. It is not true.
Chair: Elliot Jacobs is wrong.
Nick Read: He is wrong.
Ben Tidswell: He is wrong. He accepts that.
Chair: You said that you don’t recognise that remark, but it is clearly
common currency among board directors.
Nick Read: Between Mr Jacobs and Mr Staunton, clearly it is, but that is
not common currency in our business. Common currency would mean
people would be talking about it. It is not common currency.
Andy McDonald: Let me wind back a little to the Nick Vamos issue. Just
for the record, Mr Read, did you take it upon yourself to write to the Lord
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Chancellor?
Nick Read: Yes.
Andy McDonald: Did you challenge the view that Nick Vamos expressed
in his letter? Did you subject it to a challenge process?
Nick Read: No, I didn’t challenge his process.
Andy McDonald: You just accepted it.
Nick Read: I recognised that it was a letter of significance. I am not a
lawyer, as I say. I spoke with my corporate affairs team, and they felt that
it was something that we needed to release. That is what we did. But as I
say, I am under no illusions that—
Andy McDonald: So you talked to your corporate affairs team. Did you
talk to the board? Did you mention it to the board?
Nick Read: No, I didn’t mention it to the board. I don’t mention all the
decisions that I make to the board.
Andy McDonald: My goodness, that is a pretty significant intervention
not to mention to the board.
Nick Read: It is a matter of judgment, and clearly, as the group chief
executive, I didn’t believe it was the case that I needed to do that. I
wasn’t drawing any conclusions as a consequence of this. I have been very
clear that we were releasing this information because we had done so to
the advisory board and to the Government back in September. This is not
new news.
Andy McDonald: It’s not news? It’s a bomb that has gone off, and you
are not talking to your board about it.
Nick Read: We have an obligation, and that obligation, from a legal
perspective, is why it was important for us to release that information.
We're making no judgments about it—no value judgments about it.
Julie Marson: Mr Tidswell, in the first session I had an exchange with Mr
Creswell, and I wanted to make sure that you had an opportunity to
comment on it. Mr Creswell said to me that he had “never heard...anything
like the allegations that were made to me by Ben Tidswell” about the
chairman. They included, as you mentioned to my colleague Mr Gullis,
silencing a whistleblower and potentially bypassing a board appointment
process.
Mr Creswell also mentioned something that I think might be relevant to
our next session as well, in terms of interpreting the meanings of various
memos and conversations that the former chairman had. Mr Creswell said
that “some aspects of the chair’s performance in terms of his grip on his
brief, and whether he was alert in meetings,” were also a concern that had
been passed to him. Is that a concern that you raised and that you can
expand on?
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Ben Tidswell: That is not a concern that I raised in the conversation that
I had with Mr Creswell. I think I can say that there was a distinct change
in Mr Staunton’s behaviour that I perceived once he became aware of the
investigation into him. I know that because, as the senior independent
director, I was the person who was asked to convey to him that he was
going to be investigated. That was in about November last year. I think it
would be fair to say that his behaviour changed in a way that was
somewhat erratic from that point, and it became more erratic as we got
into January.
So, if I am answering your question correctly, I did have some concerns
about Mr Staunton’s behaviour from about November. Prior to that, I don’t
think—Mr Staunton has his own style, and that was the way in which he
ran meetings and dealt with people. I didn’t have a problem with that. It
was not necessarily the way I would have done it, but I didn’t have a
problem with it. I certainly don’t recall him falling asleep in meetings or
anything like that.
Julie Marson: That is useful. Thank you.
Antony Higginbotham: Mr Recaldin, when you made settlement offers to
sub-postmasters, did you mark them as without prejudice and go on to
say that that made them confidential?
Simon Recaldin: Yes.
Antony Higginbotham: Why?
Simon Recaldin: We did it because we got legal advice to do it, and when
it was set up, that is what we agreed to do—
Antony Higginbotham: Who gave you that legal advice?
Simon Recaldin: And by the way, that is standard practice. But we have
listened and we have changed. Without prejudice has now been withdrawn
because we have listened and we understand the message that that sends
about secrecy and not wanting to disclose, and so on.
Antony Higginbotham: Who gave you that legal advice? I have here a
warning notice from the Solicitors Regulation Authority, from 28 November
2022, that makes very clear that you should not do that in those
circumstances.
Simon Recaldin: The original legal advice was from our legal advisers,
which was Herbert Smith at the time, to go through the process to make
sure we are safe in terms of withdrawing without prejudice. We sought
other legal advice and the view is that it is a call that you can make if you
want to. The recommendation, by the way, is to keep it on, but we
understand the optics and the message it is sending, so on that basis in
the HSS we are taking without prejudice off those—and retrospectively, as
well.
Antony Higginbotham: Was there a conversation when that warning
notice was issued about whether it was right to keep them on the
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settlement letters? After 28 November 2022, was there a conversation
about the fact that the notice had been issued and you needed to review
them?
Simon Recaldin: The conversation has been an ongoing one for some
time; I can’t remember when it first started, but it has been ongoing,
because of the feedback we have been having about the optics of what
that looks like—hiding behind corporate secrecy and so on.
Antony Higginbotham: It is not just optics. This is a Solicitors
Regulation Authority warning notice. I assume you employ a general
counsel and you did back in 2022. You would expect your general counsel
to keep up to date with warning notices issued by the SRA. Is it your belief
that the general counsel was negligent and just did not pay attention to
documents coming from the regulatory body for solicitors?
Simon Recaldin: That is not my belief at all. I have to be careful here
because, as you know, this has been referred to the SRA and we await the
outcome, so I can’t comment on that. But the group legal counsel has
absolutely been involved in all these decisions.
Antony Higginbotham: Mr Read, last time you were before this
Committee, we had an exchange about non-disclosure agreements and I
specifically asked, “does the Post Office still use non-disclosure
agreements in reaching settlements with sub-postmasters?”. You said,
“Not to my knowledge.” I said, “So no non-disclosures have been
requested or signed since you took over as chief executive.” You said, “Not
to my knowledge”, and then you said you would check. I appreciate you
have now checked—
Nick Read: I have checked and written to that effect, yes.
Antony Higginbotham: Is it not the kind of thing that you would expect
your general counsel to keep you updated on, given that there was a
warning notice by the regulatory body?
Nick Read: Yes, that is a fair challenge.
Antony Higginbotham: Mr Tidswell, on a separate matter, in the
disclosures we have had of various email exchanges, it is clear that there
was some dispute about the process to follow to secure your
replacement—whether that was an internal process or an external one. I
think the former chairman, Mr Staunton, suggested it was external, but
the majority of the board voted instead to make it internal. What is your
recollection of how that process worked?
Ben Tidswell: 1 think that is not quite right; it was the other way round.
In fact, it was not even necessarily the other way round, if I may just
explain. The original position, which I think was towards the end of last
year, was an agreement among the board that it would be an external
appointment.
Antony Higginbotham: To get more experience.
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Ben Tidswell: Yes. I think it was felt particularly that here was an
opportunity to bring on the board someone with different experience,
particularly Whitehall-facing experience, who could help us a little bit more
with understanding how to navigate Government and policy.
To be very clear, that is not a decision the board can take; it is a decision
for the shareholder. All we did at that stage was recommend it to the
shareholder and the shareholder agreed with that. Of course it was not
something that we said without consultation; it was a position that had
been foreshadowed, and we understood that to be the Department's view
as well, so we agreed and we started the process.
What happened in January, very shortly before the decision was taken by
the Secretary of State in relation to Mr Staunton, was that a series of
discussions were convened by Mr Staunton in which he sought to reverse
that decision—and, indeed, gave instructions to the company secretary to
stop the search, in circumstances where there had not been a proper
board meeting to discuss it.
Antony Higginbotham: So he made that decision without consulting the
board formally?
Ben Tidswell: Yes. He discussed it with some board members, but—
Antony Higginbotham: But not at a formal board meeting.
Ben Tidswell: Not at a formal board meeting and, most importantly, he
had not consulted the shareholder. I think it was always plain—it should
have been plain to him, but certainly it was plain to me—that there was no
prospect of the shareholder changing its view on that. I think the
shareholder had a firm preference for an external appointment.
I think that was the second thing that Mr Creswell referred to this
morning, and it was certainly a point that was key in my discussion with
him in January, which took place two days after Mr Staunton sent an email
about that. You have probably seen the email in which he says to the
company secretary to please stop the search. You could probably say that
that was somewhat the straw that broke the camel’s back, in that at that
stage I think it became apparent that something needed to be done—
some discussion needed to take place about whether he was the right
person to be the chairman.
Antony Higginbotham: Would you characterise the way Mr Staunton
undertook that process as pretty standard for how you would approach
governance more broadly?
Ben Tidswell: The second bit of the discussion?
Antony Higginbotham: Yes.
Ben Tidswell: No, absolutely not. On the contrary, I think it was not how
you would approach governance. It seemed to me, and indeed to other
board members who were involved, that it was very odd. It wasn’t
consistent with what you would do at all.
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Antony Higginbotham: You have sat on other boards before,
presumably.
Ben Tidswell: 1 am not on the Post Office board because I am a
governance specialist. As you know, I am a lawyer, and I am there
primarily to help Mr Recaldin. I joined the board in July 2021 in order to
try and push forward all the things we have been talking about today in
terms of oversight, and so Mr Recaldin and I work very closely together on
that.
I am not a governance specialist. I have chaired a board of a professional
partnership with independent directors on it and I have also had a career
in which I have dealt with governance issues like the collapse of Barings
and the collapse of RBS, where I acted for the non-executive directors.
Antony Higginbotham: It is fair to say you have some experience.
Ben Tidswell: I have a long history and experience of understanding how
you do this. And of course, there is a lot of guidance about corporate
governance, which is published.
Antony Higginbotham: Finally, to Mr Read, on an unrelated point. One
of our roles in this place is to represent people across the country. I am
sure we have all been contacted by postmasters and sub-postmasters,
certainly since the last evidence session. I have been contacted by quite a
few. They all share broadly the same perspective, which is that the culture
of the Post Office has not changed; that as postmasters and sub-
postmasters, they feel undervalued and under-remunerated; and that they
do not feel like they have the ear of the executive team. What would your
message to all those people be?
Nick Read: I am deeply worried that that is how people feel. I would want
to reassure them that we have postmasters at the centre of everything we
are trying to do—from a remuneration perspective, from an engagement
perspective, a communication perspective and a support perspective.
We have put in places where we are making ourselves available to them.
We have a series of regional meetings with postmasters starting in March
and April. I am going to be available—I am always available to speak with
postmasters, as we did yesterday with the Voice of The Postmaster and
the CWU postmasters. I am available to do that, as is my leadership team.
Antony Higginbotham: But you heard an earlier panel, where we were
talking about remuneration and the level of pay that sub-postmasters
receive. We heard that it was under £20,000 or just over £20,000. You
can’t be happy with that.
Nick Read: Of course I am not.
Antony Higginbotham: Surely when you look at remuneration and when
you do your next review of how you compensate your postmasters and
sub-postmasters, that has got to rise dramatically.
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Nick Read: We have a yearly meeting, which is in April, when we discuss
the remuneration rates, and that is something that we will be in discussion
with the NFSP about—talking to them about how we are going to move
remuneration forward.
We have done it relatively succinctly over the last 18 months or so. We
had an excellent Christmas this year where remuneration was up by
11.5% over the two months of Christmas, so we are making progress.
We are migrating the business away from some of the core activities of
just simple mail and parcel distribution, by bringing in new carriers, by
bringing in new business and by building out the banking framework,
which will be more remunerative for postmasters as well. It is all about
trying to make sure that we can secure the commercial sustainability.
Antony Higginbotham: Could you make a commitment, for example,
that your intention is that every postmaster and sub-postmaster gets paid
X% above the real living wage, as a bare minimum, and that, if their
calculations are that they are not getting that, you will make sure that
there is an appropriate package?
Nick Read: As I say, we have hardship funds. We have different ways of
trying to make sure that postmasters are, but we will be working this year
when we go the remuneration improvements to make sure that we
continue to make sure that the proportion of revenue that goes to
postmasters increases year on year.
Jonathan Gullis: Mr Read, when you and I last met in January, I asked
whether any public relations companies had been hired by the Post Office
after the drama had aired.
Nick Read: Correct.
Jonathan Gullis: And I asked what the price of that was. An article in the
Telegraph today suggests that there is a firm called TB Cardew being paid
at a rate of £15,000 a month. First of all, when was that contract agreed?
Nick Read: TB Cardew started working for the business in 2019, and then
again in 2022 we had the renewal of that contract.
Jonathan Gullis: Have you had any training from them for your
appearance before the Select Committee today?
Nick Read: Have I had any—
Jonathan Gullis: Have you had any Select Committee training as they
may call it in public affairs, to prepare for today?
Nick Read: I have obviously prepared for this extremely important
meeting; of course I would prepare for it, yes.
Jonathan Gullis: And they have put a briefing pack together with
biographies of Members as well as suggested questions that might be
asked.
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Nick Read: Yes.
Jonathan Gullis: That you are using today. Okay.
Very quickly then, TB Cardew has been the company used. You will
understand that there will be concerns that, given the £15,000 a month—
an extortionate amount of money—the contrition being shown by the Post
Office might not be taken as seriously, if you are effectively paying to spin
your way out of a crisis.
Nick Read: 1 do not follow the logic of that at all. We are a business
generating £1 billion worth of income in a year. We have commercial
arrangements with the likes of Evri, DPD and banks; we need a PR
organisation to work with us to make sure that we promote today’s
business from both a social and commercial perspective. So I do not, Iam
afraid, Mr Gullis, believe that that is a fair—
Jonathan Gullis: How much of the company’s time has been spent
specifically, in percentage terms, on what has happened?
Nick Read: Very little. If the point you are trying to make is about the
preparation for today, most of the colleagues on this panel will have done
work themselves and we would have had a practice as well, which of
course you would expect us to do because we want to take this seriously.
Jonathan Gullis: I just wanted to make sure that postmasters, sub-
postmasters and sub-postmistresses feel that the contrition that you have
shown on the panel today is genuine and real.
Nick Read: Absolutely.
Jonathan Gullis: And not something that has been rehearsed and
prepared for, like a good actor.
Nick Read: No—no it is not.
Andy McDonald: The Post Office is generating income of £1 billion and
we hear about hardship funds for postmasters. The juxtaposition of those
comments is just unbelievable. Are you going to sort this out by
recognising a proper trade union to represent postmasters? That has been
sadly absent from this process and is needed.
Nick Read: You will be aware that we have a long-term contract with the
NFSP. Clearly, we are trying to work with them to create the right
environment.
Andy McDonald: The protections were clearly not afforded to these
postmasters.
Nick Read: I understand.
Andy McDonald: Finally, Mr Tidswell you serve on the remuneration
committee. Is the issue of the bonuses that were paid closed out—the
metric that was calculated opposite the funding of information to Sir Wyn
Williams, fraudulently, falsely, put into those accounts to award people
bonuses? That would ordinarily lead to a prosecution under the Theft Act.
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Is that done?
Ben Tidswell: Yes, it was very clumsy and I do apologise to everybody
for that.
Andy McDonald: Clumsy? You have postmasters prosecuted under the
Theft Act for false accounting, yet that happened at the senior level at the
Post Office.
Ben Tidswell: 1 am sure that you have seen the two reports into this
from Amanda Burton and Simmons & Simmons. I absolutely accept the
findings that they made, and the issue is closed out—yes, it is.
Ian Lavery: Hardship funds at the Post Office? This fantastic brand, the
Post Office, has hardship funds for employees. I am not sure what that
really shows with regard to your leadership, Mr Read.
I believe and understand that you received somewhere in the region of a
£400,000 bonus in the last couple of years. Four hundred-odd thousand
pounds! Two of the individuals sat here today were receiving wages of less
than £20,000—nearly less than the national minimum wage. Your
bonuses, on top of your hundreds of thousands of pounds in wages, was
20 times more than their annual salary. Does that not really show how the
Post Office is rotten to the core?
Nick Read: I am not going to answer that question in that sense. Clearly,
I am well paid and I am clearly in a position where I am trying to make
sure that the commercial sustainability of the Post Office is going to be for
the next generation as well.
Chair: Let me close off Mr Higginbotham’s questions. In your letter to me
earlier this year, you said that the offer letters made to postmasters and
postmistresses are marked “Without prejudice” so that they are
confidential. In fact, when you mark something “Without prejudice”, it just
means that the contents are not admissible in court; it is not a
confidentiality agreement. The letter you sent to us was not a perfect
reflection of the facts.
Nick Read: I will have to check that and come back to you.
Charlotte Nichols: Mr Read, you just referred to the Post Office’s
relationship with the National Federation of SubPostmasters. This is not an
independent trade union, and it has been brought up by Alan Bates in
front of this Committee in previous evidence sessions as an organisation
that was actually complicit in the perpetuation of the Horizon scandal.
Do you think that it is time for the Post Office to recognise an independent
trade union that, as in evidence previously given before this Committee by
Alan Bates, might actually have supported sub-postmasters, rather than
throwing them to the wolves as the National Federation of SubPostmasters
did?
Nick Read: We are open to talking to all postmasters and postmaster
groups. As I said yesterday, we spoke to the CWU, which represents some
275 to 300 postmasters, and the Voice of the Postmaster group, which
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represents more than 1,000 people. I am not closing down any
conversations with any specific groups. I am keen to speak to all groups of
postmasters to understand how we can move the Post Office forward.
Charlotte Nichols: Thank you. Mr Read, in your earlier evidence today
you said, “If mass exonerations are the right course”. To be crystal clear,
do you believe that this is the right course?
Nick Read: To be crystal clear, we support anything that will accelerate
justice for wronged postmasters. I am absolutely clear that if that is what
the Government want to do, we will support it.
Charlotte Nichols: But again, do you believe that there are sub-
postmasters and sub-postmistresses who are “guilty as charged”, as
advised by Nick Vamos and raised as a concern by you in your letter to the
Justice Secretary? For all the answers you have given about mass
exonerations, your answers have been very, “If this is something the
Government want to do” and, “If this is the right course”. Do you believe
that there are people who are guilty who will be exonerated under this? If
not, what is your opposition to its being carried out?
Nick Read: I have no opposition.
Charlotte Nichols: So you do not believe that there is anyone who is
guilty who will be exonerated under the mass exonerations proposal.
Nick Read: There may well be people, but it is the least worst option. We
have heard the Minister say that. These are exceptional circumstances,
and if there are one or two or whatever that number is—I do not know
what that number is—then fine. However, this is the best way to get the
right level of justice for the people who have been wronged.
Charlotte Nichols: So you still believe that there are potentially guilty
people, despite all the evidence we have heard up to this point.
Nick Read: I am not sure what you mean specifically by your question.
What do you mean “guilty people”? I do not understand that, because—
Charlotte Nichols: You still believe that there are people whose
convictions are not in fact wrongful among the numbers of people who will
be exonerated under the mass exoneration proposals put forward by the
Government and supported by this Committee and the House.
Nick Read: I think as everybody has mentioned, there may well be—I do
not know.
Charlotte Nichols: Thank you. Moving on, I do not think that anyone
watching today’s evidence session could fail to be moved by Tony, Tim
and Alan’s testimony, the impacts that what happened has had on them
and the harm it has caused to them and their families.
Nick Read: Agreed.
Charlotte Nichols: Taking up a point raised by Alan Bates in his evidence
earlier today, Mr Recaldin, why did the Post Office wait to start the process
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of disclosure, given that it knew the names of everyone eligible to claim,
instead of waiting for the claim and therefore causing even greater delay?
Simon Recaldin: Because we needed to agree, and we did agree, the
disclosure process with Freeths, the legal team—that is, what they needed
in disclosure. At the same time, we got a load of DSARs in as well, which
take longer and, from a regulatory perspective, must take priority.
We had to ensure that those DSARs were downsized, then we agreed what
Freeths wanted in terms of the disclosure. It did take time; it did take too
long. However, we are on it and producing and, as I said earlier, we are at
64% of that target. We are now slightly ahead of target thanks to the
Minister’s intervention and the £75,000 minimum payment in GLO, which
is excellent news, because it means that I can get resource more into that
space to speed up the GLO disclosure even more.
Charlotte Nichols: Finally, Mr Read, we have seen delays, lies and buck-
passing from the Post Office while hundreds of victims are still left without
a path to redress under flawed schemes. Why should you continue to be
trusted to oversee the delivery of financial redress to victims?
Nick Read: We are very clear that whatever the Government decide and
determine is the right course of action, we will follow it. If people and the
Government believe that the right level of trust is not in the Post Office
and there is a better mechanism, we will fully support it, whatever it looks
like. I am not precious about this: I am acutely conscious that we want to
get the best mechanism. Whether it is with or without us, I do not mind.
Chair: Thank you very much indeed. This evidence session draws to a
close.
Mr Read, I am grateful for your evidence, but you have been in post since
September 2019 and you have told the Committee today that only £1 of
every five of the budget has been paid out in redress. You have said that
that is not good enough, and that it is much too slow. You have said that
the toxic culture at the Post Office is not sorted yet; it is still a work in
progress, not job done. And there have been problems with the evidence
about PR advisers, but also the use of confidentiality agreements. Tell the
Committee today why we should have confidence in you continuing in your
post.
Nick Read: Because we are delivering great things for the Post Office in
terms of the way that we are performing. Our trading is excellent. The
Post Office itself is making profit. Postmasters have improved in terms of
the relationship they have with the centre and their trust in our
organisation. That is something that we can measure and we have
measured. We are making progress and we are listening to postmasters so
that we can get right the schemes that we have discussed for the last
couple of hours. We are very happy to do that and we are very flexible to
do that. We will continue to work hard to ensure that justice is served for
the postmasters.
Chair: Have you ever tried to resign as chief executive of the Post Office?
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Nick Read: No. Why do you say that?
Chair: Because we have a redress scheme that is in the wrong place, a
culture that is in the wrong place, and problems with the information given
to this Committee. I would like to know whether you are planning to stay
in post to deliver the redress schemes that we have just heard are not
performing in the way that they should.
Nick Read: I want to make sure that we get justice for our postmasters,
and that is what I will stay to do.
Chair: Thank you very much. That concludes this panel.