WITN10200100
WITN10200100
Witness Name: Baroness Neville-Rolfe
Statement No.: WITN10200100
Dated: 26 June 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF BARONESS NEVILLE-ROLFE DBE CMG
I, Lucy Neville-Rolfe, formerly Parliamentary Under Secretary of State and Minister for
Intellectual Property at the Department for Business, Innovation and Skills, will say as
follows:
INTRODUCTION
1. lam a Member of the House of Lords and am currently serving as a Minister of
State in the Cabinet Office.
2. Ihave had three careers.
(i) Between 1973 and 1997 I was a civil servant. I joined the fast stream in
1973 and left as a Grade 3 (what is now called a Director) in 1997. Among
the posts I held, I was private secretary to the Minister of Agriculture,
Fisheries and Food (1977-79), I was a member of the Prime Minister's
Policy Unit at 10 Downing Street (1992-94) and Director of the Deregulation
Unit in the Department of Trade and Industry (1995-97).
(ii) In 1997 I left the civil service to work in the private sector. I was appointed
as Director of Corporate Affairs at Tesco in 1997, became company
secretary in 2003 and was a main board member as Director of Corporate
and Legal Affairs from 2006 to 2013, when I retired. Since then, when not
Page 1 of 81
WITN10200100
WITN10200100
a government minister, I have held numerous paid and unpaid positions
including, but not limited to, being a non-executive director at FTSE
companies ITV, Secure Trust Bank and Capita, as well as HDR UK and
Metro AG, and I have chaired Assured Food Standards, Crown Agents and
the UK-ASEAN (South East Asian) Business Council.
(iii) I I have been a member of the House of Lords since October 2013 and, when
not a minister, have always played a full part in debates, especially on
business matters. I was a government minister from 2014 until 2017 in the
Business and Culture departments and the Treasury; I was reappointed as
a Minister of State in the Cabinet Office in 2022.
As relevant to the Inquiry, on 15 July 2014 I was appointed Parliamentary Under
Secretary of State and Minister for Intellectual Property at the Department for
Business, Innovation and Skills (“BIS”). This was my first ministerial role.
Following the General Election in May 2015, I took on the postal affairs brief in
addition to my existing ministerial portfolio and, at the same time, I also became
Parliamentary Under Secretary of State at the Department for Culture, Media and
Sport. The postal affairs brief was part of my portfolio from 12 May 2015 until 13
July 2016, when Theresa May was appointed Prime Minister, after which I moved
into a different ministerial role.
I make this statement in response to the Inquiry's request for evidence dated 2
May 2024 (‘the Rule 9 request”). I! have prepared it with the support of the
Government Legal Department and counsel. I have been dependent on others
putting documents before me to assist with the chronology of events as set out in
this statement. Any views expressed in this statement are my own. I would be
very happy to clarify or expand upon the evidence set out in this statement should
it assist the Inquiry.
I would like to emphasise that a large number of documents which would have
been helpful in preparing this statement, such as the minutes of several meetings
and my Ministerial Diary, have not been made available to me. This is perhaps
because in 2016 the Shareholder Executive (“ShEx”) and its staff and records
were transferred out of BIS to become part of the newly formed UKGI and in the
Page 2 of 81
WITN10200100
WITN10200100
same year BIS was merged into a new department. This has made it particularly
difficult for me to piece together what happened 10 years ago and I am surprised
by the lack of records of senior civil servant engagement in Horizon in the core
department and of my regular, brief updates with the Secretary of State.
6. I should say at once that I am horrified that innocent people have been prosecuted,
convicted and, in some cases, jailed. Others have been subject to civil
proceedings, bankruptcy and lost reputation. I very much welcome this inquiry. I
welcome the fact that it seems that some sort of justice will now be done albeit
retrospectively and too late for those who have been wrongly accused.
7. I have structured this statement in two sections. The first section contains a
detailed chronological account, based on a combination of documentary records
and my own recollections and observations. In the second section, I respond to
the specific questions set out in the Rule 9 request.
SECTION 1: CHRONOLOGICAL ACCOUNT
8. As indicated above, on 15 July 2014, I was appointed Parliamentary Under
Secretary of State and Minister for Intellectual Property at the Department for
Business, Innovation and Skills (“BIS”). On around 15 May 2015 I was informed
that the Secretary of State for Business, Innovation and Skills (“BIS”), Sajid Javid,
had decided that postal affairs would be added to my existing ministerial portfolio
(WITN10200101 Email dated 18 May 2015 deciding that postal affairs would be
added to BNR’s existing ministerial portfolio).
9. My role at BIS was wide ranging and included a number of policy areas in addition
to postal affairs. As Lords Minister I was responsible for nearly all departmental
business in the House of Lords which included in that year taking through the
House the Enterprise Bill (adding privatisation of the Green Investment Bank was
controversial) and the highly contentious Trade Union Bill. My portfolio at BIS also
included Intellectual Property, attending the Competitiveness Council in Brussels
and associated overseas visits to Poland, Berlin and elsewhere and to Asia on
Intellectual Property. I was also the Minister responsible for Companies House, a
Page 3 of 81
10.
11.
12.
13.
14.
WITN10200100
WITN10200100
new and important brief in May 2015, and the Professional and Business Services
Council.
My portfolio at DCMS occupied at least one day a week, and included policy areas
such as nuisance calls and data protection and attending the Council of Ministers
which at that time focused on roaming charges and GDPR. My DCMS portfolio
was added by Prime Minister David Cameron because of the need to have
someone experienced in the Lords to deal with the review of the BBC. I was also
the lead minister on the Cultural Property (Armed Conflicts) Act 2017 and took it
though the Lords.
In both departments I dealt with frequent questions and statements which is the
staple of a Lords Minister, often outside my own areas of responsibility.
During that period, mid-May 2015 to mid-July 2016, I gave 89 oral answers,
statements and speeches in Parliament across a very wide range of policy issues.
I have provided at Annex A to this witness statement a chronological list of those
statements. Whilst this demonstrates the scope of work in which I was involved in
the House, it gives no idea of the burden of work on Bills, which took up the greater
part of my time.
So I had a wide brief and was travelling overseas at least once a month. My prime
priorities were my Bills, Intellectual Property and attending the EU
Competitiveness and sometimes other EU Councils and long term relationship
building ahead of our 2017 Presidency of the EU (assuming we stayed in the EU).
The postal affairs brief had several facets. A briefing note (WITN10200101)
prepared for me when I took over the postal affairs brief provides a useful
summary. Issues included Network Transformation, finances and funding, with a
range of other live issues. In addition to Horizon, I spent time understanding their
business plans and helping where appropriate - for example I met with the
Economic Secretary to the Treasury, Harriet Baldwin MP, to try and persuade her
to let post offices continue to sell premium bonds. I also visited a number of post
offices when I was visiting other regions of the country on BIS or DCMS business.
Page 4 of 81
WITN10200100
WITN10200100
15. My civil service experience gave me some insight into what to expect as a minister.
A minister inherits an established line on most subjects which can only be changed
with real effort and the agreement of senior ministers. Your office receives
considerable amounts of paper of which only a part will be set before you and of
that you can only read part. To a significant extent a minister is reliant on the
judgement of private secretaries. A good allocation of time is essential noting that
much is not negotiable, for example, parliamentary statements, debates and
overseas commitments.
16. The essential function of a minister's private office, made up of one or more private
secretaries and other officials, is therefore to manage the huge demands on
ministerial time. Ministers are heavily reliant on the private office to make the right
judgements about what the minister needs to know about and/or see and to record
their meetings and decisions — although as noted above, the records that have
been made available to me in preparing this statement are incomplete.
17. I am an active Parliamentarian and before I took on the postal affairs brief I was
aware in general terms that concerns had been raised by some MPs about the
Post Office’s IT system, and that the issue had been debated in Parliament. For
this reason I was immediately concerned about my new Post Office brief, and
identified that I would need to understand “the problems with the Horizon IT
system and the losses people are complaining about’ (WITN10200101). I wanted
to be thoroughly briefed and prepared for the work to come. On 18 May 2015 I
therefore requested an “early meeting” with officials so that they could brief me on
these issues (WITN10200101). That meeting was arranged to take place on 2
June 2015.
18. On 29 May 2015, Laura Thompson, Assistant Director in ShEx, emailed my private
office (UKGI00004415 Email dated 29 May 2015 with Day 2 briefing overview pack
attached) with a 28-page briefing pack in advance of the 2 June face-to-face
briefing (UKGI00004416 Day 2 briefing overview pack dated May 2015). I
understood at that time that ShEx had expertise and responsibility for managing
and advising ministers on Government's Arm's Length Bodies (“ALBs’), including
Page 5 of 81
19.
20.
21.
22.
23.
24.
WITN10200100
WITN10200100
the Post Office. Throughout my tenure as the relevant minister, Laura Thompson
was the main official advising me on issues relating to the Post Office.
My private office passed the briefing pack on to me. It was undoubtedly a well-
prepared briefing. As explained above, it summarised the broad range of issues
across the brief, setting them out in a clear and helpful fashion, with Horizon
towards the bottom of the list. I found it quite reassuring.
Under the heading “Horizon system and mediation scheme’, the briefing pack
stated that “There has been over two years of independent scrutiny of POL’s
Horizon IT system and no evidence of systemic flaws has been found”. \t
also stated “Following complaints from a small number of (mostly former)
subpostmasters about the Horizon IT system, in 2012 the Post Office
commissioned an independent firm, Second Sight, to examine the system for
systemic flaws that could cause accounting discrepancies. Second Sight’s interim
report, published in July 2013, and final report, published in April 2015, both make
clear that there is no evidence of system-wide problems with Horizon”.
The briefing pack also indicated that a mediation scheme was in place.
Having read through the briefing pack, I asked for a more detailed briefing on,
specifically, Horizon. On or around 2 June 2015, I received a “Further briefing on
the Post Office Horizon IT system and associated mediation scheme” prepared by
Laura Thompson (UKGI00004453 Meeting agenda for Post Office Horizon
mediation scheme meeting dated 2 June 2015).
This indicated, again, that Second Sight’s independent review had found “no
evidence of systemic flaws in Horizon which could cause the issues raised [i.e.
accounting discrepancies]’ but stated that “in some cases POL could have
provided more training and support to subpostmasters, and POL have since made
changes to address this” (paragraph 2).
The 2 June briefing note also referred, again, to the mediation scheme, stating
that there were 136 applicants, and going on to emphasise that this was a tiny
Page 6 of 81
WITN10200100
WITN10200100
number of complaints and that “The vast majority of subpostmasters are using
Horizon effectively every day” (paragraph 3).
25. At paragraph 4, the briefing note states that Second Sight have “undertaken
separate investigations into each of the 136 cases in the scheme” and “There has
therefore been over two years of independent scrutiny and in that time no evidence
of systemic flaws in Horizon has been found.”
26. The briefing note continues, at paragraph 5, to inform me that “the investigators
found that the main reason for losses in the majority of cases was “errors made at
the counter” by the subpostmaster or their staff [...] cases range from, at one end,
examples where POL could and should have provided more support to the
subpostmaster in preventing errors being made, to the other end, where there has
been clear fraud or dishonesty from the subpostmaster or their staff. Where POL
identify areas for improvement on their part, they are committed to implementing
them.”
27. The briefing note goes on to provide clear and strong advice that I should not
become involved (paragraph 7):
(i) “Despite JSFA’s complaints and calls for a new investigation, it is our
strong recommendation that Government should maintain the position
that this is not a matter for Government, and increase our distance from
this matter.”
(ii) “There is no_ evidence of systemic flaws in Horizon; any issues that
individual subpostmasters have faced are contractual disputes between
two independent businesses (POL and agent). This point has stood firm
after over two years’ worth of close independent scrutiny.”
(iii) “There is no_evidence that any of POL’s prosecutions against
subpostmasters for either false accounting or theft are unsafe. POL has
a duty to disclose any new material that comes to light that could support
a subpostmaster’s defence, and none has emerged.”
(iv) The NFSP “does not support JFSA’s arguments. The NFSP general
secretary, George Thomson, has said publicly that he considers JFSA
Page 7 of 81
WITN10200100
WITN10200100
members to be “trying it on” and that their complaints are doing damage
to subpostmasters’ businesses.”
28. I was informed (paragraph 7) that the CCRC was considering some convictions
and that POL had agreed to preserve documents accordingly’. I took comfort from
this as I knew the CCRC conducted thorough, objective reviews of difficult cases.
29. I was also advised (paragraph 13) that I should not engage in correspondence
with the JFSA or agree to a meeting with Alan Bates, because this “will serve to
prolong their campaign”, and that correspondence with them should be handled
at an official (not ministerial) level.
30. The briefing note contained two annexes: a summary of the mediation scheme
and a draft letter to Alan Bates. The draft letter was a proposed response to a
letter from Alan Bates addressed to Anna Soubry, Minister of State for Business
and Enterprise at B (UKGI00004438 Letter from Alan Bates addressed to Anna
Soubry, Minister of State for Business and Enterprise at BIS dated 19 May 2015).
31. On 2 June 2015, I had a meeting with Laura Thompson, in which I believe I was
briefed in line with her briefing pack of 29 May and briefing note of 2 June. I
understand the Department for Business and Trade (“DBT”)? has been unable to
locate any minutes or other record of that meeting. However, I specifically
remember being told that, despite rigorous independent scrutiny over several
years, no evidence of systemic issues with Horizon had been found. This line was
repeated by ShEx in its advice given to me throughout my time as the junior
minister responsible for the Post Office. The advice was clear and unending.
32. A number of points are worth highlighting in relation to the information and advice
I received at this time. First, and most importantly, ministers are entitled to rely on
advice from officials. The pressure on a minister's time is relentless and it is
‘ From my career in business, I was well aware of the need to preserve documents in cases
of litigation .
2 The successor department to BIS.
Page 8 of 81
33.
34.
35.
WITN10200100
WITN10200100
necessary for a minister, and their private office, to make judgements about the
most effective and efficient use of that time. A minister cannot possibly hope, or
be expected, to read all documents relevant to their portfolio. They are to a large
extent reliant on briefings and advice from officials who, under the civil service
code, are required to act with integrity, honesty, objectivity and impartiality. Of
course, ministers can and do test and challenge the information and advice they
are given — and, indeed, I am not shy in doing so — but, again, ministers cannot
second guess all the information they are given but must make judgements in the
knowledge that they do not have much time and in the expectation that they are
provided with information in good faith and following proper analysis of the
available evidence*. Government could not function any other way. As a former
civil servant myself, I always assumed that officials were giving me proper advice,
and as a minister I was used to relying on the objectivity and thoroughness of
Official advice.
Second, Laura Thompson seemed to be competent, across the detail and to know
what she was talking about. Third, I had recently taken over the postal affairs brief,
and it was clear that my ministerial predecessors had considered these same
issues before me and there was an established Government line. Fourth, I was
conscious that POL had been established as an ALB precisely so it could operate
free of political interference. And, fifth, I was being informed that there were no
systemic problems, the postmasters’ trade union did not support the complaints,
the CCRC was looking at historic convictions and POL was taking responsible
steps (by way of mediation and improved training and support) to deal with all
issues — in other words, sensible processes were already in place.
I recall that the involvement of the CCRC was important to me, as it seemed on
the face of it a good avenue for the investigation of any errors or miscarriages of
justice. I remember asking several times how this was progressing in the 14
months or so I was responsible for postal affairs.
Taking all of this together, I agreed to follow the advice I was given at this time.
3 Which I understand is a requirement of the civil service code.
Page 9 of 81
WITN10200100
WITN10200100
36. Pausing there, I had no idea that Second Sight’s second report was so critical,
and I do not understand why ShEx consistently minimised its findings when
providing me with advice as the responsible junior minister. I assumed, and as a
minister I was entitled to expect, that ShEx would summarise the report accurately.
If ministers cannot trust the accuracy of information provided by officials,
Government would grind to a halt.
37. As described below, as I became more aware over time of specific concerns with
Horizon and POL’s response, I began to doubt and push back against similar
advice I received later and began to intervene. This was a gradual process which
came about through a steady accumulation of information. There was no ‘lightbulb
moment’.
38. As indicated above, I received and accepted advice from Laura Thompson that I
should not meet with Alan Bates, and that correspondence with him and the JFSA
should be handled by officials. It was not unusual to receive advice of this type. I
note that I did agree to meet with George Thomson of the NFSP, the responsible
trade body, the following month, and this would fit in with my general approach
right across my portfolio.
39. For context, as a busy minister I could not agree to all requests for meetings. As
a general rule, my approach, like that of most other ministers most of the time,
was to decline meetings with individuals or informal groups without official status
or the involvement of MPs. A huge volume of individuals and groups want to see
ministers, and ministers are asked to attend a very large number of meetings all
the time. That is especially true as a business minister. It is therefore necessary
to listen to advice: if the advice of officials had been to meet Mr Bates I would
probably have done so, but they were giving strong contrary advice.
40. As advised in the introductory briefing document, I asked my private office to set
up an introductory meeting with Paula Vennells, POL’s CEO. That was classically
how I worked with ALBs within my portfolio. The meeting was an introductory
meeting to touch on Post Office business generally, and was not arranged
Page 10 of 81
41.
42.
43.
WITN10200100
WITN10200100
specifically to deal with Horizon issues. The meeting was arranged to take place
on 11 June 2015.
In preparation for that meeting, on 9 June 2015 I received a briefing paper from
Laura Thompson (via my private office) (UKGI00001074 Meeting agenda for
meeting with Paula Vennells, Post Office Limited CEO meeting dated 9 June
2015). The paper gives a sense of the breadth of the issues arising under my
postal affairs brief. In respect of Horizon, Laura Thompson briefed me that Ms
Vennells might want to reassure me that POL were handling the issues relating to
the mediation scheme. The briefing again emphasised that “it remains the case
that there is no evidence of systemic fault with the IT system”. Ms Thompson also
stated that “We (ShEx) have communicated to POL that the Government
maintains that the mediation scheme and cases within it are independent of
Government. POL are supportive of that approach.”
I met Paula Vennells, and other POL executives, on 11 June 2015. I understand
that DBT has been unable to locate any minutes or other record of the meeting,
though I have been provided with a copy of a letter from Ms Vennells dated 15
June summarising the contents of the meeting from her / POL’s perspective
(POL00117718 Letter from Paula Vennells dated 15 June summarising the
contents of the meeting). The letter does not refer to Horizon being discussed and,
if it was, I do not recall it.
At some point after 22 June 2015, my private office received a letter from Mr Wilson
dated 22 June 2015 (UKGI00004710), apparently in response to a letter which was
sent on my behalf on 11 June 2015 (which I have not seen in the course of preparing
this statement), which would have been drafted by ShEx officials and which
apparently adopted the standard ShEx line that there was “no evidence of systemic
flaws”. Mr Wilson stated that “following on from your recent letters to various it would
be nice to think you had spoken to the numerous M.P’s that have much more
information on this scandal and not just accepted what you have been told by Post
Office. Good place to start would be James Arbuthnot & then Second Sight’. He
concludes with the comment, “Don’t make the mistake of supporting the wrong-
doers!”
Page 11 of 81
WITN10200100
WITN10200100
44. My general practice, and I expect the general practice of many junior ministers,
would be to sign letters upon advice from officials. I would receive many letters
across my portfolios in BIS and DCMS and additional letters would be directed to
me albeit addressed to the Secretary of State and other ministers. They arrived in
a central unit not in my office and if they came to my Parliament account would be
passed on to my office to forward for official attention. The letters would generally
be directed on to officials for advice before going back to the junior minister to
respond to if they came from an MP, a peer or a recognised trade association or
union. Other letters and emails were dealt with by officials. Usually, the letter would
come back with a proposed reply, drafted by officials, if one from me was advised.
It would be impossible to read into every issue myself. I relied, and continue to
rely, on the advice of officials and I would sign letters upon advice, unless I knew
of a good reason not to.
45. The Inquiry has also provided me late in the day with an email chain involving
Julian Wilson (UKGI00004978 Email chain involving Julian Wilson dated 9 July
2015). I can see that Mr Wilson’s email was sent to my private office and
responded to by James Baugh, of ShEx, which adopted the line that I could not
comment on individual cases. As noted above it was standard practice to deal with
such letters in this way and I doubt if I saw it.
46. On 24 June 2015, Laura Thompson sent a submission to both me and George
Freeman (my ministerial counterpart in the House of Commons) regarding a BBC
Panorama programme on Horizon which was due to be broadcast on 29 June
2015 (though it did not in fact air until 17 August) (UKGI00000040 Submission
dated 24 June 2015 about BBC Panorama programme on Post Office Horizon IT
system). This was timed to coincide with an adjournment debate called by Andrew
Bridgen MP, and the submission indicated that both Mr Bridgen and James
Arbuthnot were understood to be involved in its making. It stated that the
programme was expected to be “highly critical’ of POL. Ms Thompson again
advised that Horizon “is a matter for Post Office and sub-postmasters and it would
be inappropriate for Government to intervene”.
Page 12 of 81
47.
48.
49.
50.
51.
WITN10200100
WITN10200100
The Post Office had fallen within my portfolio for around seven weeks by this time
and I could see a pattern emerging: it was the consistent advice of ShEx that these
matters were independent of Government, that POL was dealing with the various
matters appropriately, and on Horizon that there was no evidence of any systemic
problem despite rigorous independent testing, and that I should not be interfering.
I knew that the Post Office functioned as an Arm’s Length Body, with Government
as its sole shareholder. I was aware of course from my business experience that
POL’s Board of Directors were duty bound to act in the best interests of the
Government shareholder. I knew that ShEx oversaw the Government's
shareholder function, in other words, Government oversaw and scrutinised POL
through ShEx. To do that, ShEx was represented on POL’s Board.
I considered then, and I do now, that this arrangement, when there is competence
and honesty, to have a great many benefits; not least because scrutiny of POL on
behalf of the Government, as sole shareholder function, is undertaken by experts
in ShEx (now UKGI) with relevant experience across many corporations rather
than inexpert civil servants.
Whilst I do not believe I saw it at the time, I have since been provided with a letter
dated 26 June 2015 from Paula Vennells to George Freeman, in advance of the
adjournment debate, in which she stated that POL had gone to “great lengths” to
investigate the problems with Horizon and that “the past three years have
underlined the confidence we have always had in Horizon — it has been found to
work as it should’. Ms Vennells set out in her letter that POL had found nothing to
suggest that any conviction was unsafe, and that POL took “great care” regarding
its continuing duty of disclosure on all legal matters including full cooperation with
the CCRC (POL00110078 Letter to George Freeman dated 26 June 2015). This
was of a piece with the information I was being provided by ShEx. We now know,
of course, that it was seriously misleading.
On 29 June 2015, Andrew Bridgen MP called an adjournment debate in the House
of Commons on the issues with Horizon. At that debate a number of MPs raised
constituents’ complaints. Mr Bridgen stated that he and a number of colleagues
Page 13 of 81
52.
53.
WITN10200100
WITN10200100
had “lost all faith and trust in the Post Office’s willingness to investigate the issue
properly and thoroughly’, criticised the mediation scheme, and called for a public
inquiry. George Freeman (who took the debate) referred to the striking degree of
concern expressed by Parliamentarians at and in the lead up to the debate, and
offered to convene a meeting between MPs and POL executives in which the
issues could be discussed. He also stated “Second Sight produced two
independent reports—one in 2013 and the other earlier this year—both of which
found there was no evidence of systemic flaws in the system. That is an important
point that I would like to reiterate in response to the shadow Minister's point: there
is no evidence of systemic flaws in the system. Second Sight’s reports have,
rightly, pointed out some areas where the Post Office could have improved how
it operates, particularly on the training and support that it provided in some
individual cases. As I said earlier, the Post Office is acting on those points.” This
was, of course, in line with the information that ShEx and POL were giving us as
ministers.
I understood that at least some subpostmasters were losing, or had lost, trust and
confidence in the mediation scheme, whilst at around this time ShEx officials were
telling me that “Post Office have put in a great deal of effort to be helpful and
transparent here, yet are constantly denounced for their approach and their
apparent “contempt” for MPs without any real evidence to demonstrate why. They
accept the seriousness of the situation and are committed to resolving it, but are
becoming increasingly frustrated by the attacks against them and it is not clear
what more they can do ...” (WITN10200103 Meeting agenda dated 1 July 2015
for meeting about Post Office Horizon: meeting with MPs and stakeholders). I was
keen to preserve the mediation scheme, see the CCRC reach conclusions and
encourage engagement between the subpostmasters and POL. I agreed with
George Freeman that the way forward was to bring the interested parties together
and at least provide a forum for open, frank and sensible discussion. This was an
important step, and would not have happened had we continued to follow ShEx
advice.
Andrew Bridgen followed this up in Prime Minister's Questions on 1 July 2015:
“Owing to ongoing issues with the Post Office’s Horizon software accounting
Page 14 of 81
54.
55.
WITN10200100
WITN10200100
system, I believe that many honest, decent, hard-working sub-postmasters and
sub-postmistresses have lost their reputations, their livelihoods, their savings and,
in the worst cases, their liberty. This is a national disgrace. Will my right
hon. Friend consider the requests from Members across the House for a judicial
inquiry into this matter and bring it to a conclusion?” The Prime Minister stated in
reply “My hon. Friend has done a real service in campaigning tirelessly on this
issue, and I know that he has led a debate in the House on it as well. The Post
Office’s answer is to say that it set up an independent inquiry which has not found
evidence of wrongdoing, but, clearly, that has not satisfied many Members on both
sides of the House who have seen individual constituency cases and want better
answers. What I think needs to happen next is for the Under-Secretary of State
for Business, Innovation and Skills, my hon. Friend the Member for Mid Norfolk
(George Freeman), to convene a meeting involving Members of the House, the
Post Office and representatives of sub-postmasters to discuss their concerns and
see what should happen next. I would hope that it would not be necessary to have
a full independent judicial inquiry to get to the bottom of this issue, but get to the
bottom of it we must.” I shared this view.
On 1 July 2015 Laura Thompson sent me (via my private office) and George
Freeman a further submission in relation to the meeting between POL and the
MPs proposed during the adjournment debate (WITN10200103). Ms Thompson
recorded that “we have considered carefully how to facilitate a productive meeting
while meeting the commitments made to Parliament. It is vital to balance these
commitments alongside the risk of legal challenge and further significant
reputational damage to Post Office, and the risk of increased media interest and
pressure which might lead to Government being forced into a judicial inquiry’. She
recommended, on behalf of ShEx, that the meeting should involve Andrew
Bridgen MP and “1-2 other MPs who have led on this issue” together with senior
representatives of POL, and be “facilitated by Ministers” (WITN10200103).
Ms Thompson’s advice was that “given that some scheme applicants have applied
to the Criminal Cases Review Commission, it is important that this meeting neither
undermines the role of the CCRC nor prejudices any of the individual cases being
Page 15 of 81
56.
57.
58.
59.
WITN10200100
WITN10200100
considered”. Her advice was therefore that individual cases should not be
discussed.
Ms Thompson strongly recommended that JFSA was not as “they are not a
representative body — they are members of the public”, that “each member of the
JFSA has a case in the mediation scheme” and “as with Second Sight, JFSA have
proven in the past not to abide by undertakings of confidentiality’
(WITN10200103). She also stated “they have demonstrated in their conduct since
being appointed that they have not respected confidentiality undertakings and
have been openly critical of Post Office on social media, despite having been
appointed as independent investigators” (WITN10200103).
In respect of the NFSP, she recommended not inviting them on the basis that if
they were invited then the Government might be criticised for not inviting JFSA.
She said that in inviting NFSP, “we face accusations that the Government is
skewing the meeting in Post Office’s favour (since the NFSP are supportive of
Post Office on this matter)’.
The key thing, from my perspective, was to get the MPs together in a room with
Paula Vennells and POL executives and to hear what they had to say. I was
aware that the relationship between POL and Second Sight was not healthy, and
thought it would be easier to get Ms Vennells to attend if they were not there. I
also took at face value the concern that Second Sight presented a risk of leaking
what was said at the meeting, and also thought it was important to avoid the
meeting descending into a discussion of individual cases. The point was to have
a productive discussion between MPs and POL senior management as part of a
process to “get to the bottom of the matter’, and it seemed most likely that that
would happen without Second Sight at this stage. As explained below, I did
subsequently meet with Ron Warmington and lan Henderson.
On 2 July 2015 I wrote to Andrew Bridgen MP and Paula Vennells to invite them
to the meeting, which was arranged for 15 July 2015 (UKGI00004820 Letter to
Andrew Bridgen dated 2 July 2015, POL00027164 Letter to Paula Vennells dated
2 July 2015). I also wrote to Kevan Jones MP in similar terms.
Page 16 of 81
WITN10200100
WITN10200100
60. Ms Vennells replied to my letter on 10 July, declining the invitation — which
disappointed me — but indicating Mark Davies and Patrick Bourke would attend for
POL. She also took the opportunity in that letter to criticise MPs for failing to
engage with POL, emphasised the small number of complaints and implied they
were largely historic, and stated that POL had set up the mediation scheme in
spite of “the findings ... that our computer system did not suffer from systemic
flaws”, blaming individual errors in branch for the majority of problems. She also
emphasised — misleadingly, in retrospect - POL’s ongoing disclosure duty, and
indicated her view that Second Sight’s involvement in the meetings would be
neither “necessary or appropriate” (UKGI00000026 Letter to Baroness Neville-
Rolfe from Paula Venells dated 10 July 2015).
61. On 13 July 2015 Laura Thompson sent me (via my private office) a briefing pack
relating to the forthcoming meeting between MPs and POL (BEISO000012
Meeting agenda dated 13 July 2015 for meeting with MPs and Post Office on
Horizon system). She again reiterated the usual points (see paragraphs 7-9), and
the annexed speaking note encouraged me, if necessary, to “remind MPs that
they have a responsibility as public servants to act fairly, and listen to the Post
Office’s side of the story’. I accepted the advice that my own role should be to
facilitate discussion between POL and the MPs. I wanted to create a dialogue and
to try to resolve issues.
62. The meeting between MPs and POL was attended by Andrew Bridgen, Kevan
Jones, Mark Davies (Communications Director, POL), Patrick Bourke
(Programme Director of the mediation scheme, POL), Laura Thompson (ShEx)
and me. A note of the meeting was drafted by Ms Thompson (UKGI00013954,
UKGI00005125 Note of meeting following Adjournment debate on Post Office
Horizon IT System). The note records that Messrs Bridgen and Jones outlined
their concerns relating to some individuals. The concerns focused on the length of
time the issue had been ongoing and the view of the MPs that POL had acted with
a lack of transparency in dealing with the claims that there had been problems
with Horizon; the way in which POL had used its powers of prosecution; the length
of time it took for cases to progress through the mediation scheme; concerns about
Page 17 of 81
63.
64.
65.
66.
WITN10200100
WITN10200100
miscarriages of justice where individuals had been advised to plead guilty to false
accounting by their legal representatives. I believe they also raised concerns
about document destruction.
I recall thinking that the concerns expressed by Andrew Bridgen and Kevan Jones
needed to be taken extremely seriously. I have described above the way in which
I gradually became increasingly concerned about whether Horizon operated as
the Post Office claimed. This meeting, which took place within 2 months of my
taking up the postal affairs role, was an important step in that process. Amongst
other things, it brought home that the processes in place — including mediation
and the CCRC process — were not working satisfactorily. More generally I was
from the start surprised that so many people from normally reliable sections of the
community were being convicted of dishonesty. This was troubling.
In a submission dated 17 July 2015 (UKGI00015226 Meeting agenda dated 17
July 2015 about Post Office Horizon: Next Steps), Ms Thompson described the
meeting as “very frank” and wrote that “the MPs concerns were wide ranging”, that
“their distrust of Post Office was clear’ and that “no side changed their position’.
That was a fair synopsis. My priority was for these issues to be resolved, and I
was beginning to think that some pressure from Government might be necessary.
All of the advice I was receiving regarding Horizon was from ShEx. This was
supposed to be impartial and balanced. However, my faith in that advice was
beginning to wane. I now wanted to hear different views and wanted to apply
some more independent scrutiny of the issue than had been offered to date by
ShEx and, at that meeting, I agreed with Andrew Bridgen that I should meet James
Arbuthnot MP.
On 13 July 2015, Tim Parker had been announced as POL’s new Chairman,
replacing Alice Perkins. Mr Parker was due to take over in October and Neil
McCausland, the Senior Independent Director, took over as Interim Chair. I
thought the appointment of Tim Parker, as an experienced businessman with a
reputation for getting to grips with problems, was a good and reassuring one.
Following the meeting between MPs and POL, I quite quickly began to think that
Page 18 of 81
67.
68.
69.
70.
WITN10200100
WITN10200100
his arrival might be a good opportunity to put pressure on him to commission an
independent QC-led (or similar) inquiry and, as explained below, this led to the
review by Jonathan Swift QC.
Andrew Bridgen MP emailed me the day after the meeting, 16 July 2015,
expressing his continuing concerns regarding BIS’s failure to meet directly with
Second Sight. He indicated a particular concern that POL would direct Second
Sight to destroy documentation associated with their investigation. He sought my
assurance that I would take steps to ensure that this did not happen
(WITN10200105 Email chain dated 16 July 2015 from Andrew Bridgen).
I asked my private office to consult with ShEx in relation to this email. Laura
Thompson of ShEx responded to say that “the short answer is that Post Office
have already committed on several occasions, including to the BIS Select
Committee, that they will not destroy documentation relating to this matter’
(UKGI00005053, UKGI00005060 Email chain dated 16 July 2015). I also asked
my private office to contact POL to confirm the position. My private secretary then
responded to Mr Bridgen, stating (in line with POL’s assurances) that POL had “a
legal duty to disclose any information which could undermine a conviction or assist
an individual’s defence, and they comply with that duty fully. Furthermore, the Post
Office have committed publicly on more than one occasion, including the previous
BIS Select Committee, that they will not destroy any documentation relating to this
matter. They have also repeated that commitment to me today’(WITN10200105
Email dated 16 June 2015). As explained below, officials followed this up formally
and we received a formal written assurance from Jane MacLeod, POL’s General
Counsel, dated 29 July 2015 (UKGI00005151 Letter to Baroness Neville-Rolfe
dated 29 July 2015 about retention of documents).
Mr Bridgen emailed me later that day, again suggesting that Second Sight be
asked about their findings (WITN10200107 Email chain dated 16 July 2015).
In the meantime, on 14 July 2015 I met with George Thomson of the NFSP. I
understand no note of the meeting has been located. I agreed to meet Mr
Thomson as representing the national union for subpostmasters. Laura Thompson
Page 19 of 81
71
72.
73.
74.
75.
WITN10200100
WITN10200100
advised me that Horizon would be discussed at that introductory meeting. She
suggested that I meet Mr Thomson again after the 15 July meeting between POL
and the MPs to discuss the Horizon issue in more detail (UKGI00005002 Email
chain dated 13 July 2015). I recall the meeting was positive, and was mainly
concerned with issues other than Horizon.
. On 17 July 2015 I received (via my private office) a further submission from Ms
Thompson, advising me on “next steps” [254-255].
At paragraph 9 of her note she says that following those meetings “we recommend
you should write to the Prime Minister, to set out your assessment of the situation
and the Government's position, having “got to the bottom of the matter” to use his
words. We strongly recommend that the Government comes to an agreed
position, and ideally should communicate whether it will take any action. We
advise that the priority should be to put this issue to bed — continued uncertainty
and allegation does damage to Post Office’s business and prevents those
individuals with cases from reaching a resolution’.
I essentially ignored this advice. By this stage, and especially following the
meeting with MPs and POL, I was coming to have reservations about ShEx’s
advice overall and the attitude of the Post Office to the whole issue.
As to Ms Thompson's advice that the “priority should be to put this issue to bed —
continued uncertainty and allegation does damage to Post Office’s business and
prevents those individuals with cases from reaching a resolution’, I certainly
wished to resolve issues as soon as possible, but only after proper assurance that
postmasters’ concerns had been addressed. As set out below, my priority was not
to “put this issue to bed” — in fact I put pressure on Tim Parker to institute an
independent investigation and report led by a QC (or equivalently independent
and intellectually capable individual).
On 17 July 2015 Laura Thompson emailed my private office with advice regarding
Mr Bridgen’s emails of the previous day (UKGI00005102 Email chain dated 17
July 2015). She stated “We would recommend against the Government (Ministers
Page 20 of 81
76.
77.
WITN10200100
WITN10200100
or officials) meeting Second Sight. Doing so would undermine the position that
this matter is independent of Government. Second Sight have not found evidence
of systemic problems, so we must let the established legal processes (in which
Government has no locus) continue — whether that might be mediation, an appeal,
a civil claim, or raising the case with the Criminal Cases Review Commission”. Ms
Thompson set out some background to Second Sight’s engagement and work
product and the concerns that Second Sight had lost their independence and
might be acting outside of their domain of expertise.
I note that the advice that Government should not become involved by speaking
directly with Second Sight seems at odds with Ms Thompson’s submission of the
same day, referred to above, in which she suggested that Government should “get
to the bottom of the matter’. At the same time, I remained concerned that POL
was an ALB (and that there were good reasons for this), and there was a fine line
to tread: it seemed to me at this stage that the right approach was for Government
to make sure that POL had the right processes in place and was treating the issues
seriously, and that Government should not intervene unnecessarily. In any event,
whilst I had increasing concerns, I was still being told by officials (and by POL)
that Second Sight had found no systemic issues with Horizon, the postmasters’
trade union did not support the complaints, the CCRC was looking at historic
convictions and POL was taking responsible steps (by way of mediation and
improved training and support) to deal with all issues.
On 24 July 2015 my private office was emailed by Mr Bridgen forwarding an email
sent by Ron Warmington of Second Sight to George Freeman on 22 July 2015
(UKGI00005133 Email chain dated 24 July 2015). I was either provided with a
copy of the email or informed of its contents. In his email, Mr Warmington referred
to Mr Freeman’s statement to Parliament in the adjournment debate (and to a
letter to Mr lan Warren) and stated: “You have summarised our Reports with the
following words: “Second Sight have produced two independent reports, in 2013
and 2015, both of which demonstrate that there is no evidence of systemic flaws
within the Horizon system which could cause the issues reported”. That is NOT a
correct statement.” Mr Warmington referred Mr Freeman to a number of passages
of the Report, before continuing “You may have noted [...] that Post Office has
Page 21 of 81
78.
79.
80.
81.
82.
WITN10200100
WITN10200100
continually focussed attention on the system itself (i.e. ‘Horizon’, and its successor
system, ‘Horizon Online’), and even more narrowly on the software, rather than on
the entirety of the operational platform used by its Subpostmasters. It follows that
even if there had never been any systemic flaws in either version of the system
(that being a contention with which we do not agree), that would not mean that the
operational platform as a whole was always fit for purpose for all of the tens of
thousands of users. As we have stated in our Report, it was not.”
It is evident that Mr Warmington attached a copy of the Second Sight Briefing
Report — Part Two to this email (POL00029849 Initial Complaint Review and
Mediation Scheme Briefing Report Part two). I would not ordinarily expect my
private office to have provided me with a report such as this, which was of a
technical nature and extended to 50 pages, unless I requested it. I have seen
documents which indicate that at some point in late July or early August 2015 I did
receive the report and read some or all of it — I think it is likely that I read at least
the passages referred to by Mr Warmington in his email.
Mr Bridgen’s covering email stated that Mr Warmington’s email “contradicts
statements by the Post Office”. Mr Bridgen was clearly right about this. It was
obvious to me that there needed to be some independent oversight and resolution
of these issues, but equally clearly the Government — and I as a minister — were
not well placed to arbitrate these issues to work out who was right and who was
wrong. From my perspective, it was essential to have the right system in place to
sort this matter out.
Mr Bridgen also stated that his constituent declined again to take part in the
mediation scheme as he had spoken to colleagues taking part who felt that they
were insulted through the process — this was plainly concerning to me.
I requested advice from ShEx in respect of these emails.
I received emailed advice from Laura Thompson (via my private office) the same
day, 24 July 2015 (UKGI00005133, Email chain dated 24 July 2015). Ms
Thompson stated that officials had seen both the Second Sight report and “Post
Page 22 of 81
83.
84.
85.
86.
WITN10200100
WITN10200100
Office’s response to the report which they published to correct factual errors and
inaccuracies” (paragraph 2).
At paragraph 4, Ms Thompson stated “We have looked again at the paragraphs
he has highlighted in Second Sight’s report. The statement that “there is no
evidence of systemic flaws within the Horizon system” remains correct. This is a
position we have stated repeatedly, including in Parliament, so it is unclear why
Second Sight are choosing to raise this now. We are happy to provide further
detail on the specific points if Ministers require.”
At paragraphs 2 and 4 she again gave strong advice discouraging me from
intervening. She stated “Firstly, I would emphasise that our position is not to
arbitrate in this matter — it is a commercial matter for the Post Office. As
shareholder, we expect Post Office to operate commercially and to handle
operational and legal matters such as this one without Government intervention,
which would be unnecessary and inappropriate. As you are aware, Post Office
has a dedicated team working on this and the Board (on which we are
represented) also provides scrutiny on this matter. POL’s General Counsel, who
joined in January this year, has reviewed the situation with a fresh pair of eyes
and is content that POL’s position is correct.” In the same vein, she stated at
paragraph 5 “Our strong recommendation remains that Government intervention
is neither necessary, proportionate or appropriate.”
At paragraph 6, she again emphasised the existing processes to address Horizon
issues, including the possibility of civil claims, mediation and applications to the
CCRC. She stated “These claims are a matter of law and it is not the role of
Government to intervene — nor indeed does Government have the locus to do so.”
At paragraph 8, she rebutted the suggestion that mediation was not working
properly and that subpostmasters felt insulted, stating “while they may feel this
way, I would note that mediation is not led by Post Office. In line with best practice,
mediations have been facilitated by independent, trained and experienced
mediators from the Centre for Effective Dispute Resolution.”
Page 23 of 81
87.
88.
89.
90.
91.
92.
WITN10200100
WITN10200100
As explained above, Government cannot function if ministers are unable to trust
the information provided by officials. However, I was not happy with what I was
being told. I asked for a meeting with officials at which I could set out my concerns
and take some advice on the way forward.
I met with Laura Thompson the following week (i.e. the week commencing 27 July
2015) (UKGI00001067 Meeting agenda dated 31 July 2015 about Post Office
Horizon: next steps). I made it clear that I wanted to be given proposals for
independent oversight of Horizon issues, which was to be discussed at a meeting
to take place the following Tuesday (4 August 2015). By that stage I was
dissatisfied with the advice I was receiving from ShEx, and I wanted a senior
official outside of ShEx to provide support.
I was also advised to attend a meeting with Paula Vennells and Jane MacLeod
(POL’s General Counsel), and that I would be provided with a briefing prepared
by POL setting out the independent scrutiny already given to these issues.
I was subsequently provided with a further submission, dated 31 July 2015, setting
out what was agreed at the 27 July meeting. The submission also gave advice
that “in any action, we would also want you to consider the merits of Government
being seen to act or not. There is a risk that, the more the Government gets
involved, the more we are asked to remain involved or intervene further.
Alternative options could involve, say, Post Office deciding to take action to
increase independent oversight, which as Government we could support’.
I understand that my officials spoke to Jane MacLeod, POL’s General Counsel,
on 28 July 2015, in relation to preservation of documents. The contents of that
discussion were recorded in a letter from Ms MacLeod to me dated 29 July 2015
(UKGI00005151 Letter to Baroness Neville-Rolfe dated 29 July 2015).
On Tuesday 4 August 2015, I met with ShEx officials as agreed. I attended along
with two Special Advisors, Salma Shah and Nick King, and two of my private
secretaries. ShEx was represented by Anthony Odgers, Richard Callard and
Laura Thompson. Patrick Kilgarriff, from BIS Legal, and two members of the press
Page 24 of 81
93.
94.
95.
WITN10200100
WITN10200100
office were also present (UKGI00005297 Post Office meeting notes dated 4
August 2015). Despite my request, I was not supported by a senior official outside
of ShEx, and so I was deprived of high-level official input into the policy
independent of ShEx.
It was at this meeting that I proposed that I should ask Tim Parker, the incoming
POL Chairman, to investigate the Horizon issues. My proposal was that Mr Parker
would instruct a respected Queen’s Counsel (or someone similar) to undertake an
independent review of the underlying issues and scrutiny applied to date. This
drew on my experience as a senior executive at Tesco and elsewhere where we
brought in independent QCs or other respected and independent people (e.g. a
senior civil servant) to advise the Board. I knew from experience that a QC-led
review would be rigorous, focused and genuinely independent.
It was my view that these issues did require independent investigation. I remained
mindful of the arm’s length relationship with POL, constantly reiterated by ShEx
and indeed others (for example, Salma Shah, a Special Advisor who emphasised
the value of operational independence), and I did not consider that Government
was well placed to investigate these matters itself. I considered that the
investigation could be commissioned by POL so at arm’s length - provided that
sufficient objectivity could be maintained. From my experience at Tesco, I
considered that the instruction of leading counsel would ensure that objectivity.
One of the actions from the meeting was that I would speak to Tim Parker and
encourage him to “take a fresh look at these issues and engage with those who
are still raising concerns’.
Also on 4 August 2015, Ron Warmington of Second Sight emailed my
parliamentary email address (copying in George Freeman and Andrew Bridgen)
indicating that he had not received a response to his earlier email to Mr Freeman
and that “the possibility seems to exist that Mr Freeman was inaccurately briefed
on the results of our firm’s investigation. As stated below, we have concluded that
there were, and probably still are, systemic flaws within Horizon’. Mr Warmington
attached his email of 22 July 2015 to Mr Freeman which, as explained above, Mr
Page 25 of 81
96.
97.
98.
99.
WITN10200100
WITN10200100
Bridgen had previously forwarded to me (UKGI00005300 Email dated 5 August
2015).
My private secretary acknowledged receipt the same day and said that I would
respond at my earliest opportunity. Mr Warmington responded to say “/’m in no
rush for any answer. I just want to make sure that the Minister is alert to the
possibility that she too will be misinformed” (UKGI00005279 Email dated 4 August
2015).
On 5 August 2015, Andrew Bridgen forwarded the emails to my private office,
saying “! have been forwarded this e-mail as Mr Warmington has yet to receive a
response. Perhaps you could advise given the seriousness of this allegation that
Parliament may have been misled by the Post Office.” He attached Second Sight’s
Part 2 report (UKGI00005300 Email dated 5 August 2015)=).
Also on 5 August, I had an introductory meeting with Dave Ward of the
Communications Workers Union (UKGI00015625 Meeting agenda dated 30 July
2015 about Meeting with representatives of Communications Workers Union),
another trade union with an interest in the Post Office. In advance of that meeting,
I received a briefing from Michael Dollin of ShEx, which covered a wide range of
issues which might come up in the meeting, including Horizon where Mr Dollin
repeated the usual ShEx lines. I am informed that no note of this meeting is
available. I do not recall discussing Horizon to any great extent with Mr Ward,
though I think it probably was discussed. I recall that he was generally reasonably
positive.
As indicated above, I had agreed to a meeting with Paula Vennells and Jane
MacLeod on 6 August 2015. As explained above, by this stage I was dissatisfied
with the advice I was receiving from ShEx, and I wanted a senior official outside
of ShEx to provide support. On 3 August 2015, my Private Secretary
communicated to Laura Thompson my request for support from a senior official
from outside ShEx at this meeting (UKGI00005195). Officials pushed back
against this, but I maintained that I wanted someone other than ShEx to be there.
In the event, I was not provided with the support I wanted and had asked for, but
Page 26 of 81
WITN10200100
WITN10200100
instead was accompanied by a more senior ShEx official, Richard Callard,
together with Laura Thompson.
100. In advance of the 6 August meeting, ShEx provided me with a short briefing
note and some lines to take (UKGI00000035 Notes from Baroness Neville-Rolfe
meeting with Post Office dated Thursday 6 August ), which they had drafted and
which did not reflect my concerns at the time or my intended direction of travel. I
did not want to be told yet again about POL’s side of the story; what I wanted was
to ensure that there would be a fresh and independent review to see if issues with
Horizon had been missed. The lines to take do say that I should “Explain that [I
am] speaking to Tim Parker shortly and will emphasise the importance
Government places on him taking ownership of the issue”.
101. Regrettably, I understand that DBT has been unable to locate any minutes or
other record of the meeting of 6 August. However, I received (via my private office)
a letter from Jane MacLeod dated 7 September 2015 [383] which states that I
indicated I would ask Tim Parker to review POL’s position. Whilst I cannot recall
whether I said I thought a QC-led (or similar) independent review should be
commissioned, I might not have done as I had not yet spoken to Tim Parker about
it. In preparing this statement, I have been shown a copy of an unsigned letter,
possibly in draft, from Paula Vennells to me dated 11 August 2015 (POL00254149
Draft letter from Paula Vennelles dated 11 August 2015). I do not recall reading
this letter at the time. However, this does seem to suggest that I highlighted at the
meeting the concerns raised by MPs previously, including that postmasters felt
insulted by POL’s approach to mediation. I do recall finding one of the POL
attendees to be particularly overbearing and dismissive of my concerns.
102. I have also been shown a copy of a chain of emails (provided by the Inquiry)
dated 4 August 2015 between Richard Callard of ShEx and Avene O'Farrell and
Mark Davies of POL in relation to my meeting with Paula Vennells on 6 August
(UKGI00005261 Email dated 4 August 2015). Of course I did not see these emails
at the time. Mr Callard asks Avene O'Farrell if he could speak to Ms Vennells
before our meeting as it would be “worth her being aware of (my) mood and
position (not that there’s too much to worry about)’. Mark Davies, POL’s
Page 27 of 81
WITN10200100
WITN10200100
Communications Director, responds by organising a conversation with ShEx. I find
this troubling. This seems to me to be clear evidence that ShEx — whose role it
was to provide me and other ministers with objective and impartial advice, to
scrutinise POL’s actions and to hold it to account — was taking steps to provide
advance warning to POL about my concerns and intended direction of travel. I
cannot see any good reason for them to have done so. I am sadly driven to the
conclusion that ShEx and POL, perhaps inadvertently were in effect working
together to try to deflect me, and that ShEx were not giving me the independent
and impartial advice that I needed.
103. I recall speaking to Tim Parker — probably later on 6 August 2015, and that I
impressed upon him that he needed to ensure that the Horizon issues were looked
at again, and taken seriously. I just wanted this sorted out properly and believed
that he would realise that he and the other board members had a duty to do just
that. I recall asking him to bring in an independent QC or equivalent to head a
review when he took up office, and he moved to do so soon after he took office. I
understand, again, that DBT does not hold a record of this call.
104. On6 August 2015, Richard Callard emailed my private office to say that he had
also spoken to Tim Parker, stating he (Tim Parker) “will of course take a critical
and independent look at the issue”.
105. On 7 August 2015, my private secretary emailed me a proposed response to
Mr Warmington, apparently prepared by Laura Thompson and Richard Callard
(WITN10200111 Emailed dated 7 August 2015). The draft response maintained
and developed the line that “no evidence of systemic flaws — that is to say,
consistently recurring faults — has been identified within the Horizon system, either
through your investigations or through the regular testing, audit and accreditation
processes that all large IT systems are subject to. As you say, your work looks
wider than the IT system, and where problems have been identified in individual
circumstances, those are best resolved directly between the two parties involved.”
The draft response also stated that “where your investigations have highlighted
areas for concern, Post Office have committed to addressing them and making
Page 28 of 81
WITN10200100
WITN10200100
improvements, particularly around the training and support they provide to
subpostmasters.”
106. I was unhappy with the draft letter, and on 10 August Laura Thompson emailed
my private office to say “we spoke and you passed on that the Minister would like
the letter to Second Sight to be shorter, and more nuanced around the IT system
itself’ (WITN10200112, Email dated 12 August 2015).
107. On 14 August 2015 my private office sent a response in my name to Mr
Warmington (UKGI00005504 Email dated 19 August 2015). It indicated that I had
read Second Sight’s second report and also POL’s response (POL00002415 Initial
Complaint Review and Mediation Scheme reply of Post Office Limited to Second
Sight’s Briefing Report- Part two dated 22 September 2014) and thanked him for
his work. I should add that given the terms of the letter and what had passed I
would by now have looked at the reports, but not necessarily in any great detail.
108. On the same day (14 August 2015) I wrote to the MPs, Kevan Jones and
Andrew Bridgen informing them that I would be meeting with James Arbuthnot
(WITN10200113 Letter to Kevan Jones dated 14 August 2015, UKGI00005483
Letter to Andrew Bridgen dated 14 August 2015, WITN10200115 Email dated 14
August 2015 attaching letter updating on Horizon1408151, WITN10200116 Email
dated 14 August 2015 attaching letter updating on Horizon). I also stated “/ have
also spoken to Post Office and I am confident that they take very seriously their
responsibilities to subpostmasters, and that they are committed to ensuring those
individuals who have raised concerns can have their cases heard. You will be
aware that Post Office Limited have a new Chairman, Tim Parker, who will take
up his role formally in October. I have asked Mr Parker to ensure that when he
takes up his role he gives this matter his earliest attention. I hope his fresh pair of
eyes will provide some further reassurance to you.” I concluded by saying “/ hope
you will be reassured that the Government has given this matter serious
consideration, and moreover, that there are independently assured processes in
place to enable individuals to resolve their differences with Post Office or seek
redress. I would like to thank you for your efforts in raising the concerns of your
Page 29 of 81
WITN10200100
WITN10200100
constituents and others who have raised concerns, and I hope that you will
continue to help ensure they are able to find resolution.”
109. At around the same time, I was also involved in preparing a note to update
No.10 and other departments on developments which would have issued from the
Secretary of State’s office - so not my document (WITN10200117). I was
provided with a draft note prepared by officials which had also been through the
Secretary of State’s special advisors. I was not content with it. An email from my
private secretary to Laura Thompson stated “She [i.e. me] feels we have gone
backwards and that the note doesn’t reflect the conversations she’s had with
officials or the good Bridgen letter.” The email goes on to state “However, the line
Despite three years of independent scrutiny no systemic issues found with the IT
system is not one she is comfortable with given Second Sight and others are now
taking issue with this statement.”
110. I did feel at this stage that I was fighting ShEx.
111. Laura Thompson emailed my private office in response to that email, attaching
a revised draft. She stated in her covering email “We discussed that it does remain
the case that no evidence has been brought forward that demonstrates any
systemic flaws with the IT system, despite the fact that some campaigners are
taking issue with that statement. That is not to say that evidence could not emerge
at a later date, but we can only work with the information we have to hand, and
there have been considerable efforts to surface any issues by not only of Second
Sight but also through Post Office’s own investigations and the independent
auditing that all IT systems go through. However we understand the Minister's
concerns and I have amended the wording of the note, as well as removing that
line from the LTT section.” I made further edits to the draft note, but it is important
to emphasise that as a junior minister the note was not mine.
112. The Panorama programme was broadcast on 17 August 2015. Its contents
were of course deeply concerning though, aside from the Fujitsu whistleblower’s
revelations about remote access, the allegations were not new. By this stage, of
Page 30 of 81
WITN10200100
WITN10200100
course, I had already asked Tim Parker to commission a new independent review
of Horizon, and had been given confirmation that this would happen.
113. On 24 August 2015, my private office received an email from Andrew Bridgen,
copied to and co-signed by Kevan Jones and Oliver Letwin MP. They requested
a further meeting in light of allegations made in the Panorama broadcast. They
highlighted two principal issues requiring urgent attention: “(1) the statement that
transactions from the Fujitsu whistle blower that transactions could be remotely
could be remotely manipulated and (2) the statements by Second Sight which
contradicted the version of the Second Sight report that Post Office has presented
to Ministers, MPs, and the media”. The email said that “in light of these serious
developments, we are convinced that the interests of our constituents require this
matter to be independently investigated’ and suggested some individuals who
might be able to conduct that review (UKGI00020015 email dated 24 August
2015).
114. My private office asked ShEx to provide advice in respect of that email. This
was provided by Tim McInnes of ShEx on 25 August (WITN1020119 Email dated
25 August 2015).
115. In relation to Fujitsu Remote Access, Mr McInnes informed me that:
“- Horizon does not have functionality that allows Post Office or Fujitsu to edit
or delete transactions recorded by branches. There has been no evidence in
any case reviewed as part of the Scheme that shows that these controls have
failed or that the above statement is incorrect.
- It has however always been possible for Post Office to correct errors and/or
update a branch's accounts. This is most commonly done by way of a
transaction correction however it could also be by way of a balancing
transaction or transaction acknowledgement [...]
- All of the above processes for correcting / updating a branch’s accounts
have similar features. All of them involve inputting a new transaction into the
branch’s records (no editing or removing any previous transactions) and all
Page 31 of 81
WITN10200100
WITN10200100
are shown transparently in the branch transaction records available to
Subpostmasters (as well as in the master ARQ data).” This last point was an
important assertion which later proved untrue.
116. As to the second issue, “Second Sight Allegations’, Mr McInnes advised that:
“. Second Sight has written to Ministers to complain its report has been
misrepresented and now appear to be asserting that systemic flaws in
Horizon do exist. Second Sight’s report have not identified any link between
Horizon and the losses to the postmasters in the cases they reviewed, nor
has it identified any transaction caused by a technical fault in Horizon which
has resulted in a postmaster wrongly being held responsible for a loss. There
is no evidence that the Horizon system does not work as it should.
- There is, in fact, overwhelming evidence that the losses complained of were
caused by user actions, including in some cases, deliberate dishonest
conduct.”
117. Tim Mcinnes proposed that I respond to the MPs reminding them that I would
be meeting James Arbuthnot to discuss “a range of points, including the
allegations raised in the recent BBC Panorama broadcast’ and that I had
instructed Tim Parker to “take a close look at Horizon when he takes up his role
in October’.
118. My private secretary sent Tim Mclinnes’ proposed reply to the MPs to my
personal email address on 25 August 2015. I responded later that afternoon
saying, “! am not happy with this and I would prefer to have substantive advice
including an analysis of the points the MPs make after my return and how we can
respond to them persuasively. Is there a case for alerting Tim Parker? We are
dealing with senior people like Letwin and Arbuthnot and this is not easy as I have
said all along” (WITN10200120 Email dated 26 August 2015).
119. My private secretary then sent forwarded me Tim Mcinnes’s complete email of
24 August 2015 (WITN10200120). I replied on 26 August 2015 saying “/ will leave
this until I get back. This will give you time to provide something fuller on the issues
Page 32 of 81
WITN10200100
WITN10200100
and on all the accusations in the programme, provide a substantive and objective
letter to the 3 MPs bearing in mind that we now have 4 important people who are
not going along with our approach. We also need to assess our tactical handling
options and how these will play out, including the involvement of Tim Parker and
how we use this to best effect” (WITN10200120 Email dated 26 August 2015). That
request was sent by my private office to Tim Mclnnes later that day
(UKGI00005664 Email dated 26 August 2015).
120. I was concerned that Tim Mcinnes was not fully engaging with the issues raised
by Mr Bridgen, Mr Jones, and Mr Letwin. This was the first time I had been briefed
on the technical functionality of Horizon and I am confident it was the first time I
was made aware of any (albeit limited) remote access functionality. I was also
concerned at the repeated assertion that POL and ShEx’s line, as repeated by
George Freeman in Parliament, that Second Sight had found no evidence of
systemic issues was incorrect. The fact that an increasing number of MPs,
including Oliver Letwin (a Cabinet minister, accomplished politician and serious
intellect), had reservations about POL’s approach was a real concern.
121. On 4 September 2015 I received the fuller advice I had requested from ShEx,
authored by Laura Thompson (UKGI00000042 Meeting agenda dated 4
September 2015 about Post Office Horizon: next steps). I had asked senior
officials, outside of ShEx, to review that fuller advice before it was sent to me, and
I understand that Patrick Kilgarriff (BIS legal director) and Nick King (Special
Advisor) reviewed the briefing note prior to it being sent to me (UKGI00005676
Email chain dated 2 September 2015). No senior BIS policy official appears to have
been involved however.
122. Ms Thompson’s recommendation was that I should reply to Messrs Letwin,
Bridgen and Jones by simply repeating the Government's position that the correct
channels for resolving these concerns was either through the mediation scheme
or legal means including through the CCRC. She also recommended that I refer
again to my request that Tim Parker give the matter his consideration upon him
taking up his post in October, and of my meeting with James Arbuthnot scheduled
for 17 September. The advice continued that it remained ShEx’s strong
Page 33 of 81
WITN10200100
WITN10200100
recommendation that Government resist calls for further independent inquiry on
the basis that such measures could interfere with the CCRC process and/or
discourage applicants from seeking resolution through the mediation scheme.
Laura Thompson once again repeated that no evidence had been presented to
demonstrate that any convictions were unsafe or that a fault in Horizon had causes
the losses to subpostmasters.
123. I was not impressed by this advice. It did not strike me as doing anything further
than the original email from Tim McInnes on 24 August 2015.
124. By this time, I had lost confidence in the quality of ShEx’s advice. We were
going round in circles, and they were unwilling to engage with the issues in the way
I felt they needed to. In my view ShEx had lost objectivity, and its officials were
unable or unwilling to scrutinise POL properly — even though that was an essential
part of their role. The advice they gave seemed closed minded, deaf to the issues
and constantly repeating the same mantra. As time went by I felt as though they
were trying to obstruct, or shut down, my efforts to get to grips with the issues. This
may have been connected in some way to a dogmatic belief that ALBs should be
entirely free of Government interference; and certainly I was repeatedly advised
that POL should be left alone. I do recall feeling the pressure of the consistent
advice from ShEx that these were not matters for Government and to hold that
official line, but based on what I now knew that was no longer a tenable position.
125. I decided that I should take the opportunity to speak to and seek the advice of
Oliver Letwin and, as explained below, we ultimately spoke on 14 September 2015.
126. On 6 September 2015, I sent an email to my private office dealing with a
number of Horizon issues (UKGI00000952 Email chain dated 9 July 2015). In
paragraph 1, I asked my team to send the updating note for No.10 (referred to
above) to Oliver Letwin and to prepare a brief covering letter from me. At
paragraph 2, I stated that I should formalise my request to Tim Parker regarding
the independent review, and in doing so I should leverage the increasing public
pressure and involvement of Oliver Letwin (who, as Chancellor of the Duchy of
Lancaster and Minister of State for Government Policy, was a senior Government
Page 34 of 81
WITN10200100
WITN10200100
minister) in order to emphasise the real importance of a serious independent
review. At paragraph 3, I made comments on the responses to MPs, highlighting
that I had not read the reports (but had glanced at them), and that I could not take
a definitive view. I also wanted to make it clear that I was not on POL’s side of the
argument. At paragraph 4, I stated “Finally, remember that our overwhelming
objective is to do the right and fair thing. The Post Office may have done so, but
we have to be open to the possibility that for whatever reason they have not.”
127. On7 September 2015, I received a letter from Jane MacLeod, General Counsel
at POL, which again restated POL’s position on some of the matters discussed at
our 6 August meeting, and sought to rebut the Panorama _ allegations
(POL00041135 Letter to Baroness Neville-Rolfe dated 7 September 2015).
128. On 10 September 2015 my private office sent a letter from me (drafted by ShEx)
to Tim Parker, copied to Paula Vennells, (POL00102551 Letter to Tim Parker dated
10 September 2015) to follow up on our conversation of 6 August 2015. In this
letter I say “The issues surrounding the Horizon IT system have not been resolved.
Indeed, some of the MPs concerns have written to me again following the
Panorama programme pressing the case for an independent investigation. The
Government takes seriously the concerns raised by individuals and MPs regarding
the Post Office Horizon system and the suggestions that there may have been
miscarriages of justice as a result of issues with Horizon [...] I am therefore
requesting that, on assuming your role as Chair, you give this matter your earliest
attention and, if you determine that any further action is necessary, will take steps
to ensure that happens”. The letter could have been stronger, but I was keen to
get it off rather than go round in circles with ShEx.
129. On 14 September 2015, I spoke to Oliver Letwin regarding my next steps. This
was an extremely helpful discussion, with a senior, experienced and wise Cabinet
minister. Laura Thompson's readout of the meeting (UKGI00005912 Email chain
dated 14 September 2015) captures the main points. It records that Mr Letwin
observed that “there was cross party support at the outset but also acknowledging
a genuine question between SPMs who were guilty and those who had been
mistreated. He said that, while POL had set up the review and the [Second Sight]
Page 35 of 81
WITN10200100
WITN10200100
report, he felt there were still some questions to be answered, and until a genuinely
independent person could look at the whole picture, the issues would persist. He
felt Govt needed to understand (through an independent reviewer) the scale of the
problem before it could be decided what was to be done. BNR responded that both
she and SoS were keen to make sure OL understood the background. She made
the points from her speaking note around matters of law, CCRC and mediation. OL
felt the involvement of the CCRC was constructive and accepted that would take
time. BNR spoke about the progress on mediation, acknowledging that the POL
contract was strict but rightly so, and that there were a mixture of cases in the pile
for mediation. They will take time to work through. BNR explained that she had
formally asked Tim Parker to look at the issue and explained his background. OL
was very positive about this, noting that TP would come to the issue fresh with no
vested interests. He suggested this was the right approach and BNR should set
that out in her reply to AB. TP would need to look seriously at all the information
including the findings of SS. OL suggested BNR run her plan past JA on Thursday
before she replies to AB. BNR said she would update OL after the JA meeting via
his office. OL said the call had been immensely helpful.”
130. This gave me confidence that my instinct to get Tim Parker to commission an
independent review was the right one.
131. At about this time I was also increasingly of the view that I should agree to the
many requests from MPs to meet with Second Sight.
132. On 17 September 2015 I met James Arbuthnot. In advance of that meeting, I
received a briefing from Laura Thompson (UKGI00000058 Meeting agenda dated
11 September 2015 about Meeting with James Arbuthnot on post Office Horizon).
She advised that the aim of this meeting was to hear his concerns and demonstrate
to him that the Government was listening. From my perspective, I was keen to hear
from him what action he was calling for and to see where the Government might
assist. Ms Thompson yet again stated that “/t is important to keep in mind the fact
that to date, through extensive investigation, still no evidence has emerged that
there are faults in the system or that any convictions are unsafe.” She also stated
that “any suggestions for Government actions should be considered in the context
Page 36 of 81
WITN10200100
WITN10200100
of inflated expectations of compensation amongst some campaigners, that
Government cannot repeal convictions or intervene in the CCRC’s work’(
UKGI00000058). This point about compensation had been made in the initial
written briefing on 2 June 2015, but had not, to the best of my recollection, been
repeated since.
133. The meeting itself was positive and instructive, and I believe Mr Arbuthnot also
found it useful. His main ask was that I meet Second Sight in order to better
understand the issues and to “decide for myself’ whether their concerns warrant
more Government attention or action. I said I would consider this and, ultimately, I
decided to meet with them. Mr Arbuthnot and I agreed that the CCRC’s
investigations were important and should be allowed time to conclude, although he
did raise some concerns about the process including disclosure by POL. Mr
Arbuthnot told me that there were concerns that there might be evidence that
Fujitsu could remotely alter balances in SPM accounts. He suggested that I discuss
this with Second Sight if I met with them. I sought Mr Arbuthnot’s views on my
proposed approach to an independent review by Tim Parker. He was concerned
that as the new Chairman of POL he might not be sufficiently objective to provide
that independent scrutiny. James Arbuthnot suggested asking Sir Anthony Hooper
to conduct that review. I said I would consider this but noted that he had previously
declined to meet Ministers on these issues when he was in post as independent
Chair of the Working Group. I also had faith in Tim Parker coming in as a new
broom.
134. Asummary of the headline points of my meeting with Mr Arbuthnot are captured
in a note to Oliver Letwin (UKGI00006022 Summary note for Oliver Letwin of
headline points of meeting with Mr Arbuthnot)‘. The letter explained that I was
considering whether I should meet Second Sight, and stated that “As this is
potentially a serious problem for the Government I would appreciate your [i.e. Mr
Letwin’s] views before I write”.
4 Emails concerning the process of drafting that note are at UKGI00005978 and
UKGI00006021; I note that those emails record me as describing an earlier draft of the note,
prepared by ShEx as “disingenuous”. Copies of these documents were provided to me by the
Inquiry.
Page 37 of 81
WITN10200100
WITN10200100
135. On 1 October 2015, I received a briefing from Laura Thompson at ShEx
following my meeting with James Arbuthnot (BEISO000013 Meeting agenda dated
1 October 2015 about Post Office Horizon: Update). In that briefing, Ms Thompson
weighed up the advantages and disadvantages of my meeting Second Sight and
advised that I should meet them.
136. On or shortly after 1 October 2015, I received a letter from Tim Parker
confirming that he would instruct leading counsel to provide advice on the scope
of his investigation, how to conduct the necessary enquiries, and to assist in
considering how to present and act on the findings (UKGI00006138 Letter to
Baroness Neville-Rolfe from Tim Parker dated 1 October 2015). I was naturally
happy to receive this confirmation. I considered it to be really important that this
was to happen, and provided me with great reassurance that Tim Parker was
getting on with this quickly and taking the issues seriously.
137. I recall that at some point I was informed that Jonathan Swift QC (now Mr
Justice Swift) had been instructed to lead the review. I remember researching him
on the internet and was happy to see that he was at the top of the profession and
exactly the calibre of person I wanted. This reassured me that the review was going
to be rigorous and that Tim Parker was gripping the issue.
138. On 5 October 2015, I informed Laura Thompson, through my private office, of
my decision to meet Second Sight and Sir Anthony Hooper. I was advised, through
my private office, that this should be communicated to POL in the first instance
(UKGI00006092 Email dated 5 October 2015 attaching 151001 Post Office
Horizon Update submission Revised).
139. I spoke to Paula Vennells regarding my intention to meet Second Sight and Sir
Anthony Hooper on 9 October 2015. I do not recall the conversation in any detail,
but I have seen a note of the meeting drafted by Laura Thompson of ShEx and
shared with my private office (UKGI00006142 Email chain dated 21 December
2015). The note records “POL wanted to flag their concerns around the Minister
meeting Second Sight. They felt that doing so would risk undermining her
Page 38 of 81
WITN10200100
WITN10200100
independence and distance from the situation, and were also concerned that if
news of the meeting were to leak to the media, it would risk individuals withdrawing
from the mediation process [...] Paula was also concerned that the Minister's
meeting might conflict with any meeting Tim Parker decided to have with SS. BNR
noted Paula’s views but felt it important to make the offer of a meeting to Second
Sight and inform Mr Arbuthnot that she was doing so. She suggested that the offer
should be a private meeting, and should happen quite soon, so that it would take
place before Tim Parker invited them to meet. It would be a short meeting.”
140. I wrote to James Arbuthnot on 13 October 2015 thanking him for our meeting
on 17 September 2015 and confirming that I would be writing to Second Sight to
offer a meeting (JARB0000121 Letter to James Arbuthnot dated 13 October 2015).
141. On 14 October 2015 my private office wrote to Mr Warmington to arrange a
meeting (WITN10200125 Email dated 14 October 2015). Mr Warmington replied
to that email the following day, 15 October 2015, accepting the invitation on behalf
of himself and lan Henderson (WITN10200126 Emailed dated 15 October 2015).
That meeting was arranged to take place on 19 October 2015 (WITN10200126).
142. On 15 October 2015, I received a briefing from Laura Thompson of ShEx in
advance of my meeting with Second Sight on 19 October 2015 (WITN10200127
Meeting agenda dated 15 October 2015 about Meeting with second sight on Post
Office Horizon). She recommended that I be “in listening mode”, with the focus on
“system-wide problems, rather than individual examples or cases.” I was told that
Mr Warmington had requested that I read their most recent report in advance of
the meeting; Ms Thompson said that if I chose to do so “we recommend that you
also read the Post Office’s response to that report.” I do not believe I read either
report against the time.
143. 1 met Ron Warmington and lan Henderson of Second Sight on 19 October
2015. I understand that, regrettably, DBT has been unable to locate any minutes
or other record of the meeting. I recall listening sympathetically to the issues raised,
but I do not remember much of the substance of the meeting: the meeting was
certainly not a “lightbulb moment”. I am confident I would have informed them of
Page 39 of 81
WITN10200100
WITN10200100
the Parker review and that I had asked Tim Parker to meet them and that I
encouraged them to raise issues with Mr Parker as part of that review.
144. On 13 November 2015, Oliver Letwin wrote to me asking whether I had met
Second Sight and what my conclusions from that meeting were. He also asked for
a timetable for Tim Parker's investigation (UKGI00006232 Letter to BNR dated 13
November 2015).
145. I responded on 29 November 2015 (UKGI00010325 Letter to Oliver Letwin
dated 29 November 2015). In that letter I stated “/ met with Ron Warmington and
lan Henderson from Second Sight on 19 October. It was a helpful meeting and
they raised a number of important points. I suggested that they contact Tim Parker,
the new Chair of Post Office Limited, to follow these points up. Tim is currently
conducting a review into this issue and has appointed a QC to advise him. I
understand he is currently setting up meetings with the key parties and I am
expecting him to update me on his findings in the New Year.”
146. On 20 November 2015, my private office received an email from Laura
Thompson informing me that JFSA had “announced on their website that they are
preparing for Group Litigation against the Post Office’ and appointed a firm of
solicitors, Freeths, to represent them (UKGI00006279 Email dated 23 November
2015). In response, I asked for an explanation of the mechanics of a class action
and the potential grounds (UKGI00006279) and a sense of timescales
(UKGI00001171 Email chain re: Submission to Ministers on Post Office Horizon -
potential group civil action).
147. On 14 December 2015, Laura Thompson of ShEx wrote to my private office
providing some updates in respect of the Post Office. She wrote that Tim Parker's
review was progressing as planned with the majority of work to be completed
before Christmas with a view to finalising the report in mid-January 2016. I found
this extremely encouraging. It was suggested that I should meet Tim Parker in late
January or early February (WITN10200129 Email dated 21 December 2015,
WITN10200130 Email chain dated 7 January 2016).
Page 40 of 81
WITN10200100
WITN10200100
148. On 31 December 2015, my private office contacted Diane Blanchard, Tim
Parker's PA, seeking to arrange a meeting in late January or early February
(UKGI00006451 Email chain dated 6 January 2016). A meeting was arranged to
take place on 26 January 2016.
149. On 22 January 2016, I received a briefing from ShEx ahead of my meeting with
Tim Parker on 26 January 2016. I was informed that the review was in the process
of being finalised, and that the investigation had involved a number of meetings
including with Lord Arbuthnot and Second Sight (UKGI00000020, Meeting agenda
dated 22 January 2016 about Meeting with Tim Parker).
150. I met Tim Parker on 26 January 2016. Laura Thompson was present and took
a note. There is none apparently available from my own office although a private
secretary was present. A number of issues unrelated to Horizon were discussed
following on from a meeting he had had with the Secretary of State on 24
November. In relation to Horizon, he told me that Jonathan Swift QC “was about to
report. He had found no systemic problem” (UKGI00006482 Note of meeting with
Tim Parker on 26th January 2016).
151. On 9 February 2016 I met with ShEx officials to discuss a number of Post Office
issues. In line with my meeting with Tim Parker, it was noted that “The QC engaged
by Tim Parker to look into the HORIZON IT system is due to deliver their report
soon. He has indicated that there is no systemic problem” (UKGI00006528 Note of
Post Office Meeting dated 9 February 2016).
152. On7 March 2016, I received a letter dated 4 March from Tim Parker setting out
further information about the approach to his review, the scope of work undertaken
so far, the findings to date and further work which Mr Parker had commissioned as
part of the review (POL00024913 Letter to Baroness Neville-Rolfe from Tim Parker
dated 4 March 2016).
153. Mr Parker's letter explained that the objective of the review was “To review the
Post Office’s handing of the complaints made by sub-postmasters regarding the
alleged flaws in [Horizon] and determine whether the processes [...] to understand,
Page 41 of 81
WITN10200100
WITN10200100
investigate and resolve those complains were reasonable and appropriate”. The
review was to address “both what had happened to date (in the period 2010 —
2015), and also the important question as to whether there were any gaps in the
work done and what more, if anything, could now reasonably be done to address
the complaints that have been raised”. To achieve those objectives, the review
focused particularly on “(i) criminal prosecutions; (ii) the Horizon system (i.e., the
software); (ii) the support provided to sub-postmasters though training and
helplines; and (iv) the investigations in the circumstances of specific cases where
a complaint had been raised”.
154. In respect of (i) (criminal prosecutions), Mr Parker stated that he would instruct
specialist criminal counsel to provide advice as to whether the decision to charge
theft and false accounting could undermine the safety of any conviction for false
accounting if (a) the conviction was on the basis of a guilty plea following which,
and/or in return for which, the theft charge was dropped, and (b) there had not
been a sufficient evidential basis to bring the theft charge. He also stated that he
was Satisfied that POL had adopted a proper approach to disclosure.
155. In respect of (ii) (the software), Mr Parker stated “Post Office recognises that in
a system of the age, size and complexity of Horizon, it was unremarkable that
occasional bugs, errors or glitches were uncovered and addressed. A limited
number of specific problems with the potential to affect branch accounts were
brought to the attention of Second Sight during the course of their work, together
with details of the way in which the Post Office had addressed these matters. It is
apparent that these bugs were capable of having a generic Impact (i.e. of affecting
all users of the Horizon system and not only those who had raised complaints about
them). However, no evidence has emerged to suggest that a technical fault in
Horizon resulted in a postmaster wrongly being held responsible for a loss. In the
context of this review exercise, I have concluded that there is no basis on which to
recommend further action in relation to these known, specific, errors.”
156. He went on to say that “the review report suggested that consideration should
be given to whether it would be possible, by analysis of the transaction logs of sub-
postmasters who made complaints, to determine more comprehensively whether
Page 42 of 81
WITN10200100
WITN10200100
or not the matters complained of by each sub-postmaster could show the existence
of some other, generic bug, within the system. Work is now underway to assess if
such testing is possible, and if so, to scope the work that would need to be done”.
157. Finally, Mr Parker said that “further work is also underway to address
suggestions that branch accounts might have been remotely altered without
complainants’ knowledge. In particular the security controls governing access to
the digitally sealed electronic audit store of branch accounts over the life of the
Horizon system, will be reviewed.”
158. In relation to (iii) (training and support), Mr Parker noted the difficulties in
determining the merits of these complaints, and stated “/ have concluded that these
issues have already been addressed as comprehensively as is reasonably
possible by both the Post Office and by Second Sight through their Investigations
of all complainants’ cases. However, I am taking forward one further line of enquiry
in relation to the very limited number of cases where specific allegations were
made of misleading advice being provided by the Post Office's helplines.”
159. In relation to (iv) (specific cases), Mr Parker stated “The review also looked at
the Post Office's investigations of the complaints as part of the Mediation Scheme
process. It has concluded that the investigations were detailed and thorough, and
left no more than very limited gaps which might now reasonably be filled by further
work. There is only one further accounting exercise recommended by the review
team, which consists of an examination of the extent of any relationship between
unmatched balances In the Post Office's general suspense account and branch
discrepancies, and Independent experts have been Instructed to undertake this
examination.”
160. Under the heading “Next Steps”, Mr Parker stated:
“I have commissioned independent persons to undertake the necessary work.
I am satisfied that they meet the standards of expertise and independence
appropriate to the tasks.
Page 43 of 81
161.
162.
WITN10200100
WITN10200100
I do, of course, share your aim that matters should be drawn to a conclusion as
soon as possible consistent with the need for the work that remains to be done
to a high standard. I hope you will understand that, particularly in relation to the
further testing of the Horizon system, this work may take some time. I anticipate
that I will be in a position to report back on the outcome of this further work
during May.
I firmly believe that the focus and scope of my review to date, together with the
further work which I have now commissioned, will at that time allow me to
confirm that the processes designed and implemented by Post Office Limited
to understand, investigate and resolve those complaints were reasonable and
appropriate, and that there are no further enquiries which need to be
undertaken into this matter, whether by Post Office Limited or, indeed, by
anyone else.”
The impression I had was that the investigation remained ongoing, and that
whilst much good work had been done there was still considerable work to be
done. I did not understand that the review was complete. Mr Parker's letter
stated that it was written to describe the work undertaken “so far” as part of
the review, and his “initial” findings, and set out his plan to bring the review to
a conclusion. He described his letter as an “update”, and suggested that
“once the various additional strands of work I am pursuing are complete, we
will need to find an appropriate method of communicating the results of my
review to a wider audience”. I was not provided with a copy of any final report
prepared by Jonathan Swift QC, and did not understand at that stage that one
existed — whilst Mr Parker, at the very end of the letter, stated “/f you would
like to discuss the review report with me, I would be happy to do so”, I did not
understand there to be any significance in the expression “review report’ and
did not take this to be a reference to some separate freestanding report. I also
expected Mr Parker to describe to me with full candour the contents of the
advice he had received.
I was pleased to understand that Mr Parker had “commissioned independent
persons to undertake the necessary work’. Though I did not want the review to
Page 44 of 81
WITN10200100
WITN10200100
drag on unnecessarily, I was content that Mr Parker was doing the right thing by
continuing with the review, and accepted that it would be necessary to wait until
the further work was done to receive the final outcome of the review.
163. I did not know at the time but know now that Mr Parker had in fact received a
final report dated 8 February 2016 from Jonathan Swift QC, entitled “A Review on
Behalf of The Chairman of Post Office Limited. Concerning The Steps Taken in
Response to Various Complaints Made by Sub-Postmasters” (“the Swift Report”)
(POL00167707). The first time I saw the Swift Report was earlier this year and as
result of this Inquiry’s work.
164. It is my firm view that Mr Parker should have made it plain to me that he was in
receipt of Jonathan Swift QC’s final report. If there was some genuine reason why
he could not provide me with the report, then he should have explained that and
provided me with an accurate and reasonably complete summary of the report.
165. I do not know why Mr Parker did not state clearly in his letter (or when I spoke
to him) that he had received a final report from Jonathan Swift QC. I also do not
know why he did not provide the Swift Report proactively with his letter of 4 March
2016, especially given that, whilst there was further work to do, the document was
in final form. I understand now that Mr Parker did not provide the Swift Report to
the POL Board.
166. Even more importantly I now see having had access to the Swift Report that Mr
Parker's reassuring summary of the report was materially misleading. Specifically,
it failed to make any reference to the important points made in paragraphs 145-
147 of the Swift report, which concern remote access and directly undermine the
information provided to ministers and, in turn, Parliament, and indicate serious
historic and ongoing concerns as to POL’s compliance with its disclosure
obligations in relation to criminal prosecutions and convictions. This contradicts
the assurances given in the second paragraph of the Criminal Prosecutions section
of Mr Parker's letter “/ am satisfied that Post Office has adopted a proper approach
to disclosure such that it satisfies its duty of disclosure as prosecutor’. All this
Page 45 of 81
WITN10200100
WITN10200100
touches on my key concern which was that postmasters should be able to secure
justice through the CCRC process.
167. Similarly, whilst it refers to further work commissioned in relation to POL’s tactic
of charging theft and false accounting, it did not refer to the important and strongly
critical findings in paragraphs 100-109 of the review.
168. These specific findings should have been brought to my attention.
169. I was surprised and disappointed to discover, years later, that Mr Swift's
findings were not disclosed as part of any criminal or civil proceedings. I do think
this is nothing short of scandalous.
170. I received Mr Parker’s letter on 7 March 2016 and on the same day responded
to say “/ would like officials to advise on a reply / the need for a meeting. I would
also like advice on when I should brief the Secretary of State. It’s not definitive as
I see it’ (UKGI00006583 Email chain dated 11 March 2016).
171. On 10 March 2015 Laura Thompson sent the requested advice to my private
office (UKGI00006583). She summarised Tim Parker's letter and advised that
there was no need to meet Mr Parker or respond to his letter.
172. Despite this advice, I decided that I wanted to meet Tim Parker to discuss his
letter and the next steps, and a meeting was arranged to take place on 27 April
2016.
173. Around 10 March, I spoke to Lord Arbuthnot in the House of Lords and I relayed
to him the contents of Mr Parker's letter in summary. I said I would update him in
May in line with the expected conclusion of the review.
174. On 14 April 2016 my private office was copied to an email from the Secretary
of State’s private office to No.10 saying that POL had received a letter from Freeths
Solicitors putting them on notice that civil proceedings had been issued against
them on behalf of 91 claimants (WITN10200134). The email was in very similar
Page 46 of 81
WITN10200100
WITN10200100
terms to the usual ShEx line, which leads me to conclude that ShEx were briefing
the Secretary of State / his office in the same way that they were briefing me.
175. On 14 April 2016, I received a submission from Laura Thompson summarising
the contents of that email (WITN10200135, Meeting agenda dated 14 April 2015
about Post Office Horizon: update on group legal action). She recorded that I had
arranged to meet Tim Parker on 27 April “to hear more about the final parts of his
review into this issue”.
176. On 26 April 2016, I received a briefing from Laura Thompson in advance of my
meeting with Tim Parker the following day. Ms Thompson stated “We understand
he remains on-track to complete the review by the end of May.” The common
understanding at that stage was that the review remained ongoing. Ms Thompson
advised me to discuss with Mr Parker how the findings of his review “once
complete” should be communicated to interested parties, a matter which may
become complicated given that legal proceedings were now underway
(UKGI00000048 Meeting agenda dated 26 April 2016 about Post Office Horizon:
update on group legal action).
177. \met Tim Parker on 27 April 2016. I understand DBT has been unable to locate
a copy of any minutes of the meeting, but the content of that meeting was reflected
in a submission dated 3 May 2016 from Laura Thompson (UKGIO0006692Meeting
agenda dated 3 May 2016 about Post Office Horizon: update on group legal
action). At the meeting she said we had discussed progress of the review, and the
group litigation. Tim Parker told me that the litigation would be discussed at a POL
Board meeting on 24 May 2016 and that as far as he was aware the litigation was
not affecting the last pieces of his work to bring his investigation to a conclusion.
He told me that remaining work with Deloitte “may take another month or so”. I
would have assumed from my experience in industry that there would be a
discussion at Board level about this report. I would have assumed that the report's
conclusions would have been recorded and the outstanding investigations listed
with a timeline mapped out for completion. I consider it fell within the
responsibilities of the ShEx representative on POL’s Board to ensure that the
Page 47 of 81
WITN10200100
WITN10200100
Board discussed the report and saw any remaining work through to completion, or
to report it to me if for any reason that were not to happen.
178. Ms Thompson's 3 May 2016 submission also referred to media reporting of
good progress with the CCRC review, and stated that POL “will seek an update on
timings on the basis of this report’.
179. I understood from Tim Parker’s 4 March 2016 letter and from our 27 April
meeting that the review was continuing, and I was content with that. My role at this
stage was to get him to do the review with a serious silk, take it seriously and see
it through.
180. I have now had sight of an unsigned draft letter dated 21 June 2016 from Tim
Parker and addressed to me (POL00022776 Letter to Baroness Neville-Rolfe from
Tim Parker dated 21 June 2016). In that draft letter Mr Parker states that POL “has
received very strong advice from Leading Counsel that the work being undertaken
under the aegis of my review should come to an immediate end, and instead
address the issues through equivalent work taken forward in the litigation [...] I
have therefore instructed that the work being undertaken pursuant to my review
should now be stopped”.
181. The first time I saw this draft letter was in preparation for this Inquiry. It was
published by POL on 23 January 2023 in response to a Freedom of Information
Act. POL said in that response that they could not locate any information that the
letter was sent to the Department and I am informed that DBT has no record of
receiving any such letter. I am confident I did not see it at the time.
182. I do not know why the draft letter was not sent to me (though I do note it was
dated 2 days before the Brexit referendum). It was my understanding in June 2016
and beyond that Tim Parker's work on the review was continuing.
183. On7 July 2016, I met with Richard Callard, Laura Thompson and Tim Mcinnes
(all of ShEx) to discuss matters concerning the Post Office in advance of my regular
meeting with Tim Parker scheduled for 19 July 2016 (WITN10200137Notes from
Page 48 of 81
WITN10200100
WITN10200100
Post Office catch up dated 7 July). A wide range of issues were discussed. A note
of that meeting records that “/n the light of group civil litigation, Tim Parker will also
bring thought to the catch-up on the future of POL continuing actions. Action: Laura
to speak to BIS Legal to consider position.” I would have understood the
“continuing actions” to be a reference to the ongoing review.
184. On 13 July 2016, Theresa May was appointed Prime Minister and I ceased to
have ministerial responsibility for postal affairs. My successor, Margot James, was
appointed on 17 July 2016.
185. I thought it important that I should honour the meeting with Tim Parker on 19
July 2016, despite relinquishing the postal affairs brief. I received a briefing from
Laura Thompson in advance of that meeting, which stated “We advised when we
saw you recently that POL were taking additional legal advice from a QC regarding
the group litigation against Post Office, and the implications of this action on
ongoing work regarding the Horizon matter. Mr Parker will give you an update on
this matter and the implications for his review of the system” (UKGI00001025
Meeting agenda dated 18 July 2016 about meeting with Tim Parker).
186. I met Mr Parker the following day, 19 July 2016. It was our last meeting, and it
was essentially a farewell meeting. I do not recall we discussed anything terribly
substantive on anything. I certainly have no recollection of any discussion
relevant to the Horizon legal cases although I did of course know from the
briefing that POL were taking additional legal advice from a QC about the
implications of ongoing work following the Swift review. I would in any event have
expected something of that importance to be considered by BIS lawyers and their
senior officials. My new portfolio as Minister of State — as I had been told some
days before by No 10 — was primarily focused on energy as well as intellectual
property.
SECTION 2: RULE 9 QUESTIONS
187. In this section, I address the specific questions contained in the Rule 9 request.
Page 49 of 81
WITN10200100
WITN10200100
Complaint Review and Mediation Scheme
188. 1am asked to describe my knowledge and understanding of:
a. the reason(s) for the establishment of the Complaint Review and Mediation
Scheme (the Scheme);
b. the nature of the complaints made by subpostmasters about the accounting
integrity of Horizon;
c. the initial findings made by Second Sight;
d. the concerns of Post Office Limited about the conduct of Second Sight;
e. the reason(s) for termination of the Working Group and Second Sight’s involvement.
189. As stated above, I recall that as a Member of the House of Lords I was very
generally aware of concerns raised by Parliamentarians on behalf of postmasters,
and recall that some postmasters were claiming that deficiencies in the Post Office’s
IT system were responsible for shortfalls they had experienced.
190. For this reason, when the postal affairs brief was added to my ministerial
portfolio in May 2015 I immediately asked the responsible officials to brief me on
“the problems with the Horizon IT system and the losses people are complaining
about’ (WITN10200101) My initial knowledge and understanding of these issues
was derived from my oral briefing from ShEx on 2 June 2015 and the written
materials I received in advance of that briefing, as described at paragraph 14 to 28
above.
191. Over time, my knowledge and understanding evolved as described in Section 1
above.
192. I am asked if I agreed with the advice of the Shareholder Executive that the
Government should maintain distance from the concerns raised by MPs and the
JFSA regarding the conduct of Post Office Limited and its management of the
Scheme.
193. As explained above, I initially agreed with the advice of ShEx officials that the
Department should not interfere in these issues, for the reasons described at
Page 50 of 81
WITN10200100
WITN10200100
paragraphs 29 to 33 above. In summary:
(1) I was given information and assurances by ShEx officials that these issues were
being handled appropriately by POL, and was given strong advice that
Government should not intervene. As a busy minister I was not in a position to
second guess all the advice I received from responsible officials across my
entire portfolio (and Horizon was at the time one relatively small aspect of the
postal affairs brief, which was one relatively small part of my wider ministerial
portfolio) — how far to test and probe was essentially a judgement call, and I was
reassured by the information I was provided with. I had no reason at the outset
to believe I was being misled, and every reason to believe the information and
advice was thorough, objective and impartial.
(2) Laura Thompson herself appeared competent and on top of the detail and, to
start with, I had faith in her advice.
(3) 1 had recently come into the postal affairs brief, and was conscious that a
succession of ministers had decided not to intervene in relation to these issues.
(4) I was acutely conscious that POL had been established as an ALB precisely so
it could operate free of political interference.
(5) I was being informed that there were no systemic problems, the postmasters’
trade union did not support the complaints, the CCRC was looking at historic
convictions and POL was taking responsible steps (by way of mediation and
improved training and support) to deal with all issues — in other words, sensible
processes were already in place. Had ShEx officials given me accurate
information about the contents of the Second Sight reports, the situation might
have been different.
194. As time went by and I became aware of additional information (or, at least,
opposed perspectives) — especially through my meetings and correspondence
with MPs — I did decide to become more involved, testing and probing the advice
and information ShEx officials were giving me, meeting with MPs, Second Sight
and other stakeholders, and pressing Tim Parker to conduct a genuinely
independent review. This level of involvement was unusual for a minister dealing
with an ALB — which is meant to be operationally independent of Government.
Page 51 of 81
WITN10200100
WITN10200100
Responding to Concerns of MPs and SPMs
195. I am asked to describe my response to the concerns raised by MPs about the
integrity of the Horizon IT System, and how (if at all) my attitude to these concerns
changed as a result of the adjournment debate held on 29 June 2015.
196. My main concern was that many honest and hardworking people might —
though it seemed unlikely initially - might have suffered an injustice. As to the
detail I have described above how I responded to MPs’ concerns. I immediately
requested a briefing on Horizon issues when I took over the postal affairs brief. I
corresponded and met with MPs, and obtained information (though, as it turns out,
somewhat misleading information) from the responsible ShEx officials in relation
to the concerns MPs had raised. Following my meeting with James Arbuthnot, I
agreed to meet with Ron Warmington and lan Henderson. I tested and probed the
information I received from ShEx and from POL. I sought and obtained assurances
from ShEx and POL about document retention and I pressed Tim Parker to
commission a QC-led independent review.
197. I agreed with George Freeman's observations that the strength of feeling in the
adjournment debate was striking and agreed with him that it was appropriate to
speak to MPs better to understand their concerns.
198. I am asked to describe my response to the proposal that the Government
establish a judicial inquiry to investigate MPs’ concerns.
199. I accepted the advice of officials that pressure to establish a public inquiry
should be resisted at that time. Inquiries are a last resort. They also take an
extremely long time and cost a great deal of money. it was better first to pursue
the avenues of mediation, the CCRC in which I had great faith, and the Review I
had asked Tim Parker to set up to identify outstanding issues. I believe that if the
Swift report had been published or made available early on in the sub postmasters’
litigation things might have been different and much quicker.
Page 52 of 81
WITN10200100
WITN10200100
200. I have described above the steps I took. As a minister, I was reliant on the
information which the responsible ShEx officials gave me. As explained, however,
I began to doubt this information and pressed Tim Parker to institute an
independent review, which I thought was the best and quickest way of getting to
the bottom of the disturbing complaints from MPs. At the time both James
Arbuthnot and Oliver Letwin seemed to agree.
201. I am asked if I agreed with the advice of the Shareholder Executive that “the
priority should be to put this issue to bed”.
202. I did not. I wanted to get answers to the outstanding questions raised by MPs.
As I said in my 6 September 2015 email (UKGI00000952), “Finally remember that
our overwhelming objective is to do the right and fair thing. The Post Office may
have done so, but we have to be open to the possibility that for whatever reason
they have not’.
203. I! am asked if I shared the concerns of the Shareholder Executive that the
“continued uncertainty and allegation does damage to the Post Office’s business and
prevents those individuals with cases from reaching a resolution”.
204. I agreed — in the abstract — with the proposition that continued uncertainty and
allegation did damage to the Post Office’s business, as they would have done to
any business. As POL has proved, however, it is never in the long-term interests
of businesses to ignore or suppress problems. Most importantly, as explained
above I did not see the damage caused by the “continued uncertainty and
allegation” as being any sort of justification for avoiding getting to the truth through
proper independent scrutiny, and it was for this reason that the Swift review took
place.
205. Whilst I also recognised that this might also make it less likely that settlements
would be reached through mediation (assuming that is what was meant by
“prevents those individuals with cases from reaching a resolution’), I did not agree
that this was a problem. I considered that individuals should be able to make
Page 53 of 81
WITN10200100
WITN10200100
properly informed decisions about whether to mediate, without pressure. I was
also aware that MPs were also raising concerns about the mediation scheme.
Second Sight’s Briefing Report
206. I am asked to describe my knowledge and understanding of the issues raised in
Second Sight’s Briefing Report Part Two and to address, in particular:
a. The existence of bugs, errors and defects in Horizon;
b. The ability of Fujitsu Service Limited to alter transaction data without the knowledge
of subpostmasters;
c. The limited extent and format of the Horizon transaction data available to
subpostmasters within branch;
d. The concerns raised by Second Sight about the conduct of private prosecutions
against subpostmasters; and
e. The limitations which were placed upon Second Sight's access to Post Office
documents and records.
207. My understanding of Second Sight’s Briefing Report Part Two was initially
limited to the information provided to me by ShEx officials. As explained, I had a
busy ministerial portfolio and could not possibly read everything relevant to my
work. As with other ministers, I was reliant on officials to make the right
judgements about the documents I was required to read, and reliant on officials to
provide accurate summaries of any documents I could not read in full. This was
a lengthy document - assuming I got it in my box at all to start with - I had no
reason, initially, to believe ShEx officials had failed to provide an accurate,
thorough, impartial and objective summary. I did however speak to MPs and
pushed back on the McInnes summary of its contents. I did look at the Second
Sight Report and the POL response later on but it was clear this was not a dispute
I could resolve personally resolve.
208. As to (a) (the existence of bugs, errors, and defects in Horizon), the briefing
pack stated on its “Summary and Key Issues” page that there had been “over two
years’ worth of independent investigation” which had “found no systemic faults in
Horizon”. The slide dedicated to the “Horizon System and Mediation Scheme”
Page 54 of 81
WITN10200100
WITN10200100
stated that Second Sight had been commissioned in 2012 to examine Horizon for
“systemic flaws” that could explain the accounting discrepancies. I was told that in
both Second Sight’s interim report and their final report it was made clear that
“there is no evidence of system-wide problems with Horizon”.
209. That information was repeated at paragraphs 2 and 4 of the 2 June 2015
briefing document, which seemed a substantial and authoritative document. I was
told at paragraph 5 of that document that Second Sight’s investigation had found
that “the main reason for losses in the majority of cases was ‘errors made at the
counter’ by the subpostmaster or their staff’. At paragraph 7 I was told again that
“there is no evidence of systemic flaws in Horizon” and that “this point has stood
firm after over two years’ worth of close independent scrutiny’.
210. My assumption was that, as with any computer system, there would be bugs in
the Horizon software, but my initial understanding — based on the advice and
information I was given by ShEx officials - was that these were not systemic or
system-wide. I have set out in Section 2 above the information I received later
that let me to conclude that a further independent review of Horizon was
necessary.
211. I was not provided with any information in relation to (b) (the ability of Fujitsu to
alter transaction data without the knowledge of subpostmasters) by way of my initial
briefings. In fact, at that time, I think the only information I had about Fujitsu’s
involvement was that it had supplied the Horizon software (which came from Annex
A to the 2 June 2015 briefing document).
212. I did become aware quite early on that there were concerns and allegations
about remote access. In Laura Thompson’s submission dated 24 June 2015
(UKGI00000040) she recorded that the BBC Panorama programme which was
due for broadcast on 29 June (but which was delayed until 17 August) may feature
an account of a former subpostmaster “claiming that POL are able to remotely
alter branch accounts to cause discrepancies’. Ms Thompson informed me that
“all these allegations have been made before and POL plan to defend themselves
robustly against them”.
Page 55 of 81
WITN10200100
WITN10200100
213. 1am aware that Andrew Bridgen MP also raised the issue of remote access at
the adjournment debate on 29 June 2015, in which he referred to information
provided to him by his constituent, Michael Rudkin.
214. I was provided with a copy of Hansard recording the debate as an annex to
Laura Thompson's 13 July 2015 submission (BEISO000012). In Annex B, she
referred to Michael Rudkin’s account, raised by Andrew Bridgen, that he had
“unearthed malicious remote access of the Horizon system in the Fujitsu offices
in Bracknell by POL, tampering with accounts” (BEIS0000012). Ms Thompson
wrote that POL had written to Mr Bridgen on a number of occasions offering to
discuss Mr Rudkin’s case, but he had declined. The briefing also annexed Andrew
Bridgen’s statements at the 29 June adjournment debate and similar statements
he had made at a Westminster Hall debate on 17 December 2014 (before my
involvement).
215. On 31 July 2015, I received a further briefing from Laura Thompson
(UKGI00001067), which stated that the Panorama programme would feature an
interview with “A former Fujitsu (supplier of Horizon) employee, apparently a
whistleblower saying that POL can remotely alter branch accounts to cause
discrepancies. This is related to an account by Andrew Bridgen MP’s constituent
Mr Michael Rudkin, which Mr Bridgen raised in Parliament.”
216. On 17 August 2015, the BBC Panorama programme was broadcast, and
featured the Fujitsu whistleblower’s account about remote access.
217. Remote access also featured in the 24 August 2015 email from Messrs Letwin,
Bridgen and Jones, which referred to the statements made on Panorama by "the
Fujitsu whistle blower” who said “that transactions could be remotely manipulated’
(UKG100020015).
218. As indicated above, I requested information on these issues. This was provided
by Tim Mcinnes on 25 August 2015 (WITN1020119). He informed me:
“1.) Fujitsu Remote Access
Page 56 of 81
WITN10200100
WITN10200100
e Horizon does not have functionality that allows Post Office or Fujitsu to edit
or delete the transactions recorded by branches. There has been no
evidence in any case reviewed as part of the Scheme that shows that these
controls have failed or that the above statement is incorrect.
e It has however always been possible for Post Office to correct errors in
and/or update a branch's accounts. This is most commonly done by way of
a transaction correction however it could also be by way of a balancing
transaction or transaction acknowledgement. A Post Office employee could
also, in special circumstances, log on to a branch terminal locally (i.e. by
being physically in a branch) using a new User ID and password and then
conduct transactions (though these would register against that unique User
ID).
e All of the above processes for correcting / updating a branch's accounts
have similar features. All of them involve inputting a new transaction into
the branch's records (not editing or removing any previous transactions)
and all are shown transparently in the branch transaction records available
to Subpostmasters (as well as in the master ARQ data).”
219. As explained above, I requested fuller advice, and in response to this request I
received the 4 September 2015 briefing from Laura Thompson (UKGI00000042
Meeting agenda dated 4 September 2015 about Post Office Horizon: next steps).
At paragraph 2, the briefing stated “The email from Mr Bridgen highlights two
particular areas of concern from the BBC Panorama programme: the former
Fujitsu employee who claimed that transactions can be remotely manipulated; and
the statements from Second Sight. These two issues are discussed in more detail
in Annex B, along with further detail on other matters raised in the Panorama
programme.” \t went on, at paragraph 4, to say “/t remains the case that no
evidence has been put forward to demonstrate that many convictions are unsafe,
or that issues with the Horizon system have caused losses to postmasters. The
BBC Panorama programme contained no significant new issues or evidence that
have not already been raised before and addressed by POL. As you heard when
you met POL’s CEO and General Counsel last month, POL have looked in depth
at each individual case and at the issue as a whole — with the General Counsel
herself having done this as recently as January this year when she joined the
Page 57 of 81
WITN10200100
WITN10200100
business — and found no evidence of unsafe convictions or systemic fault in
Horizon.”
220. I am informed that DBT does not hold, or cannot locate, a copy of Annex B to
this briefing. I assume the advice contained in Annex B was broadly similar to the
advice provided in earlier and subsequent briefings.
221. Annex A contained a proposed reply to Messrs Bridgen, Letwin and Jones,
drafted by ShEx, which stated “Post Office take the concerns raised on Panorama,
and elsewhere, very seriously and investigate every allegation that is made. With
regard to the specific points in your email in relation to remote access to
transactions, no evidence has been advanced that Horizon has the possibility of
remotely manipulating transactions in the manner implied, that is to say, without a
clear audit trail being created.” \t provided further proposed wording “If the Minister
wishes to address the specific points’: “With regard to remote access to
transactions, no evidence has been advanced that Horizon has the possibility of
remotely manipulating transactions in the manner implied, that is to say, without a
clear audit trail being created.”
222. That draft was subsequently amended to read “Your email mentions two
specific concerns, regarding the suggestion of remote access to transactions on
Horizon, and the reports by Second Sight. These issues have been raised both
during the BBC Panorama programme and also prior to its broadcast. The
Government has received assurances from Post Office that it takes very seriously
the concerns raised on Panorama and elsewhere, and investigates every
allegation that is made.” (WITN10200138 Emailed dated 18 September 2015)
223. During my meeting with James Arbuthnot on 17 September 2015, he raised
concerns about remote access, and suggested I discuss this with Second Sight if
I met them. As explained, during my meeting with Second Sight I asked them to
raise their concerns as part of the Swift Review.
224. Iwasnot provided with any information by way of the briefing documents relevant
to (c) (the limited extent and format of the Horizon transaction data available to
subpostmasters within branch) or (d) (the concerns raised by Second Sight about
Page 58 of 81
WITN10200100
WITN10200100
the conduct of private prosecutions against subpostmasters). As I note below, I
share the widespread concerns about POL’s conduct of prosecutions.
225. As to (e) (the limitations which were placed upon Second Sight’s access to Post
Office documents and records), this was not a matter that I was briefed on initially.
I was told in the 2 June 2015 briefing document that in or around March 2015,
Post Office terminated its contract with Second Sight and that Second Sight would
complete their work on the final report and the individual investigation reports for
each of the remaining cases in the mediation scheme. As explained above, when
the issue of document retention was raised with me I obtained assurances from
POL.
226. I am asked to describe my reaction to the suggestion by Ron Warmington that
“there were, and probably still are, systemic flaws within Horizon”.
227. As indicated above, I became aware in August 2015 that Ron Warmington
disputed the ShEx line that Second Sight had found no evidence of systemic
issues. By this stage I had already decided the issues required further independent
scrutiny — the dispute was not one I was competent to arbitrate — and had resolved
to press the incoming POL Chair, Tim Parker, to commission a further independent
review. This led to the Swift review.
Oversight of Post Office Limited
228. I am asked to describe the nature and frequency of my interactions with the
senior leadership of Post Office Limited.
229. Ihad 3 meetings with the Chair of the POL Board and two ad hoc meetings with
Paula Vennells over the course of my 14 months in post. I attended a Board
Awayday where Horizon was not discussed. I also spoke at a Women's event
chaired by Ms Vennells, which was good tempered and positive; there was not a
discussion of anything to do with Horizon. All my meetings with Ms Vennells were
well prepared and cordial although on occasions I found those accompanying her
Page 59 of 81
WITN10200100
WITN10200100
rather overbearing and dismissive of my concerns — I recall specifically the
meeting of 6 August 2015.
230. I also sent and received occasional letters, via my private office.
231. I am asked to describe the steps which I took to obtain assurance concerning
Post Office Limited’s handling of Second Sight and the Scheme.
232. As described above, I sought and obtained assurances from officials in ShEx
and, on occasion, from the Chair and Chief Executive of POL.
233. I am asked whether I considered that Post Office Limited was taking appropriate
steps to address the concerns raised by subpostmasters and Second Sight about
Horizon.
234. As explained above, I initially accepted the information with which I was
provided by ShEx officials to the effect that POL was taking proper steps to
address identified issues. Specifically, I was informed that it had commissioned
rigorous independent review which, despite at least two years of scrutiny, had
failed to find any evidence of systemic issues; that it had remedied earlier
deficiencies in the training and support provided to subpostmasters; that it had
entered into independent mediation with aggrieved subpostmasters; and that it
understood its disclosure obligations, and was cooperating with the CCRC, in
relation to past convictions. Taken together, this seemed appropriate. That was
also the advice I received from the relevant ShEx officials.
235. As explained, I began to doubt this information as time went by and acted
accordingly commissioning what became the Swift report.
236. I am asked to describe my perception of the commercial relationship between
Post Office Limited and Fujitsu, and in particular whether I considered it to be an
equal partnership.
237. Fujitsu was the supplier of a complex and wide ranging IT operation and I did
not have any particular concerns about the contract at that time and indeed it was
Page 60 of 81
WITN10200100
WITN10200100
extended at the beginning of 2016 because of problems with IBM. Looking at the
issue knowing what I know now, there are questions to be asked about the impact
of the contract fines system. The large potential impact of that is highlighted in the
footnote on page 50 of the Swift report showing the incentive Fujitsu had not to
report glitches. The Second Sight report suggests that POL benefited financially
from some of the errors subpostmasters were experiencing. Ministers have neither
the time nor expertise to conduct reviews of ALBs’ contracts unprompted, and
these issues were not brought to my attention.
Relationship with Shareholder Executive
238. Iam asked to describe the nature of my working relationship with the Shareholder
Executive.
239. My relationship was mainly with Laura Thompson who was for the most part
hard working, helpful and effective. However, she followed party lines decided
above her by Richard Callard, the POL Board member, and others. In retrospect
ShEx was too close to POL for effective scrutiny and I was at times frustrated by
their unwillingness to question the status quo.
240. I am asked what (if any) concerns I had about the Shareholder Executive's
handling of the complaints made by subpostmasters regarding Horizon’s integrity.
241. As explained above, I initially did not have any concerns about the information
and advice ShEx provided to me about Horizon. The briefing documents were
good, at least superficially. Laura Thompson appeared competent and on top of
the detail.
242. I have set out above how my faith in the objectivity and impartiality of the ShEx
advice began to wane. They continually repeated the same mantra, and in the
later stages it felt like I was having to fight them. They seemed closed to the
possibility that all was not as it seemed, and seemed to be doing what they could
to ignore my steers or reverse my direction of travel.
Page 61 of 81
WITN10200100
WITN10200100
243. I am asked whether I considered that the Shareholder Executive was providing
sufficient scrutiny / challenge in relation to Post Office Limited’s handling of the
complaints.
244. In retrospect, ShEx did not effectively fulfil their scrutiny and oversight
responsibilities. Their role was to look critically at POL and to provide independent
advice. As described above, I began to lose confidence in ShEx’s advice and
requested senior official support from outside ShEx, though this was not provided
to me.
245. I should add that I am now aware from the evidence heard by the Inquiry, but
was not at the time, that Mark Davies and his communications team at POL
regularly worked together with ShEx to produce briefings sent to me and other
ministers. This could have had implications for objectivity.
246. I am asked whether I considered that the governance arrangements in place
between the Shareholder Executive and Post Office Limited were adequate.
247. At the time, I considered the system by which ShEx provided (supposedly)
expert scrutiny of POL on behalf of the Government to be a sensible system. It is
similar to the arrangements adopted by private equity, with a representative on
the Board.
248. And as I remark elsewhere the ALB structure had much to commend it. So did
the mechanisms by which ShEx provided an input for Government as shareholder.
249. As with any system, a lot depends on individuals and I do not know how they
were managed. The problem arises when there is a crisis outside the commercial
operation of the ALB. It is significant that it there are major problems of an ethical
kind affecting an ALB, ministers will be held accountable, as has been shown in
this case by Parliamentary hearings and debates. I understood all this from the
beginning. ShEx officials mainly need to focus on commercial matters but this
crisis required other skills. ShEx may have had the capacity to take a wider view
but did not appear to apply it in this case. Nor did BIS itself. So this crisis has
Page 62 of 81
WITN10200100
WITN10200100
revealed a serious deficiency on which government should reflect and in due
course take action.
BBC Panorama Programme
250. 1am asked to describe my reaction to the allegations made in the BBC Panorama
programme broadcast on 17 August 2015.
251. I was aware of and disturbed by the contents of the Panorama programme as
described in paragraph 112 above. It however covered the ground that MPs had
raised with me and officials had warned me of in advance, notably on remote
access. I had already told Tim Parker to commission the independent review by
this stage. The programme precipitated further emails notably from Oliver Letwin
which led to my helpful exchanges with him.
252. I am asked how (if at all) my attitude to the concerns of MPs, Second Sight and
subpostmasters changed as a result of this broadcast.
253. I was more determined to pursue the independent Swift Review.
254. I am asked to explain the reason(s) why I made the following comments in
response to the briefing at UKG100000042: “our overwhelming objective is to do the
right and fair thing. The Post Office may have done so, but we have to be open to
the possibility that for whatever reason they have not.”
255. I was making two points here. First, I wanted to make it clear (if it wasn’t already)
that we, the Government, were not interested in hiding the truth and that the recent
allegations by wise heads were significant.
256. Second, I was increasingly concerned about the Post Office / ShEx line. They
seemed to be digging in, and I felt I was fighting them. There loomed a possibility,
albeit slim, that injustice had been and/or was being done, the chances of which
seemed to be increasing.
Ongoing Liaison with MPs and Second Sight
Page 63 of 81
WITN10200100
WITN10200100
257. 1am asked to describe my meeting with James Arbuthnot (as he then was) on 17
September 2015 and my response to the concerns which he raised.
258. I have described this meeting at paragraphs 132-134 above. The meeting was
an extremely helpful one. I found James Arbuthnot impressive and very sensible.
259. I am asked what (if any) consideration did you give to commissioning an
independent review of complaints about Horizon.
260. By early August 2015, less than 3 months into the job, I had come to the
conclusion that there needed to be a new, independent review. I therefore made
clear to Tim Parker, the incoming Chair, that I expected him to commission an
independent review. I saw him as a new broom, in combination with a QC. I also
saw Second Sight and asked them to input into that review, which they did.
261. The problem is not the idea of an independent QC-led report, but that it did not
see the light of day, that it was not provided to those who might have benefited in
legal proceedings and that the summary sent to me omitted vital points, as
discussed above.
262. I am asked to explain why I decided to meet with Second Sight to discuss their
concerns / findings.
263. James Arbuthnot suggested that it would be a worthwhile meeting, and I
respected his judgement. I recall seeing them in the face of opposition, especially
from POL.
264. I am asked whether I considered the objections which the Post Office raised to
this meeting were legitimate.
265. POL raised three objections to this meeting. Whilst I considered them, I had
already decided to meet Second Sight and did not allow POL’s objections to
deflect me. Dealing with each of the three objections in turn:
Page 64 of 81
WITN10200100
WITN10200100
(i) I did not see how meeting the authors of an independent report would risk
undermining my independence and distance in any serious way. I wanted
to meet both sides, and I heard from POL, MPs and Second Sight. In
meeting Second Sight I would not be attempting to resolve this dispute
myself, which I knew I was not competent to do. I explained this to Second
Sight, told them that POL were now undertaking an independent review
which I supported, and asked them to feed into it.
(ii) I did not understand what potential conflict they were referring to. This is an
example of POL trying to pressure me not to become involved. I did not
agree with the concern.
(iii) I 1 was not concerned about any risk of individuals withdrawing from
mediation, if our meeting became public. As noted above I feel individuals
were free to seek mediation — or not — so this did not trouble me.
Review of the Horizon System
266. I am asked to explain why I invited Tim Parker to undertake a review of the Post
Office’s handling of complaints made about the Horizon system.
267. I became dissatisfied with the information we were getting from POL / ShEx
and concerned by the concerns of MPs and by the apparently honest nature and
background of many of those being pursued by the Post Office. The Government
position was longstanding and mediation and the CCRC were progressing, but I
was uneasy that things just might not be right and thought it right to get additional
assurance.
268. I am asked whether I considered that the actions which Tim Parker proposed to
take would provide an adequate response to the concerns which had been raised
about Horizon.
269. I did, because he was going to bring in a top QC which he did and did quickly.
The problem was not the Swift Review but the failure to inform Government
including me that there was a final report and provide me with a copy, the positive
Page 65 of 81
WITN10200100
WITN10200100
gloss Mr Parker gave it, its suppression in court cases — current and future — and
the failure to follow through as proposed in the discussions with me.
270. I am asked to describe what I was told by Mr Parker about the findings and
recommendation made as part of his review.
271. Ihave described in paragraphs 93-95 above the communications I had with Mr
Parker in this respect. As explained there, I was given the impression that the
review was ongoing with extra threads to be pursued and was neither provided
with a report nor informed that one was available. In addition, and as set out
above, Mr Parker's letter failed to mention important and critical findings contained
in the report.
272. I am asked to explain why I sought advice from the Shareholder Executive in
relation to Mr Parker's letter of 4 March 2016.
273. Ministers always seek advice. This is standard procedure. It aids efficiency in
the context of very limited time, and additional pairs of eyes. Often officials rightly
provide advice proactively in anticipation that ministers will welcome it.
274. I am asked to explain what I was told by Mr Parker about the effect of the Group
Litigation upon his review.
275. 1 do not now recall what if anything Tim Parker told me about the effect of the
group litigation upon his review, and unfortunately there are again no meeting
notes. However as noted above I knew that POL were considering the impact of
the litigation and I expected advice to go to the Government — not necessarily me
—on that in due course. I assumed the Government lawyers would be involved and
high level discussions would take place. What I did not expect was that this
important work would be suppressed, as in effect it was as it was clearly relevant
to the litigation.
Relationship with Trade Organisations
Page 66 of 81
WITN10200100
WITN10200100
276. Iamasked to describe the nature and frequency of my interactions with the NFSP
and the CWU.
277. \had one meeting with the NFSP, represented by its General Secretary George
Thomson. The meeting is described at paragraph 70 above. It took place on 14
July 2015, at which point I had held the postal affairs brief for 2 months. I recall the
meeting was positive, and was mainly concerned with issues other than Horizon.
By that stage, I had received two briefings from ShEx to the effect that the NFSP
did not support the complaints about Horizon.
278. I also had a single meeting with the CWU, represented by its General
Secretary Dave Ward. The meeting, which took place on 5 August 2015, is
described at paragraph 99 above. I do not recall discussing Horizon to any great
extent with Mr Ward, though I think it probably was discussed. I recall that he was
generally reasonably positive.
279. I am asked whether I considered that the NFSP and CWU gave adequate
challenge to the Post Office in relation to its handling of complaints about Horizon.
280. It was clear that the NFSP and CWU’s concerns were elsewhere and that
Horizon was a subject of limited interest to their leaders. At the time, I was not ina
position to form a view about why they took the positions they did and whether they
were right to do so. What I can say is that union support for the POL line was a
factor (albeit one of many factors) in my decision making at the time.
General
281. 1am asked to reflect on my time as Post Office Minister and set out whether there
is anything you would have handled differently with hindsight in relation to the
Horizon IT System and its associated issues; and to address the following issues, in
particular:
a. whether I was provided with sufficient information by the Post Office and
government officials to understand the technical nature of the issues relating to
Horizon’s integrity;
Page 67 of 81
WITN10200100
WITN10200100
b. whether the government was right to maintain an arms-lengths approach to the
concerns / complaints which were raised about the integrity of Horizon;
c. whether the government should have pressed for an independent review / enquiry
into the concerns / complaints which were raised about the integrity of Horizon;
d. whether I and / or officials maintained effective oversight of the Post Office in relation
to its handling of complaints about Horizon.
282. I did my best having regard to the Arm’s Length structure, the advice I
consistently received from officials, and the pre-existing Government position. It is
important to highlight that I was not (as suggested in this question) the “Post Office
Minister’. As explained above, I was during the relevant 14-month period
Parliamentary Under Secretary of State and Minister for Intellectual Property at the
Department for Business, Innovation and Skills serving the Secretary of State and,
at the same time, Parliamentary Under Secretary of State at the Department for
Culture, Media and Sport. The postal affairs brief formed a relatively small part of
my portfolio in the BIS ministerial portfolio; issues relating to the Post Office (an
Arm’s Length Body operating independently of government) formed just one part
of the postal affairs brief; and only a fraction of those Post Office issues concerned
Horizon. Whilst it is now obvious that Horizon was a major problem, the context is
important. One of my many jobs as a minister was, with the support of officials, to
try to identify risks and spot problems across the whole of my portfolio — and I was
not just looking at the Post Office or just at Horizon within the postal brief.
283. I emphasise also that ministers cannot do this without leaning heavily on
officials. I had many policy responsibilities within my two ministerial briefs. On the
other hand, there was always at least one ShEx official whose sole focus was the
Post Office. Far from identifying risks and problems relating to Horizon, ShEx were
actively minimising them and telling me not to intervene.
284. Against the backdrop of large ministerial workloads and wide-ranging
pressures, ministers must be able to rely on officials to do their jobs properly:
providing thorough, accurate, impartial and objective information and advice. I feel
I was sold short by officials in this instance. As a former civil servant myself, I do
not come to this conclusion easily
Page 68 of 81
WITN10200100
WITN10200100
285. I was being told, repeatedly, that there had been rigorous scrutiny of Horizon
over the course of several years, and that no evidence of systemic flaws had been
found. For example:
(1) On 2 June 2015 I was told by Laura Thompson of ShEx in my introductory
briefing that there had been “over two years of independent scrutiny and in that
time no evidence of systemic flaws in Horizon has been found”
(UKGI00004453).
(2) On 30 July 2015, Michael Dollins of ShEx told me “it remains the case that
following intense scrutiny over nearly three years, there is no evidence that the
Horizon system is flawed” (UKGI00015625 Meeting agenda dated 30 July 2015
about Meeting with representatives of the Communications Workers Union).
(3) On 4 September 2015 I was told by Laura Thompson that “three years’ worth
of scrutiny has unearthed no evidence so far (dispute the best efforts of
investigators who are demonstrably hostile to POL)”. I understand Ms
Thompson’s reference to be to Second Sight (UKGI00000042 Meeting agenda
dated 4 September 2015 about Post Office Horizon: next steps).
(4) On 11 September 2015, Laura Thompson told me “it is important to keep in
mind the fact that to date, through extensive investigation, still no evidence has
emerged that there are faults in the system” (UKGI00000058 Meeting agenda
dated 11 September 2015 about meeting with James Arbuthnot on Post Office
Horizon).
286. Addressing the Inquiry’s specific questions:
(a) I do not believe I would have been assisted by more technical information about
Horizon. As a minister, I cannot possibly get involved in the granular detail of
technical issues of this sort — I have neither the time nor the expertise. What I
would have been helped with was accurate information in relation to Horizon —
sadly, this was in short supply. I believe I was misled, and this is an
unacceptable situation, especially where the Government is (to use the Prime
Minister's words) trying to “get to the bottom of the matter’. Government cannot
function if ministers lose faith in the civil servants whose job it is to advise them.
Page 69 of 81
WITN10200100
WITN10200100
(b) As explained, the fact of the matter is that POL exists as an Arm’s Length Body,
and there are good reasons why it remains operationally independent of central
government. However, the Government is still able to wield influence and put
pressure on POL. I would not describe my actions towards the concerns about
Horizon as being “arm’s length” — but of course there is a spectrum. As
explained above, I requested and obtained assurances from POL’s senior
leadership and in ShEx, spoke to MPs and other stakeholders in relation to
Horizon (which is an operational matter for POL, not Government), and put
direct pressure on Tim Parker to institute an independent review. This was not
the Government standing back. If the question is whether I consider now,
based on the information available to me at the time, that the Government
should have stepped in and conducted a review of Horizon for itself, I do not.
My view is that a serious independent review led by a top QC and reporting to
the new chair at the top of POL was the right step at that time.
(c) I did press for an independent review at the time; this was the Swift Review.
The problem was that Tim Parker, who started so well, allowed the report to be
shelved.
(d)! was not responsible for oversight of POL’s handling of complaints about
Horizon, because it was an Arm’s Length Body operating independently of
government. That responsibility lay with the POL board of directors at a
corporate level and, within government, ShEx had responsibility for oversight
of POL generally, in relation to Horizon and all other matters. ShEx’s job was
to scrutinise POL and to report any concerns to BIS, in its twin capacity as the
responsible policy department and shareholder in POL. I was not responsible
for overseeing ShEx, which was headed by a chief executive and overseen by
its own board of directors. My involvement was essentially political: postal
affairs was part of my portfolio, I was aware of the complaints and dug into
them, the Government wanted to “get to the bottom of the matter’ and our “our
overwhelming objective [was] to do the right and fair thing”. I did not see my
role as being one of “oversight” of POL — rather it was to probe and test and
push ShEx and POL, and this led to the Swift Review. On the other hand, I
Page 70 of 81
WITN10200100
WITN10200100
have to conclude that ShEx did not in retrospect effectively fulfil their scrutiny
and oversight responsibilities.
287. I am asked if there is anything further relevant to the Inquiry's terms of reference
which I would like to draw to the attention of the Chair of the Inquiry.
288. There are two additional issues which I would like to highlight.
289. First, it is critically important that proper records of Government business are
retained. My experience as a private secretary, a civil servant and as a minister
elsewhere is that all ministerial meetings, especially with outside interests, should
be properly minuted by officials (generally the private secretary). In preparing this
statement I have been handicapped by the non-availability of minutes relating to
crucial meetings, and of other important documents. Whilst I have done my best
to recall the detail of events and my reasoning at the time, the relevant issues go
back nearly a decade. The Inquiry is entitled to the best possible evidence on
which to base its conclusions and make recommendations, so that necessary
improvements can be made; it is therefore regrettable that official record keeping
and retention has been sub-par.
290. Secondly, I believe that the arrangement allowing the Post Office to pursue their
own prosecutions should have been ended at privatisation when they ceased to
be part of government. The problem, I think, was that prosecution decisions should
be made independently and impartially, whereas here there were financial
incentives for prosecuting. The position is not dissimilar to the former system
where the police conducted its own prosecutions. I do not believe the CPS would
have persisted in the way the Post Office did. I think the CPS would have noticed
the number of awkward cases quicker than the Post Office and slowed
prosecutions.
CONCLUSION
291. I welcome the opportunity to assist the Inquiry and look forward to giving oral
evidence.
Page 71 of 81
WITN10200100
WITN10200100
Statement of truth
I believe the content of this statement to. be true.
Signed: § GRO
Dated: 26 Tune 202 ; /
Page 72 of 81
WITN10200100
WITN10200100
ANNEXA
Date Statement
2 June 2015 Industry: international investment — question
4 June 2015 BBC Royal Charter — question
4 June 2015 Queen's speech — debate
8 June 2015 WMS Education, youth, culture and sport council
10 June 2015
Apprentices — question
11 June 2015
WMS - Telecommunications council
11 June 2015
Zero-hours contracts — question
11 June 2015
Small businesses: late payment — question
15 June 2015
Public Service Broadcasting — question
18 June 2015
Employment: Elite Professions — question
22 June 2015
EU Membership: Science & Technology
29 June 2015
Advertising Standards Authority — question
9 July 2015 Consumer Protection: Secondary ticketing — question
14 July 2015 Authors: Rights and income — question
14 July 2015 Future of the BBC — Question for short debate
16 July 2015 BBC Charter review statement
17 July 2015 Accessible Sports Grounds Bill — Second reading
20 July 2015 WMS Audit and auditor regulation
22 July 2015 WMS - Response to consultation on alternative providers of
higher education
10 September 2015
Iraq and Syria: Religious and Cultural Heritage — question
10 September 2015
Rugby World Cup 2015 — question
10 September 2015
BBC: Finance and Independence — motion to take note
15 September 2015
Football: disabled spectators — question
17 September 2015
BBC Charter 2017 — question
12 October 2015
Enterprise Bill: second reading
15 October 2015
Redcar Steel — statement
15 October 2015
Sport- motion to take note
20 October 2015
EU: Digital Single Market — question
20 October 2015
Steel Industry — statement
27 October 2015
WMS Enterprise Bill: extension of the business impact target
28 October 2015
Small businesses: late payments — question
29 October 2015
Cold calls — question
2 November 2015
Copyright Hub — question
5 November 2015
Olympics 2012: Regeneration Legacy
11 November 2015
Rugby World Cup 2015 — question
19 November 2015
Trade Unions
26 November 2015
Superfast Broadband — question
25 - 30 November
2015
Enterprise Bill - Report 2 days
8 December 2015
Business: advice services
10 December 2015
Channel 4 — question
14 December 2015
Sunday Trading — question
15 December 2015
Enterprise Bill — 3 reading
Page 73 of 81
WITN10200100
WITN10200100
17 December 2015
National Lottery
11 January 2016
Trade Union Bill — second reading
14 January 2016
Cultural Property: Hague Convention — question for short
debate
18 January 2016
National Minimum Wage (Amendment) Regulations 2016 —
motion to approve
18 January 2016
Steel sector — statement
20 January 2016
Trade Union Bill — motion
21 January 2016
Women: Businesses
6 January 2016
WMS - Transparency about who controls UK companies
26 January 2016
WMS - Small Companies Audit Exemption Thresholds
26 January 2016
Press regulation — question
3 February 2016
Channel 4: Privatisation — question
11 February 2016
Libraries: Local Government Finance Settlement — Question
25 February 2016
WMS - Pre Competitiveness Council
8 - 25 February
2016
Trade Union Bill - Committee (4 days)
8 March 2016
Written Ministerial statements — Competitiveness Council
8 March 2016
Aircraft: laser pointers — question
9 March 2016
Trade Union Political Funds & Political Party Funding
10 March 2016
BBC Charter — question for short debate
16 March 2016
Trade Union Bill — report
17 March 2016
Apprenticeships — question
23 March 2016
Written Ministerial statements — Performance targets for the
Intellectual Property Office
23 March 2016
Conduct of Employment Agencies & Employment Businesses
(Amendment) Regulations 2016
11 April 2016 Written Ministerial Statements - Companies House public
targets
11 April 2016 Update on the UK Steep Industry - statement
14 April 2016 Apprenticeships: Women — question
19 April 2016 BBC Royal Charter -Question
19 April 2016 Enterprise Bill - Commons Amendments
19 April 2016 Trade Union Bill — Report (2"4 day)
21 April 2016 BBC Charter Review (Communications Committee Report)
25 April 2016 Written Ministerial Statement — Nuisance calls
25 April 2016 Trade Union Bill — third reading
26 April 2016 Intellectual property — question
3 May 2016 Trade Union Bill— Commons amendments
3 May 2016 Black and Minority Ethnic People: Workplace Issues
4 May 2016 Apprenticeships — question
10 May 2016 Sport: Integrity — question
11 May 2016 Nuisance Callers — Question
11 May 2016 BBC Charter White Paper — statement
12 May 2016 BBC statement
19 May 2016 Queen's speech — Debate (2™4 Day)
6 June 2016 Cultural Property (Armed Conflicts) Bill— Second reading
6 June 2016 BHS — Statement
Page 74 of 81
WITN10200100
WITN10200100
10 June 2016
Register of Arms Brokers Bill — Second Reading
13 June 2019
Digital Skills (Select Committee Report)
28 June 2016
Cultural Property (Armed Conflicts) Bill Committee
30 June 2016
Consumer Protection: Online Ticketing
7 July 2016
International Trade Opportunities
Index to First Witness Statement of Baroness Neville Rolfe
Column
Number.
URN
Document Description
Control Number
WITN10200101
Email dated 18 May
2015 deciding that
postal affairs would be
added to BNR’s existing
ministerial portfolio
WITN10200101
UKGI00004415
Email dated 29 May
2015 with Day 2 briefing
overview pack attached
UKGI015229-001
UKGI00004416
Day 2 briefing overview
pack dated May 2015
UKGI015230-001
UKGI00004453
Meeting agenda for
Post Office Horizon
mediation scheme
meeting dated 2 June
2015
UKGI015267-001
UKGI00004438
Letter from Alan Bates
addressed to Anna
Soubry, Minister of
State for Business and
Enterprise at BIS dated
19 May 2015
UKGI015252-001
UKGI00001074
Meeting agenda for
meeting with Paula
Vennells, Post Office
Limited CEO meeting
dated 9 June 2015
VIS00009212
POL00117718
Letter from Paula
Vennells dated 15 June
summarising the
contents of the meeting
POL-0118350
UKGI00004710
Letter from Mr Wilson
dated 22 June 2015
UKGI015524-001
UKGI00004978
Email chain involving
Julian Wilson dated 9
June 2015
UKGI015792-001
10
UKGI00000040
Submission dated 24
June 2015 about BBC
Panorama programme
ViS00001001
Page 75 of 81
WITN10200100
WITN10200100
on Post Office Horizon
IT system
1
POL00110078
Letter to George
Freeman dated 26 June
2015
POL-0111172
12
WITN10200103
Meeting agenda dated
1 July 2015 for meeting
about Post Office
Horizon: meeting with
MPs and stakeholders
WITN10200103
13
UKGI00004820
Letter to Andrew
Bridgen dated 2 July
2015
UKGI015634-001
14
POL00027164
Letter to Paula Vennells
dated 2 July 2015
POL-0023805
15
UKGI00000026
Letter to Baroness
Neville-Rolfe from
Paula Venells dated 10
July 2015
VIS00000987
16
BEIS0000012
Meeting agenda dated
13 July 2015 for
meeting with MPs and
Post Office on Horizon
system
VISO0000906
17
UKGI00013954
Note of meeting
following Adjournment
debate on Post Office
Horizon IT System
UKGI024747-001
18
UKGI00005125
Note of meeting
following Adjournment
debate on Post Office
Horizon IT System
UKGI015939-001
19
UKGI00015226
Meeting agenda dated
17 July 2015 about Post
Office Horizon: Next
Steps
UKGI026019-001
20
WITN10200105
Email chain dated 16
July 2015 from Andrew
Bridgen
WITN10200105
21
UKGI00005053
Email chain dated 16
July 2015
UKGI015867-001
22
UKGI00005060
Email chain dated 16
July 2015
UKGI015874-001
23
UKGI00005151
Letter to Baroness
Neville-Rolfe dated 29
July 2015 about
retention of documents
UKGI015965-001
24
WITN10200107
Email chain dated 16
July 2015
WITN10200107
Page 76 of 81
WITN10200100
WITN10200100
25
UKGI00005002
Email chain dated 13
July 2015
UKGI015816-001
26
UKGI00005102
Email chain dated 17
July 2015
UKGI015916-001
27
UKGI00005133
Email chain dated 24
July 2015
UKGI015947-001
28
POL00029849
Initial Complaint Review
and Mediation Scheme
Briefing Report Part two
POL-0026331
29
UKGI00001067
Meeting agenda dated
31 July 2015 about Post
Office Horizon: next
steps
VIS00009205
30
UKGI00005297
Post Office meeting
notes dated 4 August
2015
UKGIO016111-001
31
UKGI00005300
Email dated 5 August
2015
UKGI016114-001
32
UKGI00005279
Email dated 4 August
2015
UKGI016093-001
33
UKGI00015625
Meeting agenda dated
30 July 2015 about
Meeting with
representatives of
Communications
Workers Union
UKGI026418-001
34
UKGI00005195
Email dated 3 August
2015
UKGI016009-001
35
UKGI00000035
Notes from Baroness
Neville-Rolfe meeting
with Post Office dated
Thursday 6 August
ViS00000996
36
POL00254149
Draft letter from Paula
Vennelles dated 11
August 2015
POL-BSFF-
0092212
37
UKGI00005261
Email dated 4 August
2015
UKGI016075-001
38
WITN10200111
Emailed dated 7 August
2015
WITN10200111
39
WITN10200112
Email dated 12 August
2015
WITN10200112
40
UKGI00005504
Email dated 19 August
2015
UKGI016318-001
a
POL00002415
Initial Complaint Review
and Mediation Scheme
reply of Post Office
Limited to Second
Sight’s Briefing Report-
VIS00003429
Page 77 of 81
WITN10200100
WITN10200100
Part two dated 22
September 2014
42
WITN10200113
Letter to Kevan Jones
dated 14 August 2015
WITN10200113
43
UKGI00005483
Letter to Andrew
Bridgen dated 14
August 2015
UKGI016297-001
44
WITN10200115
Email dated 14 August
2015 attaching letter
updating on
Horizon1408151
WITN10200115
45
WITN10200116
Email dated 14 August
2015 attaching letter
updating on Horizon
WITN10200116
46
WITN10200117
Email dated 14 August
2015
WITN10200117
47
UKGI00020015
Email dated 24 August
2015
UKGI028910-001
48
WITN10200119
Email dated 25 August
2015
WITN10200119
49
WITN10200120
Email dated 26 August
2015
WITN10200120
50
UKGI00005664
Email dated 26 August
2015
UKGI016478-001
51
UKGI00000042
Meeting agenda dated
4 September 2015
about Post Office
Horizon: next steps
VIS00001003
52
UKGI00005676
Email chain dated 2
September 2015
UKGI016490-001
53
UKGI00000952
Email chain dated 9
July 2015
ViS00009090
54
POL00041135
Letter to Baroness
Neville-Rolfe dated 7
September 2015
POL-0037617
55
POL00102551
Letter to Tim Parker
dated 10 September
2015
POL-0102134
56
UKGI00005912
Email chain dated 14
September 2015
UKGI016726-001
57
UKGI00000058
Meeting agenda dated
11 September 2015
about Meeting with
James Arbuthnot on
post Office Horizon
VIS00001019
58
UKGI00006022
Summary note for
Oliver Letwin of
headline points of
UKGI016836-001
Page 78 of 81
WITN10200100
WITN10200100
meeting with Mr
Arbuthnot
59
UKGI00005978
Emails concerning the
process of drafting note
UKGI016792-001
60
UKGI00006021
Emails concerning the
process of drafting note
UKGI016835-001
61
BEIS0000013
Meeting agenda dated
1 October 2015 about
Post Office Horizon:
Update
VIS00000907
62
UKGI00006138
Letter to Baroness
Neville-Rolfe from Tim
Parker dated 1 October
2015
UKGI016952-001
63
UKGI00006092
Email dated 5 October
2015 attaching 151001
Post Office Horizon
Update submission
Revised
UKGI016906-001
64
UKGI00006142
Email chain dated 21
December 2015
UKGI016956-001
65
JARBO000121
Letter to James
Arbuthnot dated 13
October 2015
JARBO000121
66
WITN10200125
Email dated 14 October
2015
WITN10200125
67
WITN10200126
Emailed dated 15
October 2015
WITN10200126
68
WITN10200127
Meeting agenda dated
15 October 2015 about
Meeting with second
sight on Post Office
Horizon
WITN10200127
69
UKGI00006232
Letter to BNR dated 13
November 2015
UKGI017046-001
70
UKGI00010325
Letter to Oliver Letwin
dated 29 November
2015
UKGI021133-001
71
UKGI00006279
Email dated 23
November 2015
UKGI017093-001
72
UKGI00001171
Email chain re:
Submission to Ministers
on Post Office Horizon -
potential group civil
action
VIS00009309
73
WITN10200129
Email dated 21
December 2015
WITN10200129
74
WITN10200130
Email chain dated 7
January 2016
WITN10200130
Page 79 of 81
WITN10200100
WITN10200100
75
UKGI00006451
Email chain dated 6
January 2016
UKGI017265-001
76
UKGI00000020
Meeting agenda dated
22 January 2016 about
Meeting with Tim Parker
VIS00000981
77
UKGI00006482
Note of meeting with
Tim Parker on 26th
January 2016
UKGI017296-001
78
UKGI00006528
Note of Post Office
Meeting dated 9
February 2016
UKGI017342-001
79
POL00024913
Letter to Baroness
Neville-Rolfe from Tim
Parker dated 4 March
2016
POL-0021392
80
POL00167707
Areview on behalf of
the chairman of Post
Office Limited
concerning the steps
taken in response to
various complaints
made by Sub-
Postmasters dated 8
February 2016
POL-0163003
81
UKGI00006583
Email chain dated 11
March 2016
UKGI017397-001
82
WITN10200134
Email chain dated 14
April 2016
WITN10200134
83
WITN10200135
Meeting agenda dated
14 April 2015 about
Post Office Horizon:
update on group legal
action
WITN10200135
84
UKGI00000048
Meeting agenda dated
26 April 2016 about
Post Office Horizon:
update on group legal
action
ViS00001009
85
UKGI00006692
Meeting agenda dated
3 May 2016 about Post
Office Horizon: update
on group legal action
UKGI017506-001
86
POL00022776
Letter to Baroness
Neville-Rolfe from Tim
Parker dated 21 June
2016
POL-0019255
87
WITN10200137
Notes from Post Office
catch up dated 7 July
Page 80 of 81
WITN10200100
WITN10200100
88 Meeting agenda dated I VISO0009163
UKG100001025 18 July 2016 about
meeting with Tim Parker
89 WITN10200138 Emailed dated 18 WITN10200138
September 2015
Page 81 of 81