1 Friday, 17 May 2024 2 (9.45 am) 3 MR BEER: Good morning, sir, can you see and hear us? 4 SIR WYN WILLIAMS: Yes, thank you very much. 5 MR BEER: May I call Alisdair Cameron, please. 6 SIR WYN WILLIAMS: Yes. 7 ALISDAIR CHARLES JOHN CAMERON (affirmed) 8 Questioned by MR BEER 9 MR BEER: Good morning, Mr Cameron. As you know, my name is 10 Jason Beer and I ask questions on behalf of the Inquiry. 11 Can you give us your full name, please? 12 A. Alisdair Charles John Cameron. 13 Q. Thank you for providing a long and detailed witness 14 statement to the Inquiry, it's dated 18 April 2024. 15 It's 115 pages long. Can we look at that, please. It's 16 WITN09840100. You should have a hard copy. 17 A. I do. 18 Q. I think there are five corrections that you wish to make 19 to it. Can we go through each of those in turn, please. 20 A. There are six. There was one I put forward to the 21 Inquiry a couple of days ago. 22 Q. Yes, I've left one out because it was just a grammar or 23 syntax one about a full stop. 24 A. Right. 25 Q. So I've cut that one. Page 42, please. If we look at 1 1 paragraph 177 towards the bottom of the page, in the 2 second line, there's a line which says: 3 "... according to my diary took place on 4 March 4 2014 ..." 5 Should that be 4 March 2015? 6 A. It should. 7 Q. So "4 March 2015", please. 8 A. Yeah. 9 Q. Page 67 is the second correction. It's paragraph 279, 10 again at the foot of the page. 11 A. Yeah. 12 Q. In the second line, there's a document referred to, 13 POL00021446, which is dated as 28 June 2016, whereas it 14 should be 28 June 2018? 15 A. Yes. 16 Q. Then, over the page, please. The last line reads -- 17 SIR WYN WILLIAMS: Sorry, Mr Beer. That last one, 18 a reference to 2018 in the second line, does that have 19 any effect on the 2016 in the first line? 20 MR BEER: Yes. 21 THE WITNESS: Ooh, I think it does, sorry. It should all be 22 2018 in this paragraph. I apologise. 23 SIR WYN WILLIAMS: No, that's fine, thank you. 24 MR BEER: Then, over the page to the last sentence: 25 "This was subsequently accepted by Ernst & Young in 2 1 July 2017 ..." 2 That should read "July 2018"? 3 A. Absolutely. 4 Q. Thirdly, page 71. In the last line, there's a reference 5 to a document, FUJ00171778 and that's said to be 6 15 February 2019; that should be 15 March 2019 -- 7 A. Okay. 8 Q. -- and I think that is actually correctly dated in the 9 first line of para 292? 10 A. Okay. 11 SIR WYN WILLIAMS: It is. 12 MR BEER: At page 86, please, at the top of the page, which 13 is paragraph 338, the date of the document, three lines 14 in, should be 13 May 2019, not 23 May 2019. 15 A. Yes. 16 Q. Thank you. I think the sixth amendment was just typo, 17 so we needn't correct that. 18 Can we go to page 115, please, in the hard copy. Is 19 that your signature? 20 A. Yes. 21 Q. With those corrections brought into account, are the 22 contents of that witness statement true to the best of 23 your knowledge and belief? 24 A. Yes, they are. 25 Q. Thank you. Mr Cameron, I know that in your witness 3 1 statement you make an apology in paragraph 6 -- there's 2 no need to turn it up -- but I think there's something 3 additional you wish to say now, so please do say that 4 which you wish to say. 5 A. Thank you. I'm sorry that when I joined Post Office in 6 2015 I accepted, without challenging the evidence, that 7 there had been no miscarriages of justice in the earlier 8 prosecutions which caused so much devastation to 9 postmasters and their families. As a member of the GLO 10 subcommittee, I am sorry I did not push against the lack 11 of challenge and testing of Post Office's legal case. 12 Had I done better in these things, we might have started 13 the process of getting justice for postmasters earlier. 14 I hope that my statement and evidence today assists 15 the Inquiry in its investigations and in getting to the 16 truth, which is the least that those affected deserve. 17 Thank you for giving me this opportunity. 18 Q. Thank you very much, Mr Cameron. 19 You give evidence in your witness statements about 20 issues that the Inquiry call Phase 5 and 6 issues -- 21 A. Yes. 22 Q. -- and also some Phase 7 issues -- 23 A. Yes. 24 Q. -- which are bringing us up to date? 25 A. Yes. 4 1 Q. I'm not going to ask you about those Phase 7 issues 2 today. 3 A. Okay. 4 Q. If and to the extent that it's ever necessary to ask you 5 about those issues, that will happen after the summer. 6 A. Okay. 7 Q. Can I start with your background, please. You joined 8 the Post Office in January 2015 -- 9 A. Yes. 10 Q. -- as a CFO? 11 A. Yes. 12 Q. Chief Finance Officer? 13 A. Yes. 14 Q. Between 2017 and 2019 you were jointly the CFO and 15 COO -- 16 A. Yes. 17 Q. -- Chief Operating Officer; is that right? 18 A. Yes. 19 Q. Between April 2019 and September 2019, you were the 20 Interim CEO -- 21 A. Yes. 22 Q. -- chief Executive Officer? 23 A. Yes. 24 Q. And from September 2019 until the present day, you have 25 been the Chief Finance Officer -- 5 1 A. Yes. 2 Q. -- albeit you've been on medical leave since May 2023? 3 A. That's correct. 4 Q. Thank you. Prior to the Post Office, is this right, you 5 were a trainee accountant at Binder Hamlyn from 6 September 1987, you became a partner in Arthur Andersen 7 in 1999 -- is that right -- 8 A. That's right. 9 Q. -- then Deloitte and Touche in 2002 -- 10 A. Correct. 11 Q. -- again as a partner? 12 A. Yes. 13 Q. That was in the Audit and Risk Management Department; is 14 that right? 15 A. Yes. 16 Q. You subsequently became the Head of Internal Audit and 17 Risk Management for Centrica Plc? 18 A. Correct. 19 Q. Then from 2006 onwards you held various senior roles at 20 British Gas, including Finance Director? 21 A. Correct. 22 Q. Thank you. I'm going to start towards the end by 23 looking at a document called "What Went Wrong? A Draft 24 for Discussion". Can we look at it, please. 25 POL00175235. So you'll see, at the foot of the page, 6 1 please, a little bit more, this is your document -- 2 A. Yes. 3 Q. -- is that right? 4 A. Yeah, absolutely. 5 Q. It's dated 19 November 2020? 6 A. Yes. 7 Q. That appears on all of the pages. It's seven pages 8 long, and I'm going to spend some time on this document 9 this morning, if I may. 10 A. Of course. 11 Q. Because, essentially, it's a narrative account and your 12 reflections, is this right, as at 19 November 2020 -- 13 A. Yes. 14 Q. -- on what went wrong in relation to Horizon? 15 A. Yes. 16 Q. So, just to work out where we are in the narrative, the 17 chronology: at this time, Paula Vennells had ceased to 18 be the CEO for about 18 months; is that right? 19 A. Yes. 20 Q. She, I think, announced or disclosed her intention to 21 leave in about November '18 -- 22 A. Yes. 23 Q. -- and left in about March '19? 24 A. Yes. 25 Q. You had ceased to be the Interim CEO -- 7 1 A. Yeah. 2 Q. -- at the time that you wrote this document? 3 A. Yeah. 4 Q. You finished in September 2019, so about 13 months 5 before this? 6 A. Yes. 7 Q. At the time you were writing this, Nick Read was the 8 CEO; is that right? 9 A. Absolutely. 10 Q. Thank you. If we just go to the top of the page, 11 please. The purpose of, I think, the document is 12 explained in the first paragraph, and you say: 13 "We need to explain, internally and externally, what 14 has gone wrong around the historical Postmaster 15 litigation." 16 A. Yes. 17 Q. So by this time, November 2020, the Common Issues 18 judgment had been issued -- 19 A. Yes. 20 Q. -- the Horizon Issues judgment had been published -- 21 A. Yes. 22 Q. -- and the Group Litigation had reached a settlement? 23 A. Yes. 24 Q. Standing back, what was the intention behind writing the 25 document? 8 1 A. And I think it does say it in here, it seemed to me -- 2 and I had this conversation with Nick, for whom I really 3 wrote the document -- was that if we were going to say 4 this can never happen again, which we were starting to 5 say, of course there's a sense of that literally being 6 true, because we'd never have prosecuted anyone again, 7 but, for that to be true, I think we had to have 8 a proper explanation that satisfied us as to what had 9 gone wrong. And the purpose of this document -- because 10 I had been there for a few years at this point, 11 five years -- was to write down what I had thought was 12 gone wrong, not as a definitive answer, but as a first 13 contribution to what I hoped would be a wider debate, so 14 that out of collective experiences, you know, we would 15 get something more definitive. 16 Q. In its second line under the title, it's said to be 17 "A Draft for Discussion"? 18 A. Yes. 19 Q. Who did you intend to discuss the draft with? 20 A. I did discuss it with Nick Read and Richard Taylor and 21 Ben Foat. 22 Q. Was that after it had been written? 23 A. I wrote an initial draft, which I discussed, I think, 24 with Richard Taylor and Nick Read and they made some 25 comments and this was, I believe, the revised draft 9 1 after that and the final draft. 2 Q. Can we just turn up paragraph 387 of your witness 3 statement, please, which is on page 101. You say, "The 4 paper" and you're talking about this document we are 5 looking at: 6 "... was discussed [as you've just said] with Nick 7 Read, Richard Taylor (then Communications Director) and 8 Ben Foat and I believed helped prompt some cultural 9 [change] for the leadership team in 2021." 10 Then you say this: 11 "I had intended the paper to be a first draft to be 12 built on by to others create a shared narrative for the 13 [Post Office] to test against the future. I am not 14 aware that that ever happened." 15 A. That's right. 16 Q. Do you know why that never happened, to your knowledge? 17 A. No, I don't remember us discussing it again. What I did 18 see was some, you know, good cultural challenge and 19 debate in sort of January/February 2021, which I thought 20 was helpful and which I hoped this had helped prompt, it 21 might not have done, but I don't remember discussing 22 this document again after that. 23 Q. You said that it was your intention to create a shared 24 narrative. By that, do you mean that other people 25 would -- 10 1 A. Yeah. 2 Q. -- add to and contribute to your document -- 3 A. Yes. 4 Q. -- and then, essentially, it would be settled as 5 an agreed account? 6 A. Yes. Although, listening to this Inquiry, I suspect we 7 would have kept changing it. 8 Q. Why do you think that? 9 A. Well, I've been absolutely staggered by some of the 10 testimony you've got, particularly about things that 11 happened earlier, and so I suspect whatever narrative 12 I created then would have been very incomplete. 13 Q. I understand. Do you know why the shared narrative, no 14 matter how much it moved over time, never got beyond the 15 draft that we see? 16 A. No. 17 Q. Did any of the three people that you mention, Mr Read, 18 Mr Taylor or Mr Foat, explain why it wasn't added to or 19 agreed? 20 A. No, I don't remembering it being a definitive 21 conversation. We just moved on. 22 Q. Was there an acceptance by the three of them of what you 23 said in the document? 24 A. Yes, I believe that -- I mean, obviously, having been 25 there longer, there were things that I thought I'd seen 11 1 or knew that they wouldn't have done but, essentially, 2 I don't think they disagreed with it. 3 Q. Thank you. Can we go back to the document then, please? 4 A. Yes. 5 Q. POL00175235. In the first paragraph, continuing where 6 we left off, you say: 7 "Explaining the past is essential to restoring trust 8 with third parties, many of whom are understandably 9 concerned and critical. It is important for Postmasters 10 who are working well with us and should be reassured 11 that they are in safe hands. It is important for longer 12 serving colleagues who have worked with Postmasters, 13 sometimes suspending, terminating and prosecuting. How 14 should such colleagues interpret what [the Post Office] 15 leadership asked of them and their own actions? It is 16 also important to us as leaders: we must be clear what 17 went wrong to prove to ourselves and others that it 18 cannot happen again." 19 That's essentially what you said in summary earlier 20 on? 21 A. Yes. 22 Q. You said: 23 "Firstly, there can be no doubt that things have 24 gone materially wrong: 25 "We expect the total cost of managing and settling 12 1 claims to be between [£1 billion and £1.5 billion]." 2 A. Yes. 3 Q. Was that a calculation that you undertook? 4 A. No, it was my sense of where it was likely to go at the 5 time and I can't remember exactly where we were in terms 6 of the numbers for overturned historical convictions but 7 we were certainly starting with a much bigger number 8 than is currently provided, I think. So it was a view 9 of where it might go. 10 Q. "[Secondly] We have been publicly criticised by 11 Mr Justice Fraser. Nick and I have apologised in 12 public. 13 "[Thirdly] We have not defended appeals against 14 criminal convictions that we prosecuted. 15 "The purpose of this paper is to document my 16 personal view about what has gone wrong. It relies on 17 my memory. That will be wrong or incomplete in places: 18 a lot of public studies show that memories are not 19 reliable. I joined in 2015, so many of the critical 20 happenings took place before I joined. I am sure this 21 narrative will also suffer from my unconscious bias to 22 justify myself. 23 "These issues need to be overcome so a single, core 24 narrative can emerge. More voices need to be heard with 25 different perspectives, including postmasters and 13 1 critics. We must be brave in getting it right without 2 too much concern for consequences. We must be confident 3 of our facts. A core narrative can then be distilled, 4 enabling credible, consistent and durable answers for 5 stakeholders." 6 Then you set out under the executive summary the 7 four main lines of criticism that the Post Office had 8 faced: 9 "1. We have maintained an unacceptable relationship 10 with postmasters that was self-serving, based on 11 an imbalance of power and information and a skewed 12 contract. 13 "2. We were over-reliant on Horizon when we knew 14 its weaknesses. 15 "3. The original prosecutions were a deliberate 16 miscarriage of justice. 17 "4. We should have settled the claims, apologised 18 and moved on years ago. We have defended ourselves to 19 avoid the consequences. A waste of public money and 20 a postponement of justice." 21 In relation to those four criticisms, what was your 22 view at the time as to the extent to which they were 23 accurate and had force? 24 A. So I believe through the two trials that this was 25 a reasonable view of what we knew at the time. Clearly, 14 1 a lot has emerged since which I think reinforces 2 and 2 3, particularly, even in the last couple of weeks at 3 this Inquiry. 4 Q. So, at the time, you thought that some of them, 1 to 4, 5 had some substance but your view has hardened -- 6 A. Yes. 7 Q. -- in the light of evidence that you've heard -- 8 A. Yes. 9 Q. -- to the extent that you think they are made out? 10 A. Sorry, I'm not sure I understood the question. 11 Q. That 1 to 4 are, in your view now, established? 12 A. Yes, I think so. 13 Q. Let's look, then, at the view that you took at the time 14 in November 2020. You say: 15 "At the heart of everything, the original sin of 16 Post Office -- and this may go back a very long time -- 17 is that: 18 "1. Our culture, self-absorbed and defensive, 19 stopped us from dealing with Postmasters in 20 a straightforward and acceptable way." 21 Just stopping there, to understand what you are 22 saying and the status of what you're saying there, that 23 is a conclusion which you reached at the time -- 24 A. Yes. 25 Q. -- whereas the 1 to 4 above were the criticisms that you 15 1 faced? 2 A. Yes. 3 Q. Okay, so 1, at the bottom of the page, is essentially 4 your established view as at November 2020? 5 A. Yes. 6 Q. Thank you. You describe it as an "original sin"? 7 A. Yes. 8 Q. Why did you use that language? 9 A. I don't know and it sounds a little bit overblown, 10 reading it again. But I think the point was that 11 I think I was thinking about the management of 12 shortfalls in branches and the view that, you know, 13 I accepted when I joined, which was the postmasters were 14 accountable for what happened in branches because Post 15 Office couldn't know what happened in branches and, 16 whilst there was a logic to that, I think it gave us too 17 big an excuse not to really investigate what was 18 happening and simply to accept that post offices were 19 accountable. 20 And, you know, then you had the prosecutions, and 21 then -- and I think it's a point that Second Sight bring 22 out, postmasters weren't necessarily being as open when 23 they had problems because they feared the consequences, 24 and so we weren't having the relationship we should have 25 had, where they could flag concerns, we would help them 16 1 sort them properly and we would work together to run 2 a proper business, and so that was what I was I think, 3 trying to get at. 4 Q. I see. You describe there the Post Office's culture as 5 being "self-absorbed and defensive"? 6 A. Yes. 7 Q. Did you form a view as to where that culture emanated 8 from? 9 A. I think with all of this, I felt it had probably been 10 there for quite a long time but I think, you know, I'd 11 seen it and had tried to argue with it in places, you 12 know, around the response to Second Sight, around some 13 of the media responses and, you know, I did believe and 14 do believe that organisations should embrace challenge 15 and criticism and have dialogues with people, which is 16 why I was, you know, so keen to talk to Tim McCormack in 17 2019, against advice, because I thought we were better 18 being open. 19 Q. By this time you had been in the Post Office for nearly 20 six years, January 2015 to November 2020? 21 A. Yes. 22 Q. Had that culture that you describe there, of 23 self-absorbed and defensive, persisted in that period of 24 time? 25 A. It was certainly true, through, I think, the 17 1 litigations. I think it was, you know, much less true, 2 by November 2020. 3 Q. So certainly until early 2020? 4 A. I think that's probably about right, yes. 5 Q. Can we go over the page, please. You say: 6 "Everything else flows from that attitude and the 7 lack of balance it created. It skewed the judgements 8 made about the prosecutions and the subsequent 9 management of the case. 10 "The issues that followed are fundamentally for the 11 Board, Executive and Legal teams. In particular ..." 12 Then you set out six other conclusions between 2 to 13 7. I've just described them as conclusions. Am I right 14 to do so? These are, again -- 15 A. That was what I understood at the time but, recognising 16 that some of this -- number 2, for example -- was just, 17 you know, I hadn't been there when that was happening 18 but that was what seemed to have happen. 19 Q. So this is essentially what you believed had been 20 established on the facts that you had seen in your six 21 years? 22 A. Yes. 23 Q. Thank you. So, again, these aren't the allegations that 24 we saw on the first page; these are your views? 25 A. Correct and particularly views from seeing the Common 18 1 Issues judgment and the Horizon Issues judgment, which 2 had -- and, you know, the really shocking discovery that 3 there had been real miscarriages of justice because, you 4 know, Brian Altman's work. And so, you know, this was 5 where my views had shifted really significantly. 6 Q. Thank you. Then if we scroll down, please. Under the 7 heading of "The Report", that's essentially your report, 8 so you've moved on from the executive summary -- 9 A. Yeah. 10 Q. -- you've then set out in bold some headings? 11 A. Yes. 12 Q. The first one: 13 "We have maintained an unacceptable relationship 14 with postmasters that was self-serving, based on 15 an imbalance of power and information." 16 That's back to the first point of criticism, the 17 first line of criticism? 18 A. Yes, it's explaining more information below those 19 headlines. 20 Q. Thank you. In the second paragraph under that heading, 21 you say: 22 "The fundamental belief that guided [the Post 23 Office] when I joined [remembering that was January 24 2015] and which had guided it for many years, was that 25 Postmasters were and had to be ... responsible for 19 1 whatever happened in their shops. Once the systems, 2 training and cash were handed over (and however well 3 they were handed over) the Postmaster was accountable: 4 'we cannot know what happens in a [post office] day to 5 day. When money is missing it may have been lost, 6 stolen by someone else or stolen by the Postmaster. 7 Whatever happened, the Postmaster still owes us the 8 money'." 9 A. Yes. 10 Q. Did that state of mind persist throughout the period at 11 least up until the Horizon Issues judgment? 12 A. Yeah, even the Common Issues judgment, I think. 13 Q. The Common Issues judgment. 14 A. Yes. 15 Q. I see. What you've put in quotation marks there, is 16 that actually somebody speaking or is that sort of 17 a synthesis of the views that you would expect senior 18 Post Office management, essentially, to express? 19 A. It's a synthesis. 20 Q. Right. Over the page, please. Foot of the page. Thank 21 you, three paragraphs from the bottom, you say: 22 "Often, defensiveness stopped us listening to our 23 critics. When I became Interim CEO, Tim McCormack 24 reached out to me. Paula had refused to talk to him for 25 some time. The advice of Mark Davies, Communications 20 1 Director, was never to talk to him because he couldn't 2 be trusted. I did speak to him on 2-3 occasions and 3 found him to be honest, concerned and trustworthy -- he 4 help me understand and fix an issue and then praised us 5 for it when he could have made a public fuss." 6 You referred to that earlier. 7 A. Yes. 8 Q. We'll came later on this morning or early this afternoon 9 to that exchange with Mr McCormack. 10 Why did you decide to speak with Mr McCormack? 11 A. I thought we should listen to the people who were 12 criticising us, just as a matter of principle. But 13 I was told that, you know, he was sort of an enemy of 14 the Post Office and he couldn't be trusted and he was 15 just going to -- you know, anything we said to him would 16 be used against us in public, and I was advised to read 17 his blog, I think, which I did. And then I said, look, 18 you know, this is someone who cares about post offices, 19 not just the past, although he cared about that very 20 much, but what was happening in post offices, he cared 21 about post offices and I would always have a dialogue 22 with anyone who cares about post offices. 23 Q. You continue: 24 "Second Sight, discussed elsewhere, challenged us on 25 the principle that because disputes were not fully and 21 1 transparently resolved, Postmasters had little option 2 but to hide them. This is clearly debatable. But 3 I recall no debate: their report was drafted a few weeks 4 after I joined. This idea conflicted so hard with the 5 fundamental belief that it was not really considered." 6 Where you say it was not really considered, to whom 7 are you referring? 8 A. The leadership of Post Office. 9 Q. So can you date that? 10 A. Well, their report was drafted, I think, in April 2015 11 and published in the summer of 2015, or around that 12 time. So, you know, I would date it to that, I think. 13 Q. Was that amongst the General Executive, generally? 14 A. Yeah, and the Board. I mean, I don't think we debated 15 that point, that I recall. 16 Q. You continue: 17 "The judge's views ..." 18 That's Mr Justice Fraser? 19 A. Yeah. 20 Q. "... made a difference to me. In summer 2019, a Post 21 Office came to me because they had a £4,000 shortage. 22 I asked the Network Operations Team to investigate. The 23 real source of the issue was resolved. But it took 24 months because there had been systematic misposting of 25 stamps, which made it very hard to see what had been 22 1 going on. We didn't chase errors in stamps because the 2 Postmaster would probably fix them and it didn't cost 3 us." 4 Are you referring there to contact you had from the 5 subpostmaster at the Little Milton post office. 6 A. Yes. 7 Q. Again, we'll come to that later today. Over the page, 8 please. You say: 9 "Following the judge's verdict, I raised my concerns 10 with the General Counsel ..." 11 Is that Jane MacLeod? 12 A. No, that was Ben Foat. 13 Q. That was Ben Foat by then? 14 A. Yeah. 15 Q. "... because I was now thinking about the Postmaster's 16 experience, not ours. The Network Operations Team now 17 proactively encourages postmasters to get stamps right, 18 counts are checked in Swindon and we do not convert 19 shortfalls to cash ..." 20 Then there's a passage in italics. Is that, 21 essentially, your conclusion? 22 A. Yeah, it's my summary, yeah. 23 Q. When you say "summary", it's -- 24 A. Summary of that section. 25 Q. -- a summary of that section -- 23 1 A. Yeah. 2 Q. -- and you, we'll see, arrive at a "series of wrongs", 3 as you describe them? 4 A. Yes. 5 Q. Post Office wrongs? 6 A. Yes. 7 Q. This is essentially your assessment? 8 A. Yes. 9 Q. "The first and fundamental wrong is that 'Our culture, 10 self-absorbed and defensive, stopped us from dealing 11 with Postmasters in a straightforward and acceptable way 12 ...'" 13 A. Yes. 14 Q. That correlates to number 1 of 7 on the executive 15 summary? 16 A. Yes. 17 Q. "We did not engage with Postmasters with an open mind or 18 listen properly to their concerns. We prioritised 19 issues according to their materiality to us and not to 20 a single Postmaster. We did not serve and assist 21 Postmasters. Training was not good enough. Support was 22 hard to access and of limited duration and insight. We 23 lacked transparency with Postmasters. We did not 24 resolve underlying issues, allowing them to recur 25 continuously as we prioritised other change and our 24 1 journey to profit. 2 "By forcing Postmasters to be responsible for branch 3 outcomes, they were more likely to pay for a shortfall 4 or even accept a minor charge to avoid a major one. 5 There was never a clear, transparent and objective 6 process to resolve issues -- and arguably still isn't. 7 "We did not engage with critics. We were convinced 8 we were a good thing for the UK and anyone criticising 9 was attacking. We defended or stayed silent." 10 There's quite a lot there in those conclusions. 11 A. Yes. 12 Q. But you were satisfied that, on the basis of your six 13 years' experience, working at a high level within the 14 Post Office, which and every one of those facts is 15 established? 16 A. Yes. 17 Q. Thank you. Can we turn to the second criticism that's 18 put, one of four, in bold: 19 "We were over-reliant on Horizon when we knew its 20 weaknesses." 21 You go on to address that. You say: 22 "In 2014, Post Office stopped prosecuting 23 Postmasters if the prosecution would place material 24 reliance on evidence from Horizon. I do not think this 25 decision included a full review of the implications for 25 1 earlier prosecutions. It clearly should have done and 2 it is important to know whether that question was badly 3 addressed or not addressed at all." 4 The first sentence is certainly accurate. The 5 second sentence, where you say, "I do not think this 6 decision included a full review of the implications for 7 earlier prosecutions", what did you know about what work 8 had been done in the year and a half before you joined 9 to review earlier prosecutions? 10 A. Nothing. I wasn't aware of any but, as I say at the 11 beginning of this document, this is just me writing 12 down, without research, what I understood at that time, 13 to then work with others to get a complete narrative. 14 So I wouldn't have made this statement in a more formal 15 document because I hadn't actually gone and researched 16 it. That was just my understanding at the time. 17 Q. You say: 18 "In my time, I do not recall until this year -- but 19 may have forgotten -- any discussion of the ongoing 20 duties of prosecutors. Nor do I recall any review of 21 historic issues with Horizon. 22 "Having reviewed the appeal cases in 2020, the Board 23 has concluded that disclosure of historical Horizon 24 issues should have been made. The Board chose not to 25 oppose appeals where the evidence relied on Horizon." 26 1 A. Yeah. 2 Q. We know about that decision and we know the Board 3 minutes of it. 4 Were you a party to that decision making? 5 A. Can you be a tiny bit more precise? 6 Q. Yes, in mid-2020 -- 7 A. Yes. 8 Q. -- mid-to late 2020. You were? 9 A. Yeah. No, I joined Board meetings on that. 10 Q. You say that: 11 "... the Board has concluded that disclosures of 12 historical Horizon issues should have been made." 13 Can you be more precise as to what those disclosures 14 were that you're talking about there? 15 A. No. I mean, I can't remember what I was referring to, 16 specifically. 17 Q. But your view was that the Board had accepted that the 18 Post Office ought to have disclosed, much earlier than 19 it did, historical Horizon issues? 20 A. Yeah, they should have been disclosed at the time of the 21 initial trials, I think. 22 Q. You continue: 23 "The media interpretation that the shortfalls were 24 entirely caused by system issues -- and never theft or 25 lack of management -- does not ring true. Many 27 1 certainly hid issues and lied. Some will have stolen 2 money or failed to manage it. However, that is now 3 irrelevant. The convictions were and are unsafe. The 4 convictions must be overturned. No good can be served 5 from seeking retrials. The Postmasters are therefore 6 innocent." 7 A. Yeah. 8 Q. Why were you making that point? Was there still a view 9 within the Post Office that the subpostmasters may still 10 be guilty? 11 A. It may have been partly that, although I think Post 12 Office was not having a view on that, so much as, you 13 know, lawyers having a view of that, as they were 14 working through the schemes. But I think, you know -- 15 and this may just display my real ignorance of legal 16 processes, it did seem to me that, if you hadn't had 17 a fair trial, you can't be have been found properly 18 guilty, therefore you must be innocent because you're 19 innocent until proven guilty, whereas all the language 20 around this, is around convictions being unsafe and 21 I thought, well, if they haven't had a fair trial, 22 they're innocent. 23 Q. I see. That's what that means, essentially? 24 A. Yes. 25 Q. Got it. You say: 28 1 "Our legal advice [in the next paragraph] seems to 2 have been wholly inadequate on the ongoing duties of 3 prosecutors. Had we reviewed the prosecutions much 4 earlier, we would presumably have known they were unsafe 5 earlier and everything else would have been different." 6 A. Yeah. 7 Q. Was that a view held by anyone else in the General 8 Executive? 9 A. I don't remember ever discussing it. I mean, I think it 10 was, for me -- I mean, we reached the settlement -- Nick 11 reached the settlement with the postmasters in December 12 '19 and, as part of that settlement, a review of the 13 prosecutions was agreed and, you know, I can't remember 14 the exact date when Brian Altman concluded that there 15 that been, you know, risk of miscarriage of justice and 16 informed the CCRC. But it was -- I think it was about 17 February. You know, so I mean it's a really short space 18 of time, with Christmas in between and, therefore, when 19 he got into it, it must have been really obvious that 20 there was a problem, was my take. 21 Now, all of that may be inaccurate speculation on my 22 part. But that was my sense of it: that if we had 23 really tested the evidence properly, we would have found 24 the problem quicker. 25 Q. You say: 29 1 "The second wrong is 'We did not disclose Horizon 2 issues to the defence when we prosecuted Postmasters, 3 especially between [2008], when evidence of concerns was 4 emerging, and 2014'", which is the date when you stopped 5 prosecuting. 6 A. Yes. 7 Q. The date of 2008, which you put in square brackets, 8 which you say is "when evidence of concerns was 9 emerging", can you recall where you got (a) the date and 10 (b) the information that that's when evidence of 11 concerns was emerging from? 12 A. No, but it must have been. I can't remember exactly 13 where we were in a sort of media narratives or what had 14 come out of the trials but, you know, I obviously had 15 a sense, which has come out more in this Inquiry, that, 16 you know, information was available which people should 17 have shared with the defence at the time and didn't and, 18 therefore -- and I was guessing it was about 2000 and 19 since, I think, I've read somewhere that between that 20 sort of 2007, 2010, more information had emerged which 21 should have been shared. 22 Q. So your doubt about the date is reflected by the use of 23 the square brackets; is that right? 24 A. Yes. 25 Q. Continuing: 30 1 "The third wrong ..." 2 I should have said, that second wrong corresponds to 3 paragraph 2 in the executive summary. 4 A. Yeah. 5 Q. "The third wrong is that 'We should never have conducted 6 our own prosecutions'. There is an important duality in 7 the state's approach, where the police investigate and 8 the CPS prosecute. By undertaking both functions within 9 [the Post Office], we set up a process that lacked 10 challenge and independence. In addition, 'Some of the 11 behaviours during the prosecutions, where we seemed to 12 be using bullying tactics to get Postmasters to admit 13 fault and take responsibility were unacceptable'." 14 Can you help us, where did you get the information 15 about the use of bullying tactics to get postmasters to 16 admit fault from? 17 A. I don't remember exactly when different stories and 18 narratives emerged but what I'm talking about is 19 evidence that, you know, people were pushed to accept 20 a false accounting plea, rather than another sort of 21 plea and that, you know, postmasters were told that no 22 one else had ever seen this problem, and, you know, my 23 sense of the narratives was that people had, you know, 24 been pushed very, very hard to declare themselves guilty 25 in a way that doesn't feel right. 31 1 Q. In your view, that was established on the information 2 that you had seen in your six years in the Post Office? 3 A. Not from anything I had seen in the Post Office, so this 4 is stories about the past that had emerged -- 5 Q. Yes, stories about the past? 6 A. -- because, obviously, we hadn't been doing prosecutions 7 in that period. 8 Q. Over the page, please, to the fourth wrong. 9 "The fourth wrong is 'We did not reassess our 10 behaviour as prosecutors between 2014 and 2020'." 11 So you're talking about a sort of a lost six or 12 seven years there, are you? 13 A. Yeah. 14 Q. "Instead, we went forward confident that the [Post 15 Office] was fundamentally reliable. We debated several 16 times in 2016-18 whether we insured restart 17 prosecutions. Our Legal Team were, rightly, firm that 18 we should not restart but the reason given was that it 19 might look as though we were being disrespectful of the 20 courts. No one suggested that Horizon was or had been 21 inherently inaccurate." 22 Then I'm going to skip over those bullet points and 23 scroll down, please. You add: 24 "Fujitsu did have remote access, which was 25 identified in 2015 (?) and then again later. There are, 32 1 of course, contractual limitations with Fujitsu that are 2 important to us but are not of interest to anyone else." 3 The date on which you say remote access was 4 identified as query 2015; do you know where that 5 information came from? 6 A. No, I think the question mark meant I couldn't remember. 7 It was identified to me in 2016 and forms part of my 8 witness statement. 9 Q. Yes. You say, moving on: 10 "The fifth wrong is that 'We relied on anecdotal 11 evidence that things were working properly without fully 12 investigating on a proactive basis. There were limited 13 and partial investigations around Horizon and related 14 issues like suspense accounts before and after 2012 but 15 they were never thorough or complete. We did not 16 seriously test what Fujitsu told us. When we did 17 investigate, we looked "big picture" and not at the 18 level of materiality relevant to an individual party. 19 I am afraid that this is still true'." 20 So, breaking that down, you say that we, the Post 21 Office, relied on anecdotal evidence. What are you 22 referring to as "anecdotal evidence", I think, about the 23 reliable of Horizon? 24 A. So I've been a business that -- whose main income system 25 wasn't working properly and it's absolute chaos. This 33 1 isn't something you can choose. You know, there are 2 millions of stopped transactions, customers are 3 screaming at you, you can't answer the phones you can't 4 pull any financial information together, and Post 5 Office, in my time, didn't look like that at all. So 6 that was part of the sort of anecdotal evidence for me, 7 and the DMBs worked. So the DMBs used the same system 8 to process the same transactions and they just weren't 9 getting, as I understand it, the shortfalls that we were 10 seeing in some agency branches, and that led me, you 11 know, to believe that the problem wasn't the way the 12 software operated -- I mean, it might have been in 2005 13 or 2007 but, in the time I was in Post Office, it wasn't 14 the software that wasn't operating properly. 15 It was, you know -- and these are things that may 16 have been absolutely contributed to by lack of support, 17 lack of training and clear instructions but it wasn't -- 18 you know, the post offices maybe weren't being managed 19 as tightly as they were in the directly managed 20 branches, which had much more experienced staff. So 21 I assumed it was more a process and a control point, 22 rather than a software point. So it's things like that. 23 Q. So there you're referring to anecdotal evidence as 24 meaning sort of macro-level points -- 25 A. Yeah. 34 1 Q. -- which you extrapolate to mean -- 2 A. Yes. 3 Q. -- the integrity of the system is sufficient for 4 everyone -- 5 A. Yes. 6 Q. -- without drilling down to what you describe as the 7 materiality of any faults for an individual 8 subpostmaster? 9 A. Yeah, and I think the materiality point is a really 10 intractable one, which is why I make a reference to it 11 still being true, because, you know, Post Office, you 12 know, is a medium-sized business and you are operating 13 at a level of materiality which is, you know, sort of 14 hundreds of thousands to worry about an issue and, you 15 know, our accounts are done in millions, and businesses 16 of that size run in a certain way. 17 But if you're a local postmaster -- if you're 18 a postmaster, 100 quid might make all the difference to 19 good week/bad week, whether you're making a profit, 20 whether you're not, and I genuinely don't know how you 21 maintain both levels of materiality at once. I think 22 it's a really tricky question for the Post Office. 23 Q. Are you saying, amongst the fifth wrong that you write 24 about there, was that there had not been an independent 25 and impartial investigation into the integrity of 35 1 Horizon? 2 A. I think there had been some, before my time, I think 3 KPMG had been involved in one, but, clearly, there 4 hadn't been a really comprehensive one. And it's very 5 difficult to prove negatives. I know a lot of work has 6 been done since but it is tricky to prove something is 7 working perfectly. 8 Q. Can we move on to, I think, what was the third 9 allegation, in bold: 10 "The original prosecutions were therefore 11 a deliberate miscarriage of justice." 12 You say: 13 "I cannot comment on the motivations of the original 14 prosecutors. I joined at the tail end of the Mediation 15 Scheme. I never heard anything which suggested that the 16 Board had been anything other than straightforward in 17 its desire to resolve issues and move on. I suspect but 18 cannot prove that [the Post Office] people were in fact 19 so convinced of their own positions that they 20 interpreted every victory as being justice. If I am 21 right, this was less a deliberate miscarriage of justice 22 as a blindness towards the possibility of 23 a miscarriage." 24 Then over the page, please. You say: 25 "People underestimate the chaos and lack of control 36 1 in [Post Office] in its early years as an independent 2 business." 3 What are you referring to there, please? 4 A. Well, I think it goes on to explain, and I set this out 5 as well in my 2019 speech to the NFSP conference, which 6 is that I think everyone assumes that because Post 7 Office was a much bigger business, you know, it had 8 a degree of control and understanding that actually 9 wasn't there. So it had been ripped out of Royal Mail 10 at quite short notice and its systems were incredibly 11 old and underinvestigated. At one point I was 12 challenging the idea that Post Office could have 13 a problem with Oracle software that Oracle had never 14 seen before, because it seemed absurd to me, and they 15 just said, well, you know, no other client has ever 16 tried to upgrade eight versions of the system in one go. 17 So it had been hugely neglected. It was old and 18 vulnerable and it took four years of effort to actually 19 pull them out of Royal Mail and set them up on separate 20 support because the people who built, it had never 21 occurred to them that that might be something they would 22 need to do. 23 Nothing was documented and you always assume with 24 an older business that everyone knows how it works but, 25 actually, no one knew how it worked. It had either got 37 1 lost in Royal Mail or people had retired and, often, 2 systems projects were tricky because no one knew how 3 they worked anyway and, you know, they were trying to 4 rediscover that as they were changing them. 5 Q. Sorry, did that extend to Horizon, the Horizon system? 6 You took the view that nobody in the Post Office truly 7 knew how Horizon worked? 8 A. Yes, it was an assumption that Fujitsu did. And, yeah, 9 so -- and, generally -- and I know it is absolutely 10 absurd to talk about victims within the Post Office now 11 because we know who the real victims are, and they're 12 postmasters, but there was a sort of victim mentality in 13 the Post Office, which was that, you know, everything 14 was better 20 years ago, it's all someone else's fault 15 and there's nothing we can do about it. 16 Q. Did that include at the Group Executive level? 17 A. No, I think the Group Executive were trying to sort of 18 challenge that. This was at more junior levels of the 19 organisation, where just people doing tasks in 20 a slightly hopeless way and, when I got more involved in 21 operations in 2017, we started at a really basic level 22 of asking all the teams in places like Chesterfield to 23 debate what were the tasks they were doing, who they 24 were doing them for, and what the difference between 25 success and failure was, because we had so many people 38 1 who were simply doing a task, 9 to 5, Monday to Friday 2 and going home and they had no idea why they were doing 3 it and why it mattered, and so we were starting at 4 a really basic level. 5 Q. Moving on, you say "The sixth wrong", and again, I think 6 this falls in the category of things that you believed 7 were established by this date, is that quote: 8 "... 'We did not -- do not -- always balance the 9 tactical battles with other priorities'." 10 You continue by setting out the allegation: 11 "We should have settled the claims, apologised and 12 moved on years ago. We have defended ourselves 13 inappropriately to avoid the consequences of our 14 actions. This has been a waste of public money and 15 a postponement of justice." 16 I think, essentially, you think that is established? 17 A. Yes. I think I then go through, in a separate 18 paragraph, to show why I thought that retrospectively -- 19 Q. Yes. 20 A. -- and didn't think it at the time, and what the 21 narratives were. 22 Q. Let's just look at those, then. You say: 23 "On the creation of [Post Office] as an independent 24 business, the Board set up a mediation scheme. This was 25 coming to an end as I joined. Everything I heard 39 1 suggested the new Board in 2012 had set out to reach 2 a real settlement so the business could move forward. 3 This clearly hadn't happened ..." 4 Then you say: 5 "... and the narrative when I joined was: 6 "[1] We tried to reach a fair settlement. 7 "[2] We should not try and settle with people with 8 criminal convictions. By definition, they had been 9 found guilty by an independent legal process. Many had 10 also admitted guilt. 11 "[3] The amounts some people were claiming were 12 disproportionate -- school fees for years. This was 13 opportunistic and unreasonable. 14 "Second Sight were the wrong choice. We should have 15 got a proper accounting or law firm to do a professional 16 piece of work and move on." 17 Lastly: 18 "This was not the right use of public money." 19 So you say this was the narrative when you joined in 20 January 2015; who was pushing that narrative? 21 A. So I think that was probably a collection of things but 22 this was the narrative as I recalled it when the 23 decisions were being made, in first half of 2015, to 24 deal with the Mediation Scheme differently, shut it 25 down, move on from Second Sight. 40 1 Q. Who was pushing or peddling that narrative? 2 A. Well, I think probably sort of Chris Aujard, Mark 3 Davies, Paula agreeing with it. I mean, I think it's in 4 those conversations. 5 Q. So pushed by Chris Aujard and Mark Davies but with Paula 6 Vennells agreeing to it? 7 A. That was my understanding. 8 Q. What was the relationship between Mark Davies and Chris 9 Aujard, on the one hand, and Paula Vennells, on the 10 other? 11 A. I don't know what the relationship between Mark Davies 12 was with Chris Aujard. Chris Aujard wasn't there for 13 very long and I'm not sure I ever saw them together 14 particularly. Mark appeared to have a strong positive 15 relationship with Paula, and vice versa. 16 Q. You continue: 17 "Paula [Paula Vennells], Jane [Jane MacLeod] ..." 18 A. Yeah. 19 Q. "... and I discussed informally settling rather than 20 closing the mediation scheme in 2015." 21 Just stopping there, do you remember when that was 22 in 2015? 23 A. No, I think -- I mean, it was an informal conversation, 24 I don't remember it being a -- 25 Q. What was the reason for the discussion about, "Well, 41 1 let's settle rather than shut the thing down"? 2 A. One of us, and it might have been me, just asked the 3 question, I think, which was "Well, could we settle 4 this?", because clearly, you know, it was a big part of 5 the business and, you know, we wanted to reach 6 a resolution and focus on, you know, the commercial 7 business. And I think -- so the question was: can we 8 settle this? And the feeling I recall Jane expressing 9 was that we could, and I obviously remember the figure 10 of 20 million, but it would never -- and this feeling 11 grew, so I'm slightly worried about remembering later 12 conversations, but the very strong view, I think, Jane 13 held, which I agreed with, during the development of the 14 GLO and afterwards, was that there was just too big 15 a gap between the parties for us to reach a settlement 16 that was sustainable. 17 And therefore, we had to test it in court, in a kind 18 of win or lose way, not just kick it down the road, 19 because then everyone would know where they are and we 20 could reach some resolution. 21 Q. You continue: 22 "Jane's strong and unwavering view was that the 23 issue could not be settled because any settlement would 24 trigger a second wave of claims. Later, she also 25 expressed concerns that it might trigger a change in the 42 1 CCRC view." 2 Can you tell us what you're referring to there, Jane 3 MacLeod saying, "If we settle in the mediation this 4 might trigger a change in the CCRC view"? 5 A. I really don't, actually. I was reading this again, you 6 know, a few years later. I didn't remember that 7 particularly, and I was -- yeah, I noticed it when 8 I read it. Because I remember the arguments being much 9 more about is a settlement sustainable, but I may be 10 conflating 2018 arguments with 2015. So I don't 11 remember it, I'm sorry. 12 Q. On its face, that may look to be logic, that we can't 13 settle, essentially, civil claims because it may affect 14 the view that the regulator of miscarriages of justice, 15 the investigator of miscarriages of justice, takes of 16 us, and it might prompt the CCRC to think that there may 17 be more substance in the complaints of miscarriages of 18 justice? 19 A. I agree. At this time, I don't remember Jane saying 20 that but I obviously remembered it in 2020. 21 Q. "The logic was [you continue] -- we have not done 22 anything wrong -- we could justify settling for £10 to 23 £20 million but not for hundreds of millions of pounds. 24 Jane's view never wavered and she was right on one 25 aspect -- the settlement of the GLO precipitated, 43 1 exactly the challenges and costs she was concerned 2 about. 3 "This conversation recurred at different points. 4 Jane's view was strengthened by the advice from our 5 legal teams: we were going to win in court and our 6 contract with Postmasters was lawful." 7 Then over the page: 8 "This legal advice became increasingly fixed in 9 place. In my view the Legal team of Jane, [Womble Bond 10 Dickinson] and David Cavender (QC on the Common Issues 11 Trial) became an increasingly tight group that 12 constantly reinforced each others's views: an extreme 13 example of groupthink. We did challenge -- I have 14 always held the view and articulated it that you only 15 end up in court when both sides have lawyers telling 16 them that they have a 70% chance of winning." 17 Just stopping there, you say that the legal advice 18 became increasingly fixed and you attribute that to 19 Jane, Womble Bond Dickinson and David Cavender QC, yes? 20 A. Yes, and I think it's hugely influenced by the reaction 21 to the Common Issues judgment because, to me, that was 22 a seismic moment, because we had lost on basically 23 everything, and the judge was extremely critical, and 24 I thought that was a real moment to stand back and 25 reflect, and the legal advice was "No, no, no, it's the 44 1 judge that's the problem, crack on. You know, we're not 2 changing our position at all". 3 Q. We'll see in a moment that you say the effect was 4 essentially to double down? 5 A. Yes. 6 Q. You continue: 7 "Paula also questioned whether [Womble Bond 8 Dickinson] were good enough but Jane held the line very 9 firmly, from a belief that a more assertive firm might 10 make us look like bullies. With hindsight, a more 11 assertive firm would have seen the pitfalls and kept us 12 out of court in the first place." 13 Can you tell us what you're referring to in that 14 paragraph, please? 15 A. I think I remember Paula questioning Jane about whether 16 Bond Dickinson were right, probably in 2018, and 17 I think, you know, it did feel to me -- and I think 18 I make a reference to it in one of the emails -- that 19 the postmasters just had better lawyers than us, was my 20 sort of emotional reaction to it, bearing in mind I'm 21 spectacularly ignorant of the legal processes. 22 So I think my recollection was that Paula did 23 question Jane to say, "Look, you know, are Bond 24 Dickinson the right people for us?", and Jane said, 25 "Well, they've done an awful lot of work over the years 45 1 and so they know a lot of information and that's 2 important", which I completely accept. But she thought 3 this was about the optics, whereas, if we had employed 4 a really big, aggressive City firm with that sort of 5 reputation, we would have looked like corporate bullies. 6 But my feeling is, actually, we looked like 7 corporate bullies anyway because of the size of Post 8 Office compared to the size of an individual post 9 office, and we didn't get very good advice; so it was 10 the worst of both worlds but some of that is 11 retrospective. 12 Q. I see. So this question of whether Womble Bond 13 Dickinson were good enough versus a more assertive firm, 14 are you talking there about the substance of the advice 15 you were being given or, essentially, the nature of the 16 firm, one Womble Bond Dickinson, I don't know, a Second 17 Division provincial firm versus a Magic Circle firm? 18 A. I've got no view on legal firms in that sense at all, so 19 this was about, you know, were we seeing enough 20 challenge and debate in the arguments and, you know, 21 I increasingly felt that we just weren't and that became 22 painfully true after the Common Issues judgment. 23 Q. I see. So it's about the substance of the advice? 24 A. Yes. 25 Q. I see. You continue: 46 1 "Mr Justice Fraser was very critical of us from the 2 off. When we pushed [David Cavender QC] on this, he 3 said that he had caught the judge's eye and they were as 4 one. Fraser was just posturing so it didn't look like 5 he was against the claimants." 6 So just understanding what you've written there, you 7 were saying that you'd challenged David Cavender on this 8 and he was telling you that, in fact, he, David 9 Cavender, had caught the judge's eye and they were as 10 one on the merits of the case -- 11 A. Yes. 12 Q. -- and that Mr Justice Fraser's outward behaviour was 13 posturing for the benefit of showing that he wasn't 14 against the claimants? 15 A. That was my understanding, yes. 16 Q. That's what David Cavender was telling you? 17 A. Yes, and I think this played to a whole -- I mean, 18 fundamental -- I mean, it felt all the way through the 19 Common Issues Trial that we were fighting two completely 20 different trials. So ours was entirely focused on the 21 legal interpretation of the contract, was the contract 22 between the Post Office and postmasters legal, and the 23 claimants were focusing on whether it was fair, and that 24 was presented to us, I think, by David Cavender as 25 evidence that the claimants had a really bad legal case, 47 1 so they were having to resort to fairness because they 2 didn't have a good legal contractual case, whereas, in 3 fact, you know, utterly the opposite was true. 4 Q. You say: 5 "When we asked [Mr] Cavender if he might be wrong, 6 he said that was his advice and he had been successful 7 in a long career. 8 "When the Common Issues judgment came out, the Board 9 asked for a second firm to provide independent advice, 10 challenging our team's position. This was done with 11 eminent QCs but it was not explained to the Board at the 12 point of choosing this advice (again, from my memory) 13 that they were all from the same chambers." 14 We have seen quite a lot of contemporaneous 15 documents that this concerned you. 16 A. Yes. 17 Q. What was your concern that the advice being received was 18 from barristers all within the same chambers; what are 19 you getting at? 20 A. So what I'm getting at is that we had pursued a legal 21 strategy that had proved to be, in the Common Issues 22 Trial, entirely wrong and failed, and what I was 23 expecting had been a re-examination of our position and 24 that isn't what happened, there was a sort of doubling 25 down. So I wanted someone new to come in and start with 48 1 a clear mind, and not be trying to defend what had 2 happened in the previous year. And so I was worried 3 when, very quickly, Lords Neuberger and Grabiner came 4 in -- and look, you know, in Jane's testimony she may 5 say she told me this and I'm sure she's right that she 6 did -- but I hadn't clocked that they were all from the 7 same chambers, and so my question were they going to be 8 as independent and starting from scratch, you know, or 9 were they going to be sort of briefed by David Cavender 10 as a trusted colleague and, you know, start from 11 a different position? 12 Q. You carry on: 13 "We were pushed very hard to appeal. Cavender 14 constantly laded his comments with 'this awful judge' 15 until I had to ask him to stop." 16 Does that refer to you actually telling the 17 barrister to stop saying something? 18 A. Yes. This was in internal conversations, and it's 19 referenced in email, in my thing, I think, when I give 20 a general business update to Tim Parker on email around 21 this time. I made a reference to this, so this is at 22 the time and so, you know, it was "This awful judge, 23 this terrible judge, this awful verdict", and I was 24 saying, you know, this isn't helpful, you know, we need 25 to face the facts as they are. 49 1 Q. "The advice simply doubled down. Eventually and really 2 too late, we changed [General Counsel], added [Herbert 3 Smith Freehills] and changed QC -- instantly the advice 4 changed and we moved on a path to settlement." 5 Then in the penultimate paragraph on this page: 6 "We accepted very bad legal advice. The Board 7 should have had the downside explored and the advice 8 challenged much earlier, as well of course as assessing 9 the earlier prosecutions. This has indeed been a waste 10 of money and a postponement of justice." 11 So, essentially, you were finding the allegation 12 that the claim should have been settled earlier, there 13 should have been an apology earlier and that the Post 14 Office should have moved on years ago, established? 15 A. Yeah, and we should have -- you know, I do believe and 16 it was in my apology earlier, that, you know, this was 17 the first time I've been through a process like this but 18 if we did this again now, and Post Office has learnt 19 some of these lessons, you know, there would have been 20 vastly more broad challenge and debate, probably 21 a completely independent KC going through from a sort of 22 claimant's perspective, and a real debate about the 23 evidence on which we were relying. 24 And I think we accepted the position that that was 25 being done by legal teams and we just didn't do it and, 50 1 had we done so, given what we've heard since and even 2 what we'd heard in 2020, then I think the weakness of 3 the evidence would have had emerged before we went to 4 court. But that is a retrospective supposition. 5 Q. You say, in conclusion: 6 "The seventh wrong is that 'We did not sufficiently 7 challenge and test our legal advice until it was too 8 late'." 9 A. Correct. 10 Q. Thank you. That can come down, thank you. 11 Speaking generally, how did Nick Read receive this 12 communication? 13 A. He and I and Richard, my memory is, debated it once, and 14 Richard made some helpful comments, actually pushing me 15 to the sort of sense that it was -- before it was 16 a contractual problem, it was a cultural problem, and 17 I thought that was right and helpful and adjusted it for 18 that. And, you know, we discussed it again and my sense 19 was that, you know, they'd found it helpful and sort of 20 broadly agreed with it, recognising they hadn't been 21 here in those earlier periods and had less personal 22 experience, and -- 23 Q. Was there any sense you got from the then Chief 24 Executive Officer of the Post Office, Nick Read, that 25 anything you had written here, was heretical or -- 51 1 A. No. 2 Q. -- or fundamentally wrong? 3 A. No. Not at all. 4 MR BEER: Thank you very much. 5 Sir, I wonder whether we could take the morning 6 break now, the first of them, until 11.10, please. 7 SIR WYN WILLIAMS: Yes, of course. 8 MR BEER: Thank you very much, Mr Cameron. 9 (10.56 am) 10 (A short break) 11 ( 11.10 am) 12 MR BEER: Good morning, sir, can you see and hear us? 13 SIR WYN WILLIAMS: Yes, thank you. 14 MR BEER: Mr Cameron, can we just pick up two last points in 15 your "What Went Wrong?" document, please, which I rather 16 skipped over. POL00175235, page 7, please, four 17 paragraphs from the bottom, starting: 18 "We should have been tackling these issues 10 years 19 ago." 20 Thank you, do you see that paragraph? 21 A. Yes. 22 Q. Then four lines in, if it can be highlighted, please, 23 you say: 24 "Paula did not believe there had been a miscarriage 25 and could have not got there emotionally. We believed 52 1 that there were material financial consequences that had 2 to be justified: there was consciousness that this was 3 public money that could not be spent unnecessarily ..." 4 What did you base your view on, that Paula Vennells 5 did not believe that there had been a miscarriage of 6 justice? 7 A. I mean, everything she sort of said at the time. She 8 seemed clear in her conviction from the day I joined 9 that nothing had gone wrong, and it's very clearly 10 stated in my very first Board meeting, and she never, in 11 my observations, sort of deviated from that or seemed to 12 particularly doubt that. 13 Q. So she was unwavering in her conviction that there had 14 been no miscarriages of justice? 15 A. As far as I was concerned, yes. 16 Q. Did that persist right up until you wrote this document 17 in November 2020? 18 A. As far as I know, obviously I wasn't, you know -- she'd 19 left the business in 2019. 20 Q. Yes. Then in the paragraph below, please: 21 "In conclusion, because the deficiencies in the 22 prosecutions had not been identified, [Post Office] did 23 not believe there had been a miscarriage of justice. It 24 was therefore impossible for Paula [Vennells] and Jane 25 [MacLeod] to recommend a settlement that would have cost 53 1 a great deal of money, an apology and would probably 2 trigger new claims and even change the CCRC mindset." 3 Again, you're referring to a change of the CCRC 4 mindset. To what extent, to your knowledge, was that 5 a relevant consideration in not settling the claims? 6 A. My memory of it was not. I mean, my memory of it was 7 that the real issue, which we debated quite a lot in 8 2018 and debated with the Government into October 2018, 9 was that a settlement wouldn't stick. And so the choice 10 was, do you fight a case, win or lose -- of course, we 11 expected to win -- but do you fight a case, win or lose, 12 and then you can reach a settlement later that's in line 13 with expectations and, obviously, we'd have had to have 14 asked permission from the Government for this money, 15 because there a kick-the-can down the road strategy 16 which we chose not to take, which was to settle. 17 We thought we could settle purely financially in 18 2018 before the trials, and we could have done that, we 19 thought, but the view was it wouldn't stick, because 20 what we had already seen was people, I was told, had 21 signed full and fair settlements, postmasters, in the 22 Mediation Scheme, and then joined the GLO. So the 23 feeling was you couldn't genuinely reach a full and 24 final settlement for, you know, 20 million quid. You 25 might reach a settlement but it wouldn't stick and you'd 54 1 have another case two to three years later and we did 2 want, you know, to reach a genuine permanent settlement. 3 But if we had settled then, then it would probably 4 have been years before another case could get funding 5 and work through and emerge, and that would have been 6 the cynical strategy which, actually, we choose not to 7 take. 8 Q. I'm interested in this, and it's the second time we've 9 seen it in the document -- 10 A. Yeah. 11 Q. -- that that a factor brought into the calculus on 12 whether to settle or not was that it might affect the 13 CCRC's views. 14 A. Yes. 15 Q. Did anyone express that? 16 A. I don't remember them doing so but they must have said 17 something or I wouldn't have written it in 2020 but, 18 I must admit, I've forgotten it at this stage. And 19 I haven't seen -- I've, you know, thanks to disclosure, 20 read an awful lot of documents over the last couple of 21 months and I haven't seen any reference to it. 22 Q. Thank you. That can come down. 23 Now, in a number of places in the document, is this 24 right, you are either indirectly critical or directly 25 critical of Ms Vennells. 55 1 A. I don't know, actually -- I can't remember what 2 I particularly thought then. I don't know what I think 3 now and, obviously, I haven't heard Paula's evidence to 4 this, that the mindset I've been thinking about -- it's 5 very easy to sort of go through and say "Wow, yes, I was 6 told that so I didn't do that and I didn't know that", 7 and the question I've been asking myself a bit is, 8 "Well, if I was magically transported back to January 9 2015 and I was joining the Post Office, what would I do 10 differently?", because clearly, it's gone horribly 11 wrong. 12 So I would have to do something differently, whether 13 I was wrong at the time or not. It's what would you do 14 differently? And I think it is testing and challenging 15 that evidence and, clearly, that hadn't happened, and -- 16 but what exactly, you know, whether people knew and 17 chose to disregard or were just glib in ignoring or 18 didn't know, I don't know, and I think you'll be the 19 judge. 20 Q. Do you accept that the document in places indirectly or 21 directly critical of Paula Vennells? 22 A. Yeah, yeah. 23 Q. Can we look, please, at PVEN00000445. It may be this is 24 only available in the pdf format. 25 Maybe there's a bug or even an anomaly! 56 1 A. Here we go. 2 Q. Ah, here we are. Good. Now, this is a new document for 3 the Inquiry. We got it at 11.17 last night from Paula 4 Vennells -- 5 A. Yeah. 6 Q. -- and I think you have been shown it in hard copy just 7 before you gave evidence this morning? 8 A. Yes. 9 Q. It's been put on the tables of the Core Participants 10 this morning. 11 SIR WYN WILLIAMS: Mr Beer, can you tell me the reference 12 again, please, so I've got a clear note of it? 13 MR BEER: PVEN00000445. 14 SIR WYN WILLIAMS: Thank you. 15 MR BEER: We've been told by Ms Vennells' legal 16 representatives that she has conducted some further 17 searches and has found some 50 additional documents that 18 we're to get today, ahead of her giving evidence next 19 week, and this is one of them. 20 SIR WYN WILLIAMS: All right. 21 MR BEER: Can we see the date of it is 28 November '18 and, 22 if we look at the second page, we can see that it is 23 signed off by you. 24 A. Yes. 25 Q. If we look down a little further, yes, and this is your 57 1 writing and your letter? 2 A. Yes. 3 Q. Let's just read through it. So November '18, I think 4 this is when Ms Vennells would have told you 5 internally -- is that right -- 6 A. Yes -- 7 Q. People internally, that she was going to leave? 8 A. Yes. 9 Q. Is this letter written in response to that internal 10 announcement? 11 A. Yes. 12 Q. "Dear Paula, 13 "Before we get into a world of announcements, 14 reactions and plans, I wanted to share what I'm feeling. 15 "Overwhelmingly, it's gratitude. 16 "I have loved the last 4 years. It has been 17 a privilege to serve the Post Office and that has been 18 made possible by you ..." 19 Does that say "bringing me in"? 20 A. I think it does. 21 Q. Okay: 22 "... bringing me in, treating me like a valued 23 partner and supporting me so well. For all of your 24 generosity, thank you. Because your values are so 25 strong, I have learnt so much from you and often asked 58 1 myself: 'What would Paula do?' and I especially admire 2 your self control, your restraint, your constant desire 3 to listen first and your endless ability to make tough 4 decisions and have honest conversations without ever 5 forgetting the individual you are dealing with. 6 "You have a different and a better impact than any 7 [Managing Director] or CEO I have worked for -- the joy 8 of our culture is how unpolitical it is, how collegiate 9 we can be and how shared our sense of urgency is. None 10 of that would have been created without you. 11 "However you are treated (I hope well and 12 fittingly), I know and I hope you understand what 13 a difference you've made to people's lives across the 14 [United Kingdom]. 15 "I really can't imagine doing this without you ... 16 "Thank you so much, 17 "Al." 18 A. Yes. 19 Q. The sentiments that you express in this document which, 20 as I say, has recently emerged, appear rather different 21 from the November 2020 document? 22 A. Yes. 23 Q. So what changed? 24 A. Well, Common Issues judgment, Horizon Issues judgment 25 and a recognition -- and the discovery that the earlier 59 1 trials were miscarriages of justice and that innocent 2 people had been sent to prison are the things that 3 changed. And so, you know, in the November 2020 4 document I'm trying to give, you know, a sense of how it 5 could have gone so appallingly wrong and, obviously, 6 Paula had been running the business for a long time, 7 whereas, in this, I didn't think any of that happened. 8 I didn't know that had happened and what I was 9 responding to was, you know, a personal sense of 10 gratitude. So the mission of helping the Post Office 11 business work better to help post offices stay open is 12 one that emotionally engaged me from the first day 13 I heard about it in 2014, as a possible job, and has 14 never stopped engaging me since. I think it's 15 desperately important and it's an absolute privilege to 16 be able to work on that and that feeling has never 17 changed. 18 And I was grateful to her for giving me the job and 19 working with me and giving me the opportunity, and I had 20 found her, you know, straightforward to deal with. 21 I think -- I mean, the only caveat I would add is 22 I wasn't trying to give her a performance appraisal 23 here. I was trying to say thank you and that was the 24 nature of the letter. 25 Q. You referred to information, facts and evidence 60 1 emerging -- 2 A. Yeah. 3 Q. -- between November '18 and November '20? 4 A. Yeah. 5 Q. Did that, in fact, cause you to change your view of 6 Ms Vennells and her conduct? 7 A. It causes me to be, you know, far less, sort of, 8 simple-minded about it, I had a sort of single view and 9 clearly it's much more complicated than that but, as 10 I think I said earlier, I'm trying really hard not to 11 form a final view of Paula until at least I've heard her 12 testimony next week and probably until I've heard the 13 Inquiry's verdict in due course, because I don't know 14 what to think. 15 Q. Thank you. Can I turn to the second topic, please, 16 then, the Post Office's knowledge of issues with the 17 Horizon system and, in particular, your knowledge from 18 January 2015 onwards. 19 A. Yeah. 20 Q. Can we look, please, at your witness statement to start 21 with. It'll come up on the screen, page 2, paragraph 6, 22 please. 23 I should say, Mr Cameron, if it helps, I'm going to 24 address some of these issues with a relatively light 25 touch because of the answers that you've given in 61 1 relation to the document that you wrote. 2 A. Thank you. 3 Q. Can we look at page 2 of the witness statement, 4 paragraph 6, please. I think we're switching systems. 5 We had a system crash because we had to switch systems 6 in order to display of the new document. 7 I wonder if we could remain in the room for five 8 minutes with you switched off the screen, and we'll call 9 you when we're ready? 10 SIR WYN WILLIAMS: I suppose prior to this Inquiry, I might 11 have been surprised about what are called "system 12 crashes", but perhaps not as surprised now as I would 13 have been then! 14 MR BEER: Thank you, sir. 15 So five minutes, please. 16 SIR WYN WILLIAMS: Yes. 17 (11.26 am) 18 (A short break) 19 (11.31 am) 20 MR BEER: Thank you. Sorry about that, Mr Cameron. We were 21 looking at paragraph 6 on page 2 of your witness 22 statement, please. You say that, if we just scroll 23 down, when you joined the Post Office, remembering 24 that's January 2015: 25 "... the business was confidently communicating that 62 1 it had found no evidence of faults with the Horizon IT 2 System, or that convictions of postmasters had been 3 unsafe." 4 Then the last four lines: 5 "It became clear to me in 2019 that postmasters 6 needed far greater support, and this demanded a culture 7 shift. In 2020, I understood that there had been 8 miscarriages of justice which should never have been 9 allowed to happen ..." 10 Then if we go forwards, please, to page 23 of your 11 witness statement, paragraphs 94 and 95. In 94, you 12 say: 13 "By the time I joined in 2015, the [Post Office] 14 Board had concluded that its IT was old, underinvested 15 and vulnerable. The [Post Office's] IT had always been 16 provided by [Royal Mail Group] but following 17 independence new, separate third party support 18 structures had to be put in place by March 2016." 19 "95. There are a number of concerns regarding 20 Horizon, the 'Front office' IT system. It was dependent 21 on physical data centres which were old and needed 22 continuous investment. It was time consuming and 23 expensive to change. The contract with the system's 24 provider, Fujitsu, was very expensive. It was slow and 25 expensive to extract data from it ... it was still 63 1 understood to be operating effectively ..." 2 Then, lastly, page 105, paragraph 404: 3 "In my executive roles I rarely got involved with 4 issues faced by individual [subpostmasters], as the 5 primary stakeholder relationship with [the Post Office] 6 was through the Network or Retail teams. The teams 7 I was responsible for provided operational support and 8 I tended to see that through the lens of collective 9 statistics, control measures, efficiency, and cost 10 effectiveness." 11 At the end: 12 "However, there were a few individual scenarios that 13 I was made aware of during my tenure which I set out 14 below." 15 Then you start in paragraph 405 with one in July 16 2016, yes? 17 A. Yes. 18 Q. So I just want to look, they're the paragraphs where you 19 speak about your understanding of the IT system, the 20 Post Office's view of its IT system, particularly 21 Horizon, and the extent to which you got involved in 22 individual cases? 23 A. Yes. 24 Q. I just want to look at some individual cases, if I may. 25 A. Of course. 64 1 Q. Can we start, please, by looking at POL00102249. You'll 2 see, at the bottom half of the page, please, an email of 3 1 March 2015, in which Paula Vennells copied you, 4 amongst others, into an email chain of a complaint made 5 by a subpostmaster called Michael Crocker, regarding 6 discrepancies with Horizon, and she says, Ms Vennells: 7 "I would really appreciate your help. This 8 complaint simply shouldn't have reached me ..." 9 Then she says, in her third paragraph: 10 "You will see that I have already asked for Angela 11 to look into the complaint personally. 12 "This needs to be the priority. 13 "However, I am as concerned about the helpline 14 answers and why this wasn't immediately flagged and 15 escalated? We know that scratchcards have caused 16 problems in the past; and as I say above, I'd like 17 confirmation that any of the Sparrow/Second Sight themes 18 are flagged so that colleagues know what to do if they 19 are unable to resolve them at the first line." 20 Go back to the previous page and scroll up, thank 21 you. Ms van den Bogerd replies: 22 "Hi Paula, 23 "I have already actioned your ... request and have 24 dropped a brief email to Michael at the branch", and 25 then some other information. 65 1 Do you know why you were added to this email chain, 2 what had it got to do with you? 3 A. At this stage, I don't think directly -- so I got more 4 involved in operations later, so my memory is that 5 I wouldn't have been directly involved. Paula copied me 6 in on a lot of stuff but I don't know, specifically. 7 Q. This would appear, on the documents that we've got, to 8 be the first occasion, you having joined in January 9 '15 -- this is now March '15 -- in which you had drawn 10 to your attention an issue that, in broad terms, 11 concerned Horizon? 12 A. Okay. 13 Q. Before you joined, had you read any articles or press 14 coverage regarding issues with the Horizon system? 15 A. I don't remember specifically. I would have certainly, 16 as part of a recruitment process, you know, looked at 17 press coverage and I'm sure I would have asked, you 18 know, a question of Paula and Neil Hayward at the time 19 of my recruitment to what their view of that was. But 20 I don't remember it specifically. 21 Q. When you had joined, there had been the Computer Weekly 22 article in May 2009, there had been a series of BBC 23 programmes, there had been the Second Sight 24 investigation -- 25 A. Yeah. 66 1 Q. -- the Mediation Scheme, the Second Sight report in 2 2014; when you joined were you aware of any of that? 3 A. Specifically, I don't think I had read them. So I was 4 aware of the general tenor and noise and, obviously, you 5 know, in my first Board meeting, Paula, in her CEO 6 report, gave a very, very strong view to the Board, 7 who'd been around for a bit and didn't question it, that 8 a lot of work had been done on these things and there 9 was just nothing to see here. 10 Q. And that the Board should move along? 11 A. Well, certainly, I felt, my job -- the reason I'd been 12 hired was to focus on the business as it was in 2015, 13 and so I accepted that as, you know, I could focus on 14 the current business and what had happened before was, 15 you know, other people were dealing with -- been dealing 16 with it for years and were satisfied there were no 17 issues, having done a lot of work. Clearly that was, 18 you know, as I said in my apology earlier, the wrong 19 conclusion to draw but it's absolutely the conclusion 20 I did draw. 21 Q. So when something like this came, in -- 22 A. Yeah. 23 Q. -- you're a copyee, amongst quite a group of senior 24 people, what do you make of it? 25 A. I'm not sure I made anything of this particular one. It 67 1 wasn't my area of accountability, it was one email and 2 I was probably getting 50 emails a day. And I don't 3 think -- no one was saying there can't be any problems, 4 or that branches can't be in the wrong position and, you 5 know, in the second batch of documents I got after my 6 witness statement, there are a lot of these over the 7 next -- you know, there's a dozen of these or so over 8 the next three years. 9 Q. I'm going to go through -- 10 A. Okay. 11 Q. -- not all of the dozen but some of them -- 12 A. Okay. 13 Q. -- some examples of this kind of thing? 14 A. Yeah, okay. 15 Q. It may be helpful if you just describe your generic 16 reaction to getting, say, a dozen emails raising 17 problems with the reliability or the integrity of 18 Horizon? 19 A. Well, so that wouldn't -- so, generally, the pattern of 20 these, having read them again over the last few days, is 21 it's a dozen emails over three years, four years -- 22 so -- three years -- so I wasn't necessarily seeing them 23 as a huge pattern. The general way this worked is they 24 were triggered because Paula had personally got 25 a complaint. She had then distributed it for people to 68 1 look at. Every single time, it's Angela who is asked to 2 investigate it and when there are a response back, that 3 I can see in the documents, and there are on some and 4 not on others, it's generally quite a reassuring 5 response in the sense of "Yes, we've explained that, 6 that postmaster is happy", "That postmaster isn't happy, 7 but I'm clear that this is what has happened". 8 And so what I took from it, you know, rightly or 9 wrongly, was that there was a sort of escalation because 10 we hadn't resolved the issue properly the first time, 11 and that is a good thing to have dealt with and 12 recognised it and that, you know, generally, we had 13 found an explanation that satisfied ourselves. And 14 I don't remember any of them going "Yeah, you know what? 15 There's a problem with Horizon here". 16 Q. Okay, let's look at a few more with some variations on 17 the theme. 18 A. Yeah. 19 Q. POL00233291. Look at the foot of the page first, 20 please. This is an email from you of 1 October 2015. 21 A. Yeah. 22 Q. The way the email is displayed doesn't show who you sent 23 it to but I think we can see, at the top of the page, it 24 was at least to Alwen Lyons, yes? 25 A. Yeah. 69 1 Q. Then if we scroll down back down to your email, then -- 2 also to Gill, which I think must be Gill Tait? 3 A. Yeah. 4 Q. "Gill, 5 "My understanding -- Alwen may be able to confirm -- 6 is that the Board asked, a long time ago, for us to 7 ensure that there was a fully independent review of the 8 new IBM software to ensure that it works accurately 9 before we complete/undertake (?) the rollout. 10 "At the same time, we need to work out who is going 11 to give an expert assurance to the courts that we can 12 rely on the system to prosecute people for theft. 13 Fujitsu used to do this but weren't considered 14 independent enough. 15 "Could you please give some thought to how we do 16 whatever you do to two birds with one stone?" 17 So, firstly, the new IBM software, can you explain, 18 please, what that was? 19 A. Yeah, so when I joined, the Board had been going through 20 a series of IT procurements to put in new support 21 structures for the whole of POL's IT landscape and the 22 assumption, as I understood it, had been that Fujitsu 23 would be most likely to win the front office procurement 24 the sort of Horizon system procurement because -- 25 I mean, they owned it and ran it and no one else 70 1 understood it -- but they had withdrawn from the 2 process, I think just before I joined and -- 3 Q. Just to stop there. 4 A. Yes. 5 Q. That part of what you were later to refer to in email 6 exchanges as sort of a bluff exercise by Fujitsu, as you 7 saw it? 8 A. Well, I didn't know, obviously, but it seemed -- I at 9 least asked myself the question as to whether they were 10 authentically withdrawing or merely putting ourselves in 11 a position where we had to go back and ask them for more 12 help. 13 Q. Okay. Sorry, I #interrupted what you were saying. So 14 you thought that Fujitsu would be the preferred supplier 15 for the front office and you were then going to talk 16 about IBM. 17 A. Yeah, so when Fujitsu withdrew or -- you know, what 18 Lesley Sewell and others were doing was to continue the 19 procurement and it is -- you know, with Government 20 procurements you really do have to be careful about 21 varying them at all. So we continued the procurement, 22 and IBM won, and what they were being asked to do was to 23 build a new version of Horizon. 24 Q. Yes. 25 A. So it would be more modern, it would be better digitally 71 1 connected but it would basically do exactly the same 2 thing, and that was going to cost 100 million or so, and 3 they won that procurement, IBM, and started working on 4 it in 2015. And this got us into difficulty relatively 5 quickly because no one -- I mean, this was a difficult 6 thing to do and it proved more difficult than we 7 realised because, actually, no one knew how Horizon 8 worked and, therefore, recreating it without the help of 9 Fujitsu was phenomenally difficult anyway and, actually, 10 it's a slightly maybe odd thing to do, with the benefit 11 of hindsight. 12 But anyway, that's what the business was doing. And 13 so we were really in doubt that it could be properly 14 finished and rolled out by the date when Fujitsu's 15 contract ended, so we extended the support contract with 16 Fujitsu to give us more time. But by, I think, summer 17 probably of 2015, early autumn, I was getting really 18 anxious that the business just wouldn't be able to do 19 the IBM work, so I asked Chris Broe, who was the Interim 20 CIO because Lesley had resigned and left, to reach out 21 to Fujitsu very quietly and say, "Look, if we don't do 22 the IBM project, would you help and, you know, sort of 23 come back", as it were. 24 Q. Just to cut to the issue there, you foresaw the need for 25 the supplier to be able to give an expert assurance to 72 1 the court that the system could be relied on in criminal 2 prosecutions? 3 A. So, yes, and, you know, I'm sure we'll talk about 4 prosecutions. So, you know, Post Office does give a lot 5 of cash to a lot of people, and it has to be mindful 6 that it gets properly looked after and that someone 7 might steal it or lose it or not control it, and so -- 8 and that was part of, you know, our expectation at the 9 time, that we would go back to -- 10 Q. So here you're referring to the proposed IBM system, not 11 Horizon? 12 A. Yes. 13 Q. Thank you. You say: 14 "Fujitsu used to do this [ie supply expert assurance 15 to the courts that we can rely on the system] but 16 weren't considered independent enough." 17 Who told you that Fujitsu weren't considered 18 independent enough? 19 A. I can't remember, I'm sorry. 20 Q. Had it ever been explained to you by this time, October 21 '15, that the principal witness for Fujitsu, a man 22 called Gareth Jenkins, had been regarded by the Post 23 Office as being an unreliable witness who had breached 24 his duties to the court in the evidence that he had 25 given? 73 1 A. No. 2 Q. By this time, had you been shown or been told about or 3 even had summarised to you the contents of legal advice 4 written by a man called Simon Clarke in mid-2013 to the 5 effect that Mr Jenkins had breached his duties to the 6 court, was a tainted witness and couldn't be relied on 7 by the Post Office again? 8 A. No. 9 Q. Instead, it seems that you had been told by somebody 10 that Fujitsu weren't considered independent enough -- 11 A. Yes. 12 Q. -- and that's why they weren't giving evidence? 13 A. Yeah, all through, you know, as I set out in my witness 14 statement, the time, I had a bee in my bonnet about 15 making decisions properly at the time and I was saying, 16 well look -- and the view, as I understood it from Jane 17 and the Legal Team was, "Look, we haven't done anything 18 wrong and so the reason we're not prosecuting is to give 19 the court cases time to work through and not to rile 20 people, but we'll probably come back to it later". 21 Q. When you say the legal people, can you be more specific 22 as to -- 23 A. Well, I mean, Jane MacLeod specifically. And so that 24 was my understanding, and so what I was trying to say 25 was, you know, "Well, under what circumstances, when? 74 1 What would you need to do to believe that?" And we did 2 make another quite formal decision, I forget exactly 3 when, but Paula takes it to the Board or the GE, I can't 4 remember, and said, "Well, we're not doing it now and, 5 you know, for us to do this again, you would need 6 a really reliable expert witness". And I think that's 7 what -- I'm not sure this was particularly obvious to me 8 at the time but that was clearly what Jane was working 9 on with Deloittes at one point. 10 Q. Thank you. So your view in late 2015 was that the 11 reason that the Post Office wasn't prosecuting wasn't 12 because of an acknowledgement that it had done anything 13 wrong in the past; it was simply a matter of choice? 14 A. That's right. 15 Q. Thank you. Can we move on, please, to 2016. 16 POL00030012. This is an email, if we look at the middle 17 of the page, please, from Rodric Williams, who I think 18 you will have known as a member of the Legal Team -- 19 A. Yes. 20 Q. -- to Rob Houghton? 21 A. Yeah. 22 Q. Do you remember him? 23 A. Oh, yes. 24 Q. What function did he perform? 25 A. He was the CIO who joined in -- who I recruited, who 75 1 joined from Aviva in March/April 2016. 2 Q. He, Rod Williams says -- I'm not going to take you to 3 the whole of the chain because this summarises it: 4 "... Paula's [Ms Vennells] just had another email 5 from Mr McCormack. It's typically intemperate so I'm 6 not inclined to respond, but he does say 'the very same 7 error (ie the 'Dalmellington error') has just reoccurred 8 in another branch in far more serious circumstances'. 9 "Have you got anyone who can check this with 10 Fujitsu?" 11 Now, I'm not going to take you to your witness 12 statement but you say in your witness statement, it's 13 page 105, paragraph 406, in relation to the 14 Dalmellington error, that, when you joined, you 15 understood that the problem had been resolved; is that 16 right? 17 A. Sorry, which paragraph is it? 18 Q. Yes. Page 105, paragraph 406. Let's look at it. 19 A. Yes, so this is precisely dealing with this 20 correspondence. So I saw the earlier emails, up to the 21 point, I think, at which Jane responds and says, you 22 know, that "We're on top of this". 23 Q. Yes. 24 A. I wasn't copied in on the later emails, as you can see 25 from the chain, but what I see in those emails, reading 76 1 them now, is that Fujitsu came back and said, "We 2 understood this, we've already fixed the problem, 100 3 plus postmasters were affected and we've made sure that 4 they're in good shape". And then you get the exchange, 5 which I didn't see, with Tim McCormack saying, "It's 6 happening again", which obviously would call that into 7 question but I didn't see that at the time. 8 Q. I see. So it's the fact that you weren't copied in to 9 the chain -- 10 A. Yeah. 11 Q. -- at the point that I have just displayed -- 12 A. Yeah. 13 Q. -- that meant that you didn't have the knowledge that 14 there was evidence that the Dalmellington bug continued 15 to have effect? 16 A. Yes. 17 Q. Thank you. 18 Can we move on, please. POL00244301, and start at 19 page 5, please. This is an email from a subpostmaster 20 Kirsten Fernforth in Horam to Paula Vennells of 26 July 21 2016, and we will see that later on, I think, you're 22 included in the chain. The subpostmaster says: 23 "I am writing with an issue I have been having in 24 branch and I wonder if you can help. I seem to have hit 25 a dead end with every other avenue available. I have 77 1 been running our Local Plus branch since September 2014. 2 In August 2015, we had a pouch of euros delivered to our 3 branch, which was not input properly onto the system, so 4 didn't show in the stock. It was picked up in 5 a subsequent balance. I called Chesterfield and Bristol 6 to try to locate the pouch number, which would have 7 rectified the problem, but no one was able to give me 8 this information." 9 There's quite a lot of detail. If we go over the 10 page, please, and scroll down, the subpostmaster says: 11 "In summary: 12 "We made a mistake. 13 "We asked for help. 14 "That help didn't come. 15 "It's going to cost me £1,400 that I really don't 16 have spare. 17 "I'm not sure what you can do to resolve a potential 18 system problem. It could take months. What I am asking 19 is that this sum be written off in recognition that we 20 are doing our best, and have been failed by the system 21 in getting a resolution. I am exhausted with dealing 22 with this. My integrity is bashed from it being implied 23 that I took the money. 24 "I didn't. That is all." 25 Then if we go to page 4, please. At the foot of the 78 1 page. Ms Vennells replies: 2 "Dear Kirsten, 3 "Thank you for flagging this -- I hope I can help. 4 This has clearly taken too long to resolve and I would 5 be as frustrated as you are. 6 "We are usually very good at resolving issues, with 7 6 million transactions a day we have to be! 8 "I have copied [you] and Angela van den Bogerd ... 9 I know they will do their best to get to the right 10 outcome." 11 That's on 26 July. Then if we scroll up, on 12 4 August, you email Angela van den Bogerd saying: 13 "There are we on this? Thanks, Al." 14 Just stopping there. Why were you being copied in 15 on this or being sent the complaint to deal with? 16 A. I can't remember, to be honest. I mean, the people who 17 reported to me and what I was accountable for changed so 18 frequently over this period, I can't remember. I can't 19 remember if Angela was reporting to me at the time but 20 she may have just been. Obviously, I didn't come to the 21 CFO role until 2017 so I'm not sure, but that may have 22 been it. 23 Q. Then to page 3, please, bottom of the page, the same 24 day, 4 August. Ms van den Bogerd replies saying Wendy 25 is dealing with it: 79 1 "I've requested the latest position and will revert 2 as soon as I have it." 3 Then further up the page, please, 5 August, the next 4 day: 5 "The latest is we have had all the details we need 6 from Kirsten ... but due to the incident happening last 7 year we need archived data. This typically takes 8 a fortnight to receive from Fujitsu ... Kirsten is happy 9 that this is being investigated properly." 10 Then, at the foot of page 2, Joe Connor, the Head of 11 Shared Services is emailing you saying: 12 "Thanks. Update, please." 13 Then page 1, at the foot of the page, from Shirley 14 Hailstones. Then if we scroll up: 15 "We have now received and analysed the archived 16 data. 17 "Wendy is writing up the full case report ..." 18 Then there's some details, which I'm not going to 19 read. Go over the page, scroll down, "Conclusion": 20 "The surplus is showing present at the branch on the 21 14th ... it is not in the branch by the time the 22 [Overnight Cash Holding] was declared on the 15th. We 23 can assume that during this time, there must have been 24 a corresponding error carried out in branch or user 25 error (whether it be true or deliberate) must have 80 1 occurred." 2 So what was the outcome, as you read it there? 3 A. The outcome, as I read it there, is that the team aren't 4 seeing a system problem; they're seeing human error, and 5 they're going to be talking to Kirsten to sort of take 6 it to the next stage. 7 Q. Which will be for Kirsten to pay up, presumably? 8 A. Presumably. 9 Q. Can we go on, please, to POL00174666, a letter of 10 22 June 2017. If we just look at the foot of page 2, 11 please -- scroll down a bit further -- you'll see it's 12 from Nisha Kaur, a subpostmistress, and it's copied or 13 said to have been copied to you; can you see that? 14 A. Yeah. 15 Q. If we go back to page 1, Ms Kaur says: 16 "I am writing to you out of a sense of desperation 17 regarding present difficulties within my employment with 18 the Post Office. 19 "I would be grateful if you could spend some time 20 reading this letter and helping to resolve issues in 21 a speedy and timely manner." 22 Then there's some detail, if we look at the foot of 23 the page, please: 24 "I did not have any feedback from this until 6 June 25 when he [the Auditor] visited again to tell me to close 81 1 the Post Office business down for 4 hours whilst he and 2 his colleague performed a full audit. I was told that 3 both this audit and the January audit were faultless. 4 He told me I could open the business and that there were 5 no concerns. I spoke to him about the purported 6 computer losses of [£93,000] he [the Auditor] said he 7 had no answer. He phoned the Contracts Manager ... whom 8 I have never met ... who told him that [Ms Kaur] was not 9 allowed to open. No reason was given, the Auditor was 10 surprised at this." 11 So, again, this not Post Office copying you in; this 12 is the postmistress copying you in. What responsibility 13 did you have for resolving issues such as the one raised 14 in this correspondence? 15 A. So this was 2017, I think. 16 Q. It is, yes. 17 A. It is. Then I would have -- 18 Q. June 2017? 19 A. -- had responsibility for the sort of Chesterfield team, 20 certainly, and so I don't remember seeing this letter or 21 seeing additional email correspondence but it's, you 22 know, horrible, and it should certainly have been 23 properly looked into and I can't recall whether it was 24 or not. 25 Q. Did these kind of things tend to get referred to Ms van 82 1 den Bogerd? 2 A. I never felt I was the right person to investigate 3 individual issues, for a variety of reasons. You know, 4 I'm not trained to do that, I've never run a Post 5 Office, I've never worked behind a counter or used 6 Horizon. You know, I've got no legal background. So 7 I felt I was the wrong person to do the investigations. 8 My job was generally just to make sure that they were 9 being done and it is -- was notable to me, looking over, 10 you know, extra documents I was asked to look at over 11 the last few days, as I said, there was sort of a dozen 12 of these, they generally start with a complaint to Paula 13 and it is always Angela van den Bogerd who is asked to 14 investigate it. 15 Q. Do you know why that was? 16 A. My sense, at the time, was that -- and I appreciate this 17 may seem counterintuitive -- that very few Post Office 18 people in the Home Office teams had ever actually worked 19 properly in a post office. There were some, of course, 20 but, generally, you know, people in Chesterfield have 21 been recruited to work in the Support Services, people 22 in the field teams. And so the number of people who 23 were actually experienced in running a post office and 24 using Horizon were very few, and it was a -- you know, 25 an issue and, therefore, I suspect it always defaulted 83 1 to Angela because she had, I think, worked in and run 2 a post office and done years of investigations, and was 3 prepared to go out and talk to postmasters and visit 4 post offices and, therefore, she was probably the best 5 equipped to do that. 6 Q. From memory, I think she told us she left school at 16 7 and became a counter clerk? 8 A. Yeah. 9 Q. Can we move on. POL00163587. Look at page 4, please. 10 Scroll down, please. We can see an email -- you later 11 get copied into this chain -- but it starts with 12 an email from Councillor Geoffrey Hipperson to Liz Truss 13 MP: 14 "Good morning Elizabeth, Help! Our post office is 15 closing (Shouldham). 16 "The reason is disturbing. Apparently there are 17 problems with operating system of the post office 18 computers resulting in accounting anomalies. The 19 amounts in our case bear no relation to the amounts that 20 the subpostmistress handles. I am as sure as one can be 21 that the lady is honest and having run the post office 22 for 29 years has not suddenly started making mistakes. 23 "Unfortunately the situation cannot be endured so 24 the post office is closing. 25 "In fairness I have spoken to representatives of the 84 1 Post Office who are trying to get an interim person to 2 run the office. 3 "What is concerned however, is that this may not be 4 confined to this one office. One ex-postmaster has told 5 me that 'there are hundreds of ex-post office keepers 6 who have been under suspicion or worse because of this 7 problem'. 8 "I have no proof of anything and was only told about 9 this yesterday. 10 "This subject, and the possible implications of it 11 are too much for me to handle." 12 Then Councillor Hipperson signs it off. If we 13 scroll up, please, and a little bit further, we see 14 an email from Liz Truss MP to Ken Penton, and if we 15 scroll down, she says -- it's her case worker in fact: 16 "[Ms Truss] has been contacted by ... Councillor 17 Hipperson", can you look into this, please? 18 Scroll up, please. That then gets forwarded, if we 19 scroll a little bit further, to Paula Vennells on 20 May 20 saying: 21 "I have been contacted again by [Mr Hipperson] ... 22 the Post Office is now closed", please look into the 23 issues. 24 Then scroll up still further, a bit further, please, 25 20 May, it gets sent to you directly: 85 1 "Dear Interim Chief Executive, 2 "... I have been contacted again by my constituent 3 ..." 4 Scroll down. 5 "... post office is now closed", please could you 6 look into the issues. 7 Then scroll up to the top of page 2: 8 "Thank you very much for contacting me and we will 9 revert as soon as possible." 10 Then bottom of page 1: 11 "See below. Can we have chapter and verse tomorrow 12 please." 13 Scroll up. This is from Jane Hill. What function 14 did she perform? 15 A. She was in Mark Davies's team, I think, with 16 a particular responsible for dealing with MPs, I think, 17 but, I mean, again, her role probably changed over time 18 so I could be wrong. 19 Q. So was she a media and communications person? 20 A. Yes. 21 Q. Why would the media and communications person be the 22 right person to investigate and provide a response? 23 A. Only if the underlying issues had already been 24 investigated and the business had reached a conclusion 25 and, therefore, it was about managing the communication, 86 1 rather than the underlying issues. 2 Q. So when communication like this came in from an MP, that 3 didn't trigger an investigation of the substance of 4 matters? 5 A. Well, it might have done and it might have done at some 6 point but it wouldn't -- if people felt it had already 7 been investigated, then it might not have done. It 8 might have been, well, we think we know the answer to 9 this, and I can't remember on this specific which it 10 was. 11 Q. Just scroll back down, please. The people you forwarded 12 to it, Ken Penton, Mark Davies, Amanda Jones and Julie 13 Thomas, were any of them Network people or Operational 14 people -- 15 A. Yes. 16 Q. -- and if so, which? 17 A. Amanda Jones was are running the Network with Debbie 18 Smith and Julie Thomas was running the Operational 19 teams. 20 Q. The response, in fact, came back from a media person. 21 A. Yes. 22 Q. If we just look what they say, so there's a note 23 attached, but: 24 "In summary: 25 "The closure was due to our suspending the 87 1 postmaster after an audit. 2 "The postmaster reported having regular balancing 3 shortages after new Horizon kit was installed last July. 4 "The [post office] was operated from the 5 postmaster's house, so difficult to put in a [temporary] 6 operator. 7 "We are looking at the cost of a mobile [post 8 office] ... 9 "The Contracts team are trying to fix a meeting with 10 the postmaster ... 11 "Ken has updated Liz Truss' office by phone today, 12 and is drafting a note for her." 13 That doesn't really engage with the complaint made, 14 does it -- 15 A. It doesn't. 16 Q. -- which was from a councillor, saying that his 17 constituent had been a trusted postmaster for 29 years 18 and had run the branch without problems. 19 A. (The witness nodded) 20 Q. It seems new Horizon kit had been brought in and then 21 there were losses. Why was it dealt with in this way, 22 as a media issue? 23 A. I don't know, and I haven't seen the attached note but, 24 reading it cold, you know, I think I dropped the ball on 25 this one. I think we should have gone back and said, 88 1 "Well, your answer is all about how we're changing 2 postmaster and opening an office, it's not about the 3 underlying issue", and I am not aware of any evidence 4 that I did that and I should have done. 5 Q. Thank you. Can we move on, POL00280270. This is 6 an email from you to Ben Foat headed "Confidential and 7 privileged", of 2 August 2019. 8 A. Yes. 9 Q. You say: 10 "... I have been made very uncomfortable by an issue 11 at Little Milton post office." 12 That was the post office you referred to in your 13 November 2020 note saying in mid-'19. 14 A. Yeah. 15 Q. "They approached me recently because they had been asked 16 to pay a significant amount (£3,000-£4,000) to us. Kim 17 Abbots got involved but could not explain what had 18 happened remotely. At my suggestion an audit was held 19 and the belief now seems to be that there was no loss, 20 just misbooking of stock and misremming of cash. 21 However, Kim has not yet been able to explain things to 22 my satisfaction. 23 "Could you please work with Kim while I am away to 24 understand what has happened and answer two questions. 25 "1. Is our understanding of what is happening in 89 1 branch sufficient for us to be able to ask for money or 2 suspend postmasters -- it doesn't feel like it. 3 "2. Secondly, should there be any implications for 4 our defence of the [Group Litigation]. 5 "Given our shareholder's focus on a rapid 6 settlement, I would rather you looked at these questions 7 without it being clear I am asking -- I haven't used the 8 whistleblowing process to protect privilege but I am 9 asking for that confidentiality and protection. You do 10 not therefore have my permission to discuss this 11 elsewhere, other than talking to Kim about the 12 specifics. 13 "Is that okay?" 14 So I think at this time, 2 August 2019, you were the 15 Interim CEO; is that right? 16 A. Yes, but it was, I think, (a) before I was about to go 17 on holiday but (b) it was just after I was told that 18 I wouldn't be the CEO and that Nick Read had been 19 appointed and, therefore, I didn't know how long I would 20 be at Post Office. 21 Q. You say: 22 "Our understanding of what is happening in branch 23 doesn't feel as if it's sufficient for us to be able to 24 ask for money or to suspend postmasters." 25 A. That was my question, yeah. 90 1 Q. On what basis were you saying that? 2 A. Well -- and I think, as we've seen from the evidence -- 3 I think I absolutely approached this differently because 4 of the Common Issues judgment. I'm not sure I would 5 have taken the same response the year before. But my 6 understanding of what had happened is that Post Office 7 had -- you know, it's a single-till community branch so 8 £3,000 or £4,000 is just a huge amount of money for them 9 and were asking for help, and so I gave it to good 10 people in the Operations Team and I was expecting them 11 to be able to explain it relatively quickly, and I sort 12 of nagged them over that summer. 13 And my understanding was that the problem is that 14 people had been ill, there had been temporary 15 postmasters in and out and that the stamps had been 16 systematically misbooked in. So unlike cash, and this 17 does need to change, stamps have to be -- when they are 18 delivered or picked up, manually keyed in and out, 19 whereas cash, it's an automated process and you're 20 barcoded and scanned, and that had never happened for 21 stamp. 22 So there had been, I think, over quite a long period 23 of time, lots of noise around the stamps and so you 24 couldn't see -- or the Operations Team couldn't easily 25 see what the underlying problem was because there was so 91 1 much noise on the stamps accounting. And my memory is 2 that, once that got cleared away, the branch was able to 3 resolve the issue itself. I don't think I ever was told 4 what had happened by them, they took it away -- 5 Q. But you're seeing this as an issue not just about the 6 Little Milton Post Office? 7 A. Not at all about the Little Milton post office, really. 8 This is a -- 9 Q. You're drawing a broader -- 10 A. I'm drawing a broader conclusion, which is, if that can 11 create so much noise, which was news to me, in a single 12 post office, then how does that affect the way we're 13 dealing with all the other post offices who might also 14 have got into a muddle on stamps? And so, you know, and 15 that -- hence the two questions, is, you know, if 16 there's noise on stamps, does that change how we 17 approach other branch issues and should we be disclosing 18 this, you know, in terms of the litigation? 19 Q. You were essentially raising this as a whistleblowing 20 complaint -- 21 A. Yeah. 22 Q. -- but outside the formal process; is that right? 23 A. Yeah, and it's a bit odd and it probably felt a bit odd 24 at the time. I probably made Ben's life a bit harder. 25 It was perfectly possible I -- I didn't know Nick at 92 1 this point -- it was perfectly possible he was going to 2 come in and say, "Look, I've got my own finance guy, 3 I want to start again, you know, you're done, move on". 4 So I didn't know if I was going to be there for very 5 long and what I didn't want to happen was for this to be 6 another sort of these corridor conversations where, you 7 know, I flag a concern and then there's new people and 8 everyone moves on and it's lost because I thought it 9 might be important. 10 So my point about formally telling Ben and in 11 writing, before I went on holiday, was so that he had to 12 have a look at it and it had to be dealt with properly. 13 I didn't use any sense -- I think my recollection is 14 that I told Nick about this in our very first meeting, 15 before he even started work, so I wasn't trying to hide 16 it but I didn't know what -- I didn't know how the 17 broader business and the shareholder and everyone was 18 going to react to, you know, we'd had the CIJ not the 19 HIJ and, therefore, was there going to be a closing down 20 and moving on or were we going to be throwing everything 21 open, and I just wanted it there formally so it had to 22 be dealt with. 23 MR BEER: Thank you. We'll pick up what happened after the 24 second break of the morning, please. 25 Sir, can we break until 12.30, please? 93 1 SIR WYN WILLIAMS: Yes, of course. 2 MR BEER: Thank you, sir. 3 (12.18 pm) 4 (A short break). I 5 (12.30 pm) 6 MR BEER: Sir, good afternoon. 7 SIR WYN WILLIAMS: Good afternoon. 8 MR BEER: Mr Cameron, can we pick up where we left off, 9 which was dealing with the Little Milton Post Office's 10 complaint, and we saw your email to Mr Foat. 11 Can we then turn to see what Mr Foat did with it by 12 looking at POL00327569. That's the first page, that's 13 Mr Foat's email. If we look at the second page. We can 14 see your email we've just looked at and so he forwards 15 it on, yes? 16 Then if we go back to page 1, please, he sends your 17 email under the heading "Strictly Confidential and 18 Privileged -- Highly Sensitive -- Not for further 19 forwarding" to Glenn Hall, who I think was a lawyer at 20 Norton Rose -- 21 A. Yes. 22 Q. -- and to Catrina Smith, also a lawyer at Norton Rose; 23 is that right? 24 A. I don't know. 25 Q. And Patrick Bourke, the Director of Public and 94 1 Government Affairs? 2 A. Yes. 3 Q. What was Norton Rose's role at this time, can you 4 remember? 5 A. I wasn't aware that they particularly had one. So we 6 brought them in after the Common Issues judgment, when 7 we were looking for more independent legal counsel, and 8 they did do a bit of work for us, but the decision was 9 to bring Herbert Smith, so I wasn't particularly aware 10 that they were working for us at the time, but that 11 might have been the appeal. 12 Q. Okay. Anyway, Mr Foat towards it on to those three 13 people, he doesn't copy you in but he says: 14 "Thank you for your time. I understand that Norton 15 Rose cannot act in respect of the previous matter given 16 a conflict which is understood. 17 "Unfortunately I have received what I think is 18 potentially another different whistleblowing event. 19 This one is acutely sensitive and is only relevant to 20 [the Post Office] so hopefully there should be no 21 conflict. 22 "You will see from the email below that the current 23 Interim CEO [that's you] is potentially whistleblowing 24 an issue in respect of our Group Litigation issue. In 25 effect, that our procedures around loss recovery isn't 95 1 right and that we are incorrectly seeking repayment from 2 subpostmasters (which is an allegation in respect of the 3 Group Litigation which your firm has some awareness 4 ['of', I think]). 5 "I should point out that the Interim CEO was 6 recently unsuccessful in his application to become the 7 permanent CEO. He will revert back to his CFO role once 8 the new CEO starts on 16 September. From today the 9 Interim CEO is on leave for about a month. Moreover, 10 all of the [General Executive] have been informed that 11 the shareholder intends to penalise their bonuses as 12 a result of the GLO. He [that's you] has sent me the 13 email below. On the one hand he says that he hasn't 14 used the whistleblowing process but in effect seeks to 15 do so and seeks the confidentiality and 'protections'. 16 "This is not the unusual scenario given that its the 17 current CEO of the company that is making the qualified 18 disclosure. I have not managed previously an issue 19 where it is the CEO that makes the whistleblowing. 20 Under the [Post Office] whistleblowing policy it can be 21 made to a line manager or through a variety of channels 22 which is subsequent reported to me as General Counsel. 23 I currently report into the interim CEO who is making 24 the apparent protected disclosure. 25 "I suspect that should there be further reorganising 96 1 of the General Executive Committee subsequent to the new 2 CEO, the Interim CEO/CFO will seek to rely on the 3 protections under this disclosure." 4 Just stopping here, there seems to be quite a lot of 5 mention here about the fact that you were unsuccessful 6 in your application to be CEO. Was the making of the 7 disclosure connected to that in any way? 8 A. I didn't think I was talking about any of that and 9 I think, you know, reading it -- because obviously 10 I don't think I saw any of this at the time -- 11 Q. No. 12 A. -- reading it now, I just want to kind of give Ben a hug 13 because I'd, obviously, made his life really complicated 14 and he was really anxious about it and I didn't mean to 15 do that at all, and I think, by using the word 16 "whistleblowing" in a pretty vague and ignorant way, 17 I think I just really complicated his life for a bit and 18 I hadn't meant to do that. 19 So I just wanted it formally recorded, so that we 20 were definitely going to have a look at it and 21 understand a view before we blew it up if it needed 22 blowing up and that was all I was trying to do. 23 Q. I'm going to skip the next paragraph and read the 24 following one: 25 "I should say I greatly respect the interim CEO who 97 1 I think has done an excellent job and nothing above is 2 to be taken to suggest otherwise but it does seem to me 3 that this is an unusual situation which gives rise to 4 some conflicts and potential risks for the business 5 (down the track). Hence my seeking further advice. 6 "Could you advise me of what steps I should take 7 including what investigation I should undertake; what 8 initial response should be back to Al; whether I can 9 disclose to any other person including the new CEO or 10 shareholder (my understanding is not at least). 11 I suspect that if I am instructed by my line manager 12 that I can only speak to Kim that I will not be in 13 a position to come to any conclusions in respect of the 14 questions that he is seeking. 15 "Look forward to hearing from you." 16 What in the event happened, as a result of your 17 protected disclosure or your disclosure? 18 A. I told Nick about it and, I think -- and then Ben and I, 19 I think, did have a conversation where he explained some 20 of his challenges. I think I said, "Look, don't worry 21 about any of that". So work was done on it. I don't 22 know what happened in terms of -- of the two questions, 23 there was definitely more work done on stamps but I'm 24 getting into an area where Post Office hasn't waived its 25 privilege and I don't think I can talk about that 98 1 without them doing so, my understanding -- 2 Q. Just to test your understanding of why you can't speak, 3 you think the answer to my question might involve 4 disclosing legally privileged information -- 5 A. Yes. 6 Q. -- after February 2020? 7 A. Um, yeah, and information specifically Post Office still 8 has -- 9 Q. Retained privilege -- 10 A. -- retained privilege over. 11 Q. Okay, were you aware whether this issue was raised with 12 Herbert Smith Freehills? 13 A. I don't think I know that. I'd probably assume so but 14 I don't know. And I don't know, you know, what was done 15 in terms of disclosure to the claimants. 16 Q. Okay. Just for the transcript, for later references and 17 not for you at the moment, the answer to my question 18 about disclosure to Herbert Smiths, is found in 19 POL00280603, POL00284503 and POL00327575. 20 So you don't know whether disclosure was made in the 21 Group Litigation of the issue that you had raised? 22 A. I don't remember either way. 23 Q. You don't remember or don't know the answer to your 24 first question, ie what investigation was carried out? 25 A. I do know some of the outcomes of the work that was 99 1 done. 2 Q. Which aren't protected by privilege? 3 A. Well, I think they are protected by privilege, really 4 quite specifically. 5 Q. Okay. Can I therefore move -- if that's an area that we 6 cannot further explore -- to the suspense account. 7 A. Yes. 8 Q. Can we start with paragraph 159 of your witness 9 statement, please, which is on page 38, and you say, in 10 paragraph 159: 11 "On 15 January, very soon after I joined [the Post 12 Office] I was asked by Chris Aujard, Interim General 13 Counsel and others for urgent help to answer questions 14 from Second Sight on the operation of [the Post 15 Office's] suspense account." 16 So this is, I mean, literally the week or so of 17 joining; is that right? 18 A. A couple of weeks after, yeah. 19 Q. Then at paragraph 162, which is over the page, you refer 20 to: 21 "Rod Ismay, who led the FSC, was the right person to 22 handle queries from Second Sight." 23 A. Yes. 24 Q. Why was Rod Ismay the right person to handle queries 25 about the suspense account from Second Sight? 100 1 A. Because I asked the Finance Team and they told me he 2 was, you know, the person who knew most about it. 3 Q. Then at paragraph 165, which is at the foot of the page, 4 you say that you saw a draft response to Second Sight, 5 which you weren't dealing with directly, and on 6 27 January you wrote to Chris Aujard and Jane MacLeod 7 that the response needed to be more comprehensive and 8 data driven. Okay? 9 A. Yes. 10 Q. Can we look at some of the underlying documents, please, 11 and start with POL00218942. If we scroll down, please, 12 and keep going, please, an email from Chris Aujard to 13 you on 16 January, so I think a day after you were asked 14 to address the issue of Second Sight's queries over the 15 suspense accounts. Mr Aujard says to you: 16 "Al -- [for your information] -- just in case the 17 well-oiled PA machine fails to ensure that this gets to 18 you promptly. 19 "As you will see, I really need someone from your 20 team who is technically switched on re suspense 21 accounts, and can handle themselves in front of 22 an adversarial audience. 23 "As you can imagine, I am concerned that we give 24 Second Sight no more information than is necessary to 25 address the narrow proposition that money that is 101 1 'missing' from a [subpostmaster] account is somehow 2 taken into our suspense account and then appropriated to 3 our [profit and loss]." 4 So Second Sight had asked for information, yes? 5 A. Yes. 6 Q. Mr Aujard was saying to you that Second Sight should be 7 given no more information than is necessary to address 8 the narrow proposition made by them, yes? 9 A. Yes. 10 Q. Was that generally the approach that Mr Aujard took, 11 ie to be as restrictive as possible in the disclosure of 12 information? 13 A. With Second Sight, yes. 14 Q. Was that a theme of his engagement, so far as you saw 15 it, with Second Sight? 16 A. Yes. Yeah, my understanding was that there was 17 a disagreement about the scope of Second Sight's work, 18 and I'm not sure I understood it very precisely, but 19 what I took from that was that Second Sight had been 20 employed to look at individual cases in the Mediation 21 Scheme and to follow them where they went, whereas what 22 they were doing on suspense accounts was exploring 23 a hypothesis that money was being held there and 24 released to the P&L, which should have belonged to 25 postmasters, but which hadn't come from, as I was being 102 1 told, the underlying cases. 2 I have to say, I thought this was a pretty silly 3 point on which to pause and, quite frankly, if there was 4 a problem with the suspense accounts, you know, as the 5 brand new CFO, I wanted to know about it. 6 So, you know, I think I generally sort of pushed 7 back at this very narrow approach at this point. 8 Q. Do you know why Mr Aujard took a restrictive approach to 9 the disclosure of information generally to Second Sight? 10 A. No, I did ask him. We came out of one -- I mean, 11 I never found Second Sight at all adversarial. The 12 meetings were all extremely sensible and, you know, 13 open. And I did -- I do remember asking Chris in the 14 corridor after one of those meetings where he had 15 been -- I don't know quite what the right word is -- 16 sort of chippy, with Second Sight, why, and he said, "Oh 17 they just annoy me". 18 Q. "They just annoy me"? 19 A. Yeah. 20 Q. If we go up to see what your response was to page 1. 21 You say: 22 "Rod Ismay is the right person to do this." 23 Second paragraph: 24 "As ever, I may be more inclined to be open, while 25 recognising the desire not to set more hares running." 103 1 The line, "As ever I may be more inclined to be 2 open", did that reflect your general approach -- 3 A. Yes. 4 Q. -- to Second Sight? 5 A. Yes. 6 Q. Why did you adopt that approach? 7 A. If there was a problem in the suspense account or 8 anywhere else, I thought we were better knowing that and 9 then we could deal with it. So fine, we could close it 10 down and push for time, or whatever, but, actually, 11 I wanted to know if there was a problem and I thought 12 Second Sight had been employed by Post Office to do 13 a job; you know, their view of this job was that they 14 wanted to look at suspense accounts, we should let them 15 look at suspense accounts. I couldn't see the point of 16 saying no. 17 Q. You say, "whilst recognising the desire not to set more 18 hares running"; what were you concerned about there? 19 A. So I think the concern I was hearing, you know, bearing 20 in mind it was the second day I had heard about this 21 issue, was that I think -- and I'm sort of slightly sort 22 of trying to remember here, that there was a feeling 23 that Second Sight would just go on forever asking 24 questions that hadn't been sourced from individual cases 25 and, therefore, we didn't just want to be on a treadmill 104 1 of forever asking questions. I think that's what I was 2 referring to. 3 Q. Thank you. Can we move on, please, a separate topic. 4 Can we look at paragraph 111 of your statement on 5 page 128, please. You say: 6 "With hindsight I would now conclude that 7 insufficient exclude of Horizon was undertaken before 8 finding postmasters to be at fault for unresolved 9 shortfalls." 10 I think that's something we've seen reflected in 11 an email that we looked at earlier, and in your "What 12 Went Wrong" document. 13 A. Yes. 14 Q. "I also acknowledge that even as we sought to answer 15 questions on the safe working of Horizon as it operated 16 at that point, this does not mean that it operated 17 effectively in earlier periods. I also question the 18 conclusion that postmaster training was fundamentally 19 sound. In 2017, when I was more involved in operations, 20 I attended a 2 day training course for new postmasters 21 and did not consider it to be a strong basis to support 22 [subpostmasters]. I later chased for improvements as 23 a result of this." 24 I just want to examine what material you had at the 25 time on these issues and whether hindsight was necessary 105 1 to reach the conclusion that you did there. 2 A. So taking the points in turn, I think the insufficient 3 scrutiny for unresolved shortfalls was a conclusion 4 I reached later and that was with hindsight. I think 5 I was clear -- I think I've seen emails as part of 6 preparing for this -- that I was making the point pretty 7 consistently throughout, that, just as I was saying this 8 appears to be working okay in 2015, I think 9 I acknowledged at the time that that didn't mean it was 10 working in 2005 or 2010 because -- and no one was asking 11 me to say that. I mean, the Second Sight questions, for 12 example, were all about what was happening in 2015. So 13 I think I was very clear on that at the time. 14 Postmaster training operated in three stages in 15 2017: there was some online training, which I did; there 16 was then a two-day classroom session, which I attended 17 and thought -- and there's an email setting this out 18 somewhere -- that it was really poor as a two-day 19 training course; and the third piece was, you know, 20 someone spending time with the new postmaster in branch 21 for a couple of days doing the cash transfers and the 22 balancing, and that sort of thing in real life, and that 23 bit I didn't do. 24 So I wasn't making a particular conclusion on the 25 whole of postmaster training but I was really clear 106 1 that, you know, the two-day course was poor. 2 Q. Thank you, can we look at some of the underlying 3 documents then, please. 4 A. Sure. 5 Q. Start with POL00027728. Look at page 3, please, at the 6 foot of the page, "Dear Paula Vennells", this is 7 an email from a man called Martin Barfoot, who I think 8 is a member of the public not a subpostmaster. This is 9 a chain that eventually finds its way to you: 10 "Dear Paula Vennells 11 "I need to contact you directly to bring a matter to 12 your attention. 13 "I paid my income tax bill via the Post Office on 14 23 December 2014. The cheque was made payable to the 15 Post Office and the money (£3,885) left my account on 16 30 December 2014. Since the 31 January deadline for 17 payment HMRC has been sending me many demands for 18 payment, including fines, as they have not received 19 payment. I have had to make several lengthy phone calls 20 and write 2 letters including scans of my receipt and 21 bank statement. 22 "I revisited the post office branch ... on 28 March 23 and was told that the payment had been held up in 24 a holding account, but was being directed to the correct 25 account. I did not completely understand these details 107 1 but was assured the money would go to the correct place. 2 "Still the demands and fines were sent to me, and 3 HMRC have been phoning me. So I revisited the post 4 office again and was told I needed to raise a complaint. 5 After the lengthy phone call I did so ... I have sent 6 a copy of the scanned receipt as requested, 3 weeks has 7 passed and no response has been forthcoming. 8 "I am a Homephone customer. I am amazed that the 9 Post Office would a) not pay the bill, b) not return the 10 cheque uncashed to the bank, or to me, c) not tell me my 11 bill is unpaid, d) cash the cheque and keep my money for 12 over 5 months now. It is virtually theft." 13 If we see what happens to that, please, back to 14 page 3. Scroll down, please, and again. Keep 15 scrolling, page 3, thank you. 16 Reply by Ms Vennells on the same day: 17 "... thank you, first of all for taking the time to 18 let me know. This is the first time I have heard 19 anything like this happening -- I am very sorry. And 20 would be as frustrated as you rightly are. 21 "Please leave this with me -- I will get on to it 22 today and either I or one of my senior managers will 23 respond to you personally." 24 If we go further up the page and look up the foot of 25 page 2, Gavin, that's Gavin Lambert, on an email chain 108 1 that you're copied in on: 2 "... can you personally handle this please. 3 Although I expect it is a one-off, as I genuinely 4 haven't heard of anything like this before, we have been 5 inept in handling it and I would like to learn the 6 lessons, once it is resolved. 7 "More immediately and importantly, it will be 8 unhelpful if any Sparrow connection is made, as 9 reference to money held in holding accounts has also 10 been voiced by the JFSA. My understanding is that this 11 is not the case. Can I have this reconfirmed as well 12 please." 13 So do you understand what happened Ms Vennells is 14 referring to there, where she is saying it would be 15 unhelpful if any Sparrow connection is made? 16 A. I assume she's referring to the suggestion that money is 17 being held in suspense accounts. 18 Q. Ie this money might be held in a suspense account, 19 a Post Office suspense account, we don't want 20 a connection made with the allegation that JFSA is 21 making that subpostmaster money or disputed amounts of 22 money is being held in suspense accounts? 23 A. Yes, I think so. 24 Q. Okay: 25 "I would like it resolved today. Certainly senior 109 1 contact made with Mr Barfoot. 2 "... I have copied a number of colleagues in as I'm 3 not ... sure who is best placed to help. Could each 4 person copied please read and get in touch with Gavin if 5 you can help, or know where to point him. 6 "Al is away, so Colin and Rod copied in his 7 absence." 8 Just a little further on the Project Sparrow, why 9 would there be a connection made to Project Sparrow? 10 A. I don't know why Paula made that connection but, I mean, 11 I assume it is because Second Sight were questioning 12 whether we were holding money in suspense accounts. 13 Q. So any -- would this be right -- additional evidence of 14 holding money in suspense accounts would be unhelpful? 15 A. If it's postmaster money, yes, but, as I understood it 16 and understand it, it wasn't. 17 Q. No, this is a member of the public -- 18 A. Yes. 19 Q. -- paying or trying to pay their tax bill? 20 A. Yes, absolutely. 21 Q. So how could a connection be made with Sparrow? 22 A. I don't know what Paula was specifically meaning and 23 I didn't interpret, I don't think, as anything other 24 than suspense accounts is one of those phrases that 25 people, you know, recognise. 110 1 Q. Was the Post Office at this time very sensitive as to 2 its brand image and reputation and how that might be 3 damaged by the allegations being investigated by Second 4 Sight about the holding of subpostmaster money in 5 suspense accounts? 6 A. I don't recall there being a specific concern about 7 suspense accounts in terms of brand image. It was just 8 one item on Second Sight's list. Was Post Office 9 sensitive to its brand reputation as the whole of the 10 Mediation Scheme played out, was closed, postmasters 11 continued to, you know, say they thought things were 12 wrong? Yes, absolutely. 13 Q. Thank you. That can come down. 14 Were you aware of any attempts made politically, or 15 with politicians, in order to seek to ensure that 16 politicians did not raise issues or focus on issues 17 concerning the reliability of Horizon at this time? 18 A. I don't remember anything. I've certainly seen, you 19 know, a document in this pack where Mark Davies talks 20 about it, although I'm not sure I saw it at -- maybe 21 I did see it at the time. I don't remember it being 22 a big conversation, certainly. 23 Q. Let's look at the document I think you're referring to. 24 POL00152283. If we scroll down to the middle of the 25 page, please, there's an email from Mr Davies to Paula 111 1 Vennells, to you and to Neil Hayward. What did 2 Mr Hayward do at this time? 3 A. He was the People or HR Director, I forget his title. 4 Q. Headed "[Business, Innovation and Skills] committee", so 5 that's a Parliamentary Select Committee: 6 "Paula 7 "Some good news. The new chairman of the Business, 8 Innovation and Skills committee is Iain Wright, a very 9 good Labour MP who both Jane ..." 10 Presumably that's Jane MacLeod? 11 A. Might be Jane Hill. 12 Q. Which is more likely? 13 A. I would have thought Jane Hill, personally, because she 14 worked with politicians and worked in Mark's team but 15 I could be wrong. 16 Q. Okay: 17 "... who both Jane and I know. Can't promise he 18 won't look at Horizon but much better chance of avoiding 19 it. I have dropped him a line. You will remember he 20 was mentioned by the minister last week." 21 Was there an effort made by the Post Office, to your 22 knowledge, to steer Parliament away from looking too 23 closely at Horizon? 24 A. I don't know. I don't remember there being a considered 25 effort. Were those arguments made in individual 112 1 conversations? Well, reading this, yeah, it looks like 2 it but I don't know. I mean, I think probably -- and 3 I didn't remember this one -- I just thought it was 4 "Look, aren't I doing a good job", sort of "Don't I know 5 everyone", sort of comms bullshit, really? I didn't 6 take it terribly seriously and I didn't think a Select 7 Committee Chair would have been put off an important 8 subject by an old mate. 9 Q. You didn't get to see the line that Mark Davies said 10 that he had dropped the chairman of a select committee? 11 A. Not as far as I'm aware or that I've seen since. 12 Q. If the Post Office was confident in the robustness of 13 Horizon, which I think it says that it was at this 14 time -- 15 A. Yeah. 16 Q. -- why would the Post Office not want a select committee 17 looking at it? 18 A. I guess because preparing for select committees -- and 19 I have done one -- is a very serious and time-consuming 20 business. You know, you don't just turn up and answer 21 questions. You really, really prepare for them and it 22 takes a lot of a CEO's time, and so I imagine, you know, 23 that the reason would be that. 24 Q. So are you saying you didn't take seriously the 25 suggestion that the Head of Communications and Corporate 113 1 Affairs was making, that he might make an attempt to 2 steer a select committee's sight away from Horizon? 3 A. No, I don't think I did, otherwise -- I mean, if I'd 4 been worried about it, I'd probably have remembered it. 5 MR BEER: Thank you. 6 Sir, it's 1.00. I wonder whether we might break 7 until 1.50, please? 8 SIR WYN WILLIAMS: Yes, all right. 9 MR BEER: Thank you, sir. 10 (1.00 pm) 11 (The Short Adjournment) 12 (1.50 pm) 13 MR BEER: Good afternoon, sir, can you see and hear us? 14 SIR WYN WILLIAMS: Yes, thank you. 15 MR BEER: Good afternoon, Mr Cameron. 16 Can we turn to some cultural or big picture issues, 17 please, and, in particular, the attitude of the Post 18 Office towards its subpostmasters. Can we start by 19 looking at POL00354059. Can you see that this is 20 a draft "Management Information Review" produced for the 21 Post Office Group Executive. Can you tell us what the 22 purpose of a Management Information Review of this kind 23 was? 24 A. I don't have a great recollection of this specific piece 25 of work, but -- and it's not an uncommon business 114 1 problem, I've come across it before but you do want to 2 get your management information in the best shape you 3 can, so that you have one version of the truth and 4 you're measuring the right things and you're doing it in 5 the right way, and that it's easily accessible to the 6 people who need it. So it's often a matter of making 7 sure that you've got some discipline about where you get 8 the information from, and you're presenting it in 9 a consistent, decided way. And I think this was 10 probably a sort of first go at trying to understand the 11 landscape, from my point of view. 12 Q. Were these kind of documents produced with any 13 regularity? 14 A. No, I don't think so. 15 Q. You'll see the purpose is described as to: 16 "... update the Group Executive on the recent 17 Management Information Review and to recommend next 18 steps and a longer term route map to improve the 19 [management information] which is available to steer 20 Post Office to meet its strategic objectives." 21 Under paragraph 2.1, it says that: 22 "A review has been carried out at the request of the 23 Group Executive ... over a 7 week period under the 24 sponsorship of Alisdair Cameron." 25 Is that right -- 115 1 A. Yeah. 2 Q. -- that this was under your sponsorship? 3 A. Yes, completely so. 4 Q. So was this to introduce a system by which management 5 information was regularly and uniformly provided to the 6 Group Executive or to review the way in which that 7 information was provided and to potentially change it? 8 A. I think more the latter, from memory. 9 Q. You'll see from the foot of the page -- and it's on the 10 foot of every page, if we just scroll down, please, 11 underneath the helpful triangle is Mr Goodman's name -- 12 A. Yeah. 13 Q. -- and a date of May 2015. Who was Peter Goodman? 14 A. So he was a member of the Finance Team that was in place 15 when I joined Post Office Limited and he worked for us 16 for another -- I can't remember but 18 months or so? 17 Q. Thank you. Can we just look at a couple of things that 18 the review, or at least this draft of the review, says. 19 Look at page 2, please. Scroll down to the blue box, 20 under "Findings", the first finding, "Content": 21 "Too much focus on sales volume/value and income." 22 Does that mean that the Post Office was too focused 23 on "sales volume/value and income", or that the 24 information that was provided to the Group Executive was 25 too focused on "sales volume/value and income"? 116 1 A. I think it probably means both. 2 Q. Right. Was it correct that the Post Office, in March 3 '15, was too focused on its sales volumes/value and 4 income, in your view? 5 A. So I think -- and it's probably a fairly standard CFO 6 complaint -- is a lot of commercial teams get very 7 excited by sales volume, and the question that the CFO 8 always asks is, "Well, yeah, but are we making a profit 9 from it". 10 Q. Yes. 11 A. And so I think it was -- that that was, as I remember 12 it, the focus of that first line. 13 Q. Then, if we look at the third page, please, second blue 14 box down, first bullet point: 15 "Too many versions of the truth (Credence, Finance, 16 local spreadsheets, client information -- eg Supply 17 Chain and Royal Mail maintain own branch databases in 18 addition to Network owned database)." 19 Firstly, can you explain in either the corporate 20 world, or in information technology, or in management 21 speak, what a "version of the truth" means? 22 A. So you can look at a particular area and, depending -- 23 and I'm struggling to think of an example off the top of 24 my head but, depending on how you've chosen to manage it 25 and what information you're disclosing -- I don't know. 117 1 If you look at customer complaints, if you -- there 2 are many different ways you can look at customer 3 complaints and it could be on average how long they take 4 to answer, whether they are ever repeated, what's the 5 longest answer, you know, there's lots of different ways 6 you can look at it. And what you want, in a perfect 7 world is a single view of all those things measured from 8 the right information. And so you might focus on one 9 area but you've got the others there, measured in the 10 same way. 11 And when you've got too many versions of the truth, 12 you've got a person who keeps their own spreadsheet that 13 tells you, "Well, this is that", and then you've got 14 a system over there that tells you how many and they're 15 not really properly aligned or consistent and, 16 therefore, someone can say -- so, I mean, I can give you 17 a real example on the profit because I remember, you 18 know, a particular instance of this. So Credence 19 produced volumes, sales volumes, but it wasn't very good 20 at the values. So it was a reliable system for the 21 volumes, so I never used it for values because it had 22 a limited ability to work out the value per product. 23 So if you used Credence, you could say "Oh, we've 24 had a good week", but you might not have done in terms 25 of value, it was only useful for branch volumes, whereas 118 1 the finance system would tell you the rest. Sorry, does 2 that help? 3 Q. Yes, thank you. Going back to page 2, please "Too much 4 focus on sales volume/value and income", just scroll 5 down, please, you tell us in your witness statement 6 that: 7 "At the heart of the issues experienced by Post 8 Office was a culture which stopped us from dealing with 9 postmasters in a straightforward and acceptable way." 10 Did a focus on sales volume/value and income 11 contribute to that failure? 12 A. As I say, I think the sales volume versus profit was the 13 point I was trying to get to. So, in that specific 14 instance, really not, but I think throughout this -- and 15 I made comments in my witness statement about the Audit 16 Committee -- we were consistently treating postmasters 17 as someone else, rather than as a core part of Post 18 Office. 19 Q. Why was that? 20 A. Well, I think technically, of course, the vast majority 21 of postmasters are independent third parties and so it 22 was sort of technically true, and I think we were 23 absolutely focused, and I was being absolutely focused 24 on -- well, the two big focuses of in my first few years 25 in Post Office was getting the financial controls right 119 1 and getting the profit to improve, the trading profit, 2 and so, in both cases, you're very much focused on 3 what's on your balance sheet and what's in your P&L and 4 not on other people. And I think there was a relentless 5 focus on that. 6 Q. So you don't draw a direct line between what's recorded 7 here and the way in which Post Office treated its 8 subpostmasters? 9 A. Not on the specific comment about sales volume because, 10 as I say, I think -- but, I mean, it's a long time ago 11 now -- but I think that specific reference was income 12 versus profit, rather than Post Office versus 13 postmasters, but the wider point still stands. 14 Q. Thank you. That can come down. 15 We've seen in your "What Went Wrong" paper, you set 16 out your belief that, at the heart of the issues 17 experienced by the Post Office, was a culture that 18 stopped the Post Office from dealing with postmasters in 19 a straightforward and acceptable way. 20 A. Yes. 21 Q. You tell us in your witness statement -- no need to turn 22 it up -- it's paragraph 386: 23 "This skewed Post Office's judgements about 24 prosecutions and the subsequent management of the 25 litigation." 120 1 In what way did the Post Office culture stop the 2 Post Office from dealing with postmasters in 3 a straightforward and acceptable way? 4 A. I think, by setting out the belief we referred to 5 earlier, that a postmaster was accountable for whatever 6 happened in a post office, I think, yes, there was 7 a logic to it but it gave Post Office an excuse, in 8 a way, not to investigate it because the burden was on 9 the postmaster, rather than Post Office and Post 10 Office's financials. 11 And I think one point where I saw that and, you 12 know, it was genuine moment of being ashamed, is one of 13 the areas I hadn't really looked at, was suspensions, 14 and the judge obviously told us that we couldn't -- that 15 we had to pay people during a period of suspension and 16 when, you know, he said that, we thought, "Yeah, well 17 that must be right", so we started doing that. And 18 a few months later, one of the Operational people, you 19 know, told me that, because this was now a cost to Post 20 Office, the number of suspensions and the duration of 21 the suspensions had fallen. 22 And I thought, oh, that is just awful, isn't it? 23 Because it wasn't in our P&L, we just didn't prioritise 24 it and the second it's in our P&L, we do a better job 25 and a fairer job, and I was really ashamed of that. 121 1 Q. The culture about which you speak in the paper and in 2 your witness statement, which prevented or stopped Post 3 Office from dealing with postmasters in an acceptable 4 way, who drove that culture? 5 A. I think, you know, we all did, in a way, because it was 6 the focus on -- so the absolute -- from shareholder to 7 Board to Executive Team and, absolutely, to me -- I was 8 absolutely part of this -- the focus was on improving 9 trading profit in the belief that we could provide the 10 investment in the business, and that Government subsidy 11 would reduce over time, and it did. I think its peak 12 was 415 million and it was down to sort of 50 million at 13 one point, although not sustainably so. 14 And, you know, that felt like an important component 15 of making the business sustainable. 16 Q. Just stopping there -- 17 A. Please. 18 Q. -- do I understand you to say that the Government 19 encouraged the drive for profit? 20 A. Oh, yes. 21 Q. Did it demand the drive for profit? 22 A. I don't think "demand" is -- so, in setting its 23 priorities and the priorities of the shareholder 24 representative, improving commercial performance, making 25 it more commercially sustainable was a priority for 122 1 everyone, absolutely. 2 Q. Were members of the General Executive incentivised to 3 contribute to that drive for profit by their own 4 personal remuneration? 5 A. Yes, absolutely. 6 Q. Would you agree that, up until the time you that speak 7 about, of the two judgments, the 2019 judgments, the 8 drive for profit was central to the Post Office's 9 strategy? 10 A. Yes. 11 Q. To the detriment of subpostmasters? 12 A. I didn't think so at the time because one of the engines 13 of improving the profit was to very assertively reduce 14 the costs of Post Office Limited, its staff costs and 15 its non-staff costs, and I've always believed that doing 16 that was very pro-postmaster and, when I've spoken to 17 postmasters, you know, they would all say, "In my 18 experience, the Post Office was too expensive, too 19 bureaucratic, sucking up too much of the income in its 20 own stuff". 21 So I thought taking 100 million a year out of those 22 costs was good for everybody because, in any given year, 23 there was more money available for postmasters and more 24 money to invest in the business and make it run better 25 and be more resilient. 123 1 That said, we could have absolutely taken 2 a different view of how we invested that money and where 3 we invested that money and done far more, which we 4 started to do much more in 2019/20 to make the business 5 simpler and better for postmasters. 6 Q. You tell us in your witness statement -- there's no need 7 to turn it up, it's paragraph 6 -- that: 8 "It became clear to me in 2019 that postmasters 9 needed far greater support and this demanded a culture 10 shift in the Post Office." 11 A. Yeah. 12 Q. What was it about 2019 that made it clear to you that 13 postmasters needed far greater support? 14 A. So it had been developing over 2018, so Debbie Smith was 15 Retail Director in 2018, and she had worked at Boots for 16 a long time, and she was making the point, you know, 17 really quite clearly that, in her experience, as, you 18 know, a proper retailer, we didn't treat postmasters 19 with as such support and -- well, as much support as 20 retailers like Boots would treat their own shops. 21 And she wanted more people in the field, more 22 support and she and I and Rob Houghton spent a few days 23 in Chesterfield in the summer of 2018 trying to bring 24 all these themes together, and she convinced me she was 25 right and so, as I got more into that sort of Interim 124 1 Chief Executive space in 2019, that was the priority: 2 it's the priority I set out to the Board, it's the 3 priority I set out in my speech to the NFSP. 4 Q. We heard from Mark Davies that, similarly in 2019, it 5 was necessary to tackle a culture in some quarters which 6 wrongly placed subpostmasters in a subordinate role, as 7 he called it. Do you agree that, at least until 2019, 8 subpostmasters were seen by the Post Office as being in 9 a subordinate role? 10 A. I never really thought about that phrase and I don't 11 know precisely what Mark was alluding to but they were 12 seen as, sort of, someone else, a third party, like 13 a client, to some extent, and just didn't get, you 14 know -- as Debbie got more into it, there were people 15 who just hadn't had a visit -- postmasters who hadn't 16 had a visit from Post Office for years, and -- 17 Q. How about that they weren't seen as de facto business 18 partners of the Post Office, which they were, given 19 their financial investment in their post offices? 20 A. Oh, they hugely were and the one that really sort of 21 took me aback was when I was doing that NFSP conference 22 and I said, you know, postmasters are the heart and the 23 blood, or something, of Post Office -- which, of course, 24 they are because, I mean, the DMBs were a red herring, 25 you know, there are 11,500 post offices and, whatever 125 1 there were, 150, at the time, Directly Managed Branches. 2 And so, you know, without postmasters there is no Post 3 Office and Post Office Limited only exists, you know, to 4 keep postmasters in post offices. 5 And so I'm -- 6 Q. Sorry to interrupt, were they seen as a different kind 7 of species, essentially, from -- 8 A. I think they were -- 9 Q. -- centrally managed, directly managed branches? 10 A. Yes. 11 Q. And as a lesser form? 12 A. No, I don't think that's right because we were furiously 13 shutting directly managed branches at the time, but the 14 bit -- sorry to complete the too long anecdote -- I did 15 that speech in ten minutes and a postmaster stopped me 16 as I came out in the break and said, "You know, you said 17 that, did you really mean it?" And I said, "Well, yes 18 of course I did. I mean, it's obvious Post Office 19 doesn't function without postmasters", and he said, "No 20 one has ever said that to us before", and I thought "Oh, 21 my goodness, it's worse than I thought". 22 Q. You tell us in your witness statement -- perhaps you'd 23 better turn it up -- it's page 13, paragraph 56, you say 24 paragraph 56, foot of the page: 25 "... with hindsight I feel that the ARC ..." 126 1 That's the Audit, Risk and Compliance Committee -- 2 A. Yes. 3 Q. -- which is a committee of the Board? 4 A. Yes. 5 Q. "... did not tackle the evidence underpinning the 6 performance of Horizon nor meaningfully consider the 7 potential outcomes for postmasters if there were issues 8 with shortfalls and balancing. Postmasters are rarely 9 mentioned in the documents and are treated as a third 10 party rather than an integral part of the business." 11 A. Yes. 12 Q. Is it implicit in that paragraph there that 13 responsibility for tackling the evidence concerning the 14 performance of Horizon fell to the Audit, Risk and 15 Compliance Committee of the Board? 16 A. No, I wouldn't say that but I think it should have been 17 there in the risk registers, there should have been 18 discussions about, well, how are we doing this? Are we 19 doing enough? Are we doing the right things? Where's 20 the evidence? Which there were in other areas. And 21 so -- 22 Q. To your knowledge, was -- sorry to speak over you, 23 Mr Cameron -- the integrity and reliability of the 24 Horizon system ever on a risk register? 25 A. Looking back at the documents, I don't think it was. 127 1 Q. Do you know why that was? 2 A. I'm speculating a bit. It didn't strike me as peculiar 3 until I went back and read the documents now but 4 I assume that Horizon was seen as fundamentally 5 a Fujitsu accountability. But, I mean, that isn't 6 an excuse. Reading it back again, it clearly feels 7 wrong. 8 Q. Where, within the organisation, would responsibility 9 rest for the drawing up of an appropriate risk register 10 that would have included or should have included Horizon 11 on it? 12 A. So I think those teams reported to Jane MacLeod from 13 2015 to 2019, and to me, after Nick arrived. 14 Q. So to you from -- can you give us a date? 15 A. Oh, middle of 2019, after Jane left. 16 Q. Yes. How big were the teams that drew up the risk 17 register? 18 A. I'm thinking half a dozen people because the view was 19 that the risk registers should be drawn up across the 20 business by different parts of the business, and the job 21 of the risk team -- although I'm sure it evolved at 22 points -- was to help them do that and then consolidate 23 a view that the Audit Committee or the Board or the 24 Executive could look at. 25 Q. The misfunctioning or non-functioning of Horizon was 128 1 plainly a risk to the business? 2 A. Yes, it was, and we were doing, obviously, work on 3 income flowing through, and it wasn't unusual to me. 4 I'd seen in a previous experience of not being able to 5 sort of audit through a system, so the external auditors 6 did a lot of work with Fujitsu on the controls around 7 Horizon and, if they didn't think they were good enough 8 in any particular year, they did additional substantive 9 testing. We developed a whole financial control 10 framework to go through all the income, follow it 11 through to reconcile it to third party sources, to test 12 it, do a lot of testing after the balance sheet date 13 and, you know, slowed down the speed at which we signed 14 the accounts to do more post-balance sheet testing. 15 So there was a lot of work being done. 16 Q. Again, can you assist as to why, to your knowledge, 17 Horizon never made it onto a risk register of the Post 18 Office? 19 A. I don't know that I can. I've suggested that it is 20 perhaps that it was considered something Fujitsu was 21 doing but, in reading the documents again, for the 22 purpose of this Inquiry, it struck me as -- immediately 23 as odd. 24 Q. We hear quite often how many transactions a day, how 25 many transactions a week, how many transactions a year, 129 1 the amount of money that was put through the Horizon 2 system or processed by the Horizon system; isn't it 3 self-evidently obvious that the non-functioning or 4 misfunctioning of the system was a risk that ought to be 5 registered? 6 A. Yes. 7 Q. Control measures -- I mean, the idea is not just to 8 register a risk; it's to introduce control or mitigation 9 measures to reduce or eliminate the risk? 10 A. And I think a lot of that work was being done and the 11 fact it wasn't debated in the risk register doesn't mean 12 it wasn't but, clearly, it would have been much more 13 satisfactory if that had been openly and consistently 14 debated through that period, and it wasn't. 15 Q. Thank you. That document can come down. 16 Did there ever come a time when you believed that it 17 would be necessary or desirable for the Post Office to 18 recommence prosecuting? 19 A. I asked the question on a number of occasions, as in, 20 "Are we making a deliberate decision here? Do we know 21 what the factors are?" We never got to a point or 22 anywhere close to it where we had a real conversation 23 about under what circumstances would we, and we never 24 got near a point where we thought about recommencing it, 25 but it was definitely a part of the background 130 1 conversation. 2 Q. Can we look, please, at POL00249527, and look at page 2, 3 please, and just scroll down, please -- sorry, page 3 4 not page 2. An email of yours of 27 June 2017 -- 5 A. Yeah. 6 Q. -- under the heading "Ops Board and Losses & Crime 7 Group". Can you explain what that group was, please? 8 A. So Operations Board was, you know, me working with 9 people to consistently, probably monthly, review 10 performance efficiency costs of different operational 11 teams and -- 12 Q. That's different from the Management Board, is it? 13 A. Yes, and Losses and Crime Group, I think -- and I must 14 admit I don't remember it particularly well -- was, you 15 know, trying to understand where we were losing money 16 and what we could do to stop that happening. 17 Q. You say: 18 "The guidance yesterday was that we should not 19 attempt to prosecute any cases where the losses had 20 arisen from or were identified via trading and Horizon 21 rather than a straight theft, until two things happen. 22 Firstly we complete the Deloitte work on systems 23 reliance. Secondly the CCRC opine. The former is fine 24 and I gather we are close. The second I want to make us 25 to make as a formal judgment with Paula engaged because 131 1 it is a big deal, with an open timetable and a strong 2 sense that this is now costing us blood." 3 What did you mean by that sentence? 4 A. So, as I think I said earlier, so I think there's three 5 things in this. The first is this was going to be a big 6 decision if we ever took it and we never got close to 7 taking it and, therefore, I wanted us to do it 8 thoughtfully and properly, and make it as a big 9 decision, which is something I really strongly believe 10 in on many fronts. Secondly, it was a big deal if we 11 ever changed that and, therefore, Paula absolutely had 12 to be engaged with this. This couldn't be a, you know, 13 lower level decision. It was a big decision, it had to 14 go to the Board. We didn't know what the timetable 15 would be. 16 And "costing us blood", which is clearly not 17 a phrase which reads well now, was simply saying that 18 the losses in the Network, which could be from a variety 19 of causes, you know, one might be shortfalls that we 20 didn't recover, one might be theft and robbery by third 21 parties but those losses were growing over time and 22 could continue to grow if we didn't do anything about 23 it. 24 Q. What did you mean by "is now costing us blood"? 25 A. Well, that's what I mean, is the costs were going up, 132 1 and the fear is, you know, that they would keep on going 2 up and, you know, as well as all the other 3 accountabilities, we are accountable for managing a lot 4 of public money. We have hundreds of millions pounds of 5 cash at any moment in post offices and moving back and 6 forward, you know, repatriating 80 million, 90 million 7 a day now, because obviously the -- you know, and we 8 have to look after that money. It's taxpayers money and 9 we have to be alive to that. 10 Q. You continue: 11 "My preference would be to do the Deloitte work ..." 12 I think that's referring back to Deloitte work on 13 systems reliance; is that right? 14 A. Yes, I think so. 15 Q. What did you understand Deloitte were doing? This is 16 mid-2017. 17 A. Yeah, I got, at times, a little bit confused between the 18 Deloitte work that never really happened on suspense 19 accounts, the Deloitte work for, you know, the 20 Chairman's review, the Deloitte work for the GLO 21 preparation and this Deloitte work. So I don't think 22 I was ever entirely clear what Deloitte was doing but, 23 clearly, I understood that they were doing some work on 24 the reliability of Horizon, as part of that package of 25 concern, and I think there's a document somewhere where 133 1 they were doing work to see if they would be appropriate 2 to be an expert witness. 3 Q. Okay. At least that was your understanding. 4 A. Yes. 5 Q. You say your preference would be: 6 "... to do the Deloitte work and then seek 7 a prosecution relying on Horizon in a single sympathetic 8 case -- admission, good evidence, not too sympathetic 9 a postmaster, not part of the GLO ... And then we will 10 know." 11 What did you mean, "And then we will know"? 12 A. Was the way the system was working capable of supporting 13 a legal case if we were convinced that a postmaster had 14 stolen money? So, if we were convinced of that and it 15 was one of the cases where the evidence was relying on 16 Horizon, would it stand up to legal scrutiny? And that 17 was clearly important to all the future decisions. 18 I didn't know whether it would or not and that was the 19 idea of saying, "Well, look, let's just take a case, not 20 a controversial case or political case, but let's just 21 take a case, a new case, where we really believe that 22 someone has stolen and put it in a court, and see 23 whether they agree or not". Of course we never got 24 anywhere near that. 25 Q. You say: 134 1 "In the meantime I have a specialist team setting up 2 prosecutions that will never happen." 3 What was that, the specialist team setting up 4 prosecutions that weren't going to happen? 5 A. So there was a smallish team which sometimes, I think, 6 worked for me and sometimes for Jane, who were the 7 people who would collect evidence under PACE and had 8 done so in relation to earlier prosecutions and this was 9 partly a sort of budget argument between myself and 10 Jane, because I was sort of saying, well, you know, we 11 need to keep cutting our costs. If we're not going to 12 be using these teams to do any prosecutions, then 13 presumably we don't need that level of skill -- 14 Q. We can lay them off, as you say here? 15 A. Sorry? 16 Q. We can lay them off, as you say here? 17 A. Yeah, so if we didn't need them and we could do 18 investigations differently, then my question was "Do we 19 need them?" 20 Q. To what extent were the proposals that you were making 21 here connected to or separate from the product of the 22 Chairman's review conducted by Jonathan Swift? 23 A. As far as I was concerned, completely separate. I never 24 saw the product of the Chairman's review. 25 Q. You never saw it -- 135 1 A. No. 2 Q. -- in your time at the Post Office? 3 A. No. 4 Q. Did you know about it? 5 A. I knew it was happening but I never saw the output that 6 I'd remember, or anything I've seen in documents. 7 I don't think I saw it. 8 Q. Can we look at your witness statement, please, at 9 paragraph 37, please. If we read paragraph 37, you say: 10 "During 2016-2017, I understood that Tim ..." 11 That's Tim Parker. 12 A. Yeah. 13 Q. "-- commissioned a Chairman's Review at the request of 14 Baroness Neville-Rolfe, to investigate matters related 15 to postmaster complaints and the Mediation Scheme. I do 16 not know how this work was reported, or how it was 17 transitioned from the Chairman's review into preparation 18 for the [Group Litigation]. The work was legally 19 privileged, and my recollection it was not shared, even 20 with the Board." 21 You were later included in work on suspense 22 accounts: 23 "On reflection, the Board should have insisted on 24 seeing and understanding this work as part of our 25 preparation for the [Group Litigation]." 136 1 You say there the work was legally privileged. By 2 mentioning that, are you giving that as a reason or 3 a possible reason why it was not given or shared with 4 you? 5 A. That was my understanding. 6 Q. Where did you get that understanding from? 7 A. Well, I thought it was from Jane. 8 Q. So Jane MacLeod told you that the reason why Jonathan 9 Swift's review was not being shared with you was because 10 of privilege? 11 A. That's my recollection but, you know, when you hear from 12 her, if she disagrees -- 13 Q. We're not going to hear from her. 14 A. Okay. 15 Q. She lives abroad -- 16 A. Okay. 17 Q. -- and won't cooperate. 18 A. Wow. 19 Q. So that's why I'm asking you -- 20 A. Okay, so that is my recollection, was that Jane was 21 holding this and, when you speak to Tim Parker, he can 22 probably explain what he was told by Jane as to how this 23 material had to be handled but my understanding was that 24 this was legally privileged and couldn't be shared, 25 except with the Chairman, and that was it. 137 1 Q. Did that understanding that you got from Jane MacLeod 2 extend to that being the reason that the Board didn't 3 get to see -- 4 A. Yes. 5 Q. -- the report from Jonathan Swift too? 6 A. Yes. 7 Q. Did the Board, to your knowledge, know about the 8 existence of the Chairman's review? 9 A. Oh, yes. 10 Q. Was there, to your knowledge, a summary or a synthesis 11 of it given to the Board? 12 A. Not as far as I recall. 13 Q. So does it follow that the board knew of the existence 14 of Jonathan Swift's review but didn't ask to see it, to 15 your knowledge? 16 A. I think that's right. I think I'd been told they 17 weren't going to see it and I don't remember there being 18 a particular argument or debate about that but my 19 knowledge may be incomplete. 20 Q. Did you ever question the suggestion that it was 21 a privileged document, ie had been prepared for the 22 purposes of, in broad terms, litigation? 23 A. Yeah, I don't -- 24 Q. In contemplation of litigation? 25 A. I don't think I did, which, you know, was clearly wrong. 138 1 Where I did push back was on things that were, you know, 2 specific, like if there was work being done on the 3 suspense accounts, I was saying "Look, I have to know 4 that, as CFO", but, more broadly, no, I didn't. 5 Q. Thank you. 6 My last topic, then, please. The NFSP. Can we 7 look, please, at paragraph 405 of your witness 8 statement, please -- I'm so sorry, it's 411, on page 9 107, foot of the page. This is the chapter or section 10 of your witness statement that deals with the NFSP and 11 you say that: 12 "At the [General Executive] on 12 March and the 13 board meeting on 18 June 2015 [the Post Office] approved 14 a new agreement with the NFSP whereby [the Post Office] 15 would provide most of the NFSP's funding. The agreement 16 also included a clause that the NFSP could not criticise 17 [the Post Office] in public. It is clear to me that 18 these facts undermined NFSP's independence from [the 19 Post Office] in its representation of [subpostmasters]." 20 Yes? 21 A. Yes. 22 Q. What was your understanding as to the extent to which 23 the Post Office provided NFSP funding before March '15? 24 A. I don't remember, actually. So I think it had 25 produced -- provided some but nothing like as much as 139 1 now was being proposed but I could be wrong. I don't 2 remember. 3 Q. What was your understanding before March 2015 as to 4 whether any agreements between the Post Office and the 5 NFSP included clauses forbidding the NFSP from 6 criticising the Post Office in public? 7 A. I'm not sure until it came to the Group Executive that 8 I'd thought about the NFSP much in my first couple of 9 months but my memory is that those clauses were new. 10 Q. Can we look, please, at NFSP00001075. Can you see this 11 is the Grant Framework Agreement between the Post Office 12 and the Federation? 13 A. Yes. 14 Q. I think this is the agreement to which you're referring, 15 isn't it? 16 A. I think so. 17 Q. Can we look, please, at page 10, and can you see under 18 "General Conditions of the Grant", at paragraphs -- and 19 we're going to look at 5.1, 5.2 and 5.3. At 5.1: 20 "Both parties shall use reasonable endeavours to 21 identify any issues which will or may create tension 22 between the interests of [the Post Office] and those of 23 Post Office Operators and use reasonable endeavours to 24 resolve any such issues. 25 "For the avoidance of doubt, it is acknowledged that 140 1 the NFSP may ... 2 "1. Represent individual Post Office Operators; 3 "2. Discuss and comment on [the Post Office's] 4 initiatives, policies and strategies with its 5 membership; 6 "3. Publicly comment on the same; 7 "4. State and explain its opinion on the same, even 8 if not in support of [the Post Office]; and 9 "5. Lobby relevant stakeholders such as [Business, 10 Innovation and Skills] and Royal Mail Group on behalf of 11 its members. 12 "5.3. The NFSP shall not engage in any of the 13 following activities or behaviours: 14 "1. Undertaking any public activity which may 15 prevent [Post Office] from implementing any of its 16 initiatives, policies or strategies; 17 "2. Undertaking or inducing a third party to 18 undertake media or political campaigns against [the Post 19 Office]; 20 "3. Organising or inducing a third party to 21 organise public demonstrations, protests or petitions 22 against [the Post Office]; 23 "4. Organising or inducing a third party to 24 organise boycotts of [the Post Office's] business. 25 "5. Funding or inducing any third party litigation 141 1 against [the Post Office]; and 2 "6. Other activities or behaviours the effect of 3 which may be materially detrimental to [the Post 4 Office]." 5 The agreement does not, therefore, contain 6 a clause -- and this is the only relevant part of it 7 I believe -- that the NFSP should not criticise the Post 8 Office in public, does it? 9 A. Reading it again, it doesn't. I believed it did and 10 I believed we sort of waived the clause in 2019, and 11 I had always understood that that was the case, but 12 I didn't go back and read this. And I think there is 13 a reference in one of the documents as to the clause we 14 unpicked in 2019 and whether it's 5.3 here, I'm -- 15 Q. It is, there is indeed a variation -- 16 A. Okay. 17 Q. -- prepared in 2019, which, at paragraph 2.1.8, proposes 18 to delete some parts of clause 5 -- 19 A. Yeah. 20 Q. -- including paragraph 5.3. Just for the record, the 21 crossreference is NFSP00001082 but that variation in 22 2019 doesn't affect the fact that, as originally drafted 23 in 2015, there isn't a clause which prohibits the NFSP 24 from criticising the Post Office in public? 25 A. I thought there was. I apologise. 142 1 Q. Where did you get that understanding from? 2 A. I think it must have been from the conversations in 3 2015, I think there was a sense of, "Well, if we're 4 going to be paying all the money, they can't, you know, 5 call us out in public", but, clearly, wiser heads 6 prevailed and it was a more limited set of restrictions. 7 I still think a lot of 5.3 is onerous and reducing it in 8 2019 was the right thing to do and that's what we did. 9 Q. In fact, the deed of variation hasn't been signed, 10 I think, by the Post Office -- 11 A. My goodness, I didn't know that. 12 Q. -- despite, as I understand it, the NFSP seeking to 13 persuade the Post Office to do so. 14 A. I do find that peculiar because I think, as Interim CEO, 15 I stood up and said that we would or had. So I'm 16 astonished. 17 MR BEER: Mr Cameron, thank you very much for answering my 18 questions. 19 I believe there are some questions on behalf of one 20 Core Participant, namely Mr Stein, on behalf of the 21 Howe+Co group. 22 Oh, sorry, two Core Participants sir, five minutes 23 on behalf of the HJA group. 24 SIR WYN WILLIAMS: I'm only hesitating because I'm 25 wondering -- it's very nearly 2.40 -- whether the 143 1 questions are of such a length as we require some kind 2 of break. If they're literally ten minutes and five 3 minutes, then, obviously, we'll carry on but, otherwise, 4 we might need to think about a break. 5 MR BEER: Sir, I'm assured by nods and non-verbal 6 communication of other types that they are 15 minutes at 7 most so we will finish by 3.00 and, therefore, I don't 8 think we need a break. 9 SIR WYN WILLIAMS: Fine. 10 Questioned by MS PAGE 11 MS PAGE: Thank you, sir. 12 Just a very short number of questions about the 13 Finance Team. In your witness statement -- it's at 14 paragraph 191 -- I don't intend to call it up, you say 15 this: 16 "My emerging view across my first year at POL was 17 that the competence of the Finance Teams and the control 18 environment were weaker than they should have been. 19 There were people with operational capabilities 20 undertaking financial roles." 21 Am I right in thinking that's Chesterfield that 22 you're talking about? 23 A. Yes. 24 Q. So, in effect, it's Mr Rod Ismay's team at Chesterfield? 25 A. Yes. 144 1 Q. When you started to worry about that, did you take it up 2 with Mr Ismay? 3 A. I don't know how much I did talk to Rod about it and how 4 much I just got on with what I thought needed doing, 5 which was to start to bring new people in and change the 6 senior Finance Team and create a very formal and 7 detailed financial controls framework that operated in 8 a way I thought was appropriate from past experience, 9 which took a couple of years to be fully embedded, and 10 to progressively develop the Finance Team's capability, 11 which is vastly better than it was then. 12 Q. What impact did that have on the extent to which you 13 felt able to trust Mr Ismay? 14 A. I don't know that it had much impact. I think I always 15 assumed that Rod was, you know, telling me the truth, as 16 he understood it at the time but -- and I can't remember 17 when this happened, but I did feel that we needed 18 stronger people. So very little of the senior Finance 19 Team -- I think any one member of the very senior 20 Finance Team, which he wasn't in at that point -- 21 survived more than a couple of years and, you know, we 22 made progressive changes and Rod was one of those in 23 2017-ish, I'm not sure. 24 MS PAGE: Thank you. Those are my questions. 25 THE WITNESS: Thank you. 145 1 Questioned by MR STEIN 2 MR STEIN: Mr Cameron, as you may be aware I'm Mr Sam Stein. 3 I represent a large number of postmasters/mistresses and 4 other people that worked in branches. 5 Just on a matter you were dealing with, with 6 Mr Beer, you were talking about the agreement with the 7 NFSP and your thoughts that they had had an extra 8 restriction on criticising the Post Office. 9 A. Yeah. 10 Q. The term that's used which might be described as 11 a catch-all is -- I won't bring up the document, I'll 12 just repeat it. 13 "The NFSP shall not engage in any of the following 14 activities or behaviours." 15 Then the sixth point for that is: 16 "Any other activities or behaviours the effect of 17 which may be materially detrimental to [the Post 18 Office]." 19 Do you think that that is where you drew the 20 conclusion that it's a bit wider than it seems? 21 A. It may have been. I don't recall. 22 Q. In 2019, you encouraged, I think, in a speech, that the 23 NFSP should be more active -- 24 A. Yes. 25 Q. -- and, in fact, I think in your statement -- again, 146 1 I don't need to take you to it -- you think that they 2 did become more active and that led to an increase in 3 pay? 4 A. So I thought that the brilliant work the NFSP did was in 5 the second quarter of 2019 because they did the survey 6 of members and, whilst the corporate postmasters, or 7 whatever it was, were going to throw the keys in wasn't, 8 I think, sort of literally true, I think it was a really 9 impressive signal of intent and I thought they lobbied 10 to get the select committee very effectively and really 11 ramped it up. 12 I actually felt then when they turned up at the 13 Select Committee they slightly lost their nerve and 14 didn't push the point as hard as they might have done. 15 And I've always said the same things to the NFSP and 16 they get irritated with me for doing so, which is that 17 if this was working right, postmasters would voluntarily 18 pay the subs to fund the NFSP because they would see 19 value in it and then they wouldn't need to be funded by 20 Post Office Limited. They were only funded by Post 21 Office Limited because postmasters won't fund it. And, 22 if postmasters funded it because they really felt they 23 were standing up for them, then that would be better. 24 Q. Because they'd feel invested in the organisation -- 25 A. Yeah. 147 1 Q. -- and part of it? 2 A. Yeah, and postmasters would be comfortable that the NFSP 3 was really standing up for them. 4 Q. Now, help us, going back now to 2015, why did the Post 5 Office want to -- I'm going to use the word "shackle" -- 6 why did the Post Office want to shackle the NFSP in this 7 way? Now, you've explained why Post Office needed to 8 pay -- 9 A. Yeah. 10 Q. -- but you've not explained why it is that you think 11 there was this need to mute them at that time? 12 A. Um, I don't really remember but I think there was 13 a sense of "Well, if we're paying for it, you know, they 14 can't just walk out and criticise us", and, you know, it 15 may even have been me that said that, I can't remember, 16 but I think it was that sense of "Well, if we're paying 17 for everything, you know", and I have a -- I mean, lots 18 of people have different views on what's independence 19 but my view was very firmly sort of trained in from 20 an external audit relationship, where I'd spent a lot of 21 my career, and it's really, really clear that, if you're 22 getting a lot of your income from one source, you're not 23 independent of that source. 24 It's like, oh, I mean, I'm independent of the Post 25 Office; well, of course I'm not because they pay my 148 1 salary. And that was my sense of it. 2 Q. Obviously, this is the same time, 2015, whereby there's 3 the -- well, the issues have exploded all over the Post 4 Office already -- 5 A. Yeah. 6 Q. -- but they are continuing? 7 A. Yeah. 8 Q. All right. Now, I'm going to turn to a different matter 9 and I'm going to drawing on your expertise and training 10 as an accountant, and then your work in the Post Office. 11 All right? 12 A. Okay. 13 Q. Okay. Now, stop me when I go wrong with this because 14 you may well understand this better than I do. First of 15 all, the starting point is, is that the Horizon system 16 is meant to be a double entry bookkeeping system, yes? 17 A. Yes. 18 Q. Overall? 19 A. Yeah. 20 Q. All right, so what should happen is that money coming in 21 should be accounted for against an item. So I'm going 22 to use stamps as my example, all right? 23 A. Okay. 24 Q. So money coming in to a branch for 20 stamps, that 25 should be capable of being accounted within the system, 149 1 presumably using a date mark and some reference point to 2 it being stamps; is that fair? 3 A. Yeah, I think the transaction should be recorded, yes. 4 Q. Transactions should have an identification -- 5 A. Yeah. 6 Q. -- otherwise you don't know what on earth the money is 7 for? 8 A. Yeah. 9 Q. Again, that's right. All right. Now, we know from the 10 evidence of subpostmasters and mistresses and their 11 managers and their assistants that what would happen 12 when trying to balance accounts on occasions would be 13 that Horizon would say there's a shortfall -- 14 A. Yes. 15 Q. -- but it would not be referenced to a particular item 16 like stamps or anything else. It would just say there 17 is £5,000 that should be here and then subpostmasters, 18 their helpers, their family members, would then try and 19 find, wherever they could -- it would take hours and 20 hours, evening after evening, they were trying to find 21 out what this £5,000 represented. 22 A. Yes. 23 Q. You've heard that evidence? 24 A. Yes. 25 Q. Right. So help us a bit more with this. When the Post 150 1 Office, through the Horizon system, theoretically 2 identified a shortfall -- I'm using £5,000 as 3 an example -- of £5,000 for a branch, that wasn't 4 referenced by the Post Office to a particular 5 transaction. That's not what the subpostmasters say. 6 They don't say they were told "Look, it's the stamps" or 7 something else, they were just told "It's 5 grand". 8 A. Yes. 9 Q. Help us try and understand how that could occur, how 10 Post Office would just simply say it's £5,000, and not 11 reference to any particular transaction with 12 identification? 13 A. Because I think what you had was a cash shortfall. So 14 what the Post Office view was, you know, at this point, 15 you said you had this much cash, last time you did 16 a cash declaration or last time it was counted or 17 whatever it was, and these are the transactions flowing 18 in and out. But, you know, if this was a few days, that 19 would be easy. If it was 18 months, you were getting 20 downloads from Fujitsu, there were hundreds and hundreds 21 of transactions. But if you follow through all those 22 transactions, you should now have £20,000 in cash left, 23 and we've counted it, and there's 15. 24 Q. Yes, so by it being identified in that way as a cash 25 shortfall, from the subpostmaster's point of view, it 151 1 wasn't identified as being -- again, I'll go back to my 2 stamps -- it wasn't identified as being £5,000 out of 3 the stamps', you know -- 4 A. No. 5 Q. -- transaction till -- 6 A. No, exactly. 7 Q. -- from their point of view? 8 A. Yes. 9 Q. It didn't have an ID. 10 A. Or from Post Office's point of view. So they didn't -- 11 Post Office wouldn't have known what had gone wrong, if 12 you like, in order to make up that shortfall. The whole 13 point was Post Office didn't know what had happened. 14 Q. Yes. Okay. So let's just take this one step further. 15 Now, the subpostmaster had been confronted with this 16 shortfall. We know that the systems within and 17 discussed in the judgments of Mr Justice Fraser were 18 that the subpostmasters were under pressure, putting it 19 as neutrally as I can, to pay up for shortfalls. 20 A. Yes. 21 Q. Right. You've gone through, in your evidence with 22 Mr Beer earlier today, about how you think that started 23 because it was a way of "We didn't know what happened in 24 the branches"? 25 A. Yes. 152 1 Q. All right, so let's stay with my example: shortfall, 2 5 grand, subpostmasters trying to work out what on other 3 is going on, it's not identified to a transaction. 4 Okay. So next step is, subpostmaster is under pressure 5 to pay the £5,000 -- 6 A. Yes. 7 Q. -- shortfall, and we've heard examples of people selling 8 pensions and raiding piggy banks, and things, dreadful 9 things? 10 A. Yes. 11 Q. They pay the money in to balance that shortfall, yes? 12 A. Yes. 13 Q. Now, going back to when suspense accounts occurred, that 14 would be what was occurring, yes? 15 A. Um -- 16 Q. So money would be disputed by putting it into suspense 17 and then eventually paid off. 18 A. No, I think -- well, I think this is where we have to be 19 careful of terminology and I'm very careful on this in 20 2015. So, in 2015, the suspense accounts were 21 accounting balance sheet accounts in which unresolved 22 transactions were held and these were primarily customer 23 issues. So they weren't about the postmasters. 24 Q. Okay, that's 2015? 25 A. So that's 2015. I do say in one of the emails that's in 153 1 my evidence pack that my understanding in 2015, what I'd 2 been told, is that local branch accounts had been called 3 suspense accounts 10 years earlier and I specifically 4 ask "Are we sure, with the Second Sight investigation, 5 that they want to talk about suspense accounts today not 6 the branch accounts?", and they said yes or I was told 7 they said yes. 8 Q. All right, let's go back to my example, all right? 9 5 grand, postmaster pays it in. Now, when the 10 postmaster pays in the £5,000, got through however, loan 11 shark, or whatever: they're paying it in. 12 A. Yes. 13 Q. That then is being paid into the Post Office -- 14 A. Yes. 15 Q. -- and there's no transaction that's identified for it. 16 They are simply paying off the shortfall; do you agree? 17 A. Yes. 18 Q. Right. So when that money is being paid in, identified 19 shortfall, Horizon may be making it up, paid off by 20 subpostmaster. Now, that doesn't go back to any 21 transaction, any purchase, anything that is bought or 22 paid for at the branch at all. Where is that accounted 23 for within the accounts? Do you understand what the 24 problem is? 25 A. Um -- 154 1 Q. My transaction -- 2 A. -- I'm happy to try to explain. 3 Q. Yes. 4 A. So when a shortfall is identified, there is a potential 5 loss to the Post Office in the sense that it views that 6 money as should be there, the system says it should be 7 there and it's not there, so there's a debit and, at 8 first, that debit was held as an amount owed by the 9 postmaster. So we're saying, until proved otherwise, 10 this is the postmaster's accountability and they owe us 11 the money, was the way it was accounted for. 12 And then after 60 days, so quite a short space of 13 time, if the postmaster hadn't paid that amount back, 14 what Post Office considered a debt, then it was written 15 off to the profit and loss account. So it was a loss 16 for Post Office, compared to what it believed the 17 position was at that point, and then it -- 18 Q. So if they did pay it though? 19 A. If they did pay it, then there wasn't a loss to Post 20 Office because the money was restored to where the 21 system said it should have been. 22 Q. But it was never referred, ever in this situation that 23 we're describing, to an actual transaction? 24 A. No. 25 Q. It was never referred to stamps or any other transaction 155 1 that might take place? 2 A. Unless, you know, we'd found a specific explanation -- 3 Q. Right. 4 A. -- we didn't know what had caused it. 5 Q. Right. So going back to my example, where you've got 6 this £5,000 being identified, theoretical £5,000 by the 7 Horizon system, subpostmaster paying it in. 8 A. Yes. 9 Q. Was there, at that stage, then someone designated to go 10 find out what on earth this was meant to represent? Go 11 find out what on earth this transaction was meant to 12 have been all about? 13 A. So I think at times people did try but I don't think 14 they tried hard enough. I mean, let's be clear and 15 that's part of what I was talking about in 2020, because 16 it was just too convenient. You know, that the theory 17 was only the postmaster knows what's happened, therefore 18 until proved otherwise, they owe us the money, and that 19 will restore the system to where it was. And so I don't 20 think there was enough investigation on that and, 21 indeed, I think, you know, Post Office General Counsel 22 has said that no investigations before, you know, 23 a certain date, would pass, you know, Mr Justice 24 Fraser's test of evidence to support. 25 Q. The other consequence of this, I think you'll agree, 156 1 Mr Cameron, is that, if you're not looking into things 2 that relate to the shortfall, subpostmaster stumping up 3 the cash, getting it from wherever and trying to 4 identify where on earth this came from, then that's 5 masking, again, potential problems in the Horizon system 6 because nobody is looking into it properly? 7 A. It might be. 8 Q. Yeah, okay. Now, let's go back, then, a bit further. 9 Now, the branch suspense accounts. Now, these were held 10 locally. So branch suspense accounts were where 11 shortfall identified, there was an ability that was 12 removed around 2006 to put monies into suspense, as 13 a result of the IMPACT Programme; were you aware of 14 that? 15 A. I think I've heard it. I don't understand the detail of 16 it because it was a long time before I joined. 17 Q. It may be a long time ago, Mr Cameron, but you have said 18 in your evidence that you thought there were limited 19 investigations and questions in relation to some matters 20 and one of those was suspense accounts. You've also 21 said, later on in your evidence, that when suspense 22 account questions came up, you decided to look into 23 this. 24 A. So -- 25 Q. Why didn't you go back and try to understand what on 157 1 earth had happened in those earlier days? 2 A. Well, happy to answer that. So in terms of what I think 3 of suspense accounts, the proper balance sheets suspense 4 accounts that I referred to and which we discussed with 5 the Second Sight in 2015, my understanding of the 6 immediate task was to see if there was evidence of 7 a problem in suspense accounts, based on Second Sight's 8 hypothesis, and I'm really clear in the emails that 9 I didn't think there was. 10 When Deloitte were asked to do work by the Legal 11 Team, which included work on suspense accounts, I'm 12 really clear in emails that I didn't think there was 13 a problem but, if they were going to do the work, then 14 they should do a proper job and go into not just the 15 formal suspense accounts but all the client creditor 16 accounts that preceded them, which, again, we had looked 17 at a couple of the big ones and there hadn't been any 18 evidence of a problem. But I thought "Well, if you're 19 going to do this, do a proper job, and then we can just 20 settle everyone's mind at rest". 21 In the meantime, we were doing a huge amount of work 22 on the Financial Controls Framework and so there were 23 all sorts of investigations, checks, reconciliations, 24 proof going on, and none of it suggested that there was 25 a problem in suspense accounts. 158 1 And then later, at Lord Arbuthnot's request to Nick, 2 we got KPMG -- and I very deliberately didn't get 3 involved in it, I just let it flow -- to do another 4 investigation into suspense accounts in 2020, which is 5 in my witness statement, and Post Office have very 6 kindly allowed us to put the papers reporting that, and 7 we did. 8 In the summer of 2020 they did an investigation into 9 the current operation of suspense accounts and then, in 10 November 2020, they had done a backward-looking one. 11 And what they said is, "There is no evidence of 12 a problem in suspense accounts. There is not a problem 13 in suspense accounts because, if what Second Sight were 14 worried about was happening, then one of two things must 15 follow: either there's a huge build-up of credits in the 16 suspense accounts, growing over time, or they were being 17 released to the P&L, and they weren't". And we kept 18 seeing this, and KPMG went through it with great care 19 and it wasn't happening. 20 Q. Okay. So you've mentioned that you were aware of the 21 IMPACT Programme and your words were "I think I've heard 22 of it". All right. Were you aware the IMPACT Programme 23 had an impact on -- 24 A. No, I don't -- 25 Q. -- on suspense accounts? Was that something you ever 159 1 came across and looked into? 2 A. No. 3 Q. Okay. A couple of last questions. I'm very conscious 4 of the time; we're getting close to the 3.00 cut-off, 5 okay? All right. 6 Help us understand a bit more to try to identify 7 where the money went, all right. So let's go back to 8 the branch suspense accounts, the ones that you don't 9 know much about, that were abolished by the IMPACT 10 Programme. How are we going to find out where that 11 money went, from subpostmasters stumping up the cash 12 from their family and friends, wherever they got it 13 from, where that money went when the Horizon system was 14 at least, they believe, on many occasions, at fault for 15 it? Where did that money go? How do we find that out, 16 Mr Cameron? 17 A. I genuinely don't know. I was always asked questions by 18 Second Sight and others about the operation at the time 19 at which I was in the business. 20 Q. Well, who should we ask, Mr Cameron? 21 A. Well, I think, I'd assumed -- and this may have been 22 false -- that the reason no one was asking to go back to 23 2005 or 2007 was because there just wasn't the data to 24 do it because, otherwise, I mean, I'd have thought they 25 would have done. So I don't know if there is 160 1 information to do that -- 2 Q. Who do we ask, Mr Cameron? I'm aware, obviously, you're 3 on sick leave. But who should we ask, because I don't 4 think we can ask you to do this? Who should be able to 5 give us that information? 6 A. Well, I think, you know, ask Nick Read. He's the CEO. 7 I mean, I'm not saying he is the one who is going to do 8 the work but he's the one that can marshal the resources 9 and make it a priority and ascertain if it is possible, 10 at this time of day, to go back as far as 2005. 11 Q. To get the records that would answer the questions for 12 later suspense accounts -- in other words, money being 13 paid in the way we have discussed, to get those records 14 going forward, around the time that you were looking at 15 this, and the way that you've described, who do we go to 16 for those? 17 A. Also Nick. 18 Q. Okay. You understand the concern -- 19 A. Of course. 20 Q. -- that this is people's individual money -- 21 A. Of course. 22 Q. -- that they believe has literally been taken by the 23 Post Office -- 24 A. Yes. 25 Q. -- and put into profit. Do you understand the problem? 161 1 A. I absolutely understand the problem. I've always been 2 open to look at it. We've done a huge amount of 3 controls work over the years. I think -- and this is 4 just a personal opinion -- that the suspense accounts in 5 terms of the formal client creditor and suspense 6 accounts in the balance sheet are a red herring on this. 7 I think we've done a lot of work over the years and 8 KPMG came in and checked it again in 2020, and they were 9 pleased with the controls over it, they were pleased 10 with the checks and no one has found -- you know, if we 11 were piling credits into suspense accounts, then either 12 you could see them there or you could see them being 13 released into the P&L account, and that has not 14 happened. And so -- 15 Q. Did you see the records? 16 A. -- it's not for me to decide what Post Office -- 17 Q. Did you see the records for this, Mr Cameron? 18 A. Which records? 19 Q. The records we've just been talking about? 20 A. The KPMG work? Yes, of course. 21 Q. So you went through them yourself? 22 A. I read the reports and the underlying reports. I didn't 23 go through individual transactions. 24 Q. Okay, one last thing. 25 A. Yeah? 162 1 Q. Angela van den Bogerd mentioned the fact that she had 2 a bonus the same year that she was shown by the High 3 Court Judge, Mr Justice Fraser, as being someone that 4 was less than truthful. 5 A. Yes. 6 Q. Is not being truthful to a High Court, is that not on 7 the risk questions that relate to bonuses? Is it just 8 something that the Post Office doesn't pick up? 9 A. I think the mindset in 2019 -- and you see that through 10 the recusal and the appeals -- was a belief that 11 Mr Justice Fraser wasn't treating Post Office witnesses 12 and other witnesses fairly and on the same basis and so 13 I think there was a feeling that that hadn't been 14 a reasonable judgment. And I think that was the reason 15 why no one was taking it at face value, however, you 16 know, wrong that seems now. 17 MR STEIN: Thank you, Mr Cameron. 18 THE WITNESS: Thank you. 19 SIR WYN WILLIAMS: Is that it, Mr Beer? 20 MR BEER: Sir, it is. 21 SIR WYN WILLIAMS: All right. 22 Well, Mr Cameron, I'm very grateful to you for your 23 very detailed witness statement, and for answering many 24 questions today. 25 Thank you very much for your participation in the 163 1 Inquiry. 2 THE WITNESS: Thank you. 3 SIR WYN WILLIAMS: So we'll resume on Tuesday with Ms Lyons, 4 yes? 5 MR BEER: That's it. Alwen Lyons, 9.45 on Tuesday, sir. 6 SIR WYN WILLIAMS: Fine. Thank you very much. 7 MR BEER: Thank you, sir. 8 (3.01 pm) 9 (The hearing adjourned until 9.45 am 10 on Tuesday, 21 May 2024) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 164 I N D E X ALISDAIR CHARLES JOHN CAMERON (affirmed) ......1 Questioned by MR BEER .........................1 Questioned by MS PAGE .......................144 Questioned by MR STEIN ......................146 165