1 Friday, 24 May 2024 2 (9.45 am) 3 MR BEER: Good morning, sir, can you see and hear us? 4 SIR WYN WILLIAMS: Yes, I can. 5 Before the questioning resumes, can I just first of 6 all confirm with you how we intend to proceed today. My 7 understanding is that we will begin with questioning 8 from Mr Henry, which will last for up to one hour and 9 then, after that questioning, there will be the first 10 morning break. 11 MR BEER: Yes. 12 SIR WYN WILLIAMS: Followed by Mr Stein, again, with 13 questioning up to one hour, followed by the second 14 morning break, and then this morning's session will 15 conclude with questioning on behalf of the NFSP and on 16 behalf of a lady called Susan Sinclair. 17 MR BEER: That's right, sir. 18 SIR WYN WILLIAMS: Then we take our lunch, then Mr Moloney 19 will ask questions for up to one hour, and then, if she 20 wishes to do so, Ms Leek may ask questions on behalf of 21 Ms Vennells. That will then conclude, subject, to you, 22 as always, having the last word if necessary. 23 MR BEER: Thank you, sir. 24 SIR WYN WILLIAMS: Right, so that deals with the timetable 25 for today. 1 1 Then, just to avoid any confusion, if there is any, 2 about what is to be said about Ms MacLeod, can I make it 3 clear that there will be, if there is not already, 4 a reasonably lengthy statement on the Inquiry website. 5 I don't propose to, in effect, read it out today, that 6 would take up unnecessary time but my reasoning is fully 7 set out in the written statement as to how it comes to 8 be that Ms MacLeod will not give oral evidence. 9 MR BEER: Thank you very much, sir. Just for the record, 10 for our transcript, because we're -- as people will see 11 when they read your statement -- reading her statement 12 into the record -- 13 SIR WYN WILLIAMS: Yes. 14 MR BEER: -- her witness statement's URN is WITN10010100. 15 So that is, by virtue of what I've just done, to be 16 treated as evidence in the Inquiry. 17 SIR WYN WILLIAMS: Thank you very much, Mr Beer. 18 All right, over to you, Mr Henry, and since I've 19 taken two or three minutes of your time, would you aim 20 to complete your questioning, please, by 10.50. 21 PAULA ANNE VENNELLS (continued) 22 Questioned by MR HENRY 23 MR HENRY: Thank you, sir. 24 There were so many forks in the road but you always 25 took the wrong path, didn't you? 2 1 A. It was an extraordinarily complex undertaking and the 2 Post Office and I didn't always take the right path. 3 I'm very clear about that. 4 Q. You exercised power with no thought of the consequences 5 of your actions, despite those consequences staring you 6 in the face? 7 A. I'm sorry, I missed the beginning, could you say -- 8 Q. You exercised power with no thought of the consequences 9 of your actions, despite those consequences staring you 10 in the face. 11 A. The scheme was set up and, for the time that I worked on 12 that, I believed that I -- and I wasn't working alone in 13 this, I was surrounded by colleagues as the Inquiry has 14 seen -- and I believed that we were doing the right 15 things and clearly that was not always the case. We 16 did -- 17 Q. Can I take you to -- 18 A. If I may, we did look at the consequences and, although 19 that may have been misunderstood, the reason 20 I circulated the eight cases, including Mr Castleton's, 21 was that I was -- it was an act of compassion and I was 22 very moved by the content of that. That was right at 23 the start of the mediation process and I felt it was 24 important that I and colleagues understood that. But 25 I accept your point that there are no words I can find 3 1 today that will make the sorrow and what people have 2 gone through any better. 3 Q. Ms Vennells, that's humbug. You preach compassion but 4 you don't practice it. For example, with Mr Castleton, 5 he was even closed out of the mediation process; and you 6 know why that was, don't you? 7 A. I'm sorry, I cannot recall the detail of that. I wasn't 8 personally involved in which cases did or didn't go into 9 the Mediation Scheme. I have -- 10 Q. It so deeply moved you, you said in your statement, it 11 was so shocking, yet he was locked out of the Mediation 12 Scheme because, of course, he was an illustrious scalp 13 that could we turn used, a precedent that could be used 14 in the GLO? 15 A. What happened to Mr Castleton is completely 16 unacceptable. At the time, his case was not taken 17 through the scheme -- I personally wasn't involved in 18 the decision but the Post Office took the decision based 19 on legal advice -- 20 Q. Yes -- 21 A. It was wrong, Mr Henry. I completely agree with that 22 and what happened to Mr Castleton is unforgivable. 23 Q. You in instigated no investigation into why £321,000 of 24 public money was used to crush him and grind him into 25 the dirt. 4 1 A. I agree with what you're saying. 2 Q. Thank you. Let's -- I'm talking now about things that 3 were staring you in the face -- no need to get it up on 4 screen -- but you remember, and there's absolutely 5 nothing wrong with talking to your husband and I don't 6 suggest that you should be ashamed at all about that, 7 but you wrote that email: 8 "My engineer/computer literate husband sent the 9 following reply to the question: 10 "'What is a non-emotive word for computer bugs, 11 glitches, defects that happen as a matter of course?' 12 "Answer: 13 "'Exception or anomaly. You can also say 14 conditional exception or anomaly which only manifests 15 itself under unforeseen circumstances'." 16 Unforeseen, random, difficult to predict, impossible 17 to guard against. It was staring you in the case but 18 you took from your husband's text or email that which 19 suited you, and ignored or dismissed the potent jeopardy 20 that these bugs could arise under unforeseen 21 circumstances. Isn't that shocking? 22 A. I covered this yesterday with Mr Beer. I should have 23 said "bugs", the Post Office should have said "bugs". 24 Q. I'm not talking about that; I'm talking about "manifests 25 itself under unforeseen circumstances". In other words, 5 1 these things could crop up intermittently at any time, 2 as Tim McCormack warned you in 2014, and here you have 3 this from your husband on 2 July 2013 warning you about 4 bugs that manifest themselves under unforeseen 5 circumstances. You should have been horrified. 6 A. I was concerned by the bugs. There was -- 7 Q. You did nothing. 8 SIR WYN WILLIAMS: Mr Henry, let her finish, please. 9 MR HENRY: So be it, sir. 10 A. I'm sorry, could you repeat the question? 11 Q. You were concerned by the bugs, you say. What I'm 12 suggesting to you is that you took what you wanted from 13 the information your husband had supplied to you but you 14 did not heed the warning contained in what he said, 15 which was that these bugs could manifest themselves 16 under unforeseen circumstances. It was staring you in 17 the face. 18 A. The Inquiry has heard that there was information that 19 was not known to me, and potentially to other colleagues 20 I was working alongside. At that stage, I only had the 21 information of those two bugs. There were, as I said in 22 my statement, other glitches and incidents that I had 23 come across visiting post offices. What I've said on 24 this so far is all that I knew at the time, and really 25 all that I can say, and I repeat again: we should have 6 1 said "bugs". 2 Q. You have no one to blame but yourself; do you agree? 3 A. Where I'm -- absolutely. Where I made mistakes and 4 where I made the wrong calls, whether or not I had -- in 5 those cases where I didn't have information, I think 6 that's more difficult, but where I had information and 7 I made the wrong calls, yes, of course. 8 Q. Well, you are responsible for your own downfall, aren't 9 you? 10 A. From when the Court of Appeal passed its judgment, 11 I lost all the employment that I have had and, since 12 that time, I have only worked on this Inquiry. It has 13 been really important to me to do what I didn't or was 14 unable to do at the time I was Chief Executive, and 15 I have worked for the last three years and prioritised 16 this above anything else. For the last year it has 17 probably been a full-time job. And it is my commitment. 18 I have avoided talking to the press, perhaps to my own 19 detriment, because, all the way through, I have put this 20 first. 21 Q. I suggest to you that you still continue to live in 22 a cloud of denial, and it persists, even to today, 23 because you have given, in 750-odd pages, a craven 24 self-serving account, haven't you: "I didn't know, 25 nobody told me, I can't remember, I wasn't shown this, 7 1 I relied on the lawyers"? 2 A. I have tried to do this to the very best of my ability. 3 I have taken, as I hope the Inquiry has seen, all of the 4 questions I have been asked. I have answered them 5 honestly, no matter how difficult or how embarrassing or 6 how wrong I was at the time. I don't believe I could 7 have worked harder for this. 8 Q. What I'm going to suggest to you is that whatever you 9 did was deliberate, considered and calculated. No one 10 deceived you; no one misled you. You set the agenda and 11 the tone for the business. 12 A. I'm sorry, what's the question? 13 Q. You set the agenda and the tone for the business, didn't 14 you? 15 A. I was the Chief Executive. I did not set the agenda for 16 the work of the scheme and the way the legal and the IT 17 parts of it worked. I wasn't, as I've said to the 18 Inquiry over the last two days, I'm not a lawyer, 19 I didn't have the expertise or the experience to lead on 20 that, nor did I on the IT side. I had to rely on those 21 colleagues who were experts and I had no reason not to 22 take the advice that I was given. I accept I was Chief 23 Executive and, as I have said, as a Chief Executive, you 24 have ultimate accountability, and that is simply fact. 25 You are not responsible for everything that happens 8 1 underneath you. You have to rely on the advice of 2 internal and external experts and that is what I did and 3 I was not working alone on this. I was surrounded by 4 a Board, by the Group Executive Committee. I cannot 5 think that any of the major decisions I took by myself 6 in isolation of anybody, this was far too serious 7 an undertaking for the Post Office, for everybody 8 affected, for every single postmaster case, and my 9 ambition was to get those through the scheme. 10 I did my very best through this, and it wasn't good 11 enough, and that is a regret I carry with me. 12 Q. I mean, you like euphemisms like "anomaly" or 13 "exception", so I'm going to use a euphemism called 14 "containment". You wanted to contain this problem; it 15 sounds so much nicer than "suppression", doesn't it? 16 You wanted to contain this escalating threat to your 17 leadership and the image that you wanted to project to 18 stakeholders, the Board, the Government, Whitehall and 19 the media. 20 A. That isn't the way I worked. 21 Q. You were managing up, not down. You're very politically 22 adept, aren't you? 23 A. My role required me to work with various groups of 24 stakeholders inside and outside the organisation, 25 upwards and downwards from my role, and I tried my very 9 1 best to work with all of those groups at whatever level 2 they worked in the organisation or outside of it. 3 Q. Do you agree that you're politically adept? 4 A. I would suggest that wasn't the case. There were people 5 in the organisation who had -- this was my first job in 6 a public sector organisation. I had no experience prior 7 to this of working alongside politicians or the Civil 8 Service. 9 Q. Well, your denial is surprising -- 10 A. I wouldn't have said -- 11 Q. Your denial is surprising -- 12 SIR WYN WILLIAMS: Mr Henry, please. 13 MR HENRY: Sorry, sir. I do apologise. 14 SIR WYN WILLIAMS: I appreciate that you have a difficult 15 task but also the witness has a difficult task, so I'd 16 ask you both, one to ask the question and one to 17 complete the answer, and then we move on. 18 MR HENRY: I do apologise to the witness, sir, and I also 19 apologise to you. 20 SIR WYN WILLIAMS: Thank you. 21 THE WITNESS: Thank you. 22 I think I've answered your question. 23 MR HENRY: I mean, it's surprising, your refusal to admit 24 your political skills because you ended up in the 25 Cabinet Office, didn't you? 10 1 A. I'm sorry, I am not sure I understand your connection. 2 Q. Well, your concerns were managing upwards. You were 3 obsessed with the media, pleasing the stakeholders, the 4 Board, the Government, Whitehall; those were your 5 priorities, weren't they? 6 A. They were very important stakeholders for the Post 7 Office Board. The Post Office, as you know, was 8 owned -- it had -- its single shareholder was 9 Government. That was an important part of my role. It 10 most certainly wasn't the largest part of my role by any 11 means. 12 Q. I'm going to go now to 2010 and the top policy goal of 13 your 100 per cent shareholder, the Government, was to 14 split the Post Office from Royal Mail and then privatise 15 Royal Mail by floating it on the Stock Market; do you 16 agree? 17 A. That was an important priority for Government, yes. 18 Q. Helping to fulfil that plan was therefore important to 19 you because, of course, you had been measured point as 20 a yardstick of your success at Royal Mail and then, 21 subsequently, the Post Office. 22 A. It was probably more significant for Royal Mail than it 23 was -- the Post Office's challenge was trying to cope 24 with the separation, to make it happen. 25 Q. You worked closely with Dave Smith, didn't you? 11 1 A. The Managing Director? 2 Q. Mm-hm. 3 A. Yes, he was my boss. 4 Q. Yes, and he commissioned the Ismay Report, which you 5 must have read at the time? 6 A. I don't believe I did and I have found no -- the 7 document itself, when I saw it recently in preparation 8 for the Inquiry, seemed to be a surprise to me and 9 I don't -- I haven't seen any documentation to say that 10 I received it. 11 Q. Yes. Not aware of the Ismay Report, you say? 12 A. I don't think so, no. 13 Q. Horizon had a clean bill of health, its integrity was 14 sound. But I digress. 15 Obviously, the proposed flotation of the Royal Mail 16 Group was vitally important to Donald Brydon and Moya 17 Greene, as well? 18 A. I'm sure it was but you'd have to ask them. 19 Q. Back in 2010, a week before you were appointed Managing 20 Director, a trial took place in Guildford and 21 an innocent woman was jailed. Her trial became the high 22 watermark of Horizon infallibility. Her conviction 23 became, for years, a validation of Horizon's integrity 24 for the Post Office. It was, as it were, a test case 25 and, if the Post Office had failed in this prosecution, 12 1 it would have opened up the floodgates to civil 2 litigation, civil claims for damages and a defeat in 3 that trial in Guildford would have made civil claims 4 difficult to defend. 5 The Inquiry has seen documents to support what I've 6 just put to you. But do I take it you knew nothing 7 about that case at the time, in October 2010, because 8 you were unaware of prosecutions being mounted by the 9 Post Office until 2012? 10 A. I've seen some documentation this morning that showed 11 I was aware of the case afterwards. I think -- I can't 12 remember, I'm sorry, in my statement, but I think I say 13 in my statement that I remember being told about the 14 case after the court had reached its decision, and so 15 that would have been at the time of that -- of the 16 conviction. 17 Q. You see, again, no need to put it up, but there's 18 an email chain which you've seen this morning, dated 19 21 October 2010 to Rod Ismay, Mike Moores -- Mike 20 Moores, Chief Finance Officer -- 21 A. Yes. 22 Q. -- mike Young, Head of IT -- 23 A. Yes. 24 Q. -- and you, from Dave Smith, after hearing that Seema 25 Misra had been jailed, saying: 13 1 "Brilliant news, well done, please pass on my thanks 2 to the team." 3 Then Mr Ismay forwards that to a wider group of 4 people, including Susan Crichton, with these words: 5 "Dave and the Executive Team had been aware of the 6 significance of these challenges and had been supportive 7 of the excellent work going on in so many teams to 8 justify the confidence that we have in Horizon, and in 9 our supporting processes." 10 So you must have been aware at the time because you 11 were, of course, a member of the Executive Team. 12 A. I was. I can't recall the Executive Team discussing 13 Mrs Misra's case or any other cases. They, as far as 14 I can see from documentation and my recall, they didn't 15 come to the Executive Committee in any detail. 16 Q. Mm. 17 Well, let's move on. So you don't know about the 18 Ismay Report? 19 A. I don't believe I did, no. 20 Q. Right. 26 November 2010, there's an email to you, Mike 21 Moores, Chief Finance; Mike Young, Head of IT; Susan 22 Crichton; Kevin Gilliland; Sue Huggins; and Rod Ismay. 23 If you want to see it, but I think you've already seen 24 it outside of the room, it's POL00120561, and the 25 subject line is "Update on JFSA and Horizon issues -- 14 1 an urgent response needed for BIS, in strictest 2 confidence", and it reads as follows: 3 "You will be aware of the allegations that the JFSA 4 have been making about the integrity of Horizon, the 5 integrity of the system and the associated processes 6 that POL uses in terminating contracts. There have also 7 been various legal cases relating to individual 8 subpostmasters being prosecuted for theft, false 9 accounting ..." 10 Mrs Misra is then mentioned: 11 "... the most recent being Ms Misra where the 12 ex-subpostmaster was recently found guilty of theft. 13 "As you are aware, Channel 4 were also looked at the 14 subject in the summer although nothing yet has come of 15 this. Our approach throughout has been to robustly 16 defend the integrity of the Horizon system." 17 Then it talks about positioning because it's very 18 important that BIS don't do something off their own back 19 which could lead to more difficulties. 20 Then these words: 21 "As you have all had an involvement in this 22 particular issue, I'm looking to see if I can gain 23 concurrence to this particular statement", which was 24 a very robust statement about Horizon system's 25 integrity." 15 1 Now, "As you have all had an involvement in this 2 particular issue", and that issue of course is Horizon 3 issues, and Rod Ismay is on the same email as you, that 4 email sent to you, Mike Moores, Mike Young; are you sure 5 that you hadn't discussed with Rod Ismay anything to do 6 with his report? 7 A. No, I don't believe I had, Mr Henry. 8 Q. Right. Anyway, we know that on 13 June 2011, the Postal 9 Services Act was passed that set down the roadmap for 10 the separation and the privatisation; you agree with 11 that? 12 A. Yes. 13 Q. Then on 29 September 2011, three months after the Act, 14 you received the email from Mr Brydon, Chair of RMG, 15 which Mr Beer took you to yesterday, and that was, of 16 course, the Private Eye article, and he was expressing 17 concerns and giving you and Alice Perkins directions 18 about how to deal with the subpostmaster's complaints, 19 wasn't he? 20 A. Yes, I can't remember the email in detail. 21 Q. Yes. He was saying that the article raises some 22 questions about Horizon: 23 "I suspect the Audit and Risk Committee ought to 24 take an interest. Have we ever had an independent audit 25 of Horizon?" 16 1 He was worried this might disrupt the big plan to 2 privatise the Royal Mail Group, wasn't he? 3 A. I'm sorry, I don't recollect that. Whether I made that 4 association, I don't know. 5 Q. If it were to be established that the Royal Mail Group 6 had wrongly prosecuted dozens/hundreds of subpostmasters 7 who might sue them, it would have threatened to disrupt 8 the flotation in October 2013, wouldn't it? 9 A. I'm sure that would have been the case. 10 Q. Yes, and you have accepted in your witness statement 11 that attempts to reopen past prosecutions posed 12 a reputational and financial risk to the Post Office? 13 A. Would you mind taking me to that? If you want -- 14 Q. By all means, it's paragraph 456. 15 A. Thank you. 16 Q. So if we could go to your first witness statement, 17 WITN01020100, and it's paragraph 456. 18 I'm so sorry, I seem to have lost the page reference 19 for it but -- 20 SIR WYN WILLIAMS: It's page 220. 21 MR HENRY: Thank you so much, sir. 22 Martin Edwards, correct? 23 A. Right, yes, thank you. 24 Q. Yes. So, I mean, this would also pose a reputational 25 financial risk to the Royal Mail Group, since they were 17 1 responsible for the Legacy of prosecutions because, 2 until 2012, they were the prosecuting authority weren't 3 they? 4 A. Yes, that's correct. 5 Q. No need to go to your reply to Mr Brydon but Mr Beer 6 took you to it. To use his expression "POL has a 100% 7 strike rate in court", but the Post Office was going to 8 have Horizon verified by an external systems auditor 9 with results in the next month. 10 You say you don't remember but this, clearly, this 11 reference to an external systems auditor, this was 12 clearly a reference to the work that Ernst & Young had 13 recommended in their 2011 audit letter, wasn't it? 14 A. No, I don't believe it was and the Inquiry has 15 documentation that refers to two separate external 16 agencies. One was a company called Pen Test, I think, 17 and the other was KPMG, and I haven't been able to 18 find -- I haven't recalled that, and I chased Lesley 19 Sewell or Mike Young for progress on that work, and 20 I haven't seen anything that followed it through. 21 Q. Okay. Well, let's concentrate, however, on the Ernst & 22 Young angle for a moment. Because you will accept that 23 they recommended what was then called an SAS 70 audit; 24 do you remember that? 25 A. I'm sorry, could you say that again, please? 18 1 Q. You do remember that Ernst & Young had recommended as 2 a solution to what Mr Beer had called remote access 1, 3 was an SAS 70 audit? 4 A. Yes, I do. 5 Q. Yes, and that that would, as it were, try to address the 6 threat that they had identified, which was that lax 7 controls at Fujitsu and I quote "may lead to the 8 processing of erroneous or unauthorised transactions"; 9 you do remember that? 10 A. I do. It wasn't exactly that the SAS 70 -- there was 11 a new name for it after that -- the issue -- Ernst & 12 Young said in their management letter that they had had 13 to put in -- and these are my words not theirs -- but 14 something like manual workarounds, to reach the 15 conclusion they had that they could pass an unqualified 16 audit. They said it would have been much easier if 17 Fujitsu had in place a SAS 70, which was a -- my 18 understanding was an ongoing and automated reporting on 19 the various controls in place, and, by the time we got 20 to 2012/13, that had been introduced. It had taken some 21 work with Fujitsu to get there. 22 Q. We know that Lesley Sewell, rather than getting 23 an SAS 70 audit, asked the Royal Mail Group for 24 an internal audit, were you responsible for that -- 25 A. I -- I beg your pardon, I'm sorry. 19 1 Q. Don't worry. Were you responsible for that? 2 A. There were -- if I may, having read through the 3 documentation and remembered on this, I think the 4 process is slightly different than you outline. So 5 there was criticism in '10/'11 because the audit had 6 taken too long. It had run over massively in terms of 7 time and budget and the reason -- there were two reasons 8 for that: Ernst & Young had a new team on it and were 9 not familiar and, secondly, Horizon Online had been put 10 in place and there simply hadn't been -- I'm told there 11 simply hadn't been the time to get all of the right 12 controls and documentation up to speed. So Ernst & 13 Young had to spend much more time to validate what was 14 there. 15 They suggested a SAS 70 report. We then worked with 16 Fujitsu to make sure that that was put in place. They 17 were not keen to do it because it was a huge investment 18 for them, but they agreed to do that. And then, 19 through -- one of the check steps in that process for 20 improving the approach to the audit was the Royal Mail 21 internal audit process. That was not instead of; that 22 was a check step to make sure that Lesley Sewell and her 23 team were -- an "independent" check step -- 24 "independent" in inverted commas but internal audit 25 teams are generally seen as independent, as much as they 20 1 can be, within a company -- and that was a check step to 2 make sure that Lesley and her team were doing the work 3 that was required to achieve what eventually became 4 ISAE 2304, I think, or 2403. 5 Q. Well, the internal audit review of Horizon has been seen 6 by the Inquiry, and it's dated 1 February 2012. It was 7 sent to you and Moya Greene, the CEO at RMG -- 8 A. Yes. 9 Q. -- as well as to other senior people at RMG. It stated 10 that, with regard to the poor controls, it found that, 11 and I quote: 12 "It is difficult to detect and prevent inappropriate 13 changes being made to master data." 14 It also responded to the Ernst & Young March 2011 15 letter, and stated that the position as, at the end of 16 January 2012, was that none of the issues raised by 17 Ernst & Young had been resolved. The verdicts were that 18 substantial progress had been made in respect of some of 19 the recommendations or significant work remained and was 20 required. 21 So I just ask you this: would it be right to say 22 that that remained the position throughout the time that 23 you were CEO? You were MD from October 2010 but CEO in 24 2012. Those issues were never fully resolved, were 25 they? 21 1 A. Well, you're right to raise that report because what it 2 did was -- it was a very useful report because what it 3 did was highlight, first of all -- and, of course, 4 people took reassurance from that -- the areas where 5 progress had been made and it highlighted where further 6 work was needed. From memory, I think substantial 7 progress had been made on -- there were ten 8 recommendations in the Ernst & Young report, four of 9 those were high risk -- no, not high risk, high rating, 10 and I believe the Royal Mail internal audit report said 11 that was where substantial progress had been made. 12 There was still more progress to be made. 13 In '12/'13, so the end of the following financial 14 year, when I was Chief Executive, and throughout the 15 year prior to that, there had been numbers of check 16 steps in place. Ernst & Young found that -- again, 17 forgive me because I can't remember the words from the 18 report -- but they were very pleased with the outcome. 19 The audit had gone very well and there were always, as 20 there always are in these processes, some improvements 21 to be made. But Lesley was congratulated on the work 22 that was done; the Chair of Post Office Audit Committee 23 congratulated her on that. And so, you know, I and the 24 Group Executive and the Board took some comfort from 25 that. 22 1 As we went forwards, the audits continued to flag 2 some improvements but, to be clear, that the accounts 3 could be signed off unqualified and that the IT side of 4 the audits had improved from the -- I think, you know, 5 you're right to flag the crisis situation, which we took 6 over on separation. 7 Q. I am sure that the Board took comfort and I'm sure there 8 was a mutual congratulatory fest, but the fact is that 9 remote access was never -- unauthorised tampering was 10 never resolved throughout the entire time of your tenure 11 as Managing Director and as Chief Executive. 12 A. And the question is? 13 Q. Well, in other words, the disconnect between corporate 14 communications, the outward face of the business and the 15 grubby internal reality. 16 A. I am sorry, I'm still -- I'm really not -- I want to be 17 able to help. I'm -- you're making statements -- 18 SIR WYN WILLIAMS: Let me try, Ms Vennells. I think the 19 point that's being put to you is that, throughout the 20 period that you were Chief Executive -- let's keep to 21 that, it makes it simpler -- the true extent of remote 22 access was never satisfactorily resolved by the senior 23 people at the Post Office? 24 A. And, Sir Wyn, that is correct. 25 SIR WYN WILLIAMS: Right. 23 1 A. The volume of interventions that were happening, as 2 I understand it, and I can any -- I've only understood 3 this since in terms of what is detailed in the Horizon 4 IT judgment and the Project Bramble report, which I've 5 seen afterwards, is that it appears as though there were 6 interventions on a fairly frequent basis, which, as 7 Mr Beer said yesterday, was not uncovered, at least -- 8 I'm sorry, was not known to me and, I believe, the Board 9 and the Group Executive. I don't know how widely within 10 Post Office that information was known but, clearly, it 11 was happening. 12 MR HENRY: It is extraordinary though, isn't it, because 13 Cartwright King, your external lawyers, know all about 14 it and yet you're saying that you didn't, the Board 15 didn't. I mean, this is la-la land, isn't it? 16 A. What was the point about Cartwright King, please? 17 Q. Well, Cartwright King were concerned about remote access 18 and Andy Winn having to authorise transactions, and 19 Cartwright King were stating that, you know, they 20 weren't sure to what extent the Post Office actually 21 knew about Fujitsu's access to the system. 22 A. That -- I think -- I'm not sure if that's news to me or 23 not, today. I don't recall that at all from the time. 24 If our external lawyers were aware of that and that was 25 shared within the Post Office, it is completely 24 1 unacceptable. I had no knowledge that Cartwright King 2 knew that, at the time I was Chief Executive. 3 Q. Well, anyway, I'm going to now fast forward to July 4 2013. July 2013, of course, is a momentous month 5 because, of course, there's going to be the announcement 6 on the privatisation on the 10 July, correct? 7 It is also the month, of course, that Second Sight 8 presents its Interim Report, which was a bit of 9 a bombshell, correct? 10 A. Sorry, yes. 11 Q. Yes, and, of course, it's also the month, although the 12 groundwork had been laid for it the month before, where 13 the unsafe witness emerges into clear sight: Gareth 14 Jenkins, fatally undermined and having put the Post 15 Office in breach of its duties as a prosecutor. So it's 16 a very, very momentous month and, of course, you were at 17 the centre of all of that, weren't you? 18 A. I was aware of some of that. 19 Q. Let's go to POL00111625. So this is the internal 20 briefing note to you and, presumably, it's after you've 21 received your text or email from your husband, because 22 of the nomenclature that's used in this. But could we 23 go to paragraph 8, please, which is on page 2., in other 24 words, the next page. Paragraph 8, please: 25 "We believe James Arbuthnot may feel that any 25 1 interim findings which disclose any issue with Horizon 2 should result in past criminal prosecutions by Post 3 Office Limited being reopened and overturned." 4 So that is noted. Could we now go to paragraph 30, 5 please: 6 "The Falkirk Anomaly was the subject of expert 7 evidence in the 'Misra' criminal prosecution, where: 8 "The defence expert asserted that its existence 9 demonstrated Horizon had faults which could laws losses, 10 and therefore that possibility could not be excluded in 11 Misra's case. 12 "The prosecution expert (Gareth Jenkins from 13 Fujitsu)", et cetera, et cetera. 14 So you knew, because you would have read this 15 briefing and you would have read it very carefully, 16 given the fact that it refers to anomalies and the 17 like -- which was done at your instigation, 18 presumably -- you would have been aware that Gareth 19 Jenkins was the prosecution expert in Mrs Misra's trial, 20 correct? 21 A. I would think so, yes. 22 Q. Well, I mean, not "I would think so". I mean, there it 23 is, it's a briefing to you -- 24 A. I'm sorry, yes, of course. What I meant by my response 25 was how much of this very detailed briefing I'd taken 26 1 in -- on board at the time. But it's absolutely there, 2 you're correct. 3 Q. It's the job of a CEO to read briefings and take them on 4 board, isn't it? 5 A. Yes, it is. 6 Q. Right. Now, while all of this is going on, the Inquiry 7 has got documents, and you have been shown them, I'm 8 sure, and I don't go against Parliamentary privilege in 9 any way at all, but on 9 July, the Minister, Jo Swinson, 10 gave a short statement to Parliament, which included: 11 "It is important to note that the issues in the 12 report have no impact on Royal Mail which is an entirely 13 separate business." 14 There was also a Whips briefing, that the Inquiry 15 has seen, which talks about wide impacts, and it says 16 this: 17 "Royal Mail Privatisation. 18 "The timing of Arbuthnot's intended statement should 19 be considered in the context of the Royal Mail 20 privatisation. Vince Cable and Michael Fallon are 21 making a statement to Parliament on Wednesday, 10 July, 22 setting out the steps towards a Royal Mail transaction. 23 In the eyes of many MPs, the media and the public at 24 large, Royal Mail and Post Office are the same entity, 25 although not related. The adverse coverage that 27 1 Arbuthnot is seeking to attract is likely to have 2 a significant diversionary impact on the messaging of 3 the Royal Mail statement." 4 That should be on record, that's UKGI00001679. Now, 5 you could see, couldn't you, it must have been obvious 6 to you, it must have been staring you in the face, that 7 if you had a blow-up or a conflagration concerning the 8 Second Sight Interim Report, the prospect of criminal 9 convictions being challenged, et cetera, et cetera, this 10 would be hugely embarrassing politically, and 11 potentially damaging to the flotation. 12 A. I don't believe I was involved in any of those 13 conversations. The two organisations, with some 14 exceptions, were now working separately. I had no 15 conversations about any strategy around the Royal Mail 16 privatisation. 17 Q. But let's be clear. You were given the job, I suggest, 18 or it must have been uppermost in your mind, to "keep 19 the lid on this", because, of course, you wanted to 20 please stakeholders; you wanted to please the Board, 21 Government, Whitehall. I mean, how else can we explain 22 your intransigence throughout your tenure in relation to 23 the concerns that were being bought to you about 24 Horizon? 25 A. I'm sorry, Mr Henry, can you repeat the question, 28 1 please? 2 Q. What I am suggesting to you is that you wanted to 3 diffuse this because, of course, it was going to be 4 immensely politically damaging, both to the Post Office 5 itself but also to the privatisation, and you were, of 6 course, anxious to please BIS, weren't you? 7 A. I had no role at all in relation to the privatisation. 8 I had no conversations with BIS about the privatisation. 9 My concerns at this stage were only about the Post 10 Office and, as the Inquiry has seen, there were many, 11 many conversations, and a good deal of documentation at 12 this time, about how we might find a way through this. 13 I don't believe I made any connection between this 14 and the Royal Mail privatisation at all and I have -- my 15 approach to my work is that I do it to the best of my 16 ability and honestly. It was not -- I don't think it 17 was ever my style to try to please or keep in with 18 people, whoever they were. When you're doing a job as 19 difficult as this was, you make it more complicated if 20 you try to do that. 21 Q. Well, then I'm going to ask you about 12 September 2013. 22 The Government announces the IPO shares in the Royal 23 Mail Group, and that did open up a problem for the Post 24 Office, because what was the prospectus going to say 25 about Horizon and Second Sight and what was it going to 29 1 say about Gareth Jenkins? 2 You say you had absolutely nothing to do with the 3 privatisation. Why did you get involved in bowdlerising 4 or amending the prospectus? 5 A. This was a very last minute -- I wasn't involved in the 6 prospectus at all. I can't remember how it occurred but 7 it was flagged to me that -- which was complete news -- 8 that within the IT section -- and I should say, this 9 isn't a recollection at all, this is from looking at 10 documentation this morning. 11 It was flagged to me that, in the IT section of the 12 Royal Mail prospectus, there was a reference to -- 13 I can't remember the words now -- but risks relate to 14 the Horizon IT System and, again, I can't recall, but 15 I clearly arrived at a view that that seemed -- it 16 seemed the wrong place to -- so the line that was put in 17 said that no systemic issues had been found with the 18 Horizon system. The Horizon system was no longer 19 anything to do with the Royal Mail Group. So I got in 20 touch with the company secretary and said this, "I don't 21 understand why this is here. Please can we have it 22 removed? This prospectus is about Royal Mail, than the 23 Post Office", and I believe that was the case. 24 The other thing I learned from the documentation 25 this morning that I did not know at the time is that the 30 1 original genesis of that statement going into that IT 2 section was from one of the Non-Executive Directors who 3 sat on the Royal Mail Board and the Post Office Board, 4 Les Owen. Now, whether Les Owen had wanted to put that 5 in because, in some ways, it was reassuring about the 6 Horizon IT system, I don't know. But my involvement was 7 simply to say, "I don't understand why there is a line 8 in an IT section in a Royal Mail prospectus about the 9 Post Office", and I don't recall but I believe it was 10 taken out. 11 Q. You had, on 16 July, the Board meeting where Susan 12 Crichton is sitting outside on the naughty step. You 13 know that at that 16th July board meeting, the Board was 14 alarmed about potential claims against it, correct? 15 A. Yes. 16 Q. You know, as well, that on 22 July your insurers were 17 notified, correct? 18 A. I don't recall that -- 19 Q. There was a notification -- 20 A. -- but I'm happy to take your word. 21 Q. Right. Now, how would revelations about possible 22 prosecution failures, during the time when Royal Mail 23 was in charge of the Post Office, have affected 24 privatisation? It would have been devastating, wouldn't 25 it? 31 1 A. Yes, it would. I'm sure. 2 Q. Right. So was this discussed with the Royal Mail Board? 3 A. I don't know if it was discussed with the Royal Mail 4 Board. It certainly wasn't discussed at the Post Office 5 Board. 6 Q. What about your discussions with the Business 7 Department? Because you were in regular contact with 8 BIS. Did you discuss it with BIS? 9 A. No, I don't believe it was discussed with BIS, not by 10 the Post Office -- sorry, not by me. Whether the 11 Chairman -- I can't think who else, but I certainly 12 didn't. 13 Q. Well, you've mentioned, of course, about Les Owen 14 because he had formerly been on the inside at the Post 15 Office because he had formerly been a Board Director at 16 the Post Office, hadn't he? 17 A. Yes, he had. 18 Q. He was concerned enough to want something put in the 19 prospectus but you wanted it out and you succeeded in 20 getting it taken out, didn't you? 21 A. I did because I felt it was an irrelevant statement in 22 a section about the Royal Mail IT system. 23 Q. You sent an email to Alice Perkins, POL00146462, which 24 stated: 25 "I have earned my keep on this one." 32 1 Do you remember reading that this morning? 2 A. I do, yes. 3 Q. What did you mean when you wrote that to your Chairman? 4 A. I meant that it had taken some time, in a very short 5 period of time, to remove that statement about Post 6 Office IT from the Royal Mail prospectus because 7 I didn't believe that it was helpful in any way to the 8 Post Office, because the two businesses were separate, 9 the prospectus was about the flotation of the Royal Mail 10 and, as I have said a couple of times over the last two 11 days, there was always, with the Post Office -- and it 12 was the same for the Royal Mail -- the challenge of 13 managing potential misinterpretation in the media of 14 facts that were not necessarily always understood. 15 And this -- as Chief Executive, part of your role is 16 to protect the reputation of the Post Office, as it is 17 for the Board and the Chairman. 18 Q. There would have been no misinterpretation in the media 19 because the media's instincts were entirely correct. 20 You knew of the existence of bugs, errors and defects 21 and you'd already kept those out, hadn't you, because 22 they don't appear in the prospectus. 23 A. I had no work, Mr Henry, on the prospectus at all, no 24 involvement with it until this very last-minute 25 intervention. 33 1 Q. You knew that there was a risk of civil claims for 2 wrongful prosecutions and civil actions based on such 3 bugs. You were aware of that, 16 July Board meeting, 4 correct? 5 A. Yes, yes. 6 Q. You knew that the Royal Mail Group was responsible for 7 the legacy of those prosecutions, together with the Post 8 Office. You really had earned your keep on that one, 9 hadn't you, you kept the lid on it? 10 A. That was not at all what I was doing. I had no 11 reflection in relation to that whatsoever. 12 Q. Contain negative press, protect the business, hide 13 Horizon issues; that's the truth, isn't it? 14 A. No, Mr Henry, that isn't the truth. I never -- as 15 I said earlier, if there were difficult issues that 16 needed to be addressed, that was what I tried to do. 17 Q. Right. Now -- 18 SIR WYN WILLIAMS: Mr Henry, just before you go on to 19 a slightly different topic, if it is, that line of 20 questioning, as you appreciate, is new to me. So I'd be 21 grateful if you or Ms Page would give Mr Beer a note of 22 the documents you've been referring to so that I can 23 read them for myself. 24 MR HENRY: Thank you, sir. We shall do so. 25 The 27 September 2013, the prospectus is released, 34 1 the closing date for Royal Mail share applications is 2 8 October 2013, and this is around the time, a month 3 after we can know for sure that you had been told about 4 Gareth Jenkins, because you must accept that you'd been 5 told about the Gareth Jenkins problem at least a month 6 before 27 September 2013? 7 A. I believe that's correct, yes. 8 Q. Right. 9 A. I explained to Mr Beer what I had been told about Gareth 10 Jenkins and the bugs. 11 Q. Yes. I am just going to concentrate -- because 12 I suggest that your conversation with Lesley Sewell is 13 a creation of yours, isn't it? 14 A. I'm sorry? 15 Q. Well, you see, you want to explain how you acquired the 16 information about Jenkins but, at the same time, being 17 told that it wasn't a serious legal problem. So you 18 have an undocumented conversation with Ms Sewell in the 19 corridor, where she says, "Oh it's more of a practical 20 problem, it's all a red herring", and so that gives you 21 reassurance that it isn't a serious legal problem, as 22 you knew it to be. 23 A. I've told the Inquiry exactly how I found out, in the 24 conversation with Lesley Sewell, as I explained to 25 Mr Beer. 35 1 Q. You see, you were fully briefed by the lawyers, weren't 2 you? 3 A. I have spoken to the Inquiry about this with Mr Beer. 4 I was briefed by Lesley, as I explained, I came across 5 her in a corridor looking frustrated about something. 6 We had a conversation, she explained that -- and I don't 7 believe she dismissed it as an inconvenience, or however 8 you suggested. 9 Q. The question I'm putting to you is that you were fully 10 briefed about this, about risk, by Susan Crichton. What 11 do you say to that? 12 A. I was briefed by Susan that Gareth Jenkins could no 13 longer be used. I'm not sure what you mean by "risk". 14 What I know now is much more about this, that Gareth 15 Jenkins hadn't been properly briefed in the first place 16 as an expert witness, and -- but, at the time, I had no 17 idea of the contents of the Simon Clarke Advice. 18 Q. I want to ask you, please, because I'm going to suggest 19 to you that you must have known about this by the end of 20 August and I want to take you to POL00108065, and could 21 we go to the second page, please. Could we scroll up, 22 please. Yes, right, "Legal and Adjudication of future 23 case": 24 "We are urgently working with our external firms to 25 identify an independent expert to provide evidence on 36 1 the Horizon system. PREVIOUSLY THIS WAS PROVIDED BY 2 FUJITSU?" 3 These are you, in caps. 4 A. Yes. 5 Q. "WHY MOVE FROM THIS? DO WE HAVE TO VALIDATE FUJITSU?" 6 Okay? You sent that to Susan Crichton -- from 7 memory I think it was 23 August. She responds on the 8 28th, I think, and she says this: 9 "We are concerned that that is needs to be 10 independent rather than [Fujitsu] verifying its own 11 system. Happy to explain rationale further at our 12 steering board meeting this week." 13 That took place on 29 August 2013. So there we have 14 a very careful response from Susan Crichton, not putting 15 down anything in writing, but she must have fully 16 informed you about the problem by the steering group 17 meeting on 29 August 2013. 18 A. The nature of this response -- which, again, I've only 19 seen this morning but I think I'm fairly clear in my 20 recall on this -- is that we were under significant 21 pressure, as the Inquiry has heard, from myself and many 22 others, in terms of cost management. And my question 23 here was based on this, which is: well, surely, if we've 24 had to stand down Mr Jenkins -- I don't know whether 25 I remembered his name or not at this stage -- why would 37 1 we not get Fujitsu to provide us another witness -- 2 another -- yes, another witness? Why would we move from 3 that because the cost on that had been borne by Fujitsu? 4 And so my last question is, "Does this mean, therefore, 5 we can't do that because we have to validate Fujitsu?" 6 It was a completely open, straightforward question and 7 Susan's answer was, "I'll explain that to you when we 8 meet". 9 Q. I've got very little time left so I'm going to have to 10 just give you the document references without putting 11 them up. I suggest that this knowledge changed your 12 behaviour, because your plan was to have a Lessons 13 Learned Review going into some considerable detail, 14 POL00146243. 15 On 3 September 2013, that was run past Bond 16 Dickinson and you decide to limit the Lessons Learned 17 Review, and de-risk it by making it much smaller in 18 scope and that it should only take place after Susan 19 Crichton has gone. That, I suggest, is because you are 20 already moving into cover-up mode concerning Gareth 21 Jenkins. 22 A. No, and I'm sorry we haven't got more time to go through 23 that because I read that document this morning. The -- 24 there were two issues around the Lessons Learned Review. 25 I was looking for, as the Inquiry has heard, a very fast 38 1 review, because I was faced with how do we really make 2 this scheme work going forwards; how do we work properly 3 and carefully with Second Sight and the JFSA; and what 4 were the lessons learnt in terms of the project 5 management side? That was going to be overseen by the 6 ARC and the Chair of ARC. 7 When I came back off holiday there was a different 8 process put in place. 9 Susan and Simon Baker were leaving the organisation 10 and part of that review had been to look at how, as 11 I explained yesterday, the project management hadn't 12 been handled as well as it could have been. As they 13 were leaving the organisation, the requirement was for 14 something fairly fast and speedy, so we could move 15 forward. 16 At the same time -- and I was not aware of this, 17 I guess it must have been Susan -- somebody sought 18 advice from Bond Dickinson, who came back with -- and 19 I've only seen it this morning -- a three-page note as 20 to why, from a legal point of view, the review shouldn't 21 be taken forwards and so that was what was -- that is 22 what was -- that is what happened. I -- 23 Q. Andy Parsons was telling you that it would blow open 24 duties of proactive disclosure for criminal appeals. 25 A. It's a very long note and there is a lot of legal 39 1 information in it, and I say to the person who forwarded 2 it to me, "Thank you, I can see what this says", and 3 then I say that I'm going to discuss it with Alwen. 4 I have seen nothing more, Mr Henry. But if you are 5 suggesting that I have suddenly changed my approach to 6 things, that was not the case. All the -- 7 Q. No, you said the timing was helpful, that you would 8 follow their advice and that the timing was helpful. 9 The timing was helpful because you knew about Gareth 10 Jenkins; you knew about the unsafe witness and you did 11 nothing to disclose it. 12 A. That's not the case -- 13 Q. Now, I've got one -- 14 A. -- and I think it's really important. That is not the 15 case; I did not know that. If the Post Office knew it, 16 it should have disclosed it and those advices should 17 have come to the Board. 18 Q. What legal knowledge do you need to know, Ms Vennells, 19 that if an unsafe witness has given false witness or 20 false evidence against somebody by not telling the whole 21 picture about Horizon's integrity, what legal knowledge 22 did you need to know to say, "Oh well, we should tell 23 her lawyers"? 24 A. I understood that we were in the process of disclosing 25 the Second Sight Report and, I learned later, the Helen 40 1 Rose Report, to -- as part of the CK Sift Review. 2 Q. That's separate and distinct from Gareth Jenkins' 3 alleged misconduct and alleged perjury. 4 SIR WYN WILLIAMS: Mr Henry, I've got the point. 5 MR HENRY: You've got the point. Can I go to one last 6 document, sir? I'll deal with it very, very quickly. 7 SIR WYN WILLIAMS: Yes. 8 MR HENRY: On 23 February 2015 there is a document called 9 POL00116285. If we could get that up, I would be so 10 grateful. 11 Could we go to the 3.4 in the document. This is you 12 in contact with your team and can we go to 3.4, further 13 down. Yes, thank you, "Prosecution paper (Chris 14 [Aujard] and Mark)". Then you write this: 15 "If we are likely to take forwards fewer of the 16 stacked cases -- what is the reason and what is the 17 comms line to explain that? Presumably this is 18 genuinely a [Post Office] view of lessons learnt and/or 19 closer to the supportive mutual culture we want in 20 place. If we were to explain it like that, does it then 21 lead to a need for further disclosure re past legal 22 cases -- presumably not as they were subject to the 23 policy at the time?" 24 Then Mr Aujard responds: 25 "Correct, and double-checked with Brian Altman QC." 41 1 Ms Vennells, the real reason you're not prosecuting 2 stacked cases is because you don't have an expert to 3 validate Horizon. You knew that. 4 A. No, at this date, we had stopped prosecutions. 5 Q. Stacked cases are the cases waiting to be prosecuted. 6 A. Yes, they were the ones waiting, yes, and I say in the 7 next point, actually, that I'm uncomfortable keeping 8 people waiting; this will be a big deal for them and 9 very stressful. 10 Q. What you're doing here, I suggest, is what you have done 11 in other contexts: you're spinning it, telling your team 12 what you want to hear. You're spinning it so that you 13 don't have to provide disclosure of that, the reason why 14 you don't have an expert, because of the unsafe witness 15 and the whole debacle concerning Gareth Jenkins. That's 16 what you're doing. 17 You've disguised all that in this cloying, 18 managerial ease and your counsel tells you that 19 non-disclosure of all that has been double-checked with 20 the QC and he is fine with it. That's what's happening 21 here: 22 "... what is the reason and what is the comms line 23 to explain [why we're taking forwards fewer of the 24 stacked cases]? Presumably this is genuinely a [Post 25 Office] view of lessons learnt and/or closer to the 42 1 supportive mutual culture we want in place. If we were 2 to explain it like that, does it then lead to a need for 3 further disclosure regarding legal cases -- presumably 4 not ..." 5 "Correct, and double-checked with Brian Altman ..." 6 This is how you led, Ms Vennells. You led through 7 deception, manipulation and word weaving the reality you 8 wanted in place. 9 A. That isn't the case, Mr Henry. I worked in a very 10 straightforward way and the Inquiry has seen so many 11 examples of where I fired questions in a very 12 straightforward way, usually because I don't understand 13 a particular issue, and that is what I'm asking here. 14 If you can read this, with a very neutral intent of 15 me trying to seek information, that is what I was doing. 16 I didn't work under deception. I was trying to address 17 a culture in the organisation which I had found to be 18 command and control, where people couldn't speak their 19 minds and they couldn't speak up. I was trying to 20 encourage people to work in that way. I didn't -- I did 21 not deal in deception. 22 Q. You did not -- 23 SIR WYN WILLIAMS: Thank you both very much. 24 MR HENRY: Thank you. 25 SIR WYN WILLIAMS: I think that's fine. 43 1 MR HENRY: Thank you, sir. 2 SIR WYN WILLIAMS: We'll now have our first morning break 3 and, Mr Henry, you'll be glad to know that there's been 4 great efficiency because I've already been sent 5 a message to the effect that the documents you referred 6 to are now with me. 7 MR HENRY: Thank you, sir. I have to thank my learned 8 junior. 9 SIR WYN WILLIAMS: Well, I'm thankful to you both. 10 I think by my clock it's 10.56 so 11.10 all right 11 with everyone? 12 (10.56 am) 13 (A short break) 14 (11.12 am) 15 MR BEER: Good morning, sir, can you see and hear us still? 16 SIR WYN WILLIAMS: Yes, I can, thank you. 17 MR BEER: I'll just wait for the room to settle down because 18 we're about to hear some evidence. 19 Yes, it's Mr Stein. 20 SIR WYN WILLIAMS: Yes, thank you, Mr Beer. 21 Questioned by MR STEIN 22 SIR WYN WILLIAMS: Is there still some chatter going on, 23 Mr Stein, which is preventing you starting? 24 MR STEIN: Sir, no, there was a phone that was going off, 25 and I was just pausing for a moment. 44 1 SIR WYN WILLIAMS: All right, that's fine. 2 MR STEIN: All right. 3 Ms Vennells, the situation here is that you covered 4 up the faults in the Horizon system, didn't you? You 5 papered over the cracks and dragged POL, the Post 6 Office, into financial profitability over the debris 7 that your firm had made of the lives of the 8 subpostmasters; that's what happened here, isn't it, 9 Ms Vennells? 10 A. I said at the very beginning of giving my evidence -- 11 there are no words that can express the regret that 12 I feel for what happened to the subpostmasters. I had 13 an objective, it is right, as the Chief Executive of the 14 company, to bring it to -- it wasn't profitability but 15 a commercial sustainability so that it consumed less 16 funding and less subsidy from the Government -- 17 Q. What the evidence that's shown us, Ms Vennells, is quite 18 simply this: you didn't actually care about 19 subpostmasters/mistresses and their employees, did you, 20 Ms Vennells? 21 A. When I was Chief Executive of the Post Office, and 22 before that as Network Director, I spent many hundreds 23 of days, met hundreds, if not thousands, of 24 subpostmasters and their staff, and I was noted within 25 the organisation for caring about subpostmasters, and 45 1 one of my huge regrets in this is that I did not do that 2 for the subpostmasters affected in this way and that 3 will be with me. 4 Q. At the time of your appointment, Ms Vennells, the Post 5 Office had gone through the Network Reinvention 6 Programme in 2001, 2004. That had been an attempt to 7 ensure the survival of the Post Office from the attack 8 by commercial providers to the core business and, also, 9 to cope with the fact that there was an increasing 10 take-up of digital banking. Now, that was just before 11 the time you joined. Do you remember being told about 12 the Network Reinvention Programme? 13 A. The Network Reinvention Programme was six years before 14 I joined. 15 Q. Yes. 16 A. I remember the name. That's all I recall of it. 17 Q. Right, so the answer is yes. By 2006, the next Save the 18 Post Office programme is Network Change. Now, that went 19 from 2006 to 2009 or 2010; do you remember that one? 20 A. I do. 21 Q. Right. Now, people that worked in the Post Office may 22 recall the fact that Post Office staff members wore 23 lanyards, the sort of lanyards we have for this Inquiry, 24 which had "Forward 5 to 11" on them; do you remember 25 that? 46 1 A. I do. 2 Q. That was a way of stating that that programme, the 3 Network Change Programme, was going to be the next 4 attempt to return the Post Office to profit by the year 5 2011; do you recall that? 6 A. The Forward 5 to 11 programme was much wider than 7 Network Change. That was one workstream of it. 8 Q. Yes, so the answer is, yes, this was the next attempt to 9 try to get the Post Office back into profitability; do 10 you agree? 11 A. Forward 5 to 11, yes, certainly. 12 Q. Right. So by 2010/2011, we then get to the start of the 13 Network Transformation Programme; do you recall that 14 one? 15 A. I do. 16 Q. Now, you should recall that one because, by this point, 17 you had been appointed as Network Director and then 18 later on as the CEO of the Post Office; is that correct? 19 A. That's correct. 20 Q. Now, the Network Transformation Programme was the Post 21 Office's attempt to eliminate subpostmasters' basic pay, 22 in other words cut out a certain amount of expenditure 23 from the balance sheet but increase slightly the 24 percentage from Post Office transactions going to 25 subpostmasters; do you agree that was one of the 47 1 strategies? 2 A. That's not entirely correct. It was far more complex 3 than that. 4 Q. I'm not saying that was not complex, I'm saying it was 5 one part of it; do you agree? 6 A. That misrepresents the offers and the impacts on 7 subpostmasters. There -- 8 Q. Do you agree, Ms Vennells, that the position -- 9 SIR WYN WILLIAMS: Sorry. 10 MR STEIN: Yes, sir, sorry. 11 SIR WYN WILLIAMS: I know it's extremely tempting and 12 Mr Henry cured himself of it. I don't want the witness 13 being spoken to when she's answering and I don't want 14 the witness answering when you're asking your question, 15 if you see what I mean. 16 MR STEIN: Let's try it again, Ms Vennells. Was one part of 17 the Network Transformation Programme an attempt to 18 reduce the bill to the Post Office by trying to get rid 19 of the basic pay to subpostmasters? 20 A. That wasn't at all the way it was -- the objectives were 21 set, no. I can explain the programme to you, if you 22 wish, but that was not the objective, to remove the 23 basic pay from subpostmasters. There were three 24 different aspects of the pay that was looked at and 25 some -- and subpostmasters, for many years, were able to 48 1 stay on the original contract, if they so chose. 2 There were other subpostmasters in areas of 3 protected postcodes where the contract was never changed 4 and, in fact, they were given additional subsidy. There 5 were then two models of Post Office that were put in 6 place: the Main Post Office, which is I think the one 7 you're referring to, where the larger post offices, 8 which were alongside significant retail businesses and 9 had high footfall, had the opportunity to grow sales, 10 and were paid on a purely -- but, again, it was 11 extremely complex -- but a commissioned-based payment. 12 The Locals model was a combination. 13 Q. Right. We do agree on one thing: Network Transformation 14 was a complex programme to try and get the Post Office 15 back into commercial reality -- I'm calling it 16 profitability; do you agree with that? 17 A. I do. It was one of number of streams, there were -- as 18 Alisdair Cameron mentioned in his evidence, there was 19 significant job cuts and and salary freezes for those 20 who worked for Post Office Limited too, the Crown post 21 offices and cash centres were affected. 22 Q. Right, we agree on one thing: this the latest attempt to 23 get the Post Office back on the rails. 24 A. Yes. 25 Q. Yes, fine. That's all I'm trying to establish, 49 1 Ms Vennells. 2 That also included a hard won, and no doubt complex, 3 negotiation to ensure that there was a financial package 4 from Government of 1.6 billion. 5 A. That's correct. 6 Q. Yes. Now, as I understand the papers that relate to 7 this, the total that was going to be achieved by way of 8 an injection of cash into the Post Office was going to 9 include another 400 million, taking it up to £2 billion; 10 is that about right? 11 A. I don't recollect the 2 billion figure and the subsidy 12 was divided into two parts: one was an ongoing subsidy 13 to keep the post offices going and the other was 14 an investment to try to make the savings and to invest 15 in, for instance, IT. 16 Q. Now, we know that this is ongoing because we can see, if 17 we wish to, that there's the Post Office transformation 18 documents, the third report of the session of the House 19 of Commons, Business, Innovation and Skills Committee, 20 a committee that you may recall attending. Now, that 21 was in 2012. By the time we get to 2013, the Network 22 Transformation Programme was starting to work, wasn't 23 it? It was leading to some improvements in the business 24 viability; do you agree? 25 A. I'm not sure I remember that. My recollection of the 50 1 Network Transformation Programme was a very difficult 2 meeting with the Minister where we were told that, 3 instead of converting 19 post offices a week, we had to 4 get to 50, and I believe that was around 2013. I think 5 it was another couple of years before the impacts were 6 made. 7 Q. Eventually, though, it was successful. By about 2017, 8 the balance sheet was looking better, essentially the 9 Post Office had come into commercial viability; do you 10 accept that? 11 A. I think that's probably about right -- 12 Q. That's largely how you got your gong, your CBE, by being 13 able to parade the fact that this was your work as a CEO 14 of the Post Office that led the Post Office's 15 transformation into commercial viability. That's what 16 you got the gong for, isn't it? 17 A. I didn't put together the testimonial for the CBE, 18 I never saw what it was recommended for. It was for 19 services to the Post Office and for charity. I'm sure 20 that was part of it. But the other part of the 21 turnaround of the Post Office was keeping post offices 22 in communities across the UK -- when I joined, and you 23 quite rightly point out the Network Change Programme, we 24 were closing thousands of post offices and that was 25 devastating communities, and one of the significant 51 1 outcomes of Network Transformation and the whole 2 turnaround programme was that post offices became 3 sustainable and very few closed, and so the UK was 4 better served in that sense. 5 Q. Thank you, Ms Vennells, for describing your view on what 6 happened. 7 So we do know this. 2013, by that point, we have 8 had all of these different programmes in place to try to 9 rescue the Post Office. The latest one, that was the 10 latest attempt, was Network Transformation. So let's 11 see how we compare that to what actually happened in 12 relation to the Horizon system. 13 On your account, you had been repeatedly assured 14 that the Horizon system was reliable; do you agree with 15 that? 16 A. I agree. 17 Q. Right. By 2013, you had learned that bugs did exist 18 within the Horizon system; is that correct? 19 A. That's correct. 20 Q. You'd learned the 14 branch issue bug existed; is that 21 correct? 22 A. Yes. 23 Q. The 62 branch issue bug existed, otherwise known to the 24 Inquiry as mismatch bug? 25 A. Yes. 52 1 Q. Yes? And you accept in your statement at 2 paragraph 390 -- I'm not going to take you to it -- that 3 those two bugs were significant, do you agree? 4 A. Yes. 5 Q. Okay. Later on in 2013, the Falkirk bug was learnt by 6 you, in July 2013, paragraph 421 of your statement -- 7 again, I'm not going to take you to it; do you agree? 8 A. I do. 9 Q. So by that point, July 2013, you'd learnt, contrary to 10 what you'd been told, that three bugs existed in the 11 Horizon system; is that right? 12 A. Yes. 13 Q. Now, without getting into any detail, you'd also learnt, 14 in the midst of 2013, that the expert used to support 15 prosecution had failed to mention bugs in the system and 16 that thereby disqualified himself in acting in future 17 cases; is that correct? 18 A. Yes, could you say that again? 19 Q. Yes. You had learned by mid-2013, that the expert used 20 to support prosecutions had failed to mention bugs in 21 the system? 22 A. Yes, I had learned that he had failed to mention those 23 two bugs, I think was my understanding, and, as I said, 24 that when it was explained to me, that the explanation 25 was that he had not identified the impact of those two 53 1 bugs on the case that it was applicable to. 2 Q. And had thereby disqualified himself to act in further 3 cases; you knew that, as well, yes? 4 A. Yes. 5 Q. You knew, as well, in mid-2013, that questions were 6 being asked about remote access to branch accounts; do 7 you agree? 8 A. Yes, yes. 9 Q. You had the Second Sight Report that again came along 10 mid-2013, correct? 11 A. Yes. 12 Q. You had learned something about the fact that Mr Scott, 13 Head of Security, ex-police officer, who was the person 14 with control over whether people should be prosecuted, 15 had been said to have interfered with the proper 16 recordkeeping of meetings, designed as a hub for Horizon 17 related issues; do you agree you'd learned that as well? 18 A. Yes, yes. 19 Q. Right. By this point, you'd had serial complainants 20 from the JFSA about investigations, civil actions and 21 prosecutions; do you agree? 22 A. Yes. 23 Q. You had letters that were gone through by Mr Beer 24 yesterday from subpostmasters coming to your own office, 25 complaining about the way they'd been treated. 54 1 A. Yes. 2 Q. You had articles in the press, from the Computer Weekly 3 magazine and Private Eye and other press outlets; you 4 had that as well -- 5 A. I did. 6 Q. -- mid-2013? 7 A. Yes. 8 Q. You also said in evidence this week on Wednesday, in 9 reply to Mr Beer, that, by 2012, you had learned for the 10 first time that the Post Office actually took their own 11 people to court, against what you said was your 12 assumption that those matters were prosecuted by the 13 police. 14 A. Yes. 15 Q. So you'd learned that in 2012; is that right? 16 A. Yes. 17 Q. So if we tie two points together: by 2012, you had 18 learnt about the fact that the Post Office actually 19 prosecuted people, by 2013, you had learnt that the fact 20 was that Post Office actually prosecuted its own people 21 and the expert being used to support those prosecutions 22 was no longer regard as reliable; is that right? 23 A. Yes. 24 Q. You also knew that there was a reputational and 25 potentially financial risk to the Post Office that had 55 1 to be discussed with the Board, arising from possible 2 attempts to reopen past convictions; you'd learned about 3 that as well, hadn't you? 4 A. Yes. 5 Q. Do you agree, when considering this entire collection of 6 information, that your world belief in the Horizon 7 system had been shaken to the core? 8 A. As I have explained over the last couple of days and in 9 my statement, I-- if -- I'm sure you don't want to go 10 back through those different points but, as I've 11 explained previously, my understanding around the bugs 12 is that they had been fixed, that they affected a small 13 number of post offices, that Mr Jenkins had had to be 14 stood down because of that, and that the Post Office was 15 no longer bringing prosecutions, and that it would look 16 for an expert witness at a future stage. 17 I was not aware, as I've said a number of times now, 18 that the elements around Mr Jenkins had caused the Post 19 Office to breach its duties as a prosecutor, and 20 I accept the other matters that you've explained. 21 Q. This was an entire collection of Horizon belief 22 shattering facts that were a direct attack upon the very 23 basic system that supported the Post Office; all of 24 these coming one after another -- bang, bang, bang -- 25 attacking the Horizon system. By the end of 2013, you 56 1 could have been in no doubt, Ms Vennells, that the 2 Horizon system needed investigation, needed inquiry, 3 needed a deep investigation and review; do you agree, 4 Ms Vennells? 5 A. Mr Stein, I wish we had done that. I absolutely wish we 6 had done that. I still had confidence in the Horizon 7 system from, as the Inquiry has heard, the fact that it 8 was working for the majority of people. I had not 9 understood, I did not have the detail that I have today 10 and, had I had that, my view would have been very, very 11 different. 12 Q. You've said today that your style was to -- it was not 13 your style to keep in with people, in terms of asking 14 questions. You said to Mr Henry, "I fired questions in 15 a very straightforward way". 16 What we don't see, Ms Vennells, is evidence that you 17 fired questions in any way at all at those people that 18 you would expect to be asking questions of. We don't 19 see emails saying, "I demand answers, I need them now. 20 What on earth has been going on with this system?" We 21 don't see those emails, Ms Vennells. Why not? 22 A. I had conversations, as the Inquiry has seen, with the 23 Chief Executive of Fujitsu. I spoke frequently with the 24 CIO. She and her predecessor were involved whenever 25 issues came up with the Horizon system. When the 57 1 letters came in from MPs and members of the public 2 raising issues around the Horizon system, the experts 3 were consulted, and the answers were taken from them. 4 Questions were asked all of the time. Whether I asked 5 the right questions, whether I was given the right 6 answers, I think is now a matter for the Inquiry to look 7 at and I -- 8 Q. So which is it, Ms Vennells? I agree with the Chair, 9 and I apologise if I've interrupted you, but which is 10 it, Ms Vennells? 11 A. I'm sorry, which is -- 12 Q. Which is it, Ms Vennells? You either didn't want to 13 look under the rocks because you didn't dare see what 14 was under there or you didn't ask the right, deep-rooted 15 questions; which is it, Ms Vennells? Go for one or the 16 other, because it's got to be one. 17 A. I believed that I was asking the right questions. 18 I wasn't an IT expert, I may not have asked the right 19 questions but I never once held back from asking if 20 I was unsure about something. Perhaps, if I didn't have 21 the technical expertise, I wasn't asking the correct 22 questions -- but I -- and I've said this a number of 23 times: I trusted individuals with whom I worked. 24 I trusted that the audits that we've talked about seem 25 to confirm that the system was working as it should, 58 1 that there were risks around privileged access, that 2 I accept. But at no point did I have any information 3 that would have pointed me to something I knew nothing 4 about. 5 Q. Ms Vennells, you're not stupid. You studied French, 6 Russian, business, as a degree. You then worked for 7 well-known companies in the UK: Whitbread, Argos, 8 others. You rose through the ranks of the Post Office 9 to become its CEO. You were pushing forward under 10 Network Transformation. You've been quoted as saying 11 that you want and you see a future of the Post Office 12 opening up more branches, 30,000 branches in the future. 13 That was you, Ms Vennells, at the time. A vision 14 you were expressing to everyone that asked about what 15 you could see for the future. Yet, here, all of these 16 facts were adding up there being a real problem, 17 a really difficult problem to chew over, right the way 18 through 2013, and you failed, didn't you? You failed to 19 get into this, on your account. You failed to ask the 20 right questions. You couldn't be bothered, could you, 21 Ms Vennells? The risk was too great. 22 Looking under that rock, you're going to find 23 a problem: it's going to devastate the Post Office, ruin 24 it and you couldn't let that happen, could you, 25 Ms Vennells? 59 1 A. I loved the Post Office. I gave it -- I -- 2 (Interruption from public gallery) 3 (Pause) 4 I worked as hard as I possibly could to deliver the 5 best Post Office for the UK. It would have been 6 wonderful to have 30,000 post offices branches. That 7 would have been the best outcome ever, to have that more 8 post offices in more communities. 9 What I failed to do, and I have made this clear 10 previously, is I did not recognise the -- and it's been 11 discussed within -- across the Inquiry -- the imbalance 12 of power between the institution and the individual. 13 And I let these people down, I am very aware of that. 14 And we should have had better governance in place. We 15 should have had better data reporting in place that 16 meant we could see what was happening to individual 17 postmasters and to the system. That was not the case. 18 At no time did I put the Post Office over the cases 19 that were brought forwards. I worked as hard as I could 20 and to the best of my ability, and I am very sorry that 21 I was not able to find out what the Inquiry has found 22 out. I don't know today how much wasn't told to me. 23 I do know information that I didn't get and I don't 24 know, in some cases, why it didn't reach me. But my 25 only motivation was for the best for the Post Office, 60 1 and for the hundreds of postmasters that I met, and 2 I regret deeply that I let these people down. 3 Q. Ms Vennells, that's absolute rubbish, isn't it. Under 4 your leadership, with your sidekick, Ms van den Bogerd, 5 you took on the GLO litigants in the High Court, 6 fighting tooth and nail, allowing counsel on behalf of 7 the Post Office to cross-examine the litigants on the 8 basis that the losses were their fault due to their 9 incompetence or dishonesty. That's what happened under 10 your leadership. Ms Vennells, that's what you allowed 11 to happen under your leadership. 12 This wasn't thinking, "Hang on, there might just be 13 a problem with the system, I'd better be careful". This 14 was tooth and nail, fight for the Post Office, wasn't 15 it, Ms Vennells? 16 A. Mr Stein, my ambition was that every case in that scheme 17 was looked at and the Inquiry has heard -- and I was 18 disappointed when Angela van den Bogerd gave her 19 evidence that she didn't talk more about that because 20 one of the consistent pieces of feedback we had on the 21 investigations in these cases is -- and the Inquiry 22 heard it from Patrick Bourke as well -- is that they 23 were looked at in every detail. They were re-examined. 24 The system was apparently considered. 25 I don't know why it was the case that the issues 61 1 that were there were not found in those cases. But that 2 was the ambition at the time. 3 Q. Well, let's have a look at what you said to Mr Beer in 4 your evidence on the first day, when you said that you 5 feel that there was a lack of governance and that you 6 were too trusting. 7 As we have already discussed, your statement says 8 that you were first aware of the bugs, suspense and 9 mismatch, in 2013 but you also explain in your 10 statement, and you refer to a speaking note -- and sir, 11 for your notes it is paragraphs 363, 364 -- that you 12 knew that those bugs were from the period 2010 to 2012; 13 do you accept that? 14 A. Yes, I think so. 15 Q. Right. Well, I'll take you to the relevant paragraph. 16 A. I'll take your word for it, it's fine. 17 Q. Plain and simply there, you're told in a speaking note 18 that these are old bugs, okay, or old bugs in terms of 19 going back before 2013. You say in your statement you'd 20 never been told about bugs, errors or defects in the 21 system, and you say in your evidence that what you'd 22 been told about the Horizon system's robustness was 23 wrong; that's what you're saying, do you agree? 24 A. Yes. 25 Q. Okay. Now, help us understand, from your work within 62 1 the Post Office, why was it that the knowledge of the 2 mismatch bug and the way it was dealt with was known to 3 key Post Office figures, yet that information had not 4 been supplied to either Ms van den Bogerd or yourself 5 until 2013? How'd it happen, Ms Vennells? 6 A. I understand there were managers in the meeting looking 7 at the bug, they took a decision on the best approach to 8 it and it stayed within -- 9 Q. No. No. No, no, Ms Vennells. That's not the question, 10 is it? How come you weren't told about this until 2013, 11 instead of being told, "No problem with the system, 12 Ms Vennells, it's robust. No bugs in the system". How 13 come you hadn't been told until 2013 that that actually 14 was a lie? It's not true, there were bugs in the 15 system. You did ask that question, didn't you? Are you 16 saying that you didn't ask that question? 17 MR BEER: Sir, you're on mute. 18 SIR WYN WILLIAMS: I simply intervene to say that you asked 19 her a question but then asked her a second question 20 before she had answered the first question. 21 MR STEIN: All right, I'll recap. 22 Ms Vennells, 2013, you're told that there's bugs in 23 the system. Previous to that, you'd been told no bugs 24 in the system. 25 A. Yes. 63 1 Q. Simple as that. 2 A. Yes. 3 Q. Help us understand, you did ask the question, didn't 4 you, Ms Vennells, "Why haven't I been told this before"? 5 A. I asked the question -- so I cannot remember today what 6 I -- what question I asked but I'm sure you're right 7 that I would have asked that question, and I imagine the 8 answer that came back was, "This is a bug that happened 9 in 2010, it was fixed". At the time the bug happened, 10 I don't know where my responsibilities lay. One 11 imagines that the issues around the IT were raised to 12 the IT Director. 13 My -- what I did when I was told about the bug was 14 to accept, too readily, probably -- that it had been 15 fixed and the right thing had been done. 16 Q. I'm going to take you to your statement. These are two 17 paragraphs. I have asked if possible that they be lined 18 upside by side on our screen, and these are examples, 19 I'm very grateful. These two paragraphs, paragraph 129 20 and paragraph 388, they say roughly the same thing -- 21 and there are other paragraphs, I'll deal with those in 22 a moment. 23 Paragraph 129: 24 "I did not know about any of these BEDs because no 25 one told me about them. As I have mentioned, it was the 64 1 responsibility of Mike Young, Operations Director at 2 this time. As Network Director and a member of the 3 Executive Team, it is difficult to see how I would have 4 come to know about a BED unless it was communicated to 5 me by the IT function." 6 Paragraph 388: 7 "I do not think I ever turned my mind to whether 8 there were any bugs in Horizon (which could include 9 entirely harmless glitches). My understanding until May 10 2013 was that no bugs had been found in Horizon which 11 could affect branch accounts. I believed that because 12 it was what I had been told by a series of senior IT 13 managers over many years." 14 Now, by July 2013, you had learned of two bugs. You 15 had then learned -- 16 A. Yes. 17 Q. -- about a third bug, the Falkirk bug. So what you'd 18 been told by the series of IT managers over the many 19 years of your employment at the Post Office was not 20 true. Now, in the simplest of possible terms, you must 21 have decided, "Well, I need to find out why have I not 22 been told about these bugs?" Did you do that, 23 Ms Vennells? 24 A. I'm not sure that I understand -- sorry, ask the 25 question again, please. 65 1 Q. Yes. By 2013, you'd learned of two bugs, and -- 2 A. Yes. 3 Q. -- then a third, the Falkirk bug -- 4 A. Yes. 5 Q. -- being the third one, yes? 6 A. Yes. 7 Q. We can see on the screen that you're saying in your 8 statement that you've been told repeatedly by IT staff 9 members that there were no bugs in the system. So my 10 question is the simple one: you must have asked "Why 11 have I not been told about these bugs before? What's 12 going on?", did you? 13 A. I was -- when I learned about them in 2013, my priority 14 was to understand -- was to the post offices, to 15 understand that no post offices had suffered any 16 detriment as a result of those bugs. I worked 17 personally on the local suspense bug to make sure that 18 all of the issues related to that were seen through and 19 I accepted, in terms of the payments and mismatch bug, 20 and later the Falkirk bug, the explanations that I was 21 given, that the bugs had been raised, they had been 22 dealt with, and I accepted those explanations that were 23 given. 24 Q. Did you ask the question? 25 A. Mr Stein, I cannot -- 66 1 Q. Why didn't you -- 2 A. I cannot remember if I asked that question or not. 3 Q. Well, the only way to understand your evidence is, if 4 you're saying you care about subpostmasters, if you say 5 that you cared deeply about the system, a sensible, 6 intelligent CEO would say, "What's been going on? Why 7 did not get told that there were bugs in the system, 8 that they existed and that they were the mismatch bug, 9 suspense bug, Callendar Square, all of that"? 10 A. In terms of the bug that arose when I was CEO, the local 11 suspense bug, as I said yesterday, I had a conversation 12 with Alwen Lyons where I said I want to take leadership 13 on this and I want to demonstrate that we will handle 14 these things properly. However, the two previous bugs 15 had been handled was not something for me to deal with. 16 I was reassured that they had been sorted out as they 17 needed to be and I was now working on the one that was 18 still extant, the local suspense bug, and that was what 19 I was doing. 20 Q. You've said -- 21 A. One of them went back to 2006, and I accepted the 22 explanation that that had applied to the Legacy Horizon 23 system, that it had been fixed, and I don't -- the 24 trouble is I don't know if I remember now from the 25 documentation I've read in preparation for the Inquiry, 67 1 or whether I can remember it from then, but that that 2 hadn't had impact on the cases. I think Mr Castleton's 3 case was mentioned in respect of that. 4 And the payments and mismatch bug, I accepted that 5 the work had been done on that and I was concentrating 6 on what needed to happen to the current one and, as I've 7 also said, that these bugs had no impact on the cases 8 which we were concentrating on or about to move into the 9 Complaints and Mediation Scheme. That is what 10 I remember doing. 11 Q. You've said repeatedly that you've been too trusting, 12 that you accepted what people told you. One of the 13 things that you say that you were told was that there 14 were no bugs in the system. So let's turn to the other 15 side of this: who do you blame; who did you trust too 16 much? Name them, please. 17 A. I've mentioned the names previously I -- 18 Q. No, tell us again. Who do you think you shouldn't have 19 trusted because they let you down? Give us the names, 20 please? 21 A. I will do that but I'd also like to say that, at the 22 time, I trusted the people who gave me the information, 23 so on the IT side, Lesley Sewell and Mike Young, and 24 there were two other IT directors but, at the times we 25 were talking about it was Mike Young and Lesley Sewell, 68 1 and, on the legal side, the General Counsels, Susan 2 Crichton and Chris Aujard and, later, Jane MacLeod, and 3 those people I had worked with on numbers of other, very 4 seriously important projects. They had never let me 5 down, and I -- I'm not sure at what stage you start to 6 not trust individuals with whom you have previously. 7 And I think one of the big mistakes, which 8 I mentioned on day 1 here, is that we did not have 9 sufficient oversight, particularly around two very 10 technical functions, because there is a risk, if you 11 rely on, as I did and my Board colleagues did and my 12 Group Executive colleagues -- so this isn't just me -- 13 we relied on one or two key individuals, and that puts 14 a burden on those individuals, and an organisation 15 shouldn't do that. 16 We should have had better scrutiny around the Board 17 table, in terms of IT and Legal, and I thought that 18 I had -- particularly on Legal, I thought I had the 19 scrutiny from the external legal advisers we were using, 20 and what I've heard through recent evidence to the 21 Inquiry may suggest that that wasn't perhaps as good as 22 it should have been. 23 Q. Let's stay with bugs, errors and defects. You mentioned 24 Mike Young. 25 A. Yes. 69 1 Q. Now, Mike Young is referred to in your statement as 2 someone that had told you that there was no difficulty 3 with the system, there are no bugs in the system. By 4 mid-2013, you knew that not to be true. He was someone 5 that hadn't told you the truth; do you agree? 6 A. I don't know -- in terms of the question put in that 7 very black and white way, yes. I don't know what Mike 8 Young did or didn't know. I can only go on what he told 9 me at the time. 10 SIR WYN WILLIAMS: As of July or the summer of 2013, was 11 Mr Young still working at the Post Office? 12 A. Thank you, Sir Wyn, I was going to mention that. 13 I think he had left by then. 14 SIR WYN WILLIAMS: Have you had any contact with him since, 15 at all? 16 A. No, in terms of complete transparency, I think once -- 17 he was an officer in the Para Regiment, and I contacted 18 once on 11 November. 19 SIR WYN WILLIAMS: Have you had any recent contact with him? 20 A. No, I don't know what he's doing now. 21 SIR WYN WILLIAMS: Thank you. I don't want to elliptical 22 about this, Mr Stein, it's just that the Inquiry to date 23 has been unable to trace Mr Young and so I was seeing if 24 Ms Vennells could help us. 25 THE WITNESS: No, I'm sorry. 70 1 MR STEIN: I understand that, sir -- 2 THE WITNESS: I had wondered why he hadn't been here. 3 MR STEIN: Let's turn to another matter, the contract with 4 subpostmasters. 5 Now, you know, because you have read the judgments 6 from Mr Justice Fraser, now Lord Justice Fraser, in the 7 High Court. You know that the contract was discussed in 8 detail in the judgments that he gave, yes? 9 A. Yes. 10 Q. You know that the original contract stated that the 11 subpostmaster is responsible for "all losses caused 12 through his or her own negligence, carelessness or 13 error"; that's what it said originally, yes? 14 A. Yes. 15 Q. Okay. But you're also aware, no doubt from your own 16 work in the Post Office and the evidence we have heard 17 from -- this is an example -- Ms Harding, an accountant 18 who was called in relation to the IMPACT Programme and 19 a Post Office employee, that the interpretation that had 20 been placed upon that contractual terms was that they, 21 the subpostmasters, were liable, contractually, for any 22 shortfalls which had to be made good; you were aware of 23 that? 24 A. I don't remember that but I'm happy to accept it, yes. 25 Q. Well, Mr Cameron gave evidence about that. He explained 71 1 that, traditionally, it had been because it was because 2 the Post Office didn't have visibility on what was going 3 on within a Post Office branch, okay? 4 A. (The witness nodded) 5 Q. So we get the Horizon system that comes in and we know 6 that shortfalls are being identified and that 7 subpostmasters and mistresses are being told to pay up 8 thousands and tens of thousands of pounds from their own 9 money; you're aware of all of that? 10 A. I am, yes. 11 Q. Okay. 12 When, before the High Court judgments, do you become 13 aware that the Post Office treated subpostmasters and 14 mistresses as liable for all and any shortfalls? 15 A. Is that the change from -- to the Network Transformation 16 contract? 17 Q. I'll move on to Network Transformation in a moment and 18 what happened to the contract. 19 So my question is: before the High Court judgment, 20 when did you become aware that the situation within the 21 Post Office was that subpostmasters were being told to 22 pay up for shortfalls? 23 A. I believed that was the way the contract was in place 24 from when I joined as Network Director. 25 Q. Right, okay, all right. So you accepted, is this 72 1 correct, that there are was effectively automatic 2 liability for a subpostmaster for an apparent shortfall 3 identified on the Horizon system of, for example, 4 £20,000? That's what you believed was the situation, 5 and you thought it was fair; is that right, Ms Vennells? 6 A. I understood -- I'm not -- I'm not entirely sure what 7 you're asking. I understood the contract that was in 8 place and I relied on the expertise of those dealing 9 with it -- dealing with investigations, to come to 10 whatever the correct interpretation was. I never 11 personally had any close involvement with the contract 12 or how that was interpreted or how postmasters were held 13 accountable for it. 14 Q. You turn to this all the time, don't you, Ms Vennells? 15 You always keep a distance between any knowledge you've 16 got and application of that knowledge, and you say there 17 were all these other people around, this entire group of 18 people within POL, they keep an eye on this, that's 19 their thing. It's their fault for not bringing stuff to 20 you, it's their fault for not telling you the truth. 21 That's what you do repeatedly, Ms Vennells, isn't it? 22 My question is a simple one -- 23 A. Mr Stein -- 24 Q. -- you were aware that subpostmasters had to pay up when 25 there was an alleged shortfall on the Horizon system, as 73 1 an example, for £20,000, sums like that? You were aware 2 of that, weren't you, Ms Vennells? 3 A. Mr Stein, I was the Chief Executive and I was tying to 4 run an organisation of 60,000 -- 5 Q. Answer my question. 6 A. I will come to your question but you made a statement 7 about why I didn't know things. At the level I was 8 working at, I did not have sight of those sorts of 9 decisions and nor would I -- nor could it have ever 10 happened. I was running an organisation, 60,000 people. 11 You have to have various layers of management to do 12 that. I regret deeply that some of that information 13 didn't reach me and I accept what you say that the Post 14 Office interpreted the contract and held people 15 accountable, as you've just suggested. 16 Q. When did it come to your attention that people were 17 being asked to pay up for very large sums of money that 18 were identified as so-called shortfalls: when, 19 Ms Vennells? 20 A. (Pause) 21 I imagine, when we were starting to -- or when the 22 team working on the Complaint and Mediation Scheme were 23 looking at the detail of some of those cases. And 24 I knew about Mrs Misra's case, which was a huge amount 25 of money. I can't remember other examples but I'm sure 74 1 there were some. 2 Q. Right. So we've identified that this came to your 3 attention in the way that I've described. This, again, 4 is around 2013; is that fair? 5 A. Yes, I would think so. 6 Q. Okay. Right. Now, what enquiry did you make, having 7 this been brought to your attention, that the Horizon 8 system blames all shortfalls upon subpostmasters for 9 large sums of money? What did you do about that? What 10 enquiry did you make about it, Ms Vennells? 11 A. I set up the Complaint and Mediation Scheme to look into 12 every single one of those enquiries. 13 Q. You see a reasonable, caring CEO would have said, 14 "I want answers. I want to know what's going on. 15 I want to find out about what's happening to these 16 people, the subpostmasters, who are the lifeblood of the 17 system and I want to know that answer with me now", not 18 set up some distant review. Ms Vennells, you didn't do 19 that, did you? 20 A. I think you will find cases where I asked those sorts of 21 questions but, where we were dealing with historic 22 cases, they needed to go through a proper review 23 process. You can't, just as a Chief Executive, ask 24 somebody for their opinion on something; you have to go 25 into it in a huge amount of detail, which is what 75 1 I understood was happening, and I regret that we did not 2 deal with those cases as we should have done. 3 Q. Now, we've mentioned the Network Transformation 4 Programme and we're going to just have a brief look at 5 the 2013 version of the contract, which is at 6 POL00003872. Can we go, please, to page 12. 7 SIR WYN WILLIAMS: What were the last three numbers, again, 8 Mr Stein? 9 MR STEIN: The last three numbers -- well, four numbers are 10 3872. 11 SIR WYN WILLIAMS: 3872. 12 MR STEIN: POL00003872. 13 SIR WYN WILLIAMS: Thanks very much. 14 MR STEIN: If we can scroll down slightly, we'll see 15 paragraph 4.1 -- and if you can just highlight the 4.1, 16 I'd be, very grateful. Right. 17 So we've discussed what the original contract said, 18 the original contract, which said that the subpostmaster 19 is responsible for all losses caused through his own 20 negligence, carelessness or error, okay? 21 So Network Transformation Programme coming in, in 22 relation to the new contract being put in place, we 23 think the new contract, by 2013, and this contractual 24 term that we're about to look at is repeated in 2014, 25 okay? 76 1 So it says this -- 2 A. I'm sorry, could you just say the last point about again 3 about the relevance of the two dates? 4 Q. Right, 2013 is the version of the Network Transformation 5 contract, the new one that came in at that time -- 6 A. Thank you. 7 Q. -- and this is repeated in the 2014 version of it. So 8 2013, 2014, we've now got this contractual term, 9 paragraph 4.1: 10 "The Operator shall be fully liable for any loss of 11 or damage to, any Post Office Cash and Stock (however 12 this occurs, and whether it occurs as a result of any 13 negligence by the Operator, its Personnel or otherwise, 14 or as a result of any breach of the Agreement by the 15 Operator) except for losses arising from the criminal 16 act of a third party (other than Personnel) which the 17 Operator could not have prevented or mitigated by 18 following Post Office Limited's security procedures or 19 by taking reasonable care." 20 Okay? 21 So chopping out the legalese, basically, this time 22 it says "You pay up", fully liable for any loss or 23 damage, no caveat at all, nothing being said this time 24 about subpostmasters being responsible for all losses 25 caused through his own negligence or carelessness. This 77 1 time it's straight "pay up"; do you accept that? 2 A. Yes. 3 Q. Okay. So, again, by 2013, what you've known about and 4 we've gone through, the collection of problems in the 5 Horizon system, which tell you that there are bugs in 6 the system, tell you that there's a problem with the 7 expert that was called in cases in relation to the 8 system. What the Post Office does, in the teeth of all 9 of that evidence and those issues, is it actually 10 tightens the contractual screw, doesn't it, on 11 subpostmasters? That's what the Post Office was about, 12 even in the face of what must have been doubts about the 13 system, the Post Office decides "Let's make damn sure 14 that the subpostmasters and mistresses pay up". 15 You knew about that, didn't you, Ms Vennells? 16 A. I was aware that the Network Transformation -- so when 17 we went into Network Transformation, the contract that 18 had been in place for many, many years had had numerous 19 iterations to it and the organisation took the 20 opportunity -- this was led by the then Network Director 21 Kevin Gilliland and the Legal Team, and they took the 22 opportunity to, as I understood it, simplify the 23 contract and put something in place that would be more 24 manageable for subpostmasters. 25 When the Network Transformation -- sorry, for 78 1 manageable in terms of what they had had previously was 2 a contract with many, many, addendums added to it -- 3 addenda added to it. This was an opportunity to restate 4 the contract. The contract was signed by, I think, 5 4,000 new subpostmasters. Because of the issues that 6 had been raised by Second Sight, we made sure that they 7 had copies of the contract and that they had legal 8 advisors to assist them as they went through it. 9 As far as I am aware, we had no feedback whatsoever 10 about -- well, to be fair, the new people coming in 11 wouldn't have known this was a change but there were 12 also existing subpostmasters who signed for the new 13 contract. I understand the point you're making about 14 this tightening it up. I didn't know that at the time. 15 But it was accepted by the new and the existing 16 subpostmasters who had changed to this contract, with 17 legal advice. But I completely understand the point 18 you're making. I don't -- 19 Q. It's under your leadership, Ms Vennells. It's under 20 your leadership. You were meant to be setting a tone, 21 a tone that should have gone through this organisation, 22 a tone of caring, you've explained. No one could have 23 cared more for subpostmasters and, under your leadership 24 and your tone, they tightened the contractual screw. 25 That's right, isn't it, Ms Vennells? 79 1 A. The contract was -- this clause was changed. I was not 2 involved in that conversation at all, and it was never 3 presented to me in the way you have. I completely 4 accept that, with the issues that there were with the 5 Horizon system and the things that we have since 6 understood, that this absolutely, where things went 7 wrong for postmasters, was a more difficult contract 8 than the one that had been there previously. Although, 9 as you said before, I believe the interpretation of the 10 previous one was more along the lines of what this 11 amendment said. 12 Q. I will take you to another document, it's FUJ00002037. 13 SIR WYN WILLIAMS: While that's coming up -- and sorry to 14 take a minute of your time, Mr Stein -- but you said 15 that this contract was the contract which newcomers to 16 the Post Office, as subpostmasters, would conclude but 17 you also said that existing postmasters, so already 18 contractually bound, signed this contract. Now, the 19 question I want to ask is: was that optional? Were 20 they, in effect, cajoled into signing it or what, what 21 happened? The existing postmasters -- 22 A. Yes, I understand Sir Wyn. It was optional, and 23 those -- so this -- 24 (Interruption from public gallery) 25 MR BEER: No, people should not shout out from the public 80 1 gallery, otherwise they will be removed. The witness 2 should give her evidence without interruption. 3 SIR WYN WILLIAMS: Thank you, Mr Beer. 4 A. Thank you. I tried to explain earlier, this was quite 5 a complex programme, Network Transformation. There were 6 a number of different options for subpostmasters. Some 7 chose to stay on the existing contract. Some, in 8 a sense, had no option other than to stay on the 9 existing contract because they were within what we'll 10 call protected areas. Some chose to leave the 11 organisation and they took with them compensation, which 12 was funded -- had been negotiated by the NFSP and was 13 funded by the Government from this investment subsidy, 14 and others chose to take an investment, which the Post 15 Office made with them -- for them and with them, to 16 convert their existing post offices to what was called 17 a Mains or a Locals post office, and that was when they 18 changed to the Mains contract. 19 So I don't know, Sir Wyn, the number of post offices 20 in the new Mains contract which were existing or new 21 postmasters but there was a mix of the two. 22 SIR WYN WILLIAMS: That's fine. I just wanted to get 23 a flavour of what occurred. 24 A. Thank you. 25 SIR WYN WILLIAMS: You can add two minutes to your time, 81 1 Mr Stein. 2 MR STEIN: Thank you, sir. I will try and use them wisely. 3 FUJ00002037. 4 A. I should have been brief briefer. Thank you. 5 Q. This document is an "Application Support Service (Fourth 6 Line): Service Description". Now, that rather 7 entertaining title is a document that's dated 24 August 8 2006, so this pre-dates your employment, okay? 9 A. Right. 10 Q. If we go to the bottom of the first page, please. 11 You'll see that this document has got -- 12 A. I'm sorry, Mr Stein, what was this document? Could you 13 just tell me the title again, please. 14 Q. Yes, go to the top again, please. Right. What this 15 application is "Application Support Service (Fourth 16 Line): Service Description", okay? 17 A. All right, thank you. 18 Q. Just to make sure, it says "Fujitsu Services" at the top 19 left-hand corner. Just to make sure this is also known 20 to the Post Office, we'll also go to the bottom of the 21 first page. Thank you. You'll see there approval 22 authorities, name Dave Hulbert, Post Office Head of 23 Systems Operations and Richard Brunskill, Fujitsu 24 Services, okay? 25 A. Yes. 82 1 Q. So it's a joint document, Fujitsu and Post Office, 2006. 2 All right? Now, I'm going to go to page 9, 3 paragraph 2.7.1 at the bottom of the page. Okay. Now, 4 you've been asked a number of questions by Mr Beer which 5 was that the Inquiry has been able to find out documents 6 that demonstrate that there were issues within the 7 system and the Inquiry has been able to ask the right 8 questions and receive documents describing the issues 9 within the system, okay? 10 Now, all you needed to do was ask, "What do we do 11 about these bugs?" Look at the bottom of the page. 12 2.7.1: 13 "Third Line Support Service: 14 "The Third Line Support Service works closely with 15 the Applications Support Service (Fourth Line) to 16 provide bug fixes to enable the resolution of Software 17 Incidents." 18 2006, Ms Vennells. An entire system that is 19 devoted, four lines of support that are operated by the 20 Fujitsu system, paid for by POL, trying to get to 21 resolve bug issues, and you didn't ask the question, 22 "How do we fix these things? What's the system?", or 23 did you? 24 A. I asked the question in relation to -- as I mentioned 25 earlier, my answer is the same. I asked the question on 83 1 the local suspense bug because it was still in place and 2 I accepted what was explained to me, which is that these 3 were -- I don't think we even had a conversation about 4 the Callendar Square bug because it was so long ago. 5 The one in 2010, I was told that all the work had been 6 done and it had been fixed. 7 I completely understand the point you're making: 8 that there must have been u people in the Post Office 9 who knew that this -- one of the questions I have asked 10 is that there must have been IT Managers, whether as 11 senior as Dave Hulbert, I don't know, but who knew that 12 this was happening. I heard Mr Cipione's evidence where 13 I heard that there was fix upon fix and documentation 14 wasn't in place. I don't understand why the Post 15 Office -- or who in the Post Office knew this. I don't 16 believe any Chief Executive, let alone Network Director 17 in a different stream, would understand about the third 18 or fourth line support of an IT system. But I'm very 19 disappointed that I didn't and that somehow that 20 information wasn't explained in some way. 21 Q. You're doing it again, Ms Vennells, aren't you? It 22 wasn't explained. You're doing it again, aren't you? 23 You're saying that other people might -- it might have 24 been quite nice if they'd explained this to me. You do 25 that as a way of avoiding the problem, which is that, at 84 1 best, you didn't ask the question; at worst, you knew 2 that the answer would not help the Post Office. 3 It's what you do, isn't it, Ms Vennells? You 4 distance yourself, time and time again, and you blame 5 these mysterious "other people" for not telling you the 6 truth. 7 A. Mr Stein the Inquiry has seen the number of questions 8 I asked. If I asked questions of senior people in IT or 9 Legal around issues that I don't understand or issues 10 I don't know about, if I don't know there is a third 11 line support service providing bug fixes from 2006, 12 I can't ask the question about it. 13 Q. I'm going to turn briefly to whistleblowing policies and 14 how that was dealt with by the Post Office in 2018. 15 Document POL00030969. This is "Group Policies, 16 Whistleblowing Policy", POL document, as I've described. 17 It's a Post Office document and the date of this, I hope 18 you'll take it from me, is 2018, so it's within the 19 period of time when by you're still at the Post Office, 20 okay? 21 A. Yes. 22 Q. All right. Can we go, please, to page 3 of 15, and 23 paragraph 1.4, bottom of the page. Now, Ms Vennells, 24 you know the importance to a business of whistleblowing 25 policies, don't you? 85 1 A. Yes, I do. 2 Q. It's important for the culture to have an open and 3 honest discussion between staff members, leadership, and 4 with one another, to have a strong whistleblowing 5 policy; do you agree? 6 A. I do. 7 Q. Right. It's important that people are able to find 8 someone within an organisation that they can speak to 9 properly and without fear, so that they can bring 10 matters to the attention of the leadership; do you 11 agree? 12 A. Yes. 13 Q. Right. So, again, let's have a think about how that's 14 applied to the subpostmasters. In 2018, there's 15 something like 11,000 branches still open, okay? All 16 right. 17 1.4, "Application": 18 "This policy is applicable to all employees within 19 the Group and outlines the protections provided for 20 whistleblowers by law. In order to encourage reporting 21 of wrongdoing, Post Office will, where appropriate, 22 extend equivalent protection to postmasters, agent 23 assistants and members of the public." 24 To your knowledge, first of all, was even this 25 tentative extension of the whistleblowing policy in 2018 86 1 the first time that it had been extended to 2 subpostmasters? 3 A. I don't recall, I'm afraid. 4 Q. Why does this policy at 1.4 extend only that protection, 5 where appropriate, to subpostmasters, rather than 6 saying, "Of course, we care about subpostmasters. They 7 need to have someone that they can speak to. It's 8 an important part of the culture that they're able to 9 identify issues and problems within the system"; why 10 doesn't it just simply say that? 11 A. I don't know. It's a good question. I've no idea why 12 those words were necessary. 13 Q. Lastly, let's turned to what happened at the High Court 14 again. You're aware, aren't you, that the High Court 15 judge, Mr Justice Fraser, stated in his Horizon Issues 16 judgment in December 2019 that he'd gained the distinct 17 impression that the Post Office is less committed to the 18 speedy resolution of the entire Group Litigation than 19 are the claimants. Mr Justice Fraser then went on to 20 refer to the extreme nature of costs, which were, even 21 by the experience of a High Court judge, very high, even 22 by the standards of commercial litigation. 23 Do you remember him saying that? 24 A. I think I may have left the organisation by then but 25 I will have read it in the judgment. 87 1 Q. Yes. You see, he wasn't to know that there had been 2 a discussion about the approach to the litigation in 3 September 2017, POL document POL00006380. Thank you. 4 Paragraph 4 of the document, bottom half of page 2. If 5 we can go to paragraph 4.3, actually. Thank you. 6 Right. 7 So this is a Bond Dickinson strategy advice document 8 being considered by the Post Office under your 9 leadership as CEO. What it says there is: 10 "We believe the better solution is to try to focus 11 the Claimants in a collective position where they will 12 either abandon the claims or seek a reasonable 13 settlement. It should be remembered that the claims are 14 financially supported by Freeths (whose fees are at 15 least partially conditional on winning), a third party 16 funder and insurers. Without this support these 17 proceedings would not have been possible. All three 18 entities will likely have the power to pull their 19 support if the merits of the case drop below a certain 20 level. Our target audience is therefore Freeths, the 21 funder and insurers, who will adopt a cold, logical 22 assessment of whether they will get a payout, rather 23 than the Claimants who may wish to fight on principle 24 regardless of merits." 25 2017, the Post Office set about its strategy of 88 1 fighting tooth and claw for its own reputational 2 interests over those claimants at the High Court, and 3 adopted this strategy, as the High Court judge 4 identified. That happened under your leadership, 5 Ms Vennells: all of this did. You set the tone, didn't 6 you, Ms Vennells, and the tone was "Let's eliminate 7 them. Let's get rid of these bugs in the system, the 8 subpostmasters". That's what you set in place, wasn't 9 it, Ms Vennells? 10 A. Is that a question, because I'd like to answer it, if it 11 was. 12 Q. Yes, the "wasn't it, Ms Vennells" was the question, 13 I think you may have noticed. 14 A. I did not set a culture like that. I did not lead the 15 litigation. I remember reading this -- well, actually, 16 I don't know if I saw this particular document because 17 I was not personally involved in the litigation steering 18 committee. There was a Board subcommittee of which 19 I was one member. I had two conversations with Jane 20 MacLeod, and I'm disappointed -- I don't know the reason 21 and I'm making no other point then -- I'm disappointed 22 that she can't come and give evidence to the Inquiry 23 because I think it is important that the Inquiry 24 understand more around the approach to the Group 25 Litigation. 89 1 But I had two conversations with Jane that 2 I remember clearly. They weren't documented because 3 a lot of the -- the way that you work as a Chief 4 Executive is you have conversations as you're going 5 between meetings and things but, specifically, I sat 6 down with Jane twice on this to say that I was very 7 uncomfortable that the Post Office was going through 8 this. The Post Office didn't call the Group Litigation. 9 It was set in place by the postmasters -- and 10 I understand why and I'm very pleased that it was, so 11 that we've got to where we are today -- but it wasn't 12 a policy that I put in place, and the questions I asked 13 of Jane on those two occasions were, "This feels 14 completely wrong to me, what can we do? We should not 15 be in the process where we are fighting in court with 16 subpostmasters". 17 And her first response, when I asked her the first 18 time was that -- I think it was that we hadn't got 19 enough information at this stage but it was very likely 20 that we would try to settle. And the second time that 21 I asked her, her view was -- and the view of the leading 22 counsel that we took -- that, actually, the only way to 23 solve this was to take it through. 24 So I regret hugely the Group Litigation and I've 25 seen all of the paperwork behind it and, in view of the 90 1 judgments that were taken and where we are today, it is 2 unacceptable reading. 3 SIR WYN WILLIAMS: Thank you, Mr Stein. 4 MR STEIN: No further questions, sir. 5 SIR WYN WILLIAMS: That's good. Right, fine. 6 So it's now 12.18, by my clock. So we'll start 7 again at 12.35, and then we have a half-hour session, 8 which, as I've said, encompasses questions on behalf of 9 the NFSP and Ms Sinclair. Thank you. 10 MR STEIN: Thank you, sir. 11 (12.18 pm) 12 (A short break) 13 (12.37 am) 14 MR BEER: Sir, good afternoon. Can you see and hear us? 15 SIR WYN WILLIAMS: Yes, I can, thank you. 16 MR BEER: So we have Ms Watt on behalf of the NFSP and then 17 Ms Christie Allen on behalf of Susan Sinclair. 18 SIR WYN WILLIAMS: Ms Watt, would you be kind enough to 19 arrange your questioning so you're finished around about 20 12.55, please. 21 MS WATT: Sir, around about? 22 SIR WYN WILLIAMS: 12.55. 23 MS WATT: Yes, thank you, I will. 24 Questioned by MS WATT 25 MS WATT: Ms Vennells, I appear for the NFSP. Just by way 91 1 of explanation, the NFSP of today is a Core Participant 2 at this Inquiry, has provided hundreds of documents to 3 the Inquiry, to help understand what was being said and 4 done during the Horizon scandal. 5 Yesterday you were shown what the NFSP today finds 6 and likely many others found a shocking and deplorable 7 email, sent by the former General Secretary at the time, 8 George Thomson. Now, Mr Thomson will have to come to 9 this Inquiry in a few weeks time and answer for the 10 things he said and did but there were a couple of points 11 in Mr Beer's questions of yesterday which I wanted to 12 ask you about first. 13 A. Of course. 14 Q. You were asked by Mr Beer who paid the NFSP's bills; do 15 you remember that? 16 A. Yes. 17 Q. You couldn't quite recall the situation at the time of 18 the email, which was December 2012. 19 A. Right. 20 Q. So, just thinking about that a bit more to see if you 21 can help, I think you would have been aware that the 22 NFSP was a trade union until 2014? 23 A. Thank you. I knew that it had changed status at some 24 stage. 25 Q. You may have been aware the trade union status was 92 1 removed by the certification officer because its members 2 were actually self-employed, rather than employees; were 3 you aware of that? 4 A. I don't think so, no. 5 Q. I think you would have been aware that the grant funding 6 agreement, which you and Mr Thomson were both involved 7 in bringing about, was signed in 2016; do you recall 8 that? 9 A. Thank you. 10 Q. I think you would have been aware that came after 11 a membership vote of the NFSP members at its annual 12 conference, when members were offered the options of 13 a merger with the National Federation of Retail 14 Newsagents, a merger with the CWU, or the grant funding 15 agreement, and they voted for the grant funding 16 agreement; do you remember that? 17 A. I don't remember that, no, but I'll take your word for 18 it. 19 Q. Okay. In the email we saw yesterday, Mr Thomson made 20 reference to Horizon being "robust", and I particularly 21 want to look at that word. Now, that's a word this 22 Inquiry has seen, I have to say, peddled by everyone who 23 has arrived from the Post Office to give evidence: 24 Horizon is robust. It was not just a line; it was 25 a mantra and it was repeated again and again over years 93 1 and years, until it became the corporate truth, and that 2 was in a business run and overseen by you. 3 The NFSP, along with everyone else, were fed that 4 line for years too and, actually, what we saw was 5 Mr Thomson repeating that Post Office line -- Post 6 Office lie -- back to you, wasn't it? 7 A. I think, as I explained yesterday, I and many colleagues 8 in the Post Office took comfort from the fact that 9 senior officials in the NFSP were saying that kind of 10 thing. We've seen many examples of where words are 11 picked up across time. I don't know where "robust" came 12 from originally. It was certainly, you're quite right, 13 used very regularly within the Post Office and we saw 14 an example yesterday by the NFSP. 15 But as I said yesterday, from the Post Office's 16 point of view, we took it as very genuine, useful 17 experience that the NFSP, made up, as you know, of 18 people who ran post offices on a daily basis, found the 19 system to be robust. And I don't know how well you know 20 Mr Thomson or not, but he wasn't somebody who minced his 21 words and, if he thought that was not the case, I don't 22 imagine for one moment that he would have said that. 23 Q. But you would accept that the word "robust" has its 24 origins in the Post Office? 25 A. I don't know. I imagine so but I really don't know. 94 1 Q. Just moving on, you were a Network Director and a member 2 of the senior management team, then CEO of the Post 3 Office during the period of the Horizon prosecutions 4 and, wrapping up everything that's been heard here over 5 the last few days, I'm going to make some suggestions to 6 you, and you can agree with me or not at the end of each 7 one. I will ask it as a question or put it to you, and 8 you can tell me whether you agree or not or accept it or 9 not. 10 A. Thank you. 11 Q. That you took decisions not to look into things further 12 to avoid finding out how bad things were? 13 A. I did not. 14 Q. That you presided over a culture where issues did not 15 come before the Board if you did not want them to? 16 A. Absolutely not. 17 Q. That you presided over a culture which meant that 18 everyone below and reporting to you across all areas of 19 the business thought about Post Office reputation first 20 before everything else? 21 A. No. 22 Q. That you presided over a culture which saw 23 subpostmasters as subordinate to all of the business's 24 interests, despite their actual partnership with the 25 Post Office, their financial stake in the business, 95 1 a stake which provided profits to the Post Office? 2 A. No, and, personally, absolutely not. 3 Q. That you presided over a culture which had, as its 4 priority, a requirement to ensure that the message 5 "Nothing is wrong, everything is fine, Horizon is 6 robust", and that led to MPs, Government ministers, the 7 media, the NFSP, the CWU, the courts, many others, being 8 told for years and years that Horizon was robust when 9 that wasn't true? 10 A. I'm sorry, that -- can you shorten the question? 11 Q. You presided over a culture that allowed that to happen? 12 A. I'm sorry the statement was too long for me to recall. 13 I'm really sorry, would you mind? 14 Q. I'll shorten it. 15 A. Split it into two sentences, if you can. 16 Q. Yes. That you presided over a culture which had as it's 17 priority a requirement to ensure that the message was 18 "Nothing is wrong, everything is fine, Horizon is 19 robust", everyone was told that? 20 A. That's not the case. I am sorry, but there is 21 a qualification to that, that, clearly, for the people 22 affected by this, that was absolutely the case. But 23 that was not a culture. 24 Q. That you presided over a culture in which to maintain 25 that aura of "nothing is wrong and everything is fine", 96 1 you needed to surround yourself with a variety of 2 suitable people, handy defensive people who would make 3 sure no dirty laundry landed on the Post Office's 4 doorstep, such as Angela van den Bogerd, and disposable 5 professionals such as Susan Crichton, who could be 6 blamed for anything that was going wrong; do you accept 7 you presided over that culture? 8 A. No, absolutely not. 9 Q. Looking at your witness statement -- I'm not going to 10 call it up, just for speed -- but at paragraphs 14 to 18 11 you outline the roles you held at the time -- and I've 12 mentioned that -- but across a period from 2007 to 2019, 13 you had those various roles, and we've heard evidence 14 throughout the Inquiry that the culture within the 15 investigation and audit branches was aggressive, that 16 subpostmasters were guilty rather than innocent from the 17 outset, terminology and investigations used offender 18 reports. Do you accept that was a culture inbuilt 19 across all levels of management which you oversaw? 20 A. No, and I think it's important I add a clarification to 21 that as well. The -- when I became Chief Executive, we 22 fairly soon afterwards stopped prosecutions, and the 23 size of that team and the approach of that team was 24 discussed and it was changed substantially. Most of 25 those allegations that you have heard -- and I'm not at 97 1 all challenging them in terms of the way they came 2 across from people who made them -- were from earlier. 3 Q. I want to look at the franchising of Crown post offices 4 when you were Network Director. You talk about that at 5 paragraph 25 of your statement, just for reference. 6 A. Right. 7 Q. So, whereas the NFSP had a subpostmaster membership, the 8 Crown Offices had a trade union membership. So you 9 would have dealt with unions such as the CWU when 10 overseeing the franchising of Crown post offices; is 11 that correct? 12 A. Yes, that's correct. 13 Q. It would have been important to you to have had union 14 buy-in for the continuation of Horizon? 15 A. I'm sorry, I'm not sure I understand the question or the 16 sequence. 17 Q. As part of the overall work that you did with the unions 18 and the franchising, it would have been important for 19 the unions to remain bought into Horizon as the system? 20 A. It was very difficult to get the unions to buy into 21 anything. I don't recall any conversations with either 22 the CWU -- or the CMA would have been the other one -- 23 about them buying into Horizon. 24 Q. You wouldn't have wanted them to start a dispute about 25 Horizon, for instance, would you? 98 1 A. There was no way I had any influence over whether those 2 unions started disputes or not. 3 Q. I think it's correct to say, isn't it, that the NFSP, 4 the CWU and also the Royal Mail Group had facilities and 5 offices within the Post Office main building for them to 6 conduct business with the Post Office. We've heard some 7 evidence of that; is that something you remember? 8 A. I think it may have been the case with Royal Mail but 9 not with the Post Office. 10 Q. Have you any idea what the value of those facilities 11 that were offered came to? 12 A. No. 13 Q. Okay. Some final questions on Network Transformation. 14 At paragraph 144(a) of your witness statement you say 15 the Network Transformation Programme was designed to 16 increase footfall and share costs between the sub post 17 office and the associated retail space, and you 18 mentioned in evidence to Mr Stein there about Network 19 Transformation, you felt, being about sustainable 20 businesses, I think is what you said? 21 A. Yes, yes. 22 Q. I just want to ask a little more about that. By sharing 23 costs between the sub post office and the associated 24 retail space, do you mean that the Post Office wanted 25 the subpostmasters' retail business to bear more of the 99 1 cost of running the branch? 2 A. No, what happened is that in the Mains post offices 3 particularly, they were shops, usually fairly successful 4 retail outlets. The advantage of having a post office 5 alongside those shops is that the post office brought 6 with it a very, very high footfall, and then the retail 7 owner, the subpostmaster, if you like, benefited from 8 increased sales through their retail outlet from the 9 footfall of the post office. That was primarily the 10 model for the Mains post office. 11 For the Locals post office, the postmaster always 12 paid their staff, they were their costs and, in the 13 Locals post office, what we did to a greater extent 14 successfully, is we put a till alongside the retail 15 till, and it still happens today in a couple of my local 16 post offices, you see the staff who work on the retail 17 side working also at the post office counter, which 18 meant that the subpostmaster was able to reduce their 19 overall staffing bills because, if you're in a small 20 shop and the footfall is less, what had to happen 21 previously is you had to pay for two separate members of 22 staff because they were two very separate -- and 23 counters that were apart. 24 Q. Would you agree that the Network Transformation 25 Programme actually had the effect of reducing the cost 100 1 of the post office to the taxpayer by reducing the 2 income to subpostmasters and passing the cost of 3 providing Post Office services to the retailer? 4 A. No, it's a very good question. What actually happened, 5 and much business modelling was done, business plans 6 were produced by subpostmasters as well before they took 7 on either of these models. 8 What happened at the same time is that the 9 Government particularly reduced its business through 10 post offices and, over this time, Government business, 11 which paid the sales through -- sorry, let me make that 12 clearer. 13 If people came to post offices to take up pensions, 14 benefits, process passports, DVLA, that sort of thing, 15 they were all government business and postmasters were 16 paid in different ways per transaction for those. When 17 that business was reduced dramatically, as it was, 18 because Government moved to a digital-by-default policy, 19 so it wanted everybody getting pensions and benefits to 20 have them paid directly into a bank account -- rightly, 21 actually -- and it facilitated that -- what it meant was 22 that the postmasters and the post office lost money 23 because that income simply no longer came through the 24 post office. 25 Q. Would you accept that the Network Transformation 101 1 Programme actually ended up being to the detriment of 2 subpostmasters? 3 A. I don't believe so and the programme was done for both 4 postmasters and communities. We did research, when the 5 programme was put in place initially and then every year 6 since, and I won't have remembered these figures 7 correctly but I think the satisfaction levels were high 8 and a figure of around 80 per cent comes to mind. 9 MS WATT: Thank you, Ms Vennells. Those are my questions, 10 and I think the chair will be happy to find that I'm 11 slightly early. 12 THE WITNESS: Thank you. 13 SIR WYN WILLIAMS: I'm very grateful for your economy of 14 words, Ms Watt. 15 Right, on behalf of Ms Sinclair, then please. 16 Questioned by MS ALLAN 17 MS ALLAN: Good afternoon, Ms Vennells. I'll stand up so 18 you can see me but I'll sit to do my questions. My name 19 is Christie Allan and I represent Core Participant Susan 20 Sinclair, who was a wrongfully convicted 21 subpostmistress. She was the first to successfully 22 appeal her conviction in Scotland, which only happened 23 as recently as September last year. 24 In your witness statement, you state that you were 25 always open to the real possibility of unsafe 102 1 convictions, and as such, you always sought to be 2 questioning in your approach. After reading accounts of 3 subpostmasters and reconciling these with the findings 4 of Second Sight's Interim Report, the identification of 5 bugs with Horizon and the revelations as to Gareth 6 Jenkins in 2013, to what extent, therefore, did you 7 question the safety of convictions including those in 8 Scotland? 9 A. All of the subpostmasters who raised cases were admitted 10 into the scheme, if their applications were considered, 11 that there was a case to do that. There was no means -- 12 there was no intention to exclude anybody, so my 13 understanding -- and I'm very sorry because I didn't -- 14 I wouldn't have known the individual cases -- if there 15 were Scottish cases in those numbers. I am very sorry 16 that it took so long for that to be resolved. 17 Q. Thank you. Were you reassured that there was an extra 18 layer of protection in Scottish prosecutions due to the 19 role of the Crown Office and Procurator Fiscal Service 20 as the independent prosecutor? 21 A. I don't think I -- well, I had no knowledge of that and 22 I don't believe I asked enough questions. There is some 23 documentation that shows that it was a matter that was 24 covered, I think, at a Board meeting but it was not 25 covered with any degree of frequency. I would -- not 103 1 I would have had to -- I had to rely on the legal 2 advisers within the Post Office and the external 3 advisers as to how that should be dealt with. 4 I have seen, both from Inquiry documentation and 5 from witness evidence, that that was not -- this is 6 difficult for me to comment on because I don't 7 understand the legal aspects of it, but I heard the 8 evidence from Cartwright King and it seems to me that 9 that was not handled as well as it could have been. 10 Q. To follow up, was Crown Office not, however, reliant on 11 correct information being timeously disclosed by the 12 Post Office and indeed by you, as CEO, including any new 13 revelations in respect of emerging concerns with Horizon 14 evidence? 15 A. I had no dealings at all with Crown Office, I'm sorry. 16 I'm sorry, I had no dealings with Crown Office because 17 I shouldn't have had dealings with Crown Office. 18 Q. Understood. But would you accept that the Crown Office 19 was reliant on Post Office in providing the relevant 20 information timeously in the -- 21 A. That I don't know. I know that Cartwright King were 22 involved. It may be that they were reliant on 23 Cartwright King. There will be other people who could 24 answer that question better than I can for you. 25 Q. Yes, of course, the point being that there was certain 104 1 knowledge in 2013 that wasn't disclosed timeously to the 2 Crown Office -- 3 A. At the Post Office, I accept, yes. 4 Q. How do you reconcile that, despite your knowledge of 5 issues with the reliability of Horizon evidence, 6 criminal prosecutions based on such evidence continued 7 in Scotland up until 2015? 8 A. My understanding, and there is documentation that says 9 this, was that all prosecutions after 2012 were only -- 10 were not continued based solely on Horizon evidence. 11 I have also learnt that in Scotland there was a greater 12 degree of scrutiny of that because a second area of 13 evidence of corroboration was required as well. But I'm 14 afraid my knowledge of the legal system in Scotland is 15 not sufficient to be able to answer any more than that. 16 Q. Well, unfortunately, we have since learned from the 17 Crown Office that they've identified, so far, four cases 18 since the Crown Office meeting in 2013 with the Post 19 Office that relied on Horizon evidence. 20 My final question to you, Ms Vennells, is: how have 21 you received the statements made by the Lord Advocate to 22 the Scottish Parliament last week that, due to this 23 scandal, the Post Office is no longer trusted and, as 24 such, has been stripped of its own role as a Specialist 25 Reporting Agency in Scotland? 105 1 A. I'm sorry, there was a cough, I missed the beginning of 2 your question. 3 Q. I'll repeat the full question. 4 A. Thank you. 5 Q. How have you received the statement made by the Lord 6 Advocate to the Scottish Parliament last week that, due 7 to this scandal, the Post Office is no longer trusted 8 and, as such, has been stripped of its role as 9 a Specialist Reporting Agency in Scotland? 10 A. I think that's a very appropriate response. 11 MS ALLAN: Thank you, Ms Vennells, that's all. 12 SIR WYN WILLIAMS: Thank you, Ms Christie Allen. 13 So that concludes the morning session. We'll, 14 I think, begin again at 2.00, Mr Beer, unless you 15 suggest otherwise, we have Mr Moloney and the potential, 16 but not necessarily the actuality, of further 17 questioning after that; is that it? 18 MR BEER: Yes, sir, a full hour on Friday, very welcome. We 19 know that Mr Moloney is punctilious with his 20 timekeeping. 21 SIR WYN WILLIAMS: Absolutely, all right then, 2.00. 22 (12.58 pm) 23 (The Short Adjournment) 24 (2.00 pm) 25 MR BEER: Good afternoon, sir, can you see and hear us? 106 1 SIR WYN WILLIAMS: Yes, thank you very much. 2 MR BEER: Thank you over to Mr Moloney, please. 3 Questioned by MR MOLONEY 4 MR MOLONEY: Thank you to, Mr Beer. 5 Mrs Vennells, just three topics to ask you about. 6 Firstly, the importance of legal professional privilege 7 to post office. 8 A. Right. 9 Q. Secondly, your involvement in the RMG prospectus that 10 Mr Henry asked you about this morning. 11 A. Mm-hm. 12 Q. Then, finally, some of the media coverage in 2014. So 13 I'll take those in turn, if I may? 14 A. Okay, thank you. 15 Q. The first one is the importance of legal professional 16 privilege to Post Office. I'd like to go back, if 17 I may, as far as 2011, when Post Office received letters 18 before claim from four former subpostmasters represented 19 by Shoosmiths Solicitors; do you remember that event? 20 A. I remember from the documentation I've seen recently, 21 yes. 22 Q. Thank you. Just for the purposes of accuracy, the 23 letters before claim arrived at Post Office on 26 August 24 2011. This was perceived by Post Office as a potential 25 class action, wasn't it? 107 1 A. Yes, that's right. 2 Q. Yeah, and it was important because it could have caused 3 Post Office to lose a lot of money and it could have 4 been highly damaging reputationally? 5 A. Yes, that would have been the case, certainly. I think 6 they were just concerned, full stop. I don't know that 7 it was just that, but yes. 8 Q. In due course, I'll take you to an email where you give 9 those two reasons for the importance of the class 10 action. 11 A. Okay. 12 Q. Presumably, as Chief Executive, you were up to speed on 13 the issues in the case because it was so important? 14 A. I wasn't Chief Executive at the time. We were still 15 part of the Royal Mail Group and I was, I think, 16 Managing Director at that stage. 17 Q. I'm sorry, Managing Director. 18 A. Yes. 19 Q. You were originally Chief Operating Officer and then 20 became Managing Director? 21 A. That's right, yes. 22 Q. Yeah, entirely. But, as Managing Director -- and 23 perhaps if I could just replace Chief Executive with 24 Managing Director -- but at that time you would, of 25 course, have been up to speed on the issues in the case? 108 1 A. So, just so I'm really clear too, I don't recollect them 2 now but I've seen the documentation. I'm sure that 3 I would have been briefed on them. I believe at that 4 time they were all still being dealt with within the 5 Royal Mail Group. 6 Q. Yes. 7 A. So I wouldn't have been as well briefed as I might have 8 been, had I been in a separate post office. 9 Q. So you think you would have been briefed on the issues 10 but wouldn't have seen the documentation? 11 A. I don't believe I saw -- I think all I will have seen is 12 what you have seen. 13 Q. Okay. Okay. Well, I might take you to some -- 14 A. Of course, yes. 15 Q. -- in due course but the main reason I ask you about 16 this is to do with legal professional privilege -- 17 A. Right, yeah. 18 Q. -- because, faced with this potential class action, 19 legal advice was circulated relating to document 20 retention and document creation, wasn't it? 21 A. Yes, it was, yeah. 22 Q. There was an email from Emily Springford on 20 October 23 2011 and might we look at that now, please. The 24 reference is POL00176467. I'm grateful. If we could, 25 it's on the next page that the meat of the email -- 109 1 that's it. It's from Emily Springford and it's 2 20 October 2011 at 15.51, and the time will become 3 important, Ms Vennells, that's why I point it out. 4 You can see it's to Mrs van den Bogerd, Lesley 5 Sewell, Mike Granville, Dave Pardoe, essentially lots of 6 department heads. The Inquiry has heard that this email 7 was cascaded down through the departments to relevant 8 staff, and I'll come back to the issue of whether or not 9 it was cascaded up to you, but, first of all, I'd like 10 to go through the contents, if I may. 11 A. Mm-hm. 12 Q. If we could please omit, for the sake of time, "Document 13 Preservation" and go down to "Document Creation". Thank 14 you. If we could just move the page slightly up, so we 15 can see more of this paragraph in relation to -- that's 16 great, thank you ever so much: 17 "It is very important that we control the creation 18 of documents which relate to any of the above issues and 19 which might be potentially damaging to POL's defence to 20 the claims, as these may have to be disclosed if these 21 claims proceed to litigation. Your staff should 22 therefore think very carefully before committing to 23 writing anything relating to the above issues which is 24 critical of our own processes or systems, including 25 emails, reports or briefing notes. We appreciate that 110 1 this will not always be practicable, however. 2 "Where it is necessary to create a document 3 containing critical comment on these issues, it will in 4 certain circumstances be possible to claim privilege 5 over the document, so that POL will not have to disclose 6 it in any proceedings. As litigation is now a distinct 7 possibility, the document will be privileged if its 8 dominant purpose is to give/receive legal advice about 9 the litigation or to gather evidence for use in the 10 litigation. This also applies to communications with 11 third parties -- ie with other organisations -- provided 12 they are confidential and their dominant purpose is as 13 set out above. All of the following steps should be 14 taken in order to maximise the chances of privilege 15 attaching to the document: 16 "If the dominant purpose of the communication is not 17 to obtain legal advice, try to structure the document in 18 such a way that its dominant purpose can be said to be 19 evidence gathering for use in the litigation; 20 "Mark every such communication 'legally privileged 21 and confidential'; 22 "If you are sending the document to someone, state 23 in the covering email/memo/letter that you are not 24 waiving privilege by doing so; 25 "Request that the recipient of a communication 111 1 confirm that the document will be kept confidential and 2 that he/she will not forward it to anyone else; 3 "Think very carefully before 'replying to all' on 4 an email -- do all the recipients need to see the 5 communication? 6 "Where possible and appropriate, copy a member of 7 Legal Services into the communication, and make sure 8 that that you are doing so to enable them to advise on 9 the content. Please note that copying a member of Legal 10 Services into the communication alone will not 11 necessarily suffice. 12 "If in doubt, call Legal Services before committing 13 anything to writing which relates to these issues and 14 contains critical wording." 15 Ms Vennells, did you see that advice from Emily 16 Springford? 17 A. I don't believe I did, unless you can take me to 18 something that shows that. 19 Q. Right. I might be able to but, leaving aside for one 20 moment whether or not you did see that email and 21 looking, for example, at some of the contents of that 22 email, firstly, as a person -- not a lawyer -- what do 23 you think about the suggestion that people should "think 24 very carefully before committing to writing anything 25 relating to the above issues which is critical of our 112 1 own processes or systems", because we might have to 2 disclose it"? 3 Does that seem very fair to you, Ms Vennells? 4 A. No, it doesn't and I remember when I read this recently 5 that, as you say, if you read it as a private 6 individual, rather than somebody understanding perhaps 7 the legal thinking behind it, it struck me as an odd 8 thing to say, unless there was some common sense reason 9 that what somebody might be criticising in relation to 10 their job could be misread across to something. But, 11 no, I thought it was an odd thing to say. 12 Q. Yes, and, again, and because you're not a lawyer, and so 13 I ask you as a person -- 14 A. Yes. 15 Q. -- with an interest in fairness, as the head of 16 an organisation, what do you think about saying that if 17 a document is not prepared with the dominant purpose of 18 seeking legal advice, and you can perhaps, as it were, 19 if the dominant purpose of the communication is not to 20 obtain legal advice, try to structure the document in 21 such a way that its dominant purpose can be said to be 22 used for evidence gathering for use in a litigation? 23 A. I think the whole thing about this is odd, that if there 24 is a good reason behind why people should do this, it 25 should have been explained. We came into that in 2016, 113 1 I think, when the Chairman's report was subsumed into 2 work for the Group Litigation and that was -- explained 3 clearly why that -- it was suggested on legal advice 4 that that had to happen. When I saw this, to ask 5 a group of even Senior Managers, as they are, to do 6 this, without even explaining why, it seemed like it was 7 lacking something. 8 Q. Okay, but lacking something or not, this approach 9 immediately became POL orthodoxy, didn't it? In terms 10 of how people behaved in each department, it became the 11 orthodoxy? 12 A. Well, that I don't know but I certainly saw that it was 13 passed on by one of the recipients to their team. 14 Q. Yes, and I'm going to suggest to you that this orthodoxy 15 continued all the way through POL's engagement with 16 Second Sight, all the way through your correspondence 17 with Tim McCormack and all the way through subsequent 18 prosecutions by Post Office, and it was only when 19 Cartwright King, especially Simon Clarke and Harry 20 Bowyer, started saying, actually, there were different 21 disclosure rules for criminal cases, that POL was told 22 that they couldn't possibly do this with criminal cases. 23 Are you able to comment upon that? 24 A. No, I don't know that -- I should have seen it but 25 I don't recall it. 114 1 Q. If now we could please go to POL00294928, to look at 2 just how quickly this did become orthodoxy within Post 3 Office, so that's POL00294928. Very grateful. 4 If we could focus in at the top, we see that this is 5 an email from you to Mike Young, Ms Vennells, on 6 21 October 2011 at, looks like, 7.32 in the morning. 7 Remember, if we can, that the email from Emily 8 Springford was sent at 15.51 on 20 October 2011. If we 9 can, from there, go down to the very bottom of this 10 document, please, this is where we start. So 20 October 11 2011, at 15.48. So just three minutes before Emily 12 Springford sent the email to all of the department 13 heads? 14 A. Mm-hm. 15 Q. Yeah. This is an email from you, Ms Vennells, to Lesley 16 Sewell, copying in Mike Young and Kevin Gilliland. The 17 subject line is "Horizon independent assessment". Do 18 you remember what this is about? 19 A. Yes, I think we discussed this this morning or 20 yesterday. This is the report in response to the 21 comment by Donald Brydon. 22 Q. Yes, and it reads: 23 "Lesley, excuse me if I missed it -- did you get 24 back to me re confirmation as to how robust/reliable 25 Pintest (is that the right name) were? Ie what other 115 1 type of validation work they have done on this scale/for 2 whom? 3 "Also when do we expect the results? 4 "Kevin has heard today the BBC may be going for more 5 coverage. 6 "[Thanks] Paula." 7 Now, that was 15.48 three minutes before the Emily 8 Springford email. Lesley Sewell replies at 17.39, just 9 1 hour and 48 minutes after Emily Springford sent her 10 email, and we see Lesley Sewell's email at 5.39 here, 11 and Lesley Sewell replies to you, Ms Vennells, copies in 12 Mike Young, Kevin Gilliland, Hugh Flemington and Emily 13 Springford, immediately copying in lawyers, and she 14 changes the title from the Horizon-related title to 15 "Legally privileged and confidential": 16 "Paula 17 "Fujitsu have reviewed who they will use for the 18 review of [Horizon Next Generation] and as such will not 19 be using Pen Test Partners as they had originally 20 intended. They have now engaged with KPMG to complete 21 the review which they now expect to take up to two 22 months. 23 "There is a meeting tomorrow with Legal to discuss 24 the scope and timing of this review." 25 So following some very important aspects of the 116 1 advice of Emily Springford immediately -- an hour and 48 2 minutes later -- changing the subject header to "Legally 3 privileged and confidential", even though it's a reply, 4 and copying in the lawyers, in accordance with the 5 advice of Emily Springford. 6 Just whilst we're on this page, can we go up, 7 please, to see your reply to Lesley Sewell. This is 8 you, Ms Vennells, and you send it to Mike Young. So you 9 copy everybody else out and you send your reply to 10 Lesley Sewell's reply to Mike Young, the following 11 morning, first thing, as it were. You say to whom you 12 thought was Lesley Sewell: 13 "This is very high profile. We have had lawyers' 14 advice [about] how mails etc are now handled ... so what 15 is happening here? 16 "Why do Fujitsu think they can change the test 17 company after they have told us who they were using? 18 Why is there a meeting to discuss scope and timing -- 19 when it was asked for 6 months ago and the scope must 20 have already been [signed] as Pen Test were appointed? 21 "And re 'timing in another two months' -- Lesley, 22 the last comms you and I had was that we'd have it in 23 a couple of weeks! 24 "This is unsatisfactory -- it looks as though it is 25 not being taken seriously and I don't know where the 117 1 accountability lies -- in POL or Fujitsu? 2 "A Class Action legal case against POL could be 3 hugely negative reputationally, it could cost us a lot 4 of money and this verification, which presumably could 5 be of enormous help is not even off the blocks? 6 "I don't understand. 7 "And, how can it be independent if Fujitsu are 8 choosing and swapping suppliers? Is that sustainable 9 evidence in court -- independently verified by a company 10 they choose? KPMG are a good company -- are they 11 qualified to do this? And do they have any association 12 with Fujitsu? 13 "Finally, I know everyone is working very hard but 14 I'm a bit disappoint that I found out only by asking as 15 a result of potential BBC coverage. With this going on 16 I could easily have sent a note in response to a Board 17 query saying not to worry because there's a verification 18 underway and the results are due any day soon! It 19 doesn't help our IT credibility if I'm on the back foot 20 with what's going on. 21 "Paula." 22 Now, what you hadn't realised was that you'd sent 23 that email to Mike Young by mistake, who was Lesley 24 Sewell's boss, and so, if we go up to the top of the 25 page, we see: 118 1 "Mike, I've realised I sent this to you and it was 2 intended for Lesley. 3 "But actually as her boss, would you mind looking 4 into (Also, watch the tone -- not always easy to judge 5 in mails -- on rereading it sounds 'cross'! I'm not 6 (I'm well chilled on holiday!) but have some specific 7 questions that need answering. 8 "Appreciate your help, P." 9 Once you realised you'd send that to Mike Young and 10 not to Lesley Sewell you had to rewind quickly, didn't 11 you, Ms Vennells? 12 A. I didn't operate in that way. The email to Lesley 13 Sewell would never have been written in the tone that 14 you have just read it. It was a list -- and the Inquiry 15 has seen many other emails which I send which are 16 a series of questions, open questions, nothing assumed 17 behind them, that I was looked for answers on because 18 this was, as I said in the email, a very serious matter, 19 it had been raised by the Royal Mail Chairman and it 20 obviously needed to be handled carefully because of what 21 we were dealing with. But I don't think I ever sent 22 emails with that -- in the way that you read it. 23 Q. No, and I read it in that way because I wondered if that 24 might be your response because the reality is that you 25 realised it sounded cross from having sent it, didn't 119 1 you? 2 A. Possibly, from what I've said to Mike Young, possibly, 3 but I was never somebody that got as cross as -- I'm 4 sorry, this -- my -- I said what I said in the email. 5 Q. Yes. 6 A. Yeah. 7 Q. Absolutely, but the term -- the wording, Ms Vennells, it 8 was cross, wasn't it? 9 A. I was clearly irritated, yes. 10 Q. Yes, you were, absolutely, and you expressed -- your 11 irritation was manifest in the words that you used, 12 wasn't it? 13 A. But what I say, and I think this is true, is that it 14 isn't always easy to judge tone in emails. 15 Q. Entirely. 16 A. And the questions I was asking were valid questions. 17 Q. Did you rewind in that way because Mike Young wouldn't 18 take that sort of aggressive, arguably domineering, tone 19 from you? 20 A. No, I don't think so. 21 Q. Was it a case of you having, as it were, let the mask 22 slip with that particular email? 23 A. No. 24 Q. Okay. One of the four former postmasters who'd 25 submitted letters before claim was Julian Wilson, 120 1 another one was Scott Darlington, who is in the room 2 today. But, tragically, Julian Wilson died before his 3 conviction could be quashed. He is survived today by 4 his wife, Karen, who is a Core Participant in these 5 proceedings on his behalf and she took a framed 6 photograph of him to the Court of Appeal in 2021 so he 7 could be present when the Court of Appeal quashed his 8 conviction. 9 So he was really one of the trailblazers, in terms 10 of trying to bring Post Office to account for what he 11 thought had been done to postmasters through the 12 unreliability of Horizon, in the first place, and then 13 of the way that that unreliability of Horizon was used 14 against postmasters. 15 He, in his interview under caution, complained of 16 the problems that he'd experienced with discrepancies 17 with Horizon, and what I'd like you to have a look at 18 now, please, Ms Vennells, although you say you didn't 19 see the documentation, is his letter before claim. 20 I just want to take you to this very briefly, which is 21 POL00046944. 22 If we could please go to the second page -- I won't 23 take too much time on this, it's the second page. If we 24 could scroll up, please, so we can have in the -- that's 25 perfect. 121 1 A. I'm sorry, could I just -- the date of this is when? 2 Q. It's received on 26 August 2011. 3 A. Right. Thank you. 4 Q. You said you hadn't read the documentation but you were 5 aware of the issues. Here are the issues set out in 6 Mr Wilson's letter before claim. 7 A. I should be very clear because this is important, I was 8 aware of the issues as they were set out, I think, in 9 an email to me at the time by Mike Granville, possibly, 10 but I didn't see this level of detail. 11 Q. Did you have discussions with the lawyers about the 12 issues? 13 A. No. 14 Q. Never? 15 A. No, never. 16 Q. Because in this letter before claim, which is 2011, so 17 before 2012, obviously, it says: 18 "For the avoidance of doubt, it is denied that: 19 "(a) [the Post Office] were entitled to or had 20 grounds to determine the Contract either based on the 21 matters relied upon or at all; 22 "(b) that Mr Wilson was in breach of the terms of 23 the Contract either as alleged by POL or at all; and 24 "(c) that POL had grounds to prosecute Mr Wilson." 25 So clearly a central issue was whether or not Post 122 1 Office had grounds to prosecute Mr Wilson and, for the 2 avoidance of doubt, the same denial is made in the 3 letter before claim of Mr Darlington. 4 Anyway, to conclude on this and this issue of legal 5 professional privilege, at a number of board meetings, 6 there were simply verbal updates in relation to legal 7 matters; do you remember that? 8 A. Yes, there were both. There are meetings where there 9 are minutes of discussions and papers and there were 10 oral updates as well, yes. 11 Q. Yes. 12 A. As happened on many different matters, not just on legal 13 matters. 14 Q. The use of verbal updates, was that because of issues of 15 privilege, ever? 16 A. I don't remember that being mentioned. I maybe have not 17 recalled it properly but I don't recall that being 18 mentioned. 19 Q. All right. Because Jane MacLeod in her statement, which 20 has now been read into the record, at paragraph 151, 21 says that: 22 "From April 2016 when we were informed that Freeths, 23 the claimants' solicitors, had filed a claim in the High 24 Court, I was more sensitive about confidentiality and 25 privilege issues, given the risk that litigation was 123 1 imminent and, therefore, some updates were verbal only." 2 Did Jane MacLeod ever communicate to you, 3 Ms Vennells, that that might be a reason for verbal-only 4 updates? 5 A. No, Jane, as I said in my statement, was someone who 6 was -- on a sphere of risk averse to risk tolerant, she 7 was, by nature as an individual, quite risk averse but 8 I don't ever remember her raising that as a reason for 9 only oral updates. 10 Q. Okay. Second topic, then, which is the RMG prospectus. 11 This morning you were asked about your work to propose 12 a change to the RMG prospectus. 13 A. Yes. 14 Q. Yes, and you said that you came very late in the day to 15 deal with this. 16 A. I believe so. I have absolutely no recall of being 17 involved in it but I may be wrong. It was a long time 18 ago. It was 2011, 2011/12? But yeah, I don't recall 19 being involved. 20 Q. I think it was 2013. 21 A. Yes, okay, separation I thought was 2012 but the 22 prospectus was 2013. Right, yes. 23 Q. 2013. So was it because of your minimal involvement 24 that you've got no great recollection of it, or for 25 other reasons? 124 1 A. I simply have -- there are no reasons other than I can't 2 recall it. If you can show me that I was involved, then 3 I'm very happy to accept that I was but I simply don't 4 recall that. The two organisations were operating 5 separately now. 6 Q. Okay. You were asked by Mr Henry this morning a number 7 of questions about this and, in particular, he asked 8 about how, in September 2013, you wrote to the Chair 9 that you'd earned your keep in having a particular 10 section removed. 11 A. Yes. 12 Q. When you were pressed about this by Mr Henry, he 13 suggested that you'd earned your keep by keeping a lid 14 of things about Horizon; do you remember that? 15 A. Yes. 16 Q. Yes. You said you had no recollection of that and the 17 real reason was that it had taken some time, in a short 18 period, to remove that statement about Post Office IT 19 from the Royal Mail prospectus because "I didn't believe 20 it was helpful in any way to the Post Office because the 21 two businesses were separate and the prospectus was 22 about the flotation of Royal Mail"; is that relatively 23 accurate? 24 A. Yes, that's how I remember it. 25 Q. Can we briefly look at one document, please, which is 125 1 POL00158149. That's POL00158149. If we could just zoom 2 in, thank you. So this is your "review of achievements 3 against 2013/14 personal objectives", and the way this 4 proceeds is that each section is dealt with as -- 5 firstly, "Talent" -- and that's not about your talent, 6 Ms Vennells, it's about talent you've recruited -- 7 firstly "Key achievements", and then, if we go down the 8 page, please -- and keep going, over to the next page, 9 I think -- so that's achievements, and then, ultimately, 10 we will, in due course, see the opposite of 11 achievements. Yeah, "What could have been better?" So 12 that's how it's structured. 13 Then, if we go over on to the next page, we see the 14 start of the next, which is "Culture": "Key 15 achievements" and "What could have been better?" 16 Then, if we keep going we then see "External 17 relationships" and "Key achievements". 18 So this is the part I'd like to look at and, in 19 particular, the characteristic second bullet point: 20 "Good progress in drive to strengthen our strategic 21 relationship with commercial partners in a way which 22 actively creates value for the Post Office ..." 23 There you have the first bullet point, which is: 24 "... challenged the team to be vigorous in pursuing 25 our interests and acting as confident (and equal) 126 1 partner." 2 If we could just go over the page, please, for the 3 examples of the key outcomes, and the final one there, 4 in terms of Royal Mail: 5 "also intervened personally with JM to change 6 prospectus wording (in relation to Horizon 7 investigation), with ShEx having failed to persuade them 8 to make the change." 9 So, although it wasn't something you can't remember, 10 it was a key achievement for you in that year. 11 A. Yes, it's one of a -- and it's the last point it's an 12 "also", it's one of a list of areas that I worked on. 13 Q. Yeah. You remembered it well enough to cite it as a key 14 achievement in your review of your year in 2013/14? 15 A. That was at the time. It's now that I haven't 16 remembered it. 17 Q. Yes, and you were proud that you'd intervened to change 18 the prospectus wording? 19 A. Because -- and I imagine the reason I'm sharing this 20 with the Chair, because this is a report that went to 21 the Chair -- is because it was considered inappropriate 22 for that statement on the Post Office IT system to be 23 listed under a section in the Royal Mail prospectus, 24 when, at this stage -- I completely understand, with 25 hindsight, in view of what we know now, that that was 127 1 a wrong conclusion, because there were issues with the 2 system. 3 But, at that stage, we believed there weren't, and 4 to flag something -- and actually the wording was odd 5 anyway, within the Royal Mail prospectus was -- as 6 I explained this morning -- was not seen to be something 7 helpful because it could have been picked up and 8 misinterpreted. 9 Q. Wasn't the real difficulty with this that the comment on 10 the IT problems was in the risk section of prospectus -- 11 A. Yes. 12 Q. -- and that -- 13 A. I'm sorry, I don't remember that it was in the risk 14 section but it was listed under IT and, if it was in the 15 risk section, then yes, even more so. 16 Q. Yes, entirely. That was why it had to go, wasn't it, 17 because that was very damaging to Post Office? 18 A. It would have been and, as I explained this morning, it 19 would have been wrong for that to have been taken and 20 misrepresented in some way because, at this time, the 21 Post Office believed that the Horizon system was 22 reliable. 23 Q. Yes. Do you remember, in August, because this change 24 happened in September 2013, I'm going to suggest to 25 you -- 128 1 A. Yes. 2 Q. -- but do you remember writing to the Chair, Alice 3 Perkins, saying that the language in the risk section 4 which refers to Post Office is very negative? Do you 5 remember -- can I ask you to try to remember that? 6 A. I don't but, if I thought that was the case, then that 7 would be my responsibility to either agree with it or 8 address it and, if didn't agree with it, to do something 9 about that. 10 Q. Did you think about escalating it to HMG, Her Majesty's 11 Government? 12 A. Well, this says that ShEx -- so I'm assuming that 13 somebody must have raised this with ShEx -- 14 Q. Yes. 15 A. -- because we've asked ShEx to have it removed. 16 Q. Exactly. Do you remember Martin Edwards writing to you 17 to say that all efforts by ShEx had failed and you might 18 have to intervene personally? 19 A. I'm assuming that's why I did then. 20 Q. Yes. That's when you got involved. 21 A. Right. 22 Q. It really wasn't about hearing about it late and, in 23 fact, not being involved with it late, was it? Because 24 you had Martin Edwards on the case, trying to take it 25 out and escalating it to ShEx. It wasn't about getting 129 1 involved late, was it? 2 A. I am afraid I can't answer that because I can't possibly 3 remember but my sense was that, as this says, is that 4 I was asked to step in, as we've seen on a couple of 5 other issues, to see whether I could unblock something. 6 So I don't know who was -- I wasn't -- and the Inquiry 7 hasn't seen anything on this -- I wasn't involved in the 8 prospectus review. So whether Martin was doing that on 9 behalf of Post Office or other people were doing it on 10 behalf of Post Office, and it was then flagged to me, 11 I genuinely don't know. 12 Q. I'm going to suggest to you, you knew it was damaging, 13 you were across it for some considerable time, all 14 efforts without your involvement had failed, including 15 ShEx, and then you had to personally intervene. 16 A. I can't remember. I'm sorry, I can't help you with 17 that, but I'm not -- there will be presumably 18 documentation somewhere that illustrates what the 19 process was around the prospectus. I don't think I was 20 involved with it. I mean, it wouldn't -- as somebody 21 who was now trying to run a new company that had just 22 been stood up, that wouldn't have been the level of 23 detail that I could possibly work on and it may be that 24 Martin Edwards was the individual doing that on behalf 25 of the Post Office, or the Post Office Board on behalf 130 1 of me, I don't know. 2 Q. Yes, and you were very proud that you'd managed to get 3 it out, weren't you? 4 A. I list it as an achievement because, yes, if I had felt 5 at the time, and the Chair and the Board had felt at the 6 time, that this was a something that was a risk for the 7 Post Office, at the time, it seemed the right thing to 8 do. 9 Q. Now, finally, my final topic is some of the media 10 coverage in 2014. Now, in 2014, a degree of damaging 11 publicity about concerns over the reliability of Horizon 12 began to emerge, didn't it? 13 A. I'll take your word for that. I'm sorry, I can't recall 14 the detail now. 15 Q. Okay. Well, campaigning postmasters were appearing on 16 radio and television to describe their experiences at 17 the hands of Post Office and about how their lives had 18 been ruined and how they felt Horizon was at the root of 19 their problems. Mark Davies was your Comms Director at 20 that time, wasn't he? 21 A. He was the Comms Director at the Post Office, yes. 22 Q. We saw yesterday that you worked closely with him? 23 A. Yes. 24 Q. You plainly kept a close eye, as we saw yesterday, on 25 how the Post Office message was being conveyed at this 131 1 time? 2 A. Yes, yes. 3 Q. You kept abreast of important broadcasts on TV and 4 radio, for example? 5 A. I imagine I did, yes. 6 Q. On the Today Programme, on 9 December 2014, Mark Davies 7 described one of my clients, Mrs Jo Hamilton, who was on 8 the programme and sits here, as you know, and other 9 convicted postmasters, as having faced lifestyle 10 difficulties and lifestyle problems. What had happened 11 was that John Humphrys had described Jo Hamilton as: 12 "... representative of many people like her, and 13 they're in desperate trouble now, and they have a case, 14 don't they?" 15 Mark Davies said: 16 "I'm really sorry that people have had -- have faced 17 lifestyle difficulties, lifestyle problems as a result 18 of their having been working in Post Office branches." 19 Mark Davies addressed that remark in his witness 20 statement, which is published on the Inquiry website, 21 and that witness statement, if we're able to bring it 22 up, please, is WITN09860100. Could we please go to 23 page 31, to paragraph 86. Mr Davies says here: 24 "I have also been asked where the view that people 25 had 'faced lifestyle difficulties' originated from. 132 1 This was a phrase I used in a live radio interview on 2 the BBC Today Programme. I was trying to make the point 3 that POL was sorry -- genuinely -- that people had faced 4 challenges in their lives, but that it didn't 5 necessarily follow that POL was responsible. This was 6 a reasonable sentiment given what we knew at the time. 7 The word 'lifestyle' was obviously clumsy and 8 unintended. For the avoidance of any doubt it was not 9 scripted or planned. It was certainly not meant to 10 cause offence. It was literally a slip of the tongue in 11 a high pressure media interview and I am very sorry for 12 any offence caused." 13 Do you remember Mr Davies saying that on the Today 14 Programme? 15 A. I do. I remember listening to it and thinking "Oh, 16 Mark". As he said here, I don't think he ever intended 17 that word to come out. 18 Q. I mean, on the face of it, it was an extremely 19 insensitive term? 20 A. It was, yes. 21 Q. Many had been to prison and, just as one example, Jackie 22 McDonald, who has subsequently had her conviction 23 quashed, had, by the time that Mr Davies said this, 24 served a term of imprisonment of 18 months, when she was 25 a 47-year-old mother of two and her children were 133 1 teenagers; Noel Thomas was long-serving local councillor 2 in North Wales and had spent his 60th birthday in 3 prison; and all the subpostmasters had been punished in 4 one way or another. They had all been subject to public 5 censure and humiliation. 6 You've had a taste of that now, Ms Vennells, haven't 7 you, in recent times, and it's not very nice, is it? If 8 somebody said to you, "Paula, you appear to have a bit 9 of a lifestyle difficulty at the moment", might you 10 consider that that could be viewed as slightly ironic or 11 sarcastic? 12 A. It was -- as I said, I heard -- I listened to the 13 interview, and I -- it was just completely the wrong 14 word. 15 Q. They had the inability to find employment, many were 16 going bankrupt, they had real -- we saw the break-up of 17 families, there were serious mental health problems and, 18 in at least one case, a person was driven to take his 19 own life; it was crass and insensitive, wasn't it? 20 A. It was, absolutely. 21 Q. Did you speak to Mr Davies about it? 22 A. Yes, I did. 23 Q. Obviously, from what you've said, it's not something 24 that you would have said? 25 A. No. 134 1 Q. No, and -- 2 A. And I -- well, Mark has said it. I don't believe he 3 intended the word to come out either. He must have been 4 searching for something else -- and I know how it feels 5 under high pressure that you don't always find the right 6 words. But, no, I did speak to him about it. 7 Q. Can I ask you Ms Vennells, why wouldn't you have said 8 that, what Mark Davies said? 9 A. I'm sorry? 10 Q. You wouldn't have said that, yeah? What Mark Davies 11 said, you would never have said that? 12 A. Mark Davies didn't intend to say it either. 13 Q. No, but you would never have used those words but just 14 please explain why it is that you would never say that? 15 It may be obvious that it's too insensitive, it's awful 16 and that should never be said; why is it that you 17 wouldn't say that? 18 A. For the reason that I'm here today: because people's 19 lives have been absolutely devastated. 20 Q. Okay. What Mr Davies said, was that not just reflective 21 of the dismissive attitude that the Post Office had to 22 campaigning postmasters at this time? 23 A. I don't believe so no. I can understand why people 24 would think that and I regret hugely that we are where 25 we are today. 135 1 Q. Was that not really a dismissive attitude that you 2 fostered and encouraged, Ms Vennells? 3 A. No. 4 Q. Okay, can we fast forward, please, some time and look at 5 POL00109806. That "some time" is only eight days. If 6 we go down, please, so if that was 9 December 2014 that 7 Mr Davies said what he said on the Today Programme, this 8 is 17 December, so just some eight days later. 9 Eight days after you've said, "Mark you should never 10 have said that", this is 9.45 in the evening and it's 11 an email from you, Ms Vennells, to Mark Davies, Belinda 12 Crowe, Gavin Lambert and Patrick Bourke, cc'ing in the 13 chair, Alice Perkins. It reads, and I'll read all of 14 it: 15 "Hi all, I managed to catch The One Show on iPlayer. 16 "Not denying the fact that it is unhelpful and 17 inaccurate (especially the focus on Horizon -- but see 18 below re thoughts on that), Mark has achieved a balance 19 of reporting beyond anything I could have hoped for. 20 The statements stamped across the screen with the PO 21 sign as a backdrop were really powerful. They 22 emphasised everything we have done, and came across 23 as ... fact! Very good. 24 "The rest was hype and human interest. Not easy for 25 me to be objective but I was more bored than outraged. 136 1 The MP quoted (who?) was full of bluster and inaccurate. 2 Jo Hamilton lacked passion and admitted false accounting 3 on TV. [James Arbuthnot] was nowhere to be seen. And 4 the bulletin was too long. 5 "What I thought was helpful was that it presented 6 Horizon as the problem, which is exactly what [Second 7 Sight] say they haven't found. And so easier for us to 8 refute. There was nothing about intimidation, poor 9 coaching and the message about not knowing how to use 10 the system, in my eyes made the [subpostmasters] look 11 inadequate. 12 "Lastly (belt and braces I know -- forgive me), can 13 we find out how the [subpostmaster] in Nelson (Wales) 14 thinks we're about to go after him for £18,000 and why 15 he thinks we haven't been in touch. That sounds like 16 a live issue, not one in the scheme? (I'm sure we have 17 been in touch!) 18 "My sincere thanks to all of you. I had an email 19 tonight from Richard C saying how much you had helped, 20 that we could have done nothing more and he was sorry 21 the debate had not gone better." 22 "Richard C", was that Richard Callard? 23 A. It was, yes. 24 Q. He was a Non-Executive Director on the Post Office at 25 the time, was he? 137 1 A. Yes, that's right. 2 Q. Why was he taking such an active interest in this? 3 A. He was the Non-Executive Director from ShEx and, as 4 we've seen, they were following the work we were doing 5 through the Complaint and Mediation Scheme. 6 Q. Was ShEx and Post Office, as it were, pulling in the 7 same direction around this? 8 A. I'm sorry, I'm not sure I understand the question. 9 Were? 10 Q. ShEx and Post Office pulling in the same direction in 11 terms of these irritating, campaigning postmasters? 12 A. At this stage, the work that had gone on through the 13 scheme was showing that no issues had been found on the 14 cases -- 15 Q. No, that's -- 16 A. -- and so -- 17 Q. No, rebutting what was being said by the postmasters, as 18 it were -- the word you use, actually, was "refute". 19 A. I guess you would have to ask Richard. Presumably, if 20 that was what he said, then his view was similar to mine 21 at the time. 22 Q. What impression did you gain of what Richard Callard's 23 view was at this time? 24 A. I think he was commenting on the concerns that the 25 programme was going to present issues which the Post 138 1 Office and ShEx felt were not -- were not going to be 2 represented in a particularly well-balanced way. But 3 I don't -- I can't recall anything more than is here in 4 the document. What I would like to say is that I'm very 5 sorry. 6 Q. I know. Of course. Of course. And we'll come to your 7 apology now, if we can. 8 A. Thank you. 9 Q. If we can go to Ms Vennells' witness statement, please, 10 which is WITN01020100, and to page 481, and 11 paragraph 1120 -- and I'm sorry to the document manager 12 for reading out so much information -- it's page 481, 13 and it's paragraph 1120. Oh, it's not 481 but it is 14 1120. There we go: 15 "One matter about which I have not been asked in the 16 Request but which I want to address head on is an email 17 which I sent to senior colleagues on 17 December 2014, 18 after The One Show documentary aired that evening. 19 I described the reporting as 'unhelpful and inaccurate' 20 and thoroughly regret saying that 'I was more bored than 21 outraged' at the programme. There is no excuse for what 22 I wrote, and I am embarrassed by the words I used. 23 Those words do not reflect the example I hoped to set 24 for my colleagues or my attitude to the issues we were 25 working on at the time. I was working hard to find 139 1 a way through. The difficulties of dealing with what 2 seemed such an imperative yet intractable problem to 3 solve got the better of me that evening. I am sorry." 4 So the remarks that you have expressed regret about, 5 explicitly, the first is "I was more bored than 6 outraged"; you regret that remark, Ms Vennells? 7 A. I regret everything I said. 8 Q. That "Jo Hamilton lacked passion and admitted false 9 accounting", and "MP (who?) Bluster", and so on, you 10 regret that? 11 A. I regret everything I wrote. 12 Q. Now, you regret those remarks now, just seven days 13 before Christmas in 2014 and only eight days after Mark 14 Davies had said that appalling thing about "lifestyle 15 difficulties" and "lifestyle problems" that you really 16 were very upset about, only eight days after that, you 17 regret those remarks, but did you regret -- that was on 18 17 December -- did you regret those remarks the 19 following day on the 18 December? Or is it, in fact, 20 that they were triumphalist remarks and you regret them 21 now because you're here? 22 A. Oh, I completely agree. I completely agree. The 23 pressure we were under at the time to try to manage what 24 we genuinely felt was an imbalance of media coverage and 25 representation about what was happening in the Post 140 1 Office -- and I think under pressure, I and other 2 colleagues -- I do genuinely think Mark Davies' was 3 a slip of a word. I have no excuse for what I wrote 4 other than, as I say, I was under pressure and I think 5 I was relieved that the programme hadn't been perhaps as 6 bad or hardhitting as I'd expected it to be. And I'm 7 just hugely sorry; it was a terrible thing to write. 8 Q. It was triumphalist, wasn't it? 9 A. I was very relieved that it perhaps wasn't as bad as it 10 could have been and, I'm sorry, there is simply no 11 excuse because it wouldn't have mattered, would I, how 12 bad it had been because we were wrong and I apologised 13 earlier on to Mrs Hamilton about not having known about 14 your prosecution file and the details we had of that 15 earlier. I didn't know about that at the time of this 16 and I'm deeply sorry that I was so rude to you in that 17 email. 18 Q. What you went on to say is that: 19 "Those words do not reflect the example I hoped to 20 set fort my colleagues or my attitude to the issues we 21 were working on at the time." 22 What words didn't reflect the example you hoped to 23 set for your colleagues? 24 A. I think the tone of the whole email. 25 Q. What example did you wish to set for your colleagues? 141 1 A. The example that I was not setting in that email. The 2 example of the culture change programme that I had put 3 in place to -- which I've mentioned before -- the values 4 that that had at the heart of it, and they simply 5 weren't there on this. 6 Q. Was the example that you wished to set for your 7 colleagues this, "Don't say what you think in an email, 8 only say what you'd be happy to have read out in 9 a courtroom"? 10 A. I'm sorry? 11 Q. Was the example, real example, you wished to set for 12 your colleagues, "Don't say what you think in an email; 13 only say what you'd be happy to have read out in 14 a courtroom", and you'd let yourself down there? 15 Is that, in reality, the approach you took to Tim 16 McCormack: remain calm at all times, give the appearance 17 of politeness at all times, never give anybody the 18 chance to say that you've been defensive or 19 unreasonable; was that your approach to Tim McCormack? 20 A. No, this was -- I made a mistake here. I generally 21 tried to approach things by the values that I wanted the 22 organisation to follow and this is a terrible example of 23 where I didn't do that. 24 Q. Did the mask slip in this email, Ms Vennells? Did it? 25 Did the mask slip? 142 1 A. I made a mistake in this email. 2 Q. Is the reality that what you said here reflected the 3 'behind closed doors' attitude to these postmasters? 4 A. No. 5 Q. This is how you really felt about them: they were 6 irritants and it was important to refute what they were 7 saying? 8 A. No, and I know it has chosen to be taken a different way 9 but my desire to share the details of the eight cases 10 which we talked about yesterday was completely genuine. 11 My desire behind setting up the Mediation Scheme was 12 completely genuine. This was a terrible mistake, which 13 I'm deeply sorry for, when I was working under pressure, 14 and I simply should not have done it. 15 Q. Is it not that the truth just came out this time? 16 A. No, that's not the case. 17 MR MOLONEY: That's all I ask. Thank you. 18 SIR WYN WILLIAMS: Thank you, Mr Moloney. 19 Ms Leek, I know you're the legal representative of 20 Ms Vennells in the hearing room. Are there any 21 questions that you'd like to ask her? 22 MS LEEK: No, thank you, sir. 23 SIR WYN WILLIAMS: Fine. 24 Mr Beer, are there any questions that you wish to 25 put in the light of what has been said today? 143 1 MR BEER: No, sir, nothing arising. Thank you. 2 SIR WYN WILLIAMS: Then that brings an end to the evidence 3 of Ms Vennells. 4 I'm grateful to you, Ms Vennells, for your extremely 5 detailed witness statement and for giving evidence to 6 the Inquiry over three days. 7 So that concludes today's proceedings. I think that 8 everyone in the Inquiry is now, I hope, going to have 9 a reasonable period of rest over the next week, though 10 I doubt whether that will prevent some people working 11 quite hard. But, if you can, have a good break, and 12 I think we're due to resume on Monday, is it, 2 June -- 13 MR BEER: 3 June. 14 SIR WYN WILLIAMS: -- 3 June at, unusually, 12.00 midday, 15 when we're going to be hearing from Mr Foat, is that it? 16 MR BEER: That's exactly right, sir. 17 SIR WYN WILLIAMS: Right. Thank you all very much. 18 (2.57 pm) 19 (The hearing adjourned until 12.00 midday 20 on Monday, 3 June 2024) 21 22 23 24 25 144 I N D E X PAULA ANNE VENNELLS (continued) ...............2 Questioned by MR HENRY ........................2 Questioned by MR STEIN .......................44 Questioned by MS WATT ........................91 Questioned by MS ALLAN ......................102 Questioned by MR MOLONEY ....................107 145