1 Thursday, 6 June 2024 2 (9.45 am) 3 ALICE ELIZABETH PERKINS (continued) 4 Questioned by MR BEER (continued) 5 SIR WYN WILLIAMS: Mr Beer. 6 MR BEER: Thank you, sir. 7 Good morning, Ms Perkins. 8 A. Morning. 9 Q. Yesterday we were examining the extent to which some 10 material did not get disclosed to, or summarised for, 11 the Board. I just want briefly to examine whether there 12 were other things going on in the business in relation 13 to Fujitsu that may be relevant to why that disclosure 14 or summary did not occur and to get your assistance on 15 this if possible. 16 Can we look, please, at POL00297877. If we scroll 17 down, please, this is an email from Tim Franklin to 18 Alwen Lyons, copied to you. Can you help us, Tim 19 Franklin? 20 A. I haven't seen this email before -- this email exchange 21 before, I don't think. 22 Q. I think you have? 23 A. You think I have? 24 Q. It's part of the pack, yes. 25 A. Okay, I'll take your word for it. 1 1 Q. But anyway. 2 A. Tim Franklin was one of the Non-Executive Directors on 3 the Board. 4 Q. Thank you. He says, "Chris", which presumably is Chris 5 Day. 6 A. Yeah, I would think so, yes. 7 Q. "... thanks for the updated information relating to the 8 IT Transitional Services Agreement." 9 Can you recall what that was? 10 A. I think this is to do -- if I'm right about this, this 11 is to do with the fact that we were -- we believed that 12 we were going to be transitioning away from Fujitsu to 13 a different provider but it was going to be difficult to 14 manage that transition and, over the period in question, 15 we had to extend the arrangement with Fujitsu to provide 16 us with, if you like, a kind of bridge to the new 17 arrangements. I think that's how I would describe it. 18 Q. I see: 19 "I am in agreement with the proposal as I don't see 20 we have any choice. Horizon is a complex Fujitsu 21 proprietary system and any move other than renewal would 22 present unacceptable risk. I agree with Lesley's future 23 review and the potential to mitigate our Fujitsu 24 dependency in the future. I do feel like they have us 25 over a barrel, and that they know it. I'm not clear how 2 1 much we have tried to play hardball with them, but 2 I would hope that these numbers represent our maximum 3 financial exposure, and that we will seek to negotiate 4 below this. If they want a future role in our IT 5 estate, they should want to be less exploitative of us 6 now." 7 Is what we read there about the relationship, or 8 Mr Franklin's view of the relationship, between Post 9 Office and Fujitsu representative or indicative of the 10 Board's view of the relationship between Post Office and 11 Fujitsu at that time, which is July 2013? 12 A. Yes, I think so and I would say, you know, over a longer 13 period. 14 Q. Did you ever link this, what's said here, back to your 15 initial discussion with Angus Grant back in September 16 2011, where he told you, I think, that the relationship 17 was too nice and that the Post Office had been naive or 18 too naive? Was that a constant, essentially, over that 19 period of time, September '11 to July '13? 20 A. Absolutely, all the way through, I would say. I think 21 that, as the different non-executives came on Board, 22 they, you know, reached the same view. We all wanted to 23 move away from Fujitsu altogether and, when I left the 24 Post Office in 2015, I believed that that is indeed what 25 would be happening but it subsequently turned out that 3 1 they were unable to extricate themselves. 2 Q. Was this any cause for concern, this understanding of 3 a relationship of dominance or an unequal power 4 relationship in circumstances where the Post Office was 5 continuing to rely on Fujitsu for data and analysis to 6 support its work with Second Sight? 7 A. So I think the concerns were definitely about 8 an imbalance of power and, yes, I think we were 9 sceptical; we were sceptical about all sorts of aspects 10 of the Horizon -- of the relationship with Fujitsu. 11 Q. This records that the system was complex and 12 proprietary -- 13 A. Yeah. 14 Q. -- and that Fujitsu had the Post Office over a barrel. 15 Was that a relationship that the Post Office had 16 essentially inherited from Royal Mail Group? 17 A. I think so, yes. I mean, certainly, that was how 18 I felt. Whether I would have said they had -- I think 19 I might have said they had us over a barrel. 20 I certainly came to that view early on and I now 21 understand that it did -- you know, it did go back 22 really from the very, very outset but I didn't 23 understand that at the time. 24 Q. Against that background, how would you assess the 25 executives' feeling about delivering news to the Board 4 1 that a Fujitsu expert, who had given evidence, written 2 and oral, in criminal proceedings, was considered to be 3 tainted or an unsafe witness and had breached their 4 duties to the court in a manner which may have caused 5 prosecutions brought by both Royal Mail Group and Post 6 Office to have been undermined? 7 A. Could you go back to the beginning of the question, 8 sorry? 9 Q. Yes. How would the executives have felt about 10 delivering news to the Board -- 11 A. Yes, okay, yes. 12 Q. -- that a Fujitsu expert witness may have given false 13 evidence to courts? 14 A. Well, I think that a number of the executives shared the 15 Board's view about -- I mean, obviously they wouldn't 16 have said they thought that Fujitsu had got them over 17 a barrel but my understanding was that the senior 18 executives were in agreement with the Board that we 19 wanted to move away from Fujitsu. I think everybody 20 shared that aspiration. So -- 21 Q. What I'm trying to explore is whether this may be 22 a reason or relevant to the non-revelation of 23 information to the Board? 24 A. So I think what I'm trying to get to here is, since 25 everybody was agreed that we'd rather not have Fujitsu 5 1 as a very significant IT partner, I'm not sure why that 2 would have -- I mean, maybe I'm being really stupid here 3 but I can't really see why that would affect executives' 4 ability or willingness to share that information with 5 the Board one way or -- in fact, it might be an argument 6 for, you know, "We're not sure we can trust -- this 7 another reason why we're not sure we can trust them". 8 So I think you could argue it either way. 9 Q. Thank you. That can come down. 10 Can I examine a little further the continued fallout 11 from the Second Sight Report -- 12 A. Yes. 13 Q. -- and, in particular, looking at the Board's approach 14 as to whether the Second Sight Report opened it up to 15 legal challenge, by looking at POL00344895. Can we 16 start, please, at page 2, and scroll down. An email 17 from you -- we're now March 2014 -- 18 A. Mm-hm. 19 Q. -- to Paula Vennells and Alwen Lyons, about Sparrow: 20 "Following our helpful conversation, I am setting 21 out what I would like on this for further substantive 22 discussion at the March Board meeting. 23 "1) The definitive view on all aspects of insurance 24 ie organisational and personal. What policies do we 25 have; what in practice do we believe they will cover us 6 1 for; and what have we been doing to fulfil our 2 obligations under our policies? 3 "2) Are we safe from legal challenge in what we 4 are/have been doing? What is the position both since we 5 became independent and before? 6 "3) What is the worst case in relation to costs 7 which could result from this", et cetera. 8 Now, you've been asking, as a Board, I think, 9 questions of insurance coverage for both the 10 organisation and individual members of the Board since 11 mid-2013. 12 A. Yeah. 13 Q. It seems like you hadn't got an answer, at least 14 a definitive answer, by this time; is that right? 15 A. Yes. 16 Q. If we go, please, to the reply, which is at the foot of 17 page 1, from Alwen Lyons. She says: 18 "Alice 19 "Apart from making sure the business are ready to 20 answer these questions is there anything else you would 21 like me to do. 22 "The insurance issue is with Chris [Day] and I did 23 push for clarity to be included in the B48 email without 24 success." 25 I don't know what that means. Let's go up to see 7 1 what you reply. You said: 2 "What is B48?!" 3 A. I'm no wiser. 4 Q. Yes: 5 "Maybe you can help by explaining to everyone what 6 the context is here. 7 "The position is intrinsically worrying (to put it 8 politely). The [Non-Executive Directors] are really 9 concerned because of the potential costs to the 10 business, the distraction from implementing our strategy 11 (which is demanding enough), the reputational issues, 12 and their personal positions. A bad combination made 13 far worse if the business does not appear to be on top 14 of it. So the paper needs to demonstrate that the 15 Board's concerns on the latter point [presumably that is 16 their personal positions] -- if that is possible. That 17 means it needs to be comprehensive, clear and 18 professional." 19 Then there's an issue about a non-attendance at 20 James Arbuthnot's meeting. 21 A. Mm. 22 Q. So I think this chain shows us that, by March 2014, you 23 and the Board were still not clear, seemingly, on what 24 the insurance situation was both for the company and for 25 Board members? 8 1 A. Yes. 2 Q. Were there concerns, essentially, on behalf of Royal 3 Mail that you're expressing -- 4 A. To be -- 5 Q. -- as well as Post Office? 6 A. I can't say that -- I can't remember that there were, if 7 I'm honest. 8 Q. Can you help us: the Second Sight Report had, from the 9 Post Office's perspective, been presented as a positive 10 one? 11 A. Yes. 12 Q. No system-wide, ie systemic, issues had been found, 13 albeit there were some process problems -- 14 A. Yes. 15 Q. -- concerning, in particular, training and support. Why 16 was there a continuing concern about the individual 17 liability of Board members if there were no problems 18 with the Horizon system? 19 A. I don't remember very much about this discussion about 20 the insurance side of things. I think that it was put 21 on the agenda by other non-executives. I can't remember 22 exactly but I think that Alasdair Marnoch certainly was 23 interested in this subject, at least in part because he 24 was the Chair of the Audit and Risk Committee and that's 25 the natural place for that to be -- you know, the first 9 1 port of call, I think, for that issue. 2 And I think, from what I remember, that the thing 3 that was beginning to get in the way for the 4 Non-Executive Directors was actually the delay in 5 answering the questions, rather than the questions 6 themselves, if you see what I mean. 7 Q. Not really. Why would you have a continuing concern 8 over the individual liability of Board members, ie their 9 personal positions and the need to nail down insurance 10 as protection, if there wasn't a belief that individual 11 members of the Board may be open to liability? 12 A. I think there was a question in people's minds, some 13 people's minds, about whether members of the Board might 14 be vulnerable in some way and that question, having been 15 put on the agenda, it was obviously in everybody's minds 16 and I do remember over a very long period it just 17 wasn't -- didn't seem to be possible to get definitive 18 advice about this and it became frustration in itself 19 that we couldn't get clear answers. 20 Q. Given the continuing concerns -- you first raised 21 personal liability of Board members for civil claims for 22 wrongful prosecution in July 2013 -- 23 A. Yes. 24 Q. -- and we're now in March 2014 -- 25 A. Yes. 10 1 Q. -- in the interim, had the Board asked any more 2 questions about why there may be claims against them, 3 given the positive -- generally positive -- outcome of 4 the Second Sight Interim Review? 5 A. Well, during the intervening period, you've got the 6 beginning of the Mediation Scheme and you've got -- I'm 7 sure we'll come on to this -- something that was called 8 the expectation gap between what it began to emerge 9 subpostmasters and the people representing them thought 10 might be on the table in relation to the Mediation 11 Scheme and what the Post Office thought the outcome of 12 the Mediation Scheme in individual cases might be. And 13 I think that this concern was part of the story. 14 So you don't have a situation where the Interim 15 Report has come out and we've had the view of that, and 16 then nothing happens. You've got a continuing story, if 17 you like, because of the setting up of the Mediation 18 Scheme and what's beginning to emerge as people make 19 applications to go into that and it becomes clear -- 20 clearer what it is they're hoping to get from it. 21 Q. Do I understand you to mean that you didn't think that 22 there were claims or were not advised that there were 23 claims that had merit, but you were more concerned about 24 claims that lacked merit being brought against the 25 company or the Board? 11 1 A. Both, I would say. I think we would always have been 2 concerned that there might be claims that had merit and 3 that we would need to deal with those, but we also, as 4 I've said, believed that the Horizon system was sound 5 and we thought that the legal side -- the work that 6 ought to be being done, in relation to past 7 prosecutions -- was being done and was being done 8 properly. 9 Q. I'm just trying to understand how it is that there is 10 this focus on liability of the company and the Board, 11 which seems to be a continuing concern even into March 12 '14, in the light of the positive Second Sight Report, 13 when we know that lurking underneath are a series of 14 advices that would expose the company to liability, that 15 may expose Board members to personal liability but 16 they're not revealed to you. It's as if two 17 conversations are going on at the same time -- 18 A. Yes. 19 Q. -- in parallel; do you understand? 20 A. I understand. That's very clear, thank you. I do 21 understand. 22 Q. What you're saying in these email exchanges is not 23 motivated by, or a reflection of, you knowing about the 24 other thing that hadn't been revealed; is that right? 25 A. Absolutely right, yes. 12 1 Q. So I'm trying to understand what it was that was 2 motivating you to continue to explore the extent of the 3 Board's own liability and the insurance position? 4 A. Yes. 5 Q. If it wasn't knowledge of the Jenkins problem, what was 6 it? 7 A. Well, I'm sorry to repeat myself but, if the Board asked 8 a question or people or somebody on the Board asked 9 a question, then it was important to me that the 10 business answered that question and I -- and I think 11 I wasn't alone in this -- I found it very strange that 12 it was taking this amount of time to get the answers to 13 what seemed like relatively straightforward questions. 14 And I think that, by this time, we were starting to 15 have some reservations about the way in which Chris Day 16 was performing his responsibilities and this was a part 17 of -- we just -- we didn't feel, at any rate, that he 18 was on top of this aspect of the job and we didn't seem 19 to be able to get anybody else to give us the answers, 20 and that was frustrating. 21 And I think we were, you know -- somewhere in 22 people's minds was always the thought that, you know, we 23 knew that people were interested in bringing claims 24 against us and you never know, when that happens, what 25 the outcome might be. So I think, you know, it was 13 1 a precaution -- on the part of the non-executive members 2 of the Board, it was a precautionary approach. 3 Q. If we go back to the document we were just displaying, 4 POL00344895, and look at page 2., and scroll down, your 5 second question: 6 "Are we safe from legal challenge in what we 7 are/have been doing? What is the position both since we 8 became independent and before?" 9 Why wasn't the Board -- why weren't you -- asking to 10 see the external lawyers' advice? 11 A. Because -- well, I think it depends which bit of 12 external lawyers' advice we're talking about here. 13 Q. Any. 14 A. So we knew that Brian Altman has -- had been asked to 15 give advice and we were given, at various points, 16 some -- well, I won't call them "summaries" because they 17 weren't -- as I now know, they weren't really summaries. 18 We were given a view of what was in that advice and I'm 19 sorry to say that I believed, and I think the other 20 Non-Executive Directors believed, what we were reading 21 in those papers about what was being said and we could 22 have asked to see that advice, you know, the original 23 documents and, if we had, the story might have been 24 very -- well, I think the story would have been very, 25 very different. 14 1 But, you know, given what we were being told, we 2 accepted it and we had -- I think, if you, you know, if 3 we try to put ourselves back into the shoes who were 4 reading that advice at that time, that wasn't 5 unreasonable. 6 Q. Thank you. Can I move to a new topic. You suggested in 7 your oral evidence yesterday, and suggest in a number of 8 parts in your witness statement, that, in your view, 9 Susan Crichton was substantially to blame for the 10 failure to provide the Board with relevant information 11 and documents? 12 A. Yes. 13 Q. Can we turn to POL00108058. This is an email exchange 14 of August 2013 between you and Paula Vennells. 15 A. Mm. 16 Q. In the email that we can see at the foot of this page 17 here you say: 18 "Yes. It is the fact that she ..." 19 You're talking about Susan Crichton here. 20 A. Mm. 21 Q. "... sees so much as beyond her control which made me 22 most worried. It is her alibi. That is why I pushed 23 back and also why I asked her to flag up if there was 24 anything she needed which she couldn't get." 25 Then you go on to talk about another issue. What 15 1 did you mean by "It is her alibi"? 2 A. So I was talking there about the subject which we 3 discussed yesterday, which was the fact that we'd got to 4 a position where the Interim Report from Second Sight 5 came not completely out of the blue but came very, very 6 unexpectedly to the Board in the run-up to its 7 publication, and the Board's concern as to how that had 8 happened, linked with the other issues that the Board 9 was concerned about, the length of time the work was 10 taking, the costs, and so on. So that's what I was 11 talking about there. 12 Q. What do you mean by "alibi"? 13 A. That -- 14 Q. An alibi is normally if you're accused of a crime -- 15 A. Oh, I see what you're saying, yes, yes. 16 Q. -- or accused of wrongdoing -- 17 A. Yes, yes, well -- 18 Q. -- you have an excuse or a reason to put yourself 19 somewhere else -- 20 A. Yes, yes. 21 Q. -- and, therefore, say, "I can't have committed the 22 crime" -- 23 A. Yes. 24 Q. -- or "I can't have undertaken the wrongful conduct". 25 A. Yes. So I think an "excuse" would have been a better 16 1 word. "Alibi" does sound as though -- as you say, as 2 those it's linked to a crime -- 3 Q. I'm not suggesting that you were here talking about 4 Susan Crichton committing a crime at all. I am just 5 seeking to understand what you meant by the use of the 6 word "It is her alibi"? 7 A. So what I think I'm saying here is that I didn't, and 8 the Board didn't, think that Susan had done that aspect 9 of her job well, that when I had had my conversation 10 with her, she had talked about -- she had given me 11 a variety of reasons as to why it hadn't been possible 12 for her to anticipate in the way that we would have 13 liked what was going to -- you know, the events leading 14 up to the publication of the Interim Report and 15 I thought that she was very passive, and I think that's 16 really what I was trying to say here. 17 Q. Does this show contemporaneous knowledge by you of 18 a failure by Susan Crichton to do what she should have 19 done in her job? 20 A. In that respect. Not in the respect of her having 21 concealed documents from us because -- 22 Q. That's what I was going to ask you about. 23 A. Sorry. 24 Q. Did you have any suspicion that she was deliberately not 25 flagging potential concerns to you or to the Board? 17 1 A. Absolutely not. I had no idea. 2 Q. Thank you. You raise in your witness statement that one 3 of your achievements, I think, in your time at the Post 4 Office, was replacing a large number -- in fact, I think 5 every member -- of the Executive Committee, except Paula 6 Vennells. 7 A. Well, actually, it was -- the two people on the -- 8 Q. Kevin Gilliland? 9 A. I beg your pardon? 10 Q. Kevin Gilliland as well? 11 A. Kevin Gilliland and Nick Kennett, who was the Financial 12 Services Director. 13 Q. Can we look, please, at UKGI00042089. These are the 14 minutes of a Post Office Investment Review Committee. 15 Can you see the attendees there? 16 A. Yes, I can. 17 Q. Just looking at that, of what would this be a committee? 18 A. I never had anything to do with this committee. 19 I probably heard about it at the time. There were 20 various committees inside the Business Department. This 21 looks to me like a Shareholder Executive committee. 22 Richard Callard was, at that time, the Non-Executive 23 Director on the Board representing the shareholder; 24 Roger Lowe was one of his colleagues, possibly his boss; 25 Tim McInnes was, I think, on the Post Office -- in 18 1 a separate part of the Business Department, on the Post 2 Office team; and the other names, some of them 3 I recognise and some of them I don't. I think they were 4 all officials in the Business Department. 5 Q. I see. So we should read this as not a committee of 6 Post Office but a committee either of the Department or 7 of ShEx? 8 A. Yes. I mean, I may be wrong. It's possible that there 9 is somebody in this list who was in the Post Office but 10 I don't think so. 11 Q. Thank you. Can we go forwards, please, to page 3 and 12 under "POL Management": 13 "The [Shareholder Executive Post Office] Team 14 outlined that certain key vacancies have been filled 15 over the course of the past year and a more appropriate 16 management structure has been implemented. Yet, 17 vacancies have also arisen", et cetera. 18 A. Yes. 19 Q. Next paragraph: 20 "The Review Team also discussed the suitability of 21 the current management team (ie capability and capacity) 22 and in particular whether Paula Vennells was the right 23 person to hold the CEO position long term. Questions 24 were raised and it was agreed that a confidential and 25 internal review would be undertaken to assess her 19 1 suitability." 2 Did you know this was going on? 3 A. I don't think so. 4 Q. Can we look, please, at some slides in the Department's 5 Audit and Risk Committee from February 2014, so that's 6 the next month. UKGI00042677. I think this makes it 7 much clearer that this is not the Post Office -- 8 A. Okay, yes. I think so too. 9 Q. -- this is the Department and the Shareholder Executive. 10 A. Mm. 11 Q. This is the Risk and Assurance Committee, or at least 12 a presentation to it, of February 2014. Can we go to 13 the second page, please, left-hand column underneath 14 number 1: 15 "Advice from the recent Annual Review suggested that 16 the [Post Office] team give careful consideration to the 17 continued suitability of Paula Vennells as CEO. 18 "There is a general consensus that Paula is no 19 longer the right person to lead [the Post Office] but 20 justification is anecdotal. 21 "This short paper aims to examine the options 22 available to [the Shareholder Executive]." 23 Then, on the right-hand side, under "Why is Paula's 24 position under review?", at the bottom, the Committee 25 was told: 20 1 "However, the 2010 plan, which admittedly was not 2 hers failed to deliver the expected revenue growth, and 3 the Network Transformation has required politically 4 awkward revisions to remain deliverable. 5 "Paula has not shone an understanding of political 6 considerations (ie presentation of plan to ministers) or 7 of the detail of the plan, and she has been unable to 8 work with the personalities that provide robust 9 challenge to her." 10 Then there is a third point. 11 Did you know that it was seemingly the view of 12 a team presenting to the Department and the Shareholder 13 Executive that Ms Vennells had been unable to work with 14 people that provided robust challenges to her. 15 A. I don't think I did, no. These papers, when I saw them, 16 are complete news to me. 17 Q. Was that your view: that Ms Vennells had been unable to 18 work with people who provided robust challenges to her? 19 A. No, I don't think that was my view. You know, there was 20 certainly some tension between Susan Barton, whose name 21 appeared on the previous document and Paula. I think 22 their working styles were very different and Susan 23 was -- I mean, she was a very, very able person and she 24 did a very, very good job and she was robust, and 25 I think that there was some tension between the two of 21 1 them. I'm not aware -- I'm just trying -- let me just 2 think about this for a second as to whether I was aware 3 of that sort of tension with other people in her team. 4 Q. I'm really asking you whether it was your view that 5 Ms Vennells preferred to have yes-men and yes-women -- 6 A. No, I don't think that's fair. 7 Q. -- around her, surrounding herself with a coterie of 8 trusted lieutenants: Mark Davies, Angela van den Bogerd, 9 Lesley Sewell, for example? 10 A. I don't think that would be a fair characterisation. 11 Q. Did you have any concern that she had been unable to 12 work with people that provided robust challenges to her? 13 A. I didn't have that concern, no. 14 Q. Can we go forwards, please, to page 5. A series of 15 options are outlined, one of which is, essentially, 16 release her from her role now; the next of which is 17 retain but review after a period of time. 18 A. Mm. 19 Q. Then we'll go on to see that another one is a retain 20 until the natural course of events that she wishes to 21 move on. 22 "Retain and review", you'll see, if you just briefly 23 scan what's said on that page -- 24 A. The whole of this page? 25 Q. Yes, I mean, this is just to give you some context. 22 1 A. Okay. 2 Q. Given this isn't a committee of which you were a member. 3 A. Thank you. (Pause) 4 Yeah. Thank you. 5 Q. Then, over the page, please, moving to the option of 6 "Remove", on the left-hand side of the page: 7 "There is a general feeling that Paula is not the 8 optimal person to lead [the Post Office] to deliver its 9 commercial strategy. 10 "[She] has not been able to establish good working 11 relationships with Jo Swinson ..." 12 That was the Minister at the time. 13 A. It was. 14 Q. "She has been unable to retain key staff." 15 Did you hold any of those three views? 16 A. At this point in time -- 17 Q. March 2014 -- February 2014 -- 18 A. I -- sorry? 19 Q. February 2014. 20 A. Yes. In this period in 2014, I did start -- and 21 I wasn't alone in this -- to have reservations about 22 Paula's ability to lead the Post Office in the 23 circumstances which it found itself in. 24 Q. Is it right to say those concerns included a doubt as to 25 her personal grip, specifically on Horizon issues? 23 1 A. Yes, and it went beyond that. I mean, that was the 2 example -- that's illustrated by the setting of that 3 personal objective, which I'm sure is what you've got in 4 mind, but the concern about the grip went wider than 5 that. 6 Q. So just to summarise -- I'm not going to go to the 7 documents -- for the 2014/15 year, you set as one of her 8 objectives for that year a specific personal objective 9 in relation to the need to give priority to Horizon 10 issues? 11 A. I did. 12 Q. You tell us in your witness statement that at this time 13 you had doubts as to her personal grip on Horizon issues 14 and the level of attention that she was giving them? 15 A. Yes. 16 Q. That's paragraph 180. What were your concerns about the 17 level of attention that Ms Vennells was giving to 18 Horizon issues? 19 A. I think that I felt that she was relying too much on her 20 colleagues. 21 Q. Which colleagues? 22 A. Executive colleagues, so this -- 23 Q. Any in particular? 24 A. Um ... well, in this -- in the context of Horizon, this 25 would have been IT and Legal, primarily, and that -- I'm 24 1 just trying to find a way of describing what I meant by 2 not having -- because you're asking me about whether 3 I felt she relied too much on other people; that was the 4 question? 5 Q. Yes. 6 A. Yes. I think that I felt that there was too much 7 passing on of other people's views and that, when she 8 talked, say, to the Board, gave an update to the Board, 9 that what he was relying on were words that other people 10 had written for her, rather than her own words, perhaps 11 that's the best way of putting it. 12 Q. Thank you. On the right-hand side, under "Performance 13 as CEO and delivery of strategy plan", there is 14 a repetition of the point: 15 "[The Post Office] failed to deliver its 2010 16 strategic plan, and refused to keep the Government 17 properly appraised of developments in the [Network 18 Transformation] programme, requiring difficult revisions 19 in 2013. [Paula Vennells] has shown a worrying lack of 20 knowledge about the detail of the new plan." 21 Then this: 22 "Paula's people management has caused concern as she 23 appears unable to work with personalities and approaches 24 that differ from hers ..." 25 Just stopping there, is that a concern that you 25 1 shared? 2 A. I don't think that was -- that wasn't one of my 3 concerns, other than, as I say, there was this tension 4 between her and Susan Barton, I recognised that. 5 Q. Do you know where the department and ShEx would get 6 information, that enables them to reach a view like 7 this, from? 8 A. Yes, I think they would have got it from a number of 9 sources. 10 Q. Being? 11 A. So Richard Callard, as I've already said, was 12 a Non-Executive Director on the Board and, therefore, 13 would have seen Paula operating in the context of the 14 Board, would have heard conversations, would have been 15 party to conversations that I and the other 16 Non-Executive Directors were having because he was one 17 of us, in that sense. There would have been feedback, 18 I'm sure, from the Minister and the Minister's office, 19 and there would have been interactions with officials at 20 different levels in the department. So I would think 21 those would be the three main sources. 22 Q. On that last one, where you say, "there would have been 23 interactions between officials" do you mean officials 24 within the Department and ShEx, on the one hand -- 25 A. Yes. 26 1 Q. -- and then Post Office personnel on the other? 2 A. Exactly, yes. 3 Q. I see. The sentence continues: 4 "... and [she] has failed to build relationships 5 with key Directors." 6 Was that a view that you held in February 2014? 7 A. Other than -- I'm sorry, I keep repeating myself. 8 I mean, I was aware of the issue with Susan Barton but 9 I don't remember there being a -- my being aware of this 10 in relation to other directors, no. So I don't quite 11 understand where that's coming from. 12 Q. Next bullet point: 13 "Paula's performance as CEO has been questioned by 14 [the Post Office] Chair, and by members of the Board." 15 Had you spoken to the Department or ShEx about 16 Paula's performance? 17 A. As I say, Richard was party to this. I would have -- 18 I had conversations from time to time with various 19 people in the Department, including Mark Russell, who 20 was the Head of the Shareholder Executive, and I can't 21 remember -- you know, I haven't got notes of those 22 meetings but I'm sure this would have come -- this would 23 have been a topic of conversation on a pretty regular 24 basis because, after all, it was one of my -- you know, 25 the key aspects of my role. 27 1 Q. By "other members of the Board", to your knowledge which 2 other members of the Board had questioned her 3 performance? 4 A. I think everybody had, by this stage. 5 Q. Thank you. That can come down. 6 Did you ever advise Ms Vennells that, if you wanted 7 an answer to a question, you should tell the person that 8 you were asking the question of the answer that you 9 wanted to hear and then, essentially, get them to either 10 confirm what you said was right or persuade you that you 11 were wrong? 12 A. I have absolutely no recollection of saying that and 13 it's not -- I simply cannot imagine circumstances in 14 which I would have said that. 15 Q. Ms Vennells told us that when she was preparing for the 16 Select Committee, on 3 February 2015, she sent an email 17 which said "What's the true answer?", which was about 18 the facility for remote access: 19 "I hope it is we know that this is not possible and 20 we are able to explain why that is. I need to be able 21 to say no it's not possible and that we're sure of this 22 because of XXX." 23 She told us that the phrasing of the email, the 24 framing of it, "We need to say this is not possible", 25 was specifically because you had told her that, if you 28 1 want to get to the truth and a really clear answer from 2 somebody, you should tell them what it is you want to 3 say very clearly and ask for the information that backs 4 that up. Is that true; did you tell her that? 5 A. No. I think I might have said to her, you know, if you 6 want to know something is true, you need to be really 7 clear about what the proposition is. 8 Q. That's a very different issue. 9 A. Yes. 10 Q. Thank you. Can we move forward to the Post Office's 11 conduct during the Mediation Scheme and its attitude -- 12 A. Sorry, could I just say one other thing on that last 13 conversation? 14 Q. Yes. 15 A. I'm -- it's a surprise to me that these sorts of 16 detailed conversations were going on and that nobody 17 told me that they were going on at the time. And 18 I think that is -- I just find that rather 19 extraordinary, that, you know, I was aware of these 20 reservations that I and my fellow Board members had, and 21 I would know that Richard would be party to that, and 22 I knew that the Minister had some reservations, but 23 I had absolutely no idea that there was this machinery 24 inside the department that was having these 25 conversations, and I just find that quite surprising. 29 1 Q. Thank you. Can we then turn to Post Office's conduct 2 during the Mediation Scheme proper and its attitude 3 towards the subpostmasters in the Mediation Scheme. Can 4 we start with some advice that Sir Anthony Hooper says 5 that he gave I think in February 2014, by looking at 6 POL00100335. These are the minutes of a meeting with 7 Sir Anthony Hooper. You can see who is in attendance: 8 you're not. 9 A. Yeah. 10 Q. If we go down to paragraph 4: 11 "TH [that's Sir Anthony Hooper] agreed that [Second 12 Sight] were very resource challenged, and it would be 13 difficult for them to meet the current timetable. That 14 said [Sir Anthony's] view was that [Second Sight] were 15 trying to be objective and that they had a difficult 16 path to tread ... in order to do their job properly (in 17 his view) they would need to express an opinion on the 18 merits of each claim. In [Sir Anthony's] view, this was 19 something that they found hard to do. Some concern was 20 expressed by [Paula Vennells] and [Chris Aujard] that 21 [Second Sight] had not in their correspondence come 22 across as independent, and may be unduly influenced by 23 the need to satisfy certain MPs." 24 A. Mm. 25 Q. In his evidence to the Inquiry in relation to this 30 1 paragraph, Sir Anthony said that he had communicated the 2 following to you and Ms Vennells -- 3 A. Yes. 4 Q. -- "The Post Office's case didn't make sense. It didn't 5 make sense that reputable subpostmasters, appointed by 6 the Post Office after an examination of their 7 characters, would be stealing these sums of money but it 8 didn't make sense, in particular, because, in a matter 9 of days of any 'alleged' theft, they had to balance the 10 books. It just never made sense. I made that point 11 over and over again." 12 Did Sir Anthony make that point to you, whether over 13 and over again, or at all? 14 A. Not at all. 15 Q. Do you recall having conversations with Sir Anthony? 16 A. I recall I had a meeting with him shortly, very shortly 17 after he'd been appointed, which was a sort of -- 18 I hadn't been part of the selection process, Alasdair 19 Marnoch was the non-executive who was involved with that 20 and, after he was appointed -- and I think just after 21 he'd had the very first meeting of the Working Party -- 22 he and I met and, as far as I'm aware, that is the only 23 time I ever actually met him. 24 Q. He didn't say, on that occasion, that the Post Office's 25 case didn't make sense, in that, on Post Office's view 31 1 of the contract, they had to balance the books and make 2 good any shortfalls of any losses within days of the 3 losses occurring? 4 A. He didn't say that to me. I would have remembered if 5 he'd said that to me and when we met it was very, very 6 early days, so it would have been surprising if he had 7 come to any sort of clear view. I think we were talking 8 about, you know, as it were, the future, rather than 9 about what he had already found, because it was very 10 early days. 11 Q. Then over the page, please, to paragraph 6: 12 "[Sir Anthony's] strong contention was that [the 13 Post Office] should take no precipitous action until 14 such time as [Second Sight] had produced, say, 5 15 reports, and until we had seen their thematic report. 16 He noted the adverse [public relations] consequences of 17 terminating ... and offered to make himself available to 18 the Board ... 19 "The quantum of the compensation payments was 20 discussed. [Sir Anthony] noted that the applicant's 21 CQRs often painted a very distressing picture, where 22 there had been loss of livelihood, and other losses. 23 His view was that, should the evidence show that [the 24 Post Office] that not acted properly, then the amount of 25 compensation payable could be quite material (... this 32 1 contradicts legal advice obtained by [Post Office] from 2 [Bond Dickinson] which categorically states that the 3 maximum loss [Post Office] could expect ... would be 4 limited to 3 months 'pay' under the subpostmasters' 5 contract). It was not entirely clear whether 6 [Sir Anthony] had in mind criminal cases only when he 7 had made these comments." 8 Was this passed on to you: that Sir Anthony's view 9 was that the amount, the quantum of potential 10 compensation, could be material, ie substantial? 11 A. No. 12 Q. Was it ever explained to you that there was a difference 13 of view between the advice Bond Dickinson had given and 14 that being explained by Sir Anthony? 15 A. No. 16 Q. I think, in the next month, Post Office took advice from 17 Linklaters. 18 A. Yes. 19 Q. Can we turn to a Board meeting on 26 March 2014, 20 POL00021523. These are the Board minutes for 26 March 21 2014. You will see that you're present. Can we go, 22 please, to page 2 at the foot. Thank you. Under (k): 23 "The Board agreed that they needed to commission 24 a piece of work, to complement that undertaken by 25 Linklaters, to give them and those concerned outside the 33 1 Business, comfort about the Horizon system. The 2 Business was asked to revert with the terms of reference 3 and timescale for the work which [would] cover: 4 "The work undertaken by Angela van den Bogerd 5 explaining how the system works; 6 "A review of the data integrity aspects of the 7 system; 8 "A reference to all audits and tests carried out on 9 the system; 10 "A response to the most significant thematic issues 11 raised by Second Sight. 12 "These terms of reference should be tested with 13 Linklaters to ensure this work would satisfy them as 14 evidence that Horizon is reliable and then agreed by the 15 Board Sparrow Subcommittee." 16 Just go back to the previous page, at the foot -- 17 thank you -- why did the Board wish to obtain a piece of 18 work to give it, or Linklaters or those concerned 19 outside the business comfort? 20 A. So, at this time, there were continuing questions about 21 the Horizon system and we -- and the Board was unclear 22 about what the level of exposure of the Post Office was 23 to claims, and I referred earlier this morning to the 24 different perceptions of people going into -- applying 25 to go in to the Mediation Scheme and the Post Office as 34 1 to what amounts of money might be payable, and -- 2 Q. I'm thinking more of the phraseology, Ms Perkins. 3 A. I am coming to that. So, got -- sought this legal 4 advice on what the exposure was. The legal advice was 5 delivered on the basis -- needed -- in order to deliver 6 their legal advice, Linklaters said that they wanted to 7 be confident about the safety of the Horizon system and 8 they were not happy about the quality or the nature of 9 the work that Second Sight had done. So they were -- 10 and we haven't looked at that -- I mean, there are -- 11 I think in these minutes there are quotations from the 12 Linklaters partner. 13 Q. We're going to go to the -- 14 A. Yes, I'm, sorry, I'm anticipating. 15 Q. Yes. 16 A. But we had heard at this Board meeting that the 17 Linklaters partner was sceptical about the work that had 18 been undertaken by Second Sight and thought that 19 a different kind of -- a different piece of work needed 20 to be done, and that was what we -- that's how we 21 arrived at the decision to commission a further piece of 22 work. 23 Q. I'm asking about the phraseology. 24 A. Right. 25 Q. Why is it, when I read a Board minute about commission 35 1 anything a piece of work about Horizon, it always says 2 something along the lines of "it will give us comfort, 3 it will establish that Horizon is reliable, it will 4 reassure us as to our existing view". We looked at two 5 of them yesterday. 6 A. Mm-hm. 7 Q. You remember? Why is it always framed in that way? 8 A. I think because, by this stage, we had had the Second 9 Sight Interim Report, which said that it had so far not 10 found evidence of systemic issues with the Horizon 11 system. That had been interpreted by the Post Office as 12 an assurance of that, and had, actually, as I said 13 yesterday, similarly been interpreted in that way by 14 Lord Arbuthnot and others, and we had no reason to be -- 15 to have doubts that that was the case. 16 But, here we were, being advised by this very well 17 respected legal firm but the evidence that we had was 18 not sufficient for them and, therefore, we should seek 19 some further advice. But I don't think that, at this 20 point -- we did not think that there was anything wrong 21 with the Horizon system at this point. But, if you're 22 asking me whether what we were doing was simply seeking 23 to commission advice which would give us the answer we 24 wanted, that was absolutely not my position, and I'm 25 completely sure it wasn't the position of other Board 36 1 members either. 2 Q. Can we display at the same time, please, POL00107317, 3 and page 3 of that document, please. Sorry, I should 4 have rested on page 1 for a bit, just so you can see 5 what it was. 6 It's the Linklaters advice of 20 March for this 7 board meeting, okay, and presented by Christa Band. If 8 we go forward to page 3, please, and go to 9 paragraph 2.3, if we can just highlight that, thank you. 10 In the first part of that, there's some information 11 about Jo Swinson. 12 A. Mm. 13 Q. Then, in the second part of the paragraph, Linklaters 14 say: 15 "We note that there is, so far as we understand it, 16 no objective report which describes and addresses the 17 use and reliability of Horizon. We do think that such 18 a report [will] be helpful, though there's a decision to 19 be made about how broad and/or thorough it needs to be." 20 That was what was needed, wasn't it: an objective 21 report describing the use and reliability of Horizon? 22 A. Yes. 23 Q. If you just look at the right-hand side, what that gets 24 translated into: 25 "... the work should cover: 37 1 "The work undertaken by Angela van den Bogerd 2 explaining how the system works ..." 3 Do you know what's meant by that: the work should 4 cover the work undertaken by Angela van den Bogerd? 5 A. I can't help you with that, I'm afraid, now. 6 Q. Secondly: 7 "A review of the data integrity aspects of the 8 system; 9 "A reference to all audits and tests carried out 10 ..." 11 So was that intended to mean a reference back to 12 previous audits? 13 A. Yes, I think so, yeah. 14 Q. Then: 15 "A response to the most significant thematic issues 16 raised by Second Sight." 17 That's rather different from what was proposed, 18 wasn't it: an objective report addressing the use and 19 reliability of Horizon? 20 A. Well, "an objective report which describes and addresses 21 the use and reliability of Horizon" is a very broad 22 statement. 23 Q. That was what was needed, though, wasn't it? 24 A. I'm sorry, I don't think that I can be of much more help 25 on this, I'm afraid. 38 1 Q. Did the Board commission a comprehensive review of the 2 use and reliability of Horizon? 3 A. The Board commissioned a review by Deloitte, which was 4 a desktop exercise of assurances and controls of the 5 Horizon system. 6 Q. So that does that mean: no, it did not? 7 We're going to come and look at the Deloitte report 8 with all of its limitations in a moment but what Ms Band 9 was saying was that there is no objective report 10 describing and addressing the use and reliability of 11 Horizon. Did that come as a surprise to you? Did you 12 think "Goodness me, here we are in March 2014. We 13 haven't got an objective report that addresses the 14 reliability of Horizon"? 15 A. I think it made me realise that we had gone -- probably 16 gone down the wrong road in the work that we had asked 17 Second Sight to do, the case-based review, yes. 18 Q. Did you think, "How have we ended up here and what about 19 the times that I've said that we have had Horizon 20 independently assured or the times I've been present in 21 meetings with Parlimentarians, for example, and said we 22 have had Horizon independently reviewed investigated or 23 assured? What about the Ernst & Young audits? Don't 24 they count? What about the internal review that was 25 reviewed by Deloitte; doesn't that count? Have I said 39 1 things in the past that don't really stack up?" 2 A. To be honest, I can't remember exactly what I was 3 thinking when I was considering this report, other than 4 the fact that the work that had been done so far by 5 Second Sight was not the answer, was not what was 6 required here, and that we needed to commission some 7 more work. I just can't go back and dig that out of my 8 mind. 9 Q. Okay. Was it quite sobering, though -- 10 A. Yes. 11 Q. -- to realise that in March 2014 -- 12 A. Yes. 13 Q. -- you were being told by somebody new -- 14 A. Yes. 15 Q. -- to the process, Linklaters, who were brought in -- 16 A. Yes. 17 Q. -- to say, in fact "Here we are in March 2014, we 18 haven't actually got a report that addresses the 19 reliability of Horizon"? 20 A. Yeah, I think we were surprised by that. 21 Q. Thank you. Those documents can come down. 22 Can we turn then to the Deloitte report. 23 Essentially, the Deloitte Project Zebra Report was 24 a consequence of the decision made at that March 2014 25 meeting. 40 1 A. It was. 2 Q. I'm not going to look at the report itself. I want to 3 look, please, at the Board briefing prepared by 4 Deloittes, as a result of their work because that was 5 sent to you directly. For reference, it's -- no need to 6 display -- POL00029733, and the document I'm about to 7 show you was emailed to you on 24 June 2014 by the 8 Company Secretary, Alwen Lyons. 9 Let's look at that document, then. POL00028069. So 10 this is the Board Briefing, as I say, emailed to you by 11 Alwen Lyons on the very day that it was created. Would 12 you have read this at the time? 13 A. So this document was disclosed to me after I'd finished 14 the -- I had submitted my written statement just before 15 Christmas and, when I first saw it, I had no 16 recollection of having seen it. But there clearly is 17 an email from Alwen, I think not just to me but to 18 fellow Board members, in which she says she attaches 19 this. 20 Q. Yes. 21 A. The email itself doesn't appear to have the attachment 22 attached to it but I have no reason to think that it 23 wasn't attached, but I simply don't remember this. 24 Q. So you don't remember whether you read it or not? 25 A. If it came to me, I would have read it. 41 1 Q. Okay. Can we look, please, at page 3 and just look at 2 the top paragraph: 3 "The work we carried out to support our full report, 4 and thus this Board Briefing document, did not 5 constitute an audit or assurance engagement in 6 accordance with UK or international standards. In order 7 to deliver a formal assurance opinion, we would need to 8 have carried out testing to address the scope 9 limitations. Our conclusions and findings are therefore 10 limited to the design of Horizon. They are also subject 11 to the accuracy of the assumptions and limitations in 12 section 3." 13 If we just go down the page, "Limitations and 14 Assumptions": 15 "Our findings and conclusions are presented in the 16 context of the following limitations: 17 "[1] As a desktop exercise we have not validated 18 whether Horizon has been implemented or operated as 19 described in the documentation reviewed. 20 "[2] Our work was limited by significant gaps 21 existing in the information available, relating to both 22 the granularity of information and the existence of 23 Horizon features over the entire timeline of operation 24 of Horizon. The effect of which is there are gaps 25 within what we are able to comment upon over this 42 1 timeline. Our findings below are written in the context 2 of the information available, which relates to the 3 current system. 4 "[3] An event occurred in 2010 which required the 5 use of the exceptional Balancing Transaction process in 6 Horizon to correct a subpostmaster's position from 7 a technical issue. Information has not been provided on 8 the circumstances that [led] to this system say and how 9 the issue was identified. It is assumed that verbal 10 assertions received from Fujitsu that this was the only 11 time that this process has been used hold true. 12 "[4] We have not had any direct contact with any 13 third parties other than the named contacts that you 14 have provided to us. 15 "[5] We have not validated or commented on the 16 quality of the documentation supplied to us." 17 Were you disappointed to have received a report 18 which was limited and caveated in such a heavy way? 19 A. Could I scroll -- could I go back to the setting for the 20 receipt of this report? So we had had a Board meeting, 21 I think it was in -- a few weeks earlier than this, at 22 which the partner from Deloitte, who was responsible for 23 this exercise, he'd come to that Board meeting -- 24 Q. Yes. 25 A. -- and he had given the Board an extremely positive 43 1 sense of what Deloitte had found thus far, and that's 2 recorded in the minutes. So I think it is really, 3 really important to understand that. He had been 4 present at the meeting. He had given a very clear and 5 positive account of what he and his colleagues had seen 6 so far, and there was a discussion about further work 7 that should be done. 8 This Board Briefing that came in some weeks later, 9 was therefore a follow-up to that and, if we scroll up 10 the page a bit -- do you mind going back up? 11 Q. The second paragraph from the top? 12 A. Yes. So -- 13 Q. I was going to come to that. 14 A. I'm sorry. 15 Q. I just wanted to -- 16 A. I'm sorry. 17 Q. -- deal with the limitations first. 18 A. Yes, but I was trying to explain -- I think it is 19 really, really important that people understand that, in 20 my mind, and the mind of my fellow Board members, we had 21 had that very clear and positive steer from Gareth 22 James. 23 Q. So were you surprised, therefore -- 24 A. Yes. 25 Q. -- if we scroll back down, to read all of these 44 1 limitations? 2 A. So, I think I said a minute ago, I don't recall seeing 3 this report and, therefore, I don't recall reading it. 4 I do, however, remember that there was disappointment 5 that Deloitte did not feel able to give us the kind of 6 description of Horizon that we had expected would be 7 forthcoming following Gareth James' appearance at the 8 Board and that there were, as I understood it from Chris 9 Aujard, a whole lot of reservations about the value of 10 doing further work, the cost of it and the time it would 11 take. 12 MR BEER: Thank you. I'll leave that there for the moment? 13 Sir, that would be a good time for the morning 14 break. 15 SIR WYN WILLIAMS: All right. 16 MR BEER: Can we say until 11.10. Thank you. 17 (11.00 am) 18 (A short break) 19 (11.11 am) 20 MR BEER: Thank you. 21 Ms Perkins, I was asking you about the Board 22 Briefing prepared by Deloitte -- 23 A. Yes. 24 Q. -- dated 4 June 2014. Just for the transcript, and for 25 those looking later, the document that shows that it and 45 1 the attachment was sent to you -- or it was sent to you 2 as an attachment, is POL00138401. No need for that to 3 be displayed. 4 A. No, no. 5 Q. That is an email to you and others showing that the 6 document was emailed to you. You were making the point 7 that we've got to read the Board Briefing of 4 June in 8 the light of the earlier meeting of the Board on 9 30 April, at which the partner from Deloittes had made 10 a presentation? 11 A. Yes. 12 Q. So can we look at the two documents alongside each 13 other, then. Firstly, the minutes of that Board 14 meeting, POL00021524 -- thank you -- and can we go to 15 page 6 of those. Thank you. 16 Then can we display the Board Briefing, POL00028069, 17 at page 3 of the Board Briefing and, in particular, the 18 bottom part of the page, the "Limitations and 19 Assumptions" -- thank you. 20 So dealing with the document on the right, these are 21 the minutes of the Board meeting of 30 April, which you 22 were mentioning: 23 "The Board welcomed Lesley Sewell, [CIO], and Gareth 24 James, Partner, Deloitte, to the meeting. Chris Aujard 25 also rejoined the meeting. 46 1 "The Chairman thanked Gareth James for his draft 2 report and explained there were a number of people who 3 were sceptical about Horizon. The Board were concerned 4 to know the truth about the reliability of the system. 5 Deloitte's views would need to be expressed in search 6 a way that they would persuade reasonable lay people. 7 "Lesley Sewell explained that the first piece of 8 work Deloitte had been asked to undertake was to give 9 assurance that the control framework, including the 10 security and processes for changes in the system, were 11 robust from an IT perspective. 12 "Gareth James reported that all the work to date 13 showed that the system had strong areas of control and 14 that its testing and implementation were in line with 15 best practice. Work was still needed to assure the 16 controls and access at the Finance Service Centre. 17 "Chris Aujard explained that several of the 18 subpostmasters who were challenging Horizon had made 19 allegations about 'phantom' transactions which were 20 non-traceable. Assurance from Deloitte about the 21 integrity of the system records logs would be very 22 valuable. 23 "The Board asked what assurance could be given 24 pre-2010 when the different Horizon system was in use. 25 It was agreed that [Gareth Jenkins] would produce and 47 1 cost a proposal for additional work to enable assurance 2 for the wider system, pre-2010. 3 "Lesley Sewell, Gareth James and Chris Aujard left 4 the meeting." 5 It was that that you were referring to? 6 A. It was, yes. 7 Q. The "strong areas of control" is a reference to the 8 control framework and security and processes for changes 9 in the system in this minute, isn't it? 10 A. I have to confess, at this point, that my recollection 11 of these sorts of details from this long ago are not 12 good. I mean, I can't add much to what we see. 13 Q. What was in the minutes? 14 A. I really can't, I'm afraid. 15 Q. Okay, I understand. It's clear, reading the minute as 16 a whole, that the Board needed some further work to be 17 done by Deloitte? 18 A. Yes. 19 Q. What we're reading on the left-hand side is the product 20 of that further work in June? 21 A. Yes. 22 Q. What it says, in the five limitations and assumptions, 23 would you agree, does not really mean that the questions 24 asked by the Board were answered? 25 A. Yes. I would agree but would it be all right to scroll 48 1 up -- 2 Q. Yes. 3 A. -- because there's one paragraph which we haven't looked 4 at. 5 Q. Second from the top. We're going to look at that, don't 6 worry. I'm just looking at the limitations first. 7 Looking at the limitations first. 8 A. Okay. 9 Q. Would you have focused on these limitations? 10 A. As I said to you before the break, I have a complete 11 blank about this. For a long time, when -- so if 12 I could just explain that, when I was putting my written 13 statement together, last year, in the run-up to 14 Christmas, it was a complete mystery to me what had 15 happened following the Board meeting whose minutes we're 16 looking at now. I simply couldn't remember what, if 17 anything, the Board had received from Deloitte after 18 that and I was, you know, kind of struggling to -- just 19 to work out what had happened, and then this Board 20 briefing and the covering email, which I think I'm right 21 in saying has commentary from Chris Aujard in it -- is 22 that right? 23 Q. Sorry, the Board Briefing? 24 A. Yes, the Board Briefing. It's not covered -- that's 25 just a simple email from Alwen? 49 1 Q. No, there is commentary as well. 2 A. There is commentary as well? 3 Q. Yes. 4 A. So that came with commentary. Anyway, it wasn't until 5 that was disclosed to me, that I saw that we had seen 6 this. That was the main reason why I amended my written 7 statement before I signed it. 8 Q. Can we go to page 5 in the document on the left, please. 9 The way that it worked was that Deloitte were asked to 10 address, by Post Office, five questions. They're 11 described as "Matters" here, but five matters. And 12 question 4, you can see it's been translated into 13 "Matter 4" there, the question was: 14 "What comfort can be taken that Horizon provides 15 visibility to subpostmasters of all centrally generated 16 transactions processed to their branch ledgers?" 17 The answer is: 18 "'The Horizon Audit Store reports from a complete 19 and unchanged record of all sealed baskets'. From the 20 documentation we have reviewed, it appears that Horizon 21 is designed such that extracts from the Audit Store 22 represent a complete and unchanged record of basket 23 data." 24 Reading this, would you be aware that all Deloitte 25 have done is looked at documents; they've not seen how 50 1 Horizon operates in practice? 2 A. I see that now. Whether I saw that -- I can't answer 3 the question of what I was thinking at the time, as 4 I don't remember having seen this at the time. But 5 I understand what you're saying. 6 Q. We can go to various parts of the report. 7 A. Yeah. 8 Q. You've referred to it as a desktop review in your 9 evidence earlier, which is accurate. By "desktop 10 review", do you mean essentially looking at documents? 11 A. Yes. 12 Q. Would that be a concern, that where Christa Band had 13 advised that the Post Office lacked an independent 14 objective report on the use and reliability of Horizon, 15 what you've ended up with is a heavily caveated desktop 16 review of pieces of paper? 17 A. Yeah, I see that now. I do see that. 18 Q. Wouldn't it have been obvious at the time that the ask 19 from the lawyer, or the suggestion from the lawyer, was 20 not met with a response that in any way accorded with 21 what was suggested? 22 A. I think it should have done, yes. But I think it would 23 be relevant to look at what the covering email said 24 because that's where I would have started and where 25 I am -- 51 1 Q. I'll go to that in a moment, then -- 2 A. -- sure the Board members would have started. 3 Q. -- if we may. 4 "Matter 5: 'Horizon provides visibility to 5 subpostmasters of all centrally generated transactions 6 processed to their Branch ledgers'. From the 7 documentation we have reviewed, it appears that Horizon 8 is designed such that subpostmaster has visibility of 9 all centrally generated transactions to their branch 10 ledgers in that accounting period. Central transactions 11 require subpostmaster approval to be processed, except 12 for [Balancing Transactions]. This appears to be 13 an exceptional process performed only by Fujitsu, and 14 asserted by them to have only been used once (in 2010) 15 between 2008 and the time of their assertion in this 16 area (... May 2014). Usage pre-2008 is currently not 17 known." 18 If you had read this, what would you have made of 19 a paragraph like that? Is it beyond your technical 20 understanding? What would you have drawn from it? 21 A. Well, this -- as we discussed yesterday, I think, this 22 does not come naturally to me, this area of work. It's 23 not something that I had or have any background in, so 24 I think, you know, I struggle with it, if I'm completely 25 honest. But, you know, if I -- if you read it out to me 52 1 and I look at it now, I can see that what they're saying 2 is, "This is how it said it works", and then it's making 3 some -- towards the end of this paragraph -- that there 4 are some reservations I suppose, is how you'd put it. 5 Q. So would things like this have occurred to you -- and 6 then I'm going to ask about how it may have occurred to 7 the Board -- on reading a paragraph like this, "Oh, we 8 don't know anything, number 1, about pre-2008. That's 9 maybe a concern. Number 2, Hmmm, we've only just really 10 got what Fujitsu are saying here to go by. It's just 11 an oral assurance that they've only done it once, this 12 thing" -- 13 A. Mm. 14 Q. -- "and, number 3, doesn't that mean that Fujitsu 15 actually have access to the system without the 16 subpostmaster approving what's being done to their 17 data?" Would those kind of things leap out to you? 18 A. I don't know that -- I wouldn't say that they would have 19 leaped out at me but, if you read this, you know, as 20 you're reading it to me now, I understand what you're 21 saying. 22 Q. Thinking about the Board more generally, was there 23 anyone on the Board that might, as I've just done, read 24 that paragraph -- 25 A. Yeah. 53 1 Q. -- admittedly with the knowledge of everything that has 2 happened, and pick out those three things: no assurance 3 pre-2008; we've only got Fujitsu's word that they've 4 done this once; and, if they've done it once, it means 5 they've got the facility to do things to the data 6 without a subpostmaster approving it, that's a bit 7 worrying? 8 A. I certainly would have thought that there would have 9 been members of the Board who would have seen that and 10 would have been more naturally -- I don't know what the 11 word is -- knowledgeable about looking at this sort of 12 description, yes. 13 Q. Okay, can we go back, then, to paragraph 2 on page 3. 14 A. Thank you. 15 Q. Page 3. Second paragraph from the top: 16 "Based on the desktop review we have performed, 17 except for the lack of monitoring controls and the 18 matters explicitly drawn out in our full report, we have 19 not become aware of anything to suggest that the system 20 as designed would not deliver the objectives of 21 processing of baskets of transactions and keeping copies 22 of them in the Audit Store with integrity." 23 So you wanted to draw attention to that, as 24 a comforting paragraph? 25 A. That it was one of the first paragraphs -- one of the 54 1 first bits of text you come to and there was some 2 comfort in that, which is I think what Chris Aujard said 3 in his covering -- 4 Q. Which we're going to come to in a second. 5 A. -- note. Yes. 6 Q. It's still a desktop review? 7 A. Yes. 8 Q. How would a desktop review, ie looking at pieces of 9 paper, actually discover whether the system, as 10 designed, was delivering the objectives of processing 11 data with integrity? 12 A. It wouldn't. 13 Q. Can we go to the Chris Aujard email, please, 14 POL00029733. If we scroll down, please, it's, in fact, 15 from Alwen Lyons passing on a message -- 16 A. Yes. 17 Q. -- from Chris Aujard. 18 A. Mm-hm. 19 Q. I think the point that you made earlier about the email 20 not showing that the Deloitte report was attached is 21 based on your reading of this? 22 A. Yes, it is. 23 Q. Okay, and I've given an alternative reference -- 24 A. Okay. 25 Q. -- that shows that it was attached -- 55 1 A. Okay, thank you. 2 Q. -- because, if we scroll up, we can see that Alwen had 3 missed Rod Williams off the email chain -- 4 A. Oh, I see. Got it. 5 Q. -- she resends it -- 6 A. Yeah. 7 Q. -- and on this one the Board Briefing is attached. 8 A. I see, yes, yes. 9 Q. But, because this is a chain it doesn't show attachments 10 of earlier emails. 11 A. I understand. Thank you, that's helpful. 12 Q. If we scroll down, please, Alwen says: 13 "Please find below a message from Chris Aujard and 14 Lesley Sewell [attaching the] Briefing ... 15 "Dear All, 16 "As detailed in the Board update sent last Saturday, 17 please find attached Deloittes final draft 'Board 18 Briefing' ..." 19 Then scroll over to the second page: 20 "The briefing focuses on those features of the 21 Horizon system which operate to provide subpostmasters 22 with full ownership and visibility of their branch 23 ledger which maintain a complete and accurate audit 24 trail. The briefing thus helps address allegations made 25 by the Mediation Scheme Applicants that their branch 56 1 losses may have been generated by 'phantom' Horizon 2 transactions. 3 "[It] strives to be succinct and intelligible. 4 However, given the subject matter and scope of the 5 review, it remains somewhat technical ... it is based on 6 a desktop review of currently available information ... 7 It is therefore heavily caveated. 8 "In the Briefing, Deloitte expressly identify number 9 of limitations and assumptions ... The Briefing must be 10 read in this context. That said, its key findings are", 11 and then it sets them out. 12 So the covering email, which I think you said you 13 would have focused on -- 14 A. Mm. 15 Q. -- did actually draw attention to the fact that this is 16 a desktop review -- 17 A. Yes. 18 Q. -- and it is heavily caveated with limitations and 19 assumptions? 20 A. Yes. 21 Q. I think it's right that Deloitte refuse to consent to 22 the publication of their report -- 23 A. Yes. 24 Q. -- and they refuse to consent to the use of their name 25 publicly to assert that the system was working with 57 1 integrity -- 2 A. Yes. 3 Q. -- and they refused to do so unless they had undertaken 4 specific testing of the system in operation? 5 A. Yes, but they, I think, went on to say words to the 6 effect that weren't sure that there was value in doing 7 the amount of further work that would be required in 8 order to satisfy that. 9 Q. Overall, how did you view the Deloitte report, ie taking 10 into account what you'd been told at the meeting on 11 30 April and in the light of receiving that email and 12 the Board Briefing? 13 A. Well, as I said, I don't remember what I felt about the 14 Board Briefing because I didn't remember seeing it but, 15 clearly, the picture that we had been given at the Board 16 meeting by Gareth James was not borne out by what 17 followed. 18 Q. Was that clocked by the Board at the time? Was it 19 realised by the Board at the time? 20 A. So I think clearly what the Board realised -- I'll try 21 again. At the Board meeting which Gareth James 22 attended, I think the Board had the impression that 23 Deloitte were going to be able to write a report giving, 24 if you like, Horizon a clean bill of health. That's 25 what we believed that they were -- that's what we 58 1 believed that they were leading to and that we would be 2 able to publish that, and that was what we had intended 3 we would do. 4 I did remember that the follow-up to that meant that 5 we couldn't go down that route, and I did remember that 6 Deloitte had come to a different view after this, in 7 work had been done from the view that they had -- that 8 had been expressed at that Board meeting and that that 9 was something which meant that we were not able to go -- 10 to follow the plan that we had at the time, and that -- 11 yes, I think that was disappointing. That was 12 disappointing to us. 13 Q. Did you get the impression that Deloitte were rather 14 wise to the possibility that their name might be 15 associated with a public assertion that the system was 16 working with integrity and, therefore, were 17 uncomfortable with that and refused to allow it to 18 occur? 19 A. They were clearly refusing to allow that to happen and 20 I think there was some discussion about why they -- why 21 they, you know, felt that -- that way and I think we got 22 the impression that they weren't really -- they weren't 23 really interested in doing the additional work. 24 Q. Can we move forward to what impact all of this had on 25 the Mediation Scheme and look at POL00106889. This is 59 1 a draft of a presentation, I think, to be given to you. 2 A. Mm-hm. 3 Q. Is that right? 4 A. Looks like it. 5 Q. It's a presentation -- 6 A. It does look like it. 7 Q. -- to you rather than by you? 8 A. Oh, it's not a presentation by me. 9 Q. If we go, please, to the introduction on page 7, the 10 author wrote: 11 "What does success look like? 12 "We bring a close the discussion on the Horizon IT 13 System as there is no evidence that there are systemic 14 issues with it (Independent assurance provided)." 15 Then skipping over a couple of paragraphs to the 16 fourth: 17 "In the run up to the election the Horizon issue 18 does not cause the Minister any problems." 19 Then skipping over one: 20 "Limited internal resource (from Chairman to 21 administration)/money spent on Horizon and more on 22 profit-making activity." 23 Was this a presentation, in fact, given to you? 24 A. I don't remember but probably. I mean, I don't know. 25 Q. This, on its face, is dated as being in draft on 60 1 2 February 2014, so a couple of days before receipt of 2 the Board Briefing? 3 A. Yes. 4 Q. Would it be fair to say that, in the light of that Board 5 Briefing, it would not be possible to say, "There is no 6 evidence that there are systemic issues with Horizon and 7 independent assurance has been provided"? 8 A. That would have had to have rested on the Second Sight 9 Interim Report. 10 Q. Not the Deloitte report? 11 A. Not given what we have just seen dated 4 June, no. 12 Q. No. The fourth bullet point: 13 "In the run up to the election the Horizon issue 14 does not cause the Minister any problems." 15 Was the handling of the Horizon issue seen by the 16 Board through the lens of whether it caused or did not 17 cause the Government problems? 18 A. Not -- no, not -- the answer to the question is no. 19 I think, in the sense that the Board would never have 20 done anything one way or another about Horizon because 21 of the political fallout, or otherwise. But I think 22 certainly I, because I was very -- because of my 23 Government background, would have been sensitive to 24 election -- you know, an election period, such as the 25 one we're now in. 61 1 Q. I mean, ironically at this time, June 2014 -- 2 A. There wasn't an election, no. 3 Q. There wasn't one; it happened in May 2015. 4 A. Indeed, you're right but, presumably, there was some 5 speculation as to when that election might be. 6 I just -- 7 Q. I'm just interested in the extent to which causing 8 problems for the Minister was a material consideration 9 at the handling of Horizon issues? 10 A. Well, it certainly wouldn't have been a material 11 consideration in terms of the -- of the substance of 12 doing the right thing, as far as the Board was 13 concerned. 14 Q. Thank you. Is it right that the Post Office essentially 15 took control of the Mediation Scheme in June 2014? 16 A. I can't remember the exact date but -- 17 Q. Let's look at the documents -- 18 A. -- but I thought that the Working Group was closed down 19 later than that. 20 Q. I want to look at the genesis of that. 21 A. Okay. 22 Q. Can we start, please, by looking at POL00022128. This 23 is a Board pack for the Board meeting of 6 June 2014. 24 A. Of the subcommittee meeting? 25 Q. Yes, I'm so sorry, yes, the Sparrow Sub-Committee -- 62 1 A. Yes. 2 Q. -- rather than a full Board. 3 A. Okay, yeah. 4 Q. You're present? 5 A. Yes. 6 Q. Yes? 7 A. Yes. 8 Q. If we just go to page 5, please, and look at 9 paragraph 3.8. These are amongst the options. If we 10 just scroll up to get the heading -- thank you -- these 11 are options being considered at this time, "Completing 12 the Post Office investigation in each case and moving 13 the governance and management of the scheme in-house". 14 A. Yeah. 15 Q. "Under this option we would publish a report on Horizon 16 and the Mediation Scheme setting out the legal position 17 around the contract and liability. The scheme 18 administration and management would be moved under Post 19 Office's sole control with the Working Group disbanded 20 and Second Sight's engagement ended." 21 Is that essentially what happened in due course? 22 A. So, in due course, not -- no, that's not quite right. 23 So, in due course, what happened was the Working Group 24 was disbanded. It was decided to give all applicants 25 access to the Mediation Scheme and any applicants who 63 1 wanted would -- the Post Office would fund advice to 2 them from Second Sight. That's what happened. 3 Q. The reasons for this are given in paragraph 3.9, for the 4 taking of that option, as being: 5 "[It] would substantially reduce administration 6 costs and allow the Post Office to 'take control' of the 7 scheme and its associated risks (such as adverse [public 8 relations]). We estimate the whole life cost ... at 9 £7.7 million. The option would also release management 10 time as the scheme would conclude more quickly than the 11 other options ... 12 "This could be justified publicly by setting out the 13 case that we are taking action in the absence of any 14 evidence of systemic failures with the Horizon system 15 during the last two years, mounting costs ... and clear 16 legal advice around the expectation gap." 17 I should say we should go to page 8 and 18 paragraph 7.3 -- thank you: 19 "It is the view of the Programme, Legal and 20 Communications and Corporate Affairs teams that the 21 third option -- where the scheme is effectively moved 22 in-house -- is the one which is in the best interest of 23 the business in a pure 'commercial' sense. There is 24 a weight of evidence to support this view, including 25 value for money, timescales, concerns around the cost 64 1 and quality of [Second Sight], the diversion of senior 2 management time and the critically important point that 3 in two years of investigation nothing has been uncovered 4 to raise doubts about the issue at the heart of this 5 [system] -- the operation of the Horizon computer 6 system." 7 Is it right that the subcommittee decided that this 8 option, Post Office taking control of the Mediation 9 Scheme, was the right one? 10 A. At this meeting, it appears that that was the decision 11 but it wasn't accepted by the Board. 12 Q. Do you know what the adverse public relations risks were 13 that the Post Office was facing in relation to the 14 Mediation Scheme? 15 A. I think what was meant by this was that there was 16 an increasing -- sorry, can you just give me a minute 17 while I find the words? 18 Q. Yes. 19 A. At this stage, with the Mediation Scheme, there was 20 a lot of noise around it, a lot of dissatisfaction with 21 it being expressed publicly, and I think the point here 22 was that it could be seen that the Mediation Scheme, on 23 the current -- the then current rate of progress, was 24 going to take very, very, very much longer to conclude 25 than had ever been envisaged and that, as long as that 65 1 was going on, there would be more of the kind of comment 2 that was being experienced at that time and that that 3 was -- that this was seen as unhelpful. I think that's 4 what that's saying. 5 Q. Thank you. That can come down. 6 Can I turn to my last topic, then, with you, and 7 it's essentially the role of Mr Davies, Mark Davies. 8 A. Yes. 9 Q. Can we turn up, please, POL00295386. I'm going to look 10 at a series of emails that you weren't party to 11 initially and then we'll look at some when you were. If 12 we go to page 3, please, and if we scroll down to the 13 middle of the page. Thank you. 14 So this is 21 June 2012, okay -- 15 A. Mm-hm. 16 Q. -- and that's a month before Mark Davies joined the 17 business? 18 A. Right. 19 Q. Okay? 20 A. Yes. 21 Q. Ms Vennells writes to him: 22 "Mark, Alana was going to call you but is in Downing 23 Street. 24 "My sense is we are doing the right thing in not 25 offering interviews ..." 66 1 Just in context, that means whether the Post Office 2 should offer interviews before the appointment of Second 3 Sight was announced. 4 A. Oh, I see. Okay. Thank you. 5 Q. "... as that puts us on the defensive and it also gives 6 it more airspace. 7 "Do you agree -- you must say if not [please]! 8 "Hope all is well. 9 "Paula." 10 Then top of the page, next day: 11 "Paula, sorry to pick this one up late. But 12 I agree -- absolutely nothing to be gained in giving the 13 story legs. Best course of action is to hold the 14 (strong) lines and stick with them." 15 Then: 16 "All well -- last day at Rethink." 17 That is the organisation that Mr Davies was working 18 for? 19 A. Yes. 20 Q. "Really looking forward to 9 July!" 21 That's his start date. 22 A. Okay. 23 Q. Then if we go up, please. That day, Paula Vennells 24 sends you that exchange: 25 "Thought you'd like to see this from Mark -- 67 1 [supported] and excited at joining. 2 "The only coverage this [morning] is the Telegraph 3 which is balanced." 4 Then up, please. You reply: 5 "Thanks. It will great to have him on board. ([By 6 the way] was NL okay about it?)" 7 Is that a reference to Norman Lamb. 8 A. I cannot think who else it was a reference to but 9 I don't know. 10 Q. Norman Lamb, at that time, was the Post Office Minister? 11 A. He was. 12 Q. Records suggest that he was the Parliamentary 13 Undersecretary of State for Employment Relations and 14 Postal Affairs, in office between 3 February 2012 and 15 4 September 2012, so in office at this period. You 16 can't think of anyone else who "NL" may refer to? 17 A. No. 18 Q. Okay. 19 If that does, as is suggested, refer to the 20 Minister, why were you concerned that the Post Office 21 Minister might not be okay that the Post Office had 22 appointed Mark Davies? 23 A. Mark Davies had worked for my husband and -- 24 Q. He was your husband's -- Jack Straw's -- former Special 25 Adviser, SpAd? 68 1 A. He was, yes. One of the new posts which the Post Office 2 needed to create and fill was a Communications Director, 3 following its independence from the Royal Mail. Up 4 until April 2012, when the Post Office was part of Royal 5 Mail, that communications function was exercised through 6 the Royal Mail Group, and so, although there was 7 somebody in the Communications Directorate in the Royal 8 Mail, who was the Post Office person in that team, there 9 wasn't anybody at the level with the relevant experience 10 to carry out the role for the newly created Post Office, 11 particularly given the agenda that we were trying to 12 implement. 13 I think that decision had been taken before I came 14 on board. I can't remember but, anyway, that decision 15 was taken and there was going to be a proper process 16 involving headhunters and a proper selection process. 17 And I remember that it occurred to me that Mark, who 18 I knew simply through the work that he had done for my 19 husband, was not particularly happy. I'd heard that he 20 was not particularly happy where he was working and 21 I thought that he would be a strong candidate for the 22 post. And I remember thinking at the time -- I wondered 23 whether I should even raise that because of the 24 potential conflict that that -- you know, it could 25 look -- 69 1 Q. It looked too cosy? 2 A. It looked too cosy and I nearly didn't suggest it and 3 then I thought that was completely ridiculous because he 4 would so obviously be very good at the role and why on 5 earth would you not put somebody forward who was 6 eminently qualified, both in terms of his experience and 7 also his public service values, to -- for that role, 8 just because he'd worked for your husband? 9 So I did suggest to Paula -- or, actually, I can't 10 remember if I suggested to Paula or I suggested to Mark 11 but, anyway, one way or another, Mark's name was given 12 to the headhunters and he was then included in the 13 selection process and I had absolutely nothing whatever 14 to do with that. 15 Q. Okay, and so you're checking here that the potential for 16 this to be viewed as a sort of cosy stitch-up -- 17 A. Exactly. 18 Q. -- hadn't occurred to, or was operating on, the mind of 19 the Minister? 20 A. I would have wanted to be absolutely clear, above board, 21 and I would have wanted it to be drawn explicitly to the 22 Minister's attention for all those reasons. 23 Q. Okay, if we then scroll up, please, Ms Vennells replies. 24 If you look at the third paragraph, she says: 25 "I haven't mentioned specifically this week to NL." 70 1 We needn't read the rest of it because she 2 essentially gets the wrong end of the stick. She thinks 3 you're speaking about have you run past Norman Lamb the 4 issue of whether we should proactively offer interviews 5 before Second Sight, okay? 6 A. Oh, I see. 7 Q. She gets the wrong end of the stick. 8 A. Okay. 9 Q. Then if we go to page 1 at the bottom, you put her 10 right. 11 A. Right. 12 Q. You say: 13 "My query re [Norman Lamb]" -- 14 A. Yes. 15 Q. -- "was in relation to Mark's arrival." 16 A. Yes. 17 Q. Not the issue of substance? 18 A. Yes. 19 Q. Then if we scroll up, second paragraph is her reply. 20 A. Okay. 21 Q. "[Norman Lamb] was grateful that I mentioned it. 22 I explained the proper process that had been followed 23 and the calibre of the candidates he had been competing 24 with for the role. I had to leave a message but he 25 texted back and said something like: 'I appreciate the 71 1 information, thank you, that all sounds fine'. And we 2 had a great time over supper -- [he] is good company." 3 Then at the top of the page: 4 "I'm [very] glad you did this [you reply]. Right 5 thing to do and he responded in the right way. 6 I thought he would. I've no idea whether we will get 7 any flak about Mark but if we do, we are in a perfect 8 place to handle it." 9 A. Yeah. 10 Q. So the flak is the cosy stitch-up suggestion? 11 A. Yeah, absolutely. 12 Q. The "perfect place to handle it", you're saying that 13 because it's been run past the Minister? 14 A. No, I think -- well, yes, it had been run past the 15 Minister, that was certainly part of it, but also 16 because, you know, we'd done the proper thing, you know, 17 we'd been scrupulous about it. 18 Q. To what extent, following this, did you rely on Mark 19 Davies' advice as to the substance of decisions to be 20 taken, as opposed to the later presentation and 21 disclosure of such decisions to the media, ie after the 22 decision had been taken? 23 A. I would have relied on Mark solely for his experience 24 and professionalism around the public relations angle of 25 things. 72 1 Q. So not to contribute to the substance of a decision 2 taken, only to take advice from him on the presentation 3 of the decision after it had been taken? 4 A. I think when you're thinking about decisions in a very 5 public environment, one of the factors you want to take 6 into account, you want to be aware of, is, you know, how 7 would this come across? But that's not a basis on -- 8 you take a decision to do the right thing and then you 9 work out how you're going to communicate it, but it's 10 helpful to know in advance whether the way you 11 communicate it is going to be a big issue or not. 12 Q. To what extent, to your knowledge, did Paula Vennells 13 include Mark Davies in the taking of decisions as 14 opposed to the presentation and disclosure of such 15 decisions after they had been made? 16 A. I wouldn't have had visibility of that. 17 Q. Do you know the extent to which Ms Vennells relied on 18 Mark Davies to shape and set the direction for the Post 19 Office's policy and strategy on issues? 20 A. I don't know. You know, I can't really answer that. 21 I mean, he was a trusted member of Paula's team and the 22 Board was very impressed with him but, as to the extent 23 to which she relied on him for the substance, rather 24 than the presentation, I really don't know. 25 Q. Here, he's being relied on before he's joined the 73 1 company. 2 A. But for a PR -- 3 Q. For a PR issue. 4 A. Yes, for a PR issue, yes, he clearly is. But I didn't 5 know that at the time, I think. 6 Q. Well, I think you did, because you were on this email 7 exchange? 8 A. Oh, okay, well I didn't remember that. 9 Q. Can we turn, please, to POL00295300, page 2 at the 10 bottom, please. We're in June 2012 here. 11 A. Mm-hm. 12 Q. There's an email from Lord Arbuthnot to you and to 13 Ms Vennells about the Second Sight terms of reference. 14 A. Right. 15 Q. "Thank you for sending me your proposed terms of 16 reference -- they are most helpful. 17 "A couple of issues have struck me and I wonder if 18 you might give me your thoughts ... The first is that 19 you are proposing that meetings should be held with MPs 20 but not necessarily with the relevant subpostmasters 21 there to put their side of the story. And MPs will not 22 know as much as the subpostmasters will, and so the 23 issue will not be resolved unless the MPs are also given 24 the chance to have their constituents at the meeting. 25 What about the advisers? Surely they ought to be 74 1 included as well? Since we are trying to clear the 2 matter up in ... a robust and transparent manner, it 3 does seem to me that this needs further thought." 4 Then if we go to the bottom of page 1, please, 5 there's Ms Vennells reply: 6 "Firstly, let me reassure you that Alice and 7 I intend total transparency -- as I'm sure you sensed 8 from the meeting we arranged for you and Oliver. 9 "... the queries you raise are entirely valid ... we 10 are dealing with particularly sensitive and personal 11 situations ..." 12 Third paragraph: 13 "Rather than a blanket approach, we would take each 14 case separately -- we are dealing with individuals' 15 lives and livelihoods." 16 Then further up, please. That email is sent on to, 17 amongst others, Glenda Hansen, your Executive Assistant. 18 A. Mm-hm. 19 Q. Ms Vennells says: 20 "... I will call Alice tomorrow pm or [not], 21 hopefully after meeting James or at least having a time 22 in the diary over the next two days. I shall also have 23 had a chat with Mark Davies by then, which I know we'll 24 reassure her too." 25 So, again, before Mr Davies has even taken up his 75 1 post at the Post Office, Ms Vennells was expressing 2 a view that you would be assured that she had had a chat 3 with him before speaking to you, yes? 4 A. Looks like that, yes. 5 Q. So a CEO indicating that the Chairman of the company 6 would be assured after she had had a call with the new 7 Communications Lead, than if she had not done so. Was 8 that because she knew that Mr Davies was somebody that 9 you yourself particularly trusted? 10 A. I don't know what it -- exactly what it was she was 11 going to have a chat with him about. I mean, it clearly 12 is about Lord Arbuthnot's message, but what aspect of it 13 is not clear from this. I think that, at the time -- 14 and I can't remember the detail of this but there was 15 really almost no communications input into the Post 16 Office top team at that point and I think we were 17 feeling the lack of it. But I don't remember this 18 email. 19 Q. Bearing in mind this was three weeks or so before 20 Mr Davies joined the company, why would Paula Vennells 21 chatting with him give you reassurance? 22 A. I don't -- 23 Q. He'd never worked for you, had he? 24 A. No, absolutely not. I just -- I knew that he had -- 25 I knew that my husband had rated him and I knew that he 76 1 had a very good reputation, both within the Special 2 Adviser community and that he was very much trusted in 3 the media world. 4 Q. When he joined the Post Office, did he perform the role 5 of a Special Adviser -- 6 A. No. 7 Q. -- rather than a Communications Lead? 8 A. I don't think so. Look, I don't know exactly what kind 9 of -- you know, all the conversations that Paula had 10 with Mark but, certainly, as far as I was concerned, 11 Mark was there to do the communications role and 12 that's -- you know, when I sought his advice, that's 13 what I was seeking his advice on. 14 Q. Can we turn to POL00317714, bottom of page 1, and over 15 to page 2. We're now in 2015. 16 A. Yeah. 17 Q. An email from Mr Davies to you directly: 18 "Hi Alice 19 "Hope all well and sorry to be bringing Sparrow to 20 you. 21 "I have drafted note below for colleagues and 22 thought I would let you see the update now: it is still 23 a live situation ..." 24 "I will update the Board fully on [Thursday]." 25 If we just scroll down, it is essentially a briefing 77 1 about how the Post Office is going to engage with the 2 planned Panorama programme. 3 A. Yeah. 4 Q. Then if we go back to page 1, and scroll down to see 5 your reply: 6 "Thanks for updating me Mark. It sounds difficult 7 but I am confident that nobody could be handling it 8 better than you." 9 Then you go on to describe the issues of substance. 10 Was it usual for you, as the Chairman of the 11 company, to have direct access to, or direct 12 communications with, Mr Davies? 13 A. I would have had direct access to communications with 14 any of the Executive Directors. 15 Q. Without going through Ms Vennells, who is not copied in 16 to -- 17 A. No, she's not copied in. I mean, yes, I think I did 18 sometimes have bilateral conversations or bilateral 19 correspondence with them, but I would, you know, if 20 there was anything new of substance, then I would have 21 raised that with her in one of our weekly meetings or 22 some other time. 23 Q. You say: 24 "Did you know Clare Sumner from the [Ministry of 25 Justice]?" 78 1 What's that about? 2 A. So I saw this correspondence very recently, I think last 3 week, and I have to say that, with the benefit of 4 hindsight, I don't think I should entered into this 5 conversation. But Clare Sumner was somebody who had 6 been a civil servant, I had known her particularly from 7 my role in the Cabinet Office because of her position in 8 the Civil Service, and she was by then working at the 9 BBC. 10 Q. So the "TH" -- 11 A. The "TH" is Tony Hall. 12 Q. The then Chairman of the BBC? 13 A. No, he was the Director General. 14 Q. Director General. Thank you. So what you were doing 15 was proposing to Mark Davies potentially contacting, by 16 reason of a previous connection in government, the then 17 Chief of Staff of the Director General about a programme 18 to be broadcast by Panorama about the Post Office? 19 A. That was -- I was reminding him of her existence and the 20 role that she was in, yes. 21 Q. Presumably to exert some influence? 22 A. I thought -- I don't know what was going through my mind 23 at the time. 24 Q. Can you help us? 25 A. Can I help you in what way? 79 1 Q. With what was going through your mind? "Because of past 2 connections with government, when you were part of 3 government" -- 4 A. Yes. 5 Q. -- "my husband's SpAd, did you come into contact with 6 this other person in government, who now occupies 7 a favourable position in the BBC? We're in dispute with 8 the BBC, maybe you should get in to Clare Sumner"? 9 A. I knew Clare Sumner in my own right, so that had nothing 10 to do with a connection with my husband. Mark Davies 11 was the person I knew through the connection with my 12 hers. And, yes, I obviously was suggesting -- I thought 13 Mark probably would have known her and I was suggesting 14 he might consider getting in touch with her. 15 Q. If we scroll up, please. He says: 16 "I do know Clare. I might drop her a line. 17 I always worry about going too nuclear too early but 18 I think this is getting to that point I think." 19 Did the Post Office go nuclear with Panorama? 20 A. The Post Office was strong with Panorama. I wouldn't 21 use the word "nuclear". 22 Q. Can we go back a little, please, to December 2014. 23 I think you're aware of Mr Davies appearing on the BBC 24 Radio 4 Today Programme and referring to subpostmasters 25 who'd been convicted of criminal offences, some of whom 80 1 had been imprisoned, as experiencing "lifestyle issues"? 2 A. Yes. 3 Q. Were you aware of that at the time it was broadcast? 4 A. I think I may have heard it. Yes. 5 Q. Presumably because this was quite a mainstream media 6 platform: Radio 4 Today Programme? 7 A. Because Radio 4 Today Programme was on in our house 8 every morning. 9 Q. Was this comment that he made drawn to your attention 10 afterwards? 11 A. I think -- I can't remember. I think I -- I mean, I was 12 aware of it and I remember thinking that it was ill 13 judged. 14 Q. Can you recall how it was handled, if at all, within the 15 Post Office? 16 A. No, I don't remember. 17 Q. Was anything done about it? 18 A. I don't remember. 19 Q. Can we turn to POL00101860. Go down, please, to page 2. 20 Thank you. 14 December, you're emailing Mr Davies, so 21 this is after the Today Programme, and the second 22 substantive paragraph: 23 "On Sparrow, the [Financial Times] piece is 24 obviously unhelpful. It made me think about whether it 25 is in our best interests to maintain confidentiality. 81 1 It probably is but if we haven't already, perhaps we 2 should just ask ourselves that question? As long as we 3 stick by our rules and they don't, we will not be able 4 to respond to their allegations about the process. On 5 the other hand, it's binary. So if we start to play by 6 their rules we could find ourselves giving a running 7 commentary about it." 8 Can you remember the context of this, please? 9 A. I don't know remember this Financial Times piece at all. 10 Q. Can we scroll up to see what Mr Davies replies. He 11 says, second paragraph, so it is back to you with 12 Ms Vennells and Belinda Crowe copied in: 13 "On Horizon, it is a final balance. The team and 14 I have been working pretty much all weekend on the 15 Parliamentary debate and (frankly) duelling with the BBC 16 over their plans for a further round of broadcasts on 17 Wednesday. A legal letter will go in the morning. Our 18 approach will be to answer any specific points outside 19 confidentiality -- they are very serious (such as 20 alleged failure to follow due process) so we must. But 21 I so think we need to maintain confidentiality for the 22 scheme applicants." 23 I think that might mean, "But I also think we need 24 to maintain confidentiality for the scheme applicants": 25 "I called the BBC editor on Friday to make this 82 1 point -- with every broadcast they are putting a risk in 2 the way of applicants having their cases heard. 3 "I am calling my team this afternoon to discuss our 4 next steps and will certainly have your points in mind. 5 Part of the challenge here is that the BBC are playing 6 games: and it may well be that if we can't provide 7 a spokesperson they can't broadcast it as it would lack 8 balance." 9 So do you understand this to mean that refusing to 10 provide a spokesperson would be a tactic used by the 11 Post Office in the hope that the BBC would not broadcast 12 because of a perceived lack of balance? 13 A. That is what this is saying, yes. 14 Q. Was what Mr Davies wrote here your view of what was 15 happening: that the Post Office was duelling with the 16 BBC? 17 A. I don't remember exactly what this is about and it would 18 have been -- you know, it would have been his view. 19 I wasn't engaged in this. I'm just listening to what 20 he's telling me and I am contributing -- I'm just 21 contributing some comments. 22 Q. Was the Post Office viewing itself as being embroiled in 23 a battle against the campaigning subpostmasters? 24 A. I think it was, yes. I think it was. 25 Q. Were staff fighting to protect the reputation of the 83 1 Post Office? 2 A. People were fighting to protect the reputation of the 3 Post Office, as we now know, based on a completely wrong 4 understanding of the facts. 5 Q. Is that how the scandal was then viewed internally by 6 Post Office staff: a rather bloody PR battle in which 7 they were entrenched against the campaigning 8 subpostmasters? 9 A. I wouldn't use those words. I think that what was going 10 on here was that the Post Office was trying to -- we 11 talked a bit about this yesterday -- was trying to 12 protect its reputation as an organisation that could be 13 trusted by the public and by its subpostmasters and its 14 employees, under -- in a situation where allegations 15 were being made that it couldn't be trusted. 16 People within the Post Office, or at least, speaking 17 for myself, I -- and I am very confident that my fellow 18 non-executive Board members -- our understanding of the 19 situation was that those allegations did not have 20 substance and we were worried about the reputation of 21 the Post Office suffering from allegations that were not 22 substantiated. 23 Q. If we scroll up, please, Belinda Crowe replies: 24 "Happy to join a call ... 25 "I didn't respond but we are on really dodgy ground 84 1 if we get into the detail of cases. However, as you 2 know we have some good answers to some of the points 3 raised and provided we can position this in a way that 4 under no [circumstances] can it be construed as 5 commenting on a case we should be in quite a strong 6 position with our statement. 7 "Keep trying to think of Kipling." 8 I think you were familiar with Belinda Crowe; is 9 that right? 10 A. Yes, I knew -- I worked with Belinda at the Post Office, 11 yes. 12 Q. Were you responsible for her appointment? 13 A. I didn't know Belinda until she joined the Post Office. 14 Her name was, I think, suggested either to me or to 15 Paula as somebody who could be helpful, I think, 16 initially in relation to the work we'd were doing on 17 mutualisation, which was underresourced. 18 Q. She refers to getting on to "really dodgy ground" if the 19 Post Office got into the detail of cases. Do you know 20 why, at this time, the Post Office would be on "dodgy 21 ground" if it got into the detail of individual cases? 22 A. I think she's referring to the confidentiality point. 23 Q. Rather than the substance? 24 A. Yes. I think what must have been happening here is that 25 either the BBC or the Financial Times or somebody else 85 1 was -- and this does -- I've seen this happen in other 2 contexts -- they start to talk about personal 3 confidential issues about particular cases and the 4 organisation concerned is unable to answer those points 5 because it feels itself bound by confidentiality, which 6 the commentators are not being bound by. So it's a kind 7 of unequal conversation you're having. 8 Q. She ends, "I am trying to think of Kipling", which 9 presumably is "If you can keep your head whilst all 10 about you are losing theirs and blaming it on you". 11 A. I imagine that that is -- I've no idea. 12 Q. No. Then Mr Davies replies, and I'll try to do this 13 justice: 14 "It is not the critic who counts; not the man who 15 points out how the strong man stumbles, or where the 16 doer of deeds could have done them better. 17 "The credit belongs to the man who is actually in 18 the arena, whose face is marred by dust and sweat and 19 blood; who strives valiantly; who errs, who comes short 20 again and again, because there is no effort without 21 error and shortcoming; but who actually does actually 22 strive to do the deeds; who knows great enthusiasms, 23 with great devotions; who spends himself in a worthy 24 cause; who at best knows in the end of the triumph of 25 high achievement, and who at the worst, if he fails, at 86 1 least fails while daring greatly, so that his place 2 shall never be with those cold and timid souls who 3 neither know victory nor defeat." 4 I'm not sure Theodore Roosevelt quite had in mind 5 a government-owned entity battling its own staff over 6 whether it was complicit in the procurement of wrongful 7 convictions but does this give an insight into what 8 Mr Davies saw as his role at the Post Office? 9 A. I think that this is a -- I mean, did I see this email, 10 this email exchange at the time? 11 Q. No. I'm asking you about how Mr Davies was acting -- 12 A. No, I understand, yes. 13 Q. -- what he saw his role as. 14 A. I think that he was just, you know, he must have been 15 feeling under a lot of pressure. 16 Q. Was it your view that the Post Office team regarded 17 themselves as marred by dust and sweat and blood in 18 a worthy battle against their subpostmasters? 19 A. I wouldn't have put it like that. 20 MR BEER: Thank you. They're the only questions I ask you. 21 Sir, can we take the second morning break until 22 12.30? 23 SIR WYN WILLIAMS: Then I understand the plan is to have one 24 set of questioning of Ms Perkins, which will last up to 25 40 minutes -- is that the idea -- so we have a late 87 1 lunch? That's the plan? 2 MR BEER: That's right, yes. A ten-minute-late lunch. 3 SIR WYN WILLIAMS: Yes, fine. That's very good sleight of 4 hand, if I may say so, Mr Beer. Our lunchtime gets less 5 and less in time. 6 Right, so we will have our ten-minute break and then 7 whoever is first up will have 40 minutes. 8 MR BEER: Thank you very much, sir. 9 (12.19 pm) 10 (A short break) 11 (12.32 pm) 12 SIR WYN WILLIAMS: Who is first up? 13 Questioned by MR JACOBS 14 MR JACOBS: It's me, sir. I just need to check the 15 microphone is so you can hear me. How is that? 16 Thank you, Ms Perkins, I ask questions for 17 subpostmasters, very many who are represented by 18 Howe+Co, most of whom, if not all, are following 19 proceedings this afternoon. 20 My first question for you is: did you protect the 21 subpostmasters in your role as Chairman of the Board? 22 A. I did my best to protect subpostmasters. 23 Q. Did you succeed in protecting them, Ms Perkins? 24 A. No, obviously not. 25 Q. Did you consider that the Board was under a duty to 88 1 protect subpostmasters? 2 A. The Board -- the Board was under a duty to run the 3 company properly and that clearly included looking after 4 the interests of all the people who worked in the 5 company. 6 Q. So I think your answer is yes? 7 A. Yes. 8 Q. You referred this morning to Sir Anthony Hooper's 9 evidence. You say that you dispute that these 10 conversations happened, but that's another point for 11 another day. Essentially, the point he was making was 12 that it didn't make sense that people of good character 13 would all turn to crime at approximately the same time 14 and in circumstances where they were bound to be caught 15 because they had to balance at the end of the balancing 16 period. Wasn't that a point that was obvious to the 17 Board or should have been obvious to the Board, 18 regardless of whether Sir Anthony had raised it with 19 you? 20 A. It was a point clearly that was not obvious to the Board 21 because, if it had been obvious to the Board, we would 22 have taken different actions. 23 Q. Okay. Why do you say it wasn't obvious? We have large 24 numbers of people selected because they are of good 25 character, suddenly there's a raft of prosecutions, 89 1 a raft of allegations, they all claim that the system is 2 to blame, and it appears that large numbers of people, 3 who are otherwise honest, were turning to crime, roughly 4 at about the same time. That was what was being said in 5 the press, Private Eye, Computer Weekly. Surely the 6 Board must have been aware of this? 7 A. So your question implies that this was happening out of 8 the blue at the time that I and my fellow Board members 9 were there. In fact, this had been happening over 10 a very, very long period -- 11 Q. Yes. 12 A. -- and we became aware of it only slowly. It wasn't as 13 though there was suddenly a huge implosion of cases. So 14 I think that as a misleading way of putting it. 15 Q. Well, let's move on to another issue that no action was 16 taken on. Yesterday, at around 4.10, you were taken to 17 an email that Paula Vennells sent to you on 21 October 18 2013. We don't need to put if up but she said: 19 "My concern re Sparrow currently is our obligations 20 of disclosure re an unsafe witness." 21 Then, in brackets: 22 "The representative from Fujitsu made statements 23 about no bugs which later could be seen to have been 24 undermined by the Second Sight Report. We don't think 25 it material but it could be high profile. Martin E 90 1 [Martin Edwards] is briefed if you want more detail. 2 This is just in case." 3 Now, you said yesterday you took it at face value 4 and you shouldn't have done. Did you accept, as 5 Chairman of the Board that this was an enormous issue 6 that potentially rendered convictions unsafe. 7 A. I'm sorry what was your question? 8 Q. Didn't you accept or couldn't you see from that email 9 that this was an enormous issue that potentially 10 rendered criminal convictions unsafe? 11 A. I didn't see it from that email and if I had seen it 12 from that email I would have done something about it. 13 Q. Well, what you were being told at face value was 14 essentially of the Simon Clarke Advice, that 15 a representative from Fujitsu made statements about no 16 bugs? 17 A. I was told that it was not material and I was also told 18 that I was being told just in case. 19 Q. You said in your evidence today that, some time in 2014, 20 you expressed concerns about the Chief Executive, Paula 21 Vennells; is that right? 22 A. Yes. 23 Q. Did there come a time when you stopped taking her at 24 face value and started taking the initiative yourself? 25 A. I think I did take my initiative myself, right at the 91 1 very, very beginning of this -- of my time at the Post 2 Office, when I was the person who decided that the Post 3 Office should undertake a new, independent review of the 4 subpostmasters' cases. 5 Q. This issue, the Gareth Jenkins issue, had legal 6 implications; didn't you think that you should speak to 7 your General Counsel about this? 8 A. If I had thought I should speak to the General Counsel 9 I would have done so. 10 Q. During your tenure as Chairman, there were a lot of red 11 flags which the Board should have acted on; do you 12 accept that? 13 A. During my tenure, there were a lot of what I would 14 describe as clues, I absolutely accept that. But 15 I think that one of the great difficulties that we are 16 in at the moment is that we know the truth of what 17 happened now and we can see it being laid out very 18 plainly, and it's becoming clearer and clearer as this 19 Inquiry goes on. But, at the time that I and my fellow 20 Board members were in post, that was absolutely not the 21 position. 22 Q. Very well. Well, let's take the clues cumulatively: 23 there were the clues that constitute Sir Anthony 24 Hooper's point; there were the clues in relation to the 25 Gareth Jenkins issue; matters raised by Private Eye, 92 1 Computer Weekly, the JFSA and Second Sight; there were 2 quite a lot of clues coming together, weren't there? 3 A. I was not in receipt of the clue from Sir Anthony 4 Hooper. I think you need to be -- I need to be clear 5 about the clues that I was aware of and the clues that 6 I was not aware of. 7 Q. Well, let's talk about the matters that you were aware 8 of. Do you accept that the matters that you were aware 9 of were relevant to the reputation of the Post Office as 10 a public institution? 11 A. Clearly, yes. 12 Q. Do you accept that the matters that you were aware of 13 may have attracted public interest? 14 A. Yes. 15 Q. Do you accept that these matters might have had 16 an impact on the value of the Post Office brand? 17 A. Yes. 18 Q. Do you accept that these were matters that were 19 involving prosecution decisions which were material to 20 the interests of the Post Office Group? 21 A. But we believed that what we were doing was that we -- 22 we believed that what we were doing was right because -- 23 on the basis of what we believed to be the position. 24 Q. Well, that's not the question that I asked. Do you 25 accept that the matters that you knew were matters 93 1 involving prosecution decisions which were material to 2 the interests of the Post Office Board? 3 A. Oh, I see, yes. 4 Q. Sorry, if I am going to a quickly -- 5 A. You are going extremely quickly and I have had a very 6 long morning. 7 Q. I will slow right down. 8 A. Thank you, I will appreciate that. 9 Q. Can I then ask you to look at a document, it is the 10 Board terms of reference, it's WITN00220103. If we can 11 scroll down. You'll see your name is there as Chairman 12 of the Board, and the other Non-Executive Directors, 13 Chief Executive, Chief Financial Officer. If we could 14 go down to page 2 of 5, where it says, "Duties and 15 Responsibilities", it says: 16 "In addition to its legal duties, the Board has the 17 following specific responsibilities ..." 18 Then if we could scroll down to the next bullet 19 point, which is on the next page: 20 "Maintenance of the reputation of the Post Office as 21 a public institution, including consideration of new 22 products and activities which may attract public 23 interest or have an impact on the value of the Post 24 Office brand." 25 So these issues that the Board was aware of engaged 94 1 their duties and responsibilities under this bullet 2 point, don't they? 3 A. They do, yeah. 4 Q. If we could scroll down further then, please, to page 3 5 of 5, "Matters Reserved for Board Decision", D: 6 "The following matters are reserved specifically for 7 Board decision. When indicated [with a star], the Board 8 may delegate authority to a Board subcommittee to bring 9 forward a recommendation for approval or to complete 10 a project or task on behalf of the Board." 11 If we then go to section D, scrolling down please, 12 sorry, keep scrolling down, please. I think it's 13 section 5, governance -- 6, "Governance", here we are, 14 and bullet point 5 -- the next one down, sorry: 15 "Decisions on the potential prosecution, defence or 16 settlement of litigation involving potential costs of 17 more than £1 million or being otherwise material to the 18 interests of the Group." 19 So these were the matters that the Board knew 20 engaged this part of the terms of reference, don't they? 21 A. Sorry, what was your question? 22 Q. The matters that you say the Board were aware of, the 23 clues -- 24 A. Yes. 25 Q. -- engages this aspect of the terms of reference of the 95 1 Board, doesn't it? 2 A. Yes. 3 Q. So it was the function of the Board to be proactive in 4 relation to its terms of reference; is that right? 5 A. Yes, yes. 6 Q. It was not the function of the Board to sit back and 7 accept everything that its executives were telling it; 8 is that fair? 9 A. Yes. 10 Q. In sitting back and accepting, without challenging, what 11 Paula Vennells and others were telling you, do you agree 12 the Board did not act in accordance with its own terms 13 of reference? 14 A. I think that that's a big generalisation. So I would 15 say that, first of all, in respect of the Board's wider 16 responsibilities, which we're perfectly properly not 17 discussing here, the Board absolutely fulfilled its 18 responsibilities. I think it's clear from the ground 19 that I've covered over the last day and a half that 20 there are quite specific issues where I now think that 21 the Board should have been -- have followed things up or 22 should have challenged things in a way that it didn't at 23 the time and I've been very straightforward about that. 24 Q. You said at the beginning of my questions to you that 25 you agree that the Board had duties towards the 96 1 subpostmasters? 2 A. Yes. 3 Q. At paragraph 51 of your statement -- and I'll just read 4 it out -- you say: 5 "It would not have been appropriate for the Board to 6 be involved in the granular day-to-day operations of the 7 business any more than it would have been for the Board 8 of a large commercial company." 9 That's the wrong approach, isn't it? 10 A. Well, if it -- if I'd thought it was the wrong approach, 11 I wouldn't have put it in my witness statement. 12 Q. Well, we are suggesting that what you put in your 13 witness statement is wrong. That wasn't the right 14 approach for you to take. 15 A. It wasn't -- in my view -- all Boards have a really 16 difficult line to tread between exercising 17 a strategic -- giving the company, the organisation in 18 question, strategic input into their business activities 19 and standing back and being more objective about what's 20 going on. They also have duties to hold the executives 21 to account and to challenge them. You have, all the 22 time, to be thinking about where is the right place to 23 draw that line because, if, as a board, you get too far 24 into the operational detail, you can't fulfil your wider 25 responsibilities. 97 1 So that's something that you're constantly juggling. 2 I think I have -- as I said a minute ago, I have already 3 explained where I think we should have been more 4 questioning or should have pursued things in more 5 detail. We did not get that right in every instance. 6 Q. You remember you said yesterday, "I was prepared to lift 7 the rock and see what was underneath it". 8 A. Yes. 9 Q. Our clients take the view that the Board was asleep at 10 the helm and no one lifted the rock: they accepted, 11 blandly, what Vennells and other people were telling 12 them? 13 A. If you look at what happened in my early months at the 14 Post Office, you will absolutely see that I lifted the 15 rock and I pretty much did it entirely on my own at that 16 point. 17 Q. In relation to what you say about a strategic approach 18 in respect of large commercial companies, wasn't it all 19 the more important for the Board to have been proactive 20 in the subpostmasters' cases because this was 21 a publicly-owned company that was bringing actions 22 against people that resulted in imprisonment, desperate 23 financial hardship, the breakup of families, health 24 breaking down and real damage to subpostmasters and 25 their families? Shouldn't you have taken a more 98 1 compassionate and less corporate approach? 2 A. I am just in danger of repeating myself. I have already 3 said where I think we should have pursued things more 4 than we did. We acted in the belief that the advice 5 that we had received was correct and we didn't 6 understand what it was that we had not received. 7 Q. Well, wasn't it also the case that the Board saw the 8 subpostmasters and their claims as damaging to the brand 9 and that is why the Board didn't protect the 10 subpostmasters? 11 A. The reason that the Board didn't take a different line 12 in relation to the prosecutions was because we 13 mistakenly believed the position that was being 14 explained to us by the Post Office's executives. 15 Q. Which executive? 16 SIR WYN WILLIAMS: Mr Jacobs, yes, I'm sorry to interrupt. 17 Can I just take one or two minutes from you because 18 I have still got in front of me the terms of reference, 19 and would just like to ask Ms Perkins a question about 20 the bullet point that is highlighted there, which 21 I interpret to mean as follows: that in relation to 22 litigation which has a value of £1 million or more, if 23 you at up the damages or costs, or whatever -- 24 A. Yes. 25 SIR WYN WILLIAMS: -- then the Board itself has to make 99 1 a decision about what to do about it. 2 A. That -- 3 SIR WYN WILLIAMS: But then we have this other rather 4 imprecise phrase: 5 "... or being otherwise material to the interests of 6 the Group." 7 A. Mm. 8 SIR WYN WILLIAMS: Now, forgive me, the interests of the 9 group, is that sort of taken from the time when it was 10 the Royal Mail Group and has just been drafted on, so to 11 speak, or was it a Post Office Group, after separation? 12 A. There were various iterations of these terms of 13 reference -- 14 SIR WYN WILLIAMS: Right. 15 A. -- at different points and, looking at this now, I can 16 see that the word "Group" does look odd. 17 SIR WYN WILLIAMS: Anyway, that wasn't the main point. The 18 main point I wanted to ask you about is how the Board 19 interpreted the phrase "being otherwise material to the 20 interests", and let's say of the Post Office? It's 21 a very, as I say, imprecise phrase. 22 A. It is a very imprecise phrase. 23 SIR WYN WILLIAMS: So how did you go about deciding whether 24 or not this should be a Board decision or a decision 25 made by someone else, in effect? 100 1 A. I think that we would have been mindful of the effects 2 of these sorts of issues on the shareholder. I think we 3 would have been mindful, as has been discussed at 4 length, of their affect on the Post Office's reputation 5 and, in addition to this point about costs of more than 6 1 million, we were also looking at cumulative costs. 7 SIR WYN WILLIAMS: Would I be right in thinking that the 8 Board itself would only be in a position to make 9 a decision as to who should make the decision if the 10 particular problem was brought before the Board? In 11 other words, you didn't have an internal mechanism 12 whereby, I don't know, every three or six months, you 13 checked upon whether there were decisions which the 14 Board, as opposed to Mr X or Ms Y, should be taking? 15 A. In relation to prosecutions? Yes -- 16 SIR WYN WILLIAMS: Mm. 17 A. -- you are right about that. 18 SIR WYN WILLIAMS: Yes. 19 A. Yes. 20 SIR WYN WILLIAMS: So, effectively, in relation to criminal 21 prosecutions, the Board delegated the responsibility to 22 the relevant executives; is that it, in a nutshell? 23 A. Yes, it is it, in a nutshell. Can I say a little bit 24 more about that? 25 SIR WYN WILLIAMS: Yes. 101 1 A. I think it's in my witness statement that when I -- very 2 early on when I arrived in the Post Office, Susan 3 Crichton, who was then the General Counsel, explained to 4 me that the Post Office took private prosecutions and 5 that this was handled at arm's length from the Board, 6 and I accepted that proposition. I think now, knowing 7 everything that I know, we should have really early on 8 taken a paper -- there should have been at least a paper 9 to the Board, probably leading to further discussion or 10 briefing, so that we really, really understood what all 11 that meant. 12 SIR WYN WILLIAMS: Mm-hm. 13 A. And what happened was that, because we were plunged into 14 the separation negotiations, which were way behind 15 schedule, because I didn't have -- I didn't inherit 16 a fully functioning Board and I was populating it, for 17 all those other reasons, this was something that we did 18 not get to, which, with the benefit of hindsight, 19 I think it would have made a very big difference if we 20 had got to it early on. 21 SIR WYN WILLIAMS: Thank you. 22 Thank you, Mr Jacobs, I will give you an extra 23 minute or two if you need it. 24 MR JACOBS: Thank you, sir. 25 There should always be a system, shouldn't there, in 102 1 a Board structure such as the Post Office, of reviewing 2 decisions and recording how advice given by executives 3 was considered and looked at? We don't see that here, 4 do we? 5 A. I'm not quite sure what you're -- 6 Q. There should be an audit system, a risk system, where 7 you look at the advice that the executives are giving 8 you and analyse it, audit it and minute it. Did you 9 just accept what the executives were telling you and not 10 act any further? 11 A. No, we often questioned what -- the advice that we were 12 being given and -- and the other thing that I was 13 supported by the Board in trying to get accepted as 14 a kind of way of working was that, when things had gone 15 wrong, that we would look back at them and analyse what 16 had gone wrong so that we could learn lessons for the 17 future. 18 Q. Yes. Was there a practice in the Post Office whereby 19 the Board would review its own decision and then go back 20 to that decision and see if the decision was properly 21 made? 22 A. Well, that's what I'm referring to by talking about 23 introducing the culture of having lessons learned 24 reviews. 25 Q. Right. You said early on that you were let down by the 103 1 executives and, at paragraph 82 of your statement, you 2 say that: 3 "Material information was only summarised in 4 an incomplete way." 5 You say: 6 "The Board didn't ask questions that might have got 7 to the truth of the matter." 8 The question I was going to ask you, Ms Perkins, is 9 which executives, in particular -- can you name them -- 10 only gave you information in an incomplete way and 11 didn't give you enough information for you to properly 12 look at the matter? 13 A. Well, I discussed that with Mr Beer yesterday -- 14 Q. Can you discuss it with me as well, please. 15 A. -- and I said that I thought that both Susan Crichton 16 and Chris Aujard, as General Counsel, had both -- had 17 not given us direct access to advice that we should have 18 been given or explained that advice to us clearly and 19 that some of the advice that they received was described 20 in a way that didn't give a full picture of the truth. 21 Q. Susan Crichton has said in her evidence that it was 22 unusual for there not to be a lawyer present as 23 a full-time Board member. Do you agree with that? In 24 retrospect, do you think if there had been lawyers on 25 the Board, these issues might have been grasped or 104 1 understood a bit better? 2 A. I think there are two aspects to that. There's the 3 question of whether, had the General Counsel of the day, 4 been present at all Board meetings, these kinds of 5 issues might have been revealed to the Board. I think 6 on the basis of what we've seen, I don't think that we 7 can make that presumption in this instance. 8 I have said in my witness statement that, reflecting 9 on these events, which I have done at great length, I do 10 think that we lacked -- it was a -- we lacked having 11 somebody who was a non-executive member of the Board who 12 really had a grasp of the detail of these kinds of 13 issues, and that could have been -- it could have been 14 possible to have made the case for an extra Board 15 member, had I seen or had we seen that that skillset was 16 really necessary. 17 An alternative way of getting that expertise, which 18 I floated in my witness statement but which I'm not 19 completely convinced about, is whether what we should 20 have done is to have gone and got some external advice, 21 which would come directly to the Board on these matters. 22 But one of the reasons why -- there are several reasons 23 why I'm not sure that that would have made a difference 24 and it's very detrimental to the relationship between 25 a Board and its executives to bring in that kind of -- 105 1 can be -- to bring in that kind of external advice. It 2 creates tensions in the relationship, which can have 3 adverse consequences. 4 Q. Do you accept now that, if you had had a lawyer full 5 time on the Board, it would have been less easy for the 6 executives to pull the wool over your eyes? 7 A. You're talking about a Non-Executive Director, is that 8 what you're talking about? 9 Q. Yes. 10 A. Possibly, yes. I can't be sure. It would have depended 11 on -- you know, it would have depended on a great many 12 things and one of the other things that we will never 13 know is, had the Board asked more questions than it did, 14 had the Board pursued some of these things that we 15 should have pursued in more depth, now that -- you know, 16 now that -- we can see that now, knowing what we know 17 now, would it actually have got to the truth? I don't 18 think we can -- I certainly can't be sure of that. 19 Q. I want to move on to the question of remote access. You 20 say at paragraph 225 of your statement that you weren't 21 aware that the question of remote access was an issue 22 that could threaten the integrity of prosecutions and 23 you go on to say you would have expected to have been 24 advised if this was the case, so that the Board could 25 act in the light of all relevant information. 106 1 Do you accept, or did you know at the time, that 2 a subpostmaster facing prosecution, if that person knew 3 about the possibility of remote access to a branch, they 4 would be in a position to say there's scope for doubt 5 that the alleged shortfalls in the system emanated from 6 the system, and not from them. 7 A. Could you take me to that paragraph in my witness 8 statement? 9 Q. Yes, of course. It's 225, which is on page 113 -- 10 page 112, I'm sorry. Around about the fifth line: 11 "As I mentioned I was not aware that this was 12 an issue that could threaten the integrity of 13 prosecutions, and would have expected to be advised if 14 this was the case so that the Board could act in the 15 light of all the relevant information." 16 Then you go on to talk about the Ismay Report and 17 having no backdoors. Has that refreshed your memory? 18 A. So I am saying this in the -- I'm saying this in the 19 context of what we were discussing at the Audit and Risk 20 Committee on 23 May 2012, in the context of this Ernst & 21 Young audit. 22 Q. Yes. 23 A. That's where I'm saying that. I'm not saying I never 24 had any idea that remote access was an issue. What I'm 25 saying here is that I didn't make the connection between 107 1 the point that was being made in this Ernst & Young 2 audit, about their ability to audit the accounts, and 3 the position of subpostmasters. That's what I'm saying 4 here. 5 Q. Were you aware that Post Office knew about the remote 6 access capability from 2010? 7 A. No, I wasn't aware of that and it says -- absolutely 8 I wasn't aware of that. If I'd known that, I would have 9 behaved in a different way. 10 Q. There is a document that's known to the Inquiry where 11 there was a discussion, a meeting in September 2010, 12 between Fujitsu staff and Post Office staff -- 13 A. In 2010? 14 Q. -- in September 2010 -- before your time -- 15 A. Okay. 16 Q. -- before your time -- 17 A. Right. 18 Q. -- in relation to the mismatch bug, and one of the 19 solutions -- I'm just going to read it out -- was: 20 "... Alter Horizon branch figure at the counter to 21 show the discrepancy. Fujitsu would have to manually 22 write an entry value to the local branch account." 23 Then it said: 24 "IMPACT -- When the branch comes to complete the 25 next trading period they would have a discrepancy which 108 1 they would have to bring to account." 2 Then: 3 "RISK -- This has a significant data integrity 4 concern and could lead to questions of tampering with 5 the branch Horizon system and could generate questions 6 around how the discrepancy was caused. This solution 7 could have moral implications for Post Office changing 8 branch data without informing the branch." 9 So they knew all about it in 2010 and my question 10 for you is: how is it that this information, the 11 knowledge of the Post Office, never came to the Board's 12 attention? 13 A. It was -- I'm not the person who can answer that 14 question, I'm afraid. 15 Q. You had responsibility to protect the interests of 16 subpostmasters. This was a key issue that went to the 17 integrity of prosecutions. All the meetings, all the 18 papers that you read, all the consultations that you 19 had, why did this issue never come up? Why did you 20 never raise this? Why did the Board never raise this? 21 A. Because we were being given constant repeated assurances 22 that remote access was not possible. 23 Q. You said yesterday that the problem with the Post 24 Office's conduct and the points that were missed were 25 that it was because people were not paying attention and 109 1 you said maybe it was too difficult. You also said, in 2 your words, that "cock-up rather than conspiracy lay 3 behind the failures that led to Post Office defending 4 the Horizon system in the way that it did". 5 Do you now accept, looking back, that there was 6 a conspiracy? People were lying to MPs, people were 7 lying to the Board. This was quite deliberate. It 8 wasn't just not paying attention or it being too 9 difficult. Can you accept that now? 10 A. I simply do not know, as I said yesterday, why people 11 did not pass on information that they should have passed 12 on to the Board. 13 Q. Finally, I'm going to ask you about suspense accounts. 14 Now, I know you've said that that wasn't an issue that 15 you had a great deal of knowledge about but there was 16 a paper that the Board received after the Select 17 Committee meeting in February 2015, where the Select 18 Committee said that the Post Office was denying Second 19 Sight access to information about movements in relation 20 to suspense accounts. Do you recall that? 21 A. I think I covered that in my witness statement. 22 Q. You did, yes, paragraph 79.2.3. 23 A. Would you mind putting it up -- I can't remember 24 everything -- it's a long statement. 25 Q. Of course, it's a long statement, Ms Perkins. So 110 1 paragraph 79.2.3, in the witness statement, which is 2 WITN00740100, and it's page 34. If we could scroll 3 down: 4 "The Board also received a paper on supplementary 5 evidence which the Post Office was trying as part of the 6 BIS Select Committee investigation, in which the issue 7 of suspense accounts was discussed. I understand from 8 this paper that the BIS Select Committee was informed 9 that the Post Office was denying Second Sight access to 10 information about movements into and out of the suspense 11 account." 12 A. "I understand that in June 2014 Second Sight asked the 13 Post Office to explain the operation of its suspense 14 account and the Post Office replied in July 2014." 15 Q. Yes. Were you aware at the time why this was being 16 asked? Subpostmasters -- who paid money to the Post 17 Office, on account of alleged shortfalls, so they could 18 continue trading and not be prosecuted or have their 19 contracts terminated -- physically handed money over to 20 the Post Office and Second Sight believed that that 21 money, the subpostmasters' own money, was absorbed into 22 Post Office general accounts. Were you aware that that 23 was the nub of the issue here? 24 A. I think I have explained that I didn't understand this 25 at the -- I didn't know about the suspense account issue 111 1 directly and that's what I'm saying in my witness 2 statement. I've got nothing to add to that. 3 Q. Well, taking suspense accounts out the question, then. 4 What did the Board do to look into what had happened to 5 the money that these people paid; was that something 6 that ever came up? 7 A. I don't remember that the Board did look into that. 8 Q. Are you able to say why it is that, even today, 9 subpostmasters do not know how the money that they paid 10 was accounted for, where it has gone? 11 A. I can only talk about the things that I knew about when 12 I was in my position. 13 Q. From your experience, from when you were in your 14 position? 15 A. I can't give you -- 16 Q. You can't answer that question? 17 A. I can't answer that question. 18 Q. I am just going to see if I have any more questions to 19 ask. 20 I'm asked to ask you, in relation to your opening 21 statement to the subpostmasters yesterday, you said: 22 "I'm sorry that I cannot say that, despite serious 23 efforts on my part to get to the bottom of what was 24 going on, I did not succeed in doing so during my four 25 years at the Post Office and, therefore, the suffering 112 1 of those affected was prolonged." 2 Those subpostmasters who we represent maintain that 3 your efforts as Chair of the Board were seriously 4 lacking. Can you respond to that, please? 5 A. I would say that I made some -- took some big steps to 6 try and deal with this issue. When I was faced -- not 7 faced -- when I first heard that Lord Arbuthnot had 8 issues that he wanted to raise in relation to this, 9 I agreed to see him immediately without hesitation. 10 I got the distinct impression from him that he had not 11 been able to get that kind of response from anybody in 12 Royal Mail or Post Office before that. 13 At my first meeting with him, I suggested that there 14 should be an independent review of those cases. I went 15 back to the Post Office and said that this was what 16 I had suggested. I was told it was a bad idea, that it 17 was unnecessary and that the Post Office didn't have the 18 capacity to handle that. Absolutely nothing happened 19 about it. I wouldn't let go. I went back and argued 20 for it. It was then agreed that we should have that 21 review. 22 I was then pushing, and pushing, and pushing for the 23 terms of reference of that investigation to be broadened 24 and not limited in the ways that were being suggested 25 and, later on, I and the Board, as a whole, were very 113 1 open/supportive of the idea of doing a second kind of 2 review through Deloitte, which, as I discussed this 3 morning with Mr Beer, was something which was not 4 followed up in the way that I think with the benefit of 5 hindsight, it should have been. 6 But there were a whole load of steps that were taken 7 by me that made a difference, not in the way anybody 8 would have wanted, but -- 9 Q. Yes. 10 A. Is that -- I would also like to say, since I'm having 11 this thrown at me, that there were a number of other 12 steps that were taken while I was Chair of the Board, 13 which include the fact that we reviewed the prosecutions 14 policy, and I would personally have taken that further 15 and, had I known, and had the Board known, of the first 16 piece of Simon Clarke Advice, I am very, very clear that 17 we would have taken a decision to stop private 18 prosecutions at that point. And we had already been 19 told that, once the Second Sight review was under way, 20 prosecutions based entirely on Horizon evidence were 21 ceased. 22 Q. Ms Perkins, what blame do you accept, personally? 23 A. I think we've covered a lot of that over the last day 24 and a half. I have talked about instances where I -- 25 specific instances where I think, with the benefit of 114 1 hindsight, I and/or the board should have taken things 2 further. 3 SIR WYN WILLIAMS: Thank you, Mr Jacobs. 4 MR JACOBS: Thank you. I have no further questions. 5 SIR WYN WILLIAMS: Right, I will take back a few minutes 6 from Mr Beer and we will start again at 2.15 -- sorry, 7 2.10. Can't take too many minutes back from him! 8 2.10. 9 (1.13 pm) 10 (The Short Adjournment) 11 (2.10 pm) 12 MR BEER: Sir, it's Ms Watt on behalf of the NFSP and then 13 Mr Henry. 14 SIR WYN WILLIAMS: I'm just going to move a little this way 15 so I can see you, Ms Watt. 16 Questioned by MS WATT 17 MS WATT: Good afternoon, sir. Although, I think if 18 Mr Henry sits there then maybe Ms Perkins can't see me. 19 Sorry, thank you. 20 SIR WYN WILLIAMS: We're fine now. 21 MS WATT: Thank you very much. 22 Good afternoon, Ms Perkins. I ask questions on 23 behalf of the NFSP. At paragraph 4 of your witness 24 statement, I'm not going to turn it up, I'm just going 25 to return to something you say there, you say: 115 1 "The failures by the Post Office and the Royal Mail 2 Group prior to the separation of the two companies were 3 considerable and devastating in their impact on the 4 lives of many affected subpostmasters and their 5 families." 6 I just wanted to start off by asking if you would 7 expand that to acknowledge that the failures also had 8 a devastating impact on postmaster assistants, Crown 9 Office employees and their families because they were 10 also prosecuted and are also victims? 11 A. Yes. 12 Q. Would you agree that the failures throughout, and that 13 includes the period 2011 to 2015, when you led the 14 Board, also had a considerable impact on the communities 15 that the affected post offices and subpostmasters 16 served? 17 A. Yes, they must have done. 18 Q. I'm sorry, I'm not able to hear you -- 19 A. Sorry, my fault. It's because I was trying to see you 20 and I moved away from the mic, sorry. 21 Q. Thank you. Would you accept that this is a continuing 22 situation, in other words it is the case, isn't it, that 23 there is a devastating impact on the post offices and 24 subpostmasters of today from the damage done to the 25 reputation of the Post Office and, therefore, to the 116 1 value of their investment in their businesses? 2 A. I'm afraid I'm not familiar with how the Post Office is 3 currently faring in that way. 4 Q. Do you accept that that is caused or substantially 5 contributed to by the failures of you and your Board at 6 the material time? Just to explain, by "failures", 7 I mean the failure to notice, question and act on any 8 material piece of information, all as discussed in your 9 evidence these last two days, which might have brought 10 a different outcome to this? 11 A. I think I have accepted over the last two days that 12 there were specific areas where I think that the Board 13 or I should have pursued things. I have, I think, 14 covered that ground. But, as I have also said, there 15 were a whole number of areas where, either as 16 a consequence of my personal actions or the Board 17 actions, things were done which made -- which led to -- 18 I mean, the fact that we set up the Second Sight 19 Inquiry, notwithstanding the problems with that, did 20 lead to the unravelling, in the end, of all of this, and 21 there were a number of actions that we took which were 22 very positive in this context. 23 During the time that I was in the Chair, the number 24 of prosecutions being carried out by the Post Office 25 dropped to zero in two of the years and I think to one 117 1 or two in one of the years. It was a completely 2 different picture from the picture which I inherited. 3 Q. Just picking up on that, you've said several times 4 during your evidence that, certainly at the start of 5 your tenure, you lifted the rock to see what was 6 underneath. Can I put it to you that, while that may 7 well be the case at the start, would you accept that 8 what then happened is you put the rock back down and 9 just became part of the corporate reputation protection, 10 which was, at the very least, completely incurious? 11 A. So I wouldn't accept that, no. I don't think there's 12 really anything that I can add substantively to what 13 I've said on this subject. 14 Q. Just finally on this part, would you accept that this 15 scandal and your part in it has had an impact on the 16 British taxpayers, who were effectively the source of 17 funding for the Post Office's legal fees throughout what 18 might be described as a war of attrition in defending 19 the indefensible? 20 A. Well, it certainly is the case -- I mean, I don't know 21 what the current state of the finances of the Post 22 Office are and to what extent it is dependent on 23 taxpayer subsidiaries. All I can say is that during the 24 period when I was in the chair, we were making real 25 inroads on that subsidy and the Post Office was on the 118 1 path to breaking even. But, clearly, what's happened 2 has had a very, very big impact on that. But I can't, 3 you know, I can't elaborate on that, I'm afraid. 4 Q. Well, just thinking about that financial aspect that 5 you've mentioned, at paragraph 36 of your witness 6 statement you say that the Government's vision for 7 turning the Post Office around was making it sustainable 8 by developing new streams of income, modernising it and, 9 in the process, making it profitable instead of 10 loss-making and, therefore, ready for mutualisation, if 11 you recall that is in your witness statement? 12 Can I ask you, then, was the Network Transformation 13 programme something that you were aware of/involved in? 14 A. Yes, I was aware of it. 15 Q. How hands on would you say the Government relevant 16 departments and ministers were in relation to the 17 Network Transformation Programme? 18 A. I think they were well aware of it. It was a central 19 part of their policy in relation to the Post Office. 20 Q. Thinking a bit more about the Network Transformation 21 Programme then, can you say what work was done by the 22 Post Office, along with Government and relevant 23 departments to identify and put in place new income 24 streams which would have been required for Network 25 Transformation to actually be profitable for 119 1 subpostmasters? 2 A. So you're talking here about new business for the Post 3 Office; is that what you're talking about? 4 Q. Yes. 5 A. Yes. So there were, I think, three big streams of 6 income, Mail's was the biggest, and there was a lot of 7 time and energy spent on the relationship with Royal 8 Mail, and trying to put that partnership on a much 9 better footing, and to deal on the front foot with the 10 increase in online shopping, parcel delivery and all of 11 that, which was very, very, very difficult because the 12 Royal Mail and the Post Office were behind the game, 13 compared to the competition. 14 There was the Financial Services aspect, which was 15 relatively small when I began in the chair, but we 16 rebooted our relationship with the Bank of Ireland to 17 provide a proper platform on which we could develop the 18 Financial Services offer, and that was going well, and 19 there were very ambitious plans for it, which were not 20 realised in my time. 21 And then the third aspect, which I suspect may be 22 what you are getting at, was Government business, where 23 we had been told by the Government of the day was a very 24 important part of the -- plank in their strategy for 25 growing the Post Office's revenue, which was 120 1 a disappointing -- it was a disappointment because it 2 wasn't coming through in the way that had been expected. 3 Q. So if we take the way in which the Network 4 Transformation Programme was effectively sold to 5 subpostmasters, is it not the case that, in truth, 6 certainly on the Government business side, if nothing 7 else, there really were no revenue streams and this 8 programme was, effectively, falsely sold to 9 subpostmasters? 10 A. I don't think it was falsely sold. I think there was 11 genuine intent to deliver the government services plank 12 of that, alongside the other things. It was not the 13 only thing. But I would agree that, for understandable 14 reasons, that government business was not won by the 15 Post Office because the Post Office was often not 16 commercially the most attractive vehicle for delivering 17 those services. And the Government -- in principle, 18 a government could decide that it was so important to 19 maintain a flourishing Post Office Network that you 20 would mandate Government departments to use those 21 outlets for the delivery of those services. 22 I don't think that would have been legal, actually, 23 but, in principle, you could make it legal but that was 24 not what was on offer, and it was a personal 25 disappointment to me, that. I put a huge amount of 121 1 effort into trying to explain to Government departments 2 and to ministers of Government departments what it was 3 the Post Office had to offer Government. But, as so 4 often happens -- and I know because I've been inside it 5 as well as outside it, Government departments -- it's 6 very, very difficult to get Government departments to 7 collaborate on a Government-wide initiative that doesn't 8 actually individually benefit an individual department, 9 if you see what I'm saying. So it was disappointing. 10 MS WATT: Thank you very much. 11 Those are my questions, sir. 12 SIR WYN WILLIAMS: Thank you. You look as if you're poised, 13 Mr Henry. 14 MR HENRY: As poised as I'll ever be, sir. 15 SIR WYN WILLIAMS: All right okay, I'll stay in this same 16 position. I can see both of you. Yeah. 17 Questioned by MR HENRY 18 MR HENRY: Ms Perkins, can I just ask you, please, 19 prosecutions, you say, were kept at arm's length from 20 the Board. 21 A. Yes. 22 Q. Now, obviously, that is prosecuting people but 23 litigation risks, in other words civil and criminal 24 appeals which could result in massive damages being 25 awarded against the Post Office, that must have reached 122 1 Board level? 2 A. Yes, it did reach Board level. 3 Q. Yes. So from the point of view of trying to assess risk 4 and whether or not it could have a material impact on, 5 to use the archaicism, the Group as a whole, or, 6 post-2012, the separated Post Office, that would be 7 something where the Board would obviously work in close 8 conjunction with the Executive Team and also General 9 Counsel? 10 A. Yes. 11 Q. Now, I want to just ask you, please, at paragraph 298 of 12 your witness statement -- and there's no need to get it 13 up -- but you refer to a document that was prepared by 14 General Counsel, Mr Aujard, and the reference is 15 WITN00740131. I wonder if we could have a look at that. 16 It's paragraph 298 of your witness statement, in case 17 you have a hard copy of your witness statement. 18 A. Unfortunately, I didn't bring my hard copy witness 19 statement back in with me, I'm sorry. So I would like 20 to look at that, please. 21 Q. Well, then I'm afraid, sir, my time is going to be -- 22 SIR WYN WILLIAMS: Don't worry, we'll do it quickly, 23 Mr Henry. Let's have WITN00740100 on the screen, and 24 page 145, paragraph 298, just so that Ms Perkins can 25 refresh her memory about that. 123 1 MR HENRY: I'm very grateful. 2 A. So I'm looking at paragraph 298, is that right? 3 Q. Yes. 4 A. Can we scroll down to the rest of the paragraph, then. 5 Thank you. 6 Q. Now, can we go to the actual document WITN00740131. Can 7 we concentrate, please, on paragraph 2.3: 8 "The headline conclusion of the backward looking 9 report [which is the Altman General Review of October 10 2013] is that '... review (of the cases that had been 11 prosecuted over the last few years) is fundamentally 12 sound' and that no 'systemic or fundamental flaws in the 13 review process' were detected. In addition, a number of 14 relatively small procedural recommendations were made 15 regarding matters such as document retention etc." 16 Now, "document retention" is a euphemism for 17 shredding: the unlawful, the unauthorised destruction of 18 documents that ought to be preserved under the Criminal 19 Procedure and Investigations Act. You tell us that your 20 General Counsel, of his own volition, must have decided 21 to use that disgraceful euphemism to mislead you and 22 your fellow Board members. 23 A. I don't think I've used those words. I don't remember 24 using words in relation to this sentence. 25 Q. Well, you're saying that it was kept back from you, 124 1 paragraph 298 -- you've just read the paragraph. I may 2 be embroidering it but what you're saying is that this 3 was -- and I will put words into your mouth -- 4 a disgraceful action by your General Counsel to not 5 fully apprise you of risk, not fully apprise you of what 6 was going on in the business. 7 A. I think if you look at that last sentence, I mean, 8 obviously, it depends who you are and it depends what 9 else you already know but, to me, that reads like a kind 10 of bland sentence. It could mean anything. To me, that 11 does not mean shredding of documents relating to either 12 past or current actions in relation to prosecutions. 13 I'm really sorry but I simply cannot make -- that's not 14 a connection that I think you would reasonably expect 15 somebody coming to this to see. 16 Q. That is not -- and you're a very intelligent woman, that 17 is not the thrust of my question at all. I'm not 18 suggesting that you ought to have read that as 19 "shredding". What I am suggesting, however, and I will 20 put it to you straight, is that this must have been 21 curated, between you, the Chief Executive and General 22 Counsel, that a sanitised version of the truth was 23 perpetuated in Board documents, as opposed to the 24 unvarnished truth? 25 A. That is absolutely untrue and I find that question 125 1 offensive. 2 Q. I'm very sorry if you find it offensive but the fact is 3 that you have said that things were "surprising", 4 "extraordinary", "disappointing", "astonishing"; a whole 5 range of epithets have dropped from your lips to 6 apparently excuse the Board's stupifying ignorance on 7 matters of central importance and I'm suggesting to you 8 that that cannot be right, that you must have been 9 known? 10 A. You can suggest that to me as often as you would like, 11 in as many different words as you would choose: it is 12 absolutely categorically untrue, and I am on oath and 13 I am a truthful person. 14 Q. I want to deal with the issue that Mr Beer took you to 15 very briefly about embedded commands and you deny, or 16 cannot recall, ever teaching Ms Vennells a lesson, but 17 she claimed that you taught her how to craft a question 18 to subordinates with an embedded command, a skill, in 19 other words, that you ask a question in which you 20 mandate the answer you require. 21 The famous example of that is: is it possible to 22 access the system remotely, et cetera, et cetera. You 23 remember, perhaps, or have read about, her questions 24 before Parliament. 25 I want to take you now to a document. POL00344895. 126 1 What I want to suggest to you is that the language that 2 Mr Aujard is using is a reflection of the reality that 3 you wanted to see and hear. That's why euphemisms are 4 being used in Board documents. It is a reflection of 5 what you desire, your strategy, your vision, which you 6 set for the company. Let's go to POL00344895 and can we 7 scroll up, please. Mr Beer took you to this morning 8 and: 9 "The position is intrinsically worrying (to put it 10 politely) [et cetera, et cetera]. The NEDs are really 11 concerned because of the potential costs to the 12 business, the distraction from implementing our strategy 13 (which is demanding enough), the reputational issues and 14 their personal positions. A bad combination made far 15 worse if the business does not appear to be on top of 16 it. So the paper needs to demonstrate that the Board's 17 concerns on the latter point are unnecessary -- if that 18 is possible." 19 I suggest to you that the "if that is possible" is 20 a throw away post-hyphen part of the sentence: 21 "... the paper needs to demonstrate that the Board's 22 concerns on the latter point are unnecessary ..." 23 This was a reflection of your style of leadership, 24 wasn't it? 25 A. I don't accept the premise of your question and I think, 127 1 if I may say so, if you look at some of the other 2 documents, amidst the huge quantity of documents that 3 are available, you will see that there are examples of 4 where I have made it absolutely clear to colleagues, to 5 executive colleagues, that I was always ready to face 6 bad news and would deal with it head on. What I didn't 7 want was apparently bad news that was not properly 8 evidenced and that was my -- that was absolutely my 9 position but I do not accept that I ever, either 10 directly or indirectly, encouraged people not to give 11 the full truth. 12 Q. Well, let's just change tack then and deal with that 13 because I suppose a demonstration of that would have 14 been your pushing back against the inertia demonstrated 15 by your colleagues and your fighting really hard to 16 address Mr Arbuthnot's concerns. 17 A. Is that a question? 18 Q. Yes, that would be an example of you, you know, wanting 19 clarity and candour and wanting to get to the truth, so, 20 as you profess this morning, that you fought really hard 21 to address Mr Arbuthnot's concerns, as he then was. Do 22 you remember saying that? 23 A. I did. I did try to do that, yes. 24 Q. But you didn't commission an independent report at any 25 stage, did you? 128 1 A. What was the -- well, I shouldn't ask you questions. 2 The Second Sight review was an independent review. 3 Q. But I'm talking about a review of the Ismay conclusions, 4 of which you were aware, because you had read the Ismay 5 Report and you were, at one point in your leadership, 6 concerned that, if a proper and full independent review, 7 contrary to Mr Ismay's conclusions, was not undertaken, 8 then it would look as if the Post Office was unsure of 9 its ground. You never commissioned, did you, a full 10 forensic digital review of the software system? 11 A. So I think we have covered -- have covered this ground 12 already. Lord Arbuthnot raised concerns with me about 13 the subpostmasters' positions. I offered to look at 14 setting up an independent review. He and I then had 15 some discussions about that and it was important, if we 16 were going to take this initiative, which people in the 17 Post Office didn't want to take, some people in the Post 18 Office didn't want to take, that we did this on a basis 19 that he thought he and his colleagues would regard as 20 a proper basis. And there was quite a lot of discussion 21 with him about the best way of doing that. 22 It was in the light of those discussions that we 23 went down the route of employing Second Sight, rather 24 than going down the Deloitte route. We looked at that 25 yesterday and I spent a certain amount of time, and 129 1 quite a lot of energy, trying to get the terms of 2 reference of that piece of work as extensive and open as 3 I could. 4 Now, I have said that, with the benefit of 5 hindsight, I now think that that wasn't the best -- that 6 wasn't, in retrospect, the best way to have gone about 7 that and I wish that I'd had a fully populated Board by 8 then, and, even though I didn't have a fully populated 9 Board by then, that I had used the other non-executives 10 who were in position to help me think this through and 11 to put the commissioning of whatever kind of review we 12 decided to go for on the best possible footing, really 13 having gone into what is it that we were trying to 14 achieve here and what would be the best way of doing 15 that and, if need be, if we'd come to the conclusion it 16 would have been better to go down the route of using one 17 of the Big Four, to have that conversation with Lord 18 Arbuthnot. 19 Q. Ms Perkins, did you actually read the Deloitte report? 20 A. Well, we discussed that this morning. If you're talking 21 about the Board Briefing, I talked about that with 22 Mr Beer this morning. I didn't, until I saw that report 23 in the disclosures sometime earlier this year, I didn't 24 remember seeing it. 25 Q. So, I mean, it -- 130 1 A. That doesn't mean I didn't see it. I'm just -- we're 2 talking about something that happened 10 years ago. 3 Q. That may be right but is your evidence that you cannot 4 say whether you read it or not and -- 5 A. I think I would -- since we've now established and we 6 have clearly established that it came to me and my 7 fellow Board members, I think I would have read it. 8 SIR WYN WILLIAMS: So that I'm clear, what you're 9 acknowledging reading is the briefing report -- 10 A. Yes. 11 SIR WYN WILLIAMS: -- not the full document? 12 A. Yes, sorry. 13 SIR WYN WILLIAMS: Right. 14 A. And, actually, could I just say something about that -- 15 SIR WYN WILLIAMS: Yes. 16 A. -- because, had I seen the full -- I mean, I don't know 17 whether you -- anybody here has -- well, I'm sure lots 18 of people have seen it -- the full report, when I looked 19 at it again earlier this year, has one of those colour 20 ratings, red, amber and green, against the different 21 items and, if you just take one look at that report, you 22 can see that there's an awful lot of red and an awful 23 lot of amber in there. And, if I had seen that, even if 24 I hadn't read a word of the text, it would have jumped 25 out at me. 131 1 MR HENRY: You've said many times that you would have turned 2 over every stone and that you've been asked about that, 3 but could I ask you, please, in the light of what was 4 the highly contentious Second Sight Interim Review and 5 the lessons learned, can you explain why, in early 6 September 2013, your Chief Executive Officer resiles 7 from a full Lessons Learned Review, having received 8 advice from Andrew Parsons that it would expose the Post 9 Office to proactive duties of criminal disclosure? Were 10 you aware of that? 11 A. We discussed this yesterday. I was not aware of it. 12 Q. In fact, that reference -- no need to take you to it -- 13 is POL00146243. But could I ask you, please, now to be 14 shown POL00381706, 11 September 2013. 15 We can see the heading "Lessons learned [terms of 16 reference]", PowerPoint for the Audit and Risk 17 Committee, and then if we could scroll up, please, from 18 Ms Vennells to you, 11 September -- to Alasdair Marnoch, 19 but copied to you. Then could we scroll up, please. 20 Then we see this, do we not, from Paula Vennells to 21 Alasdair Marnoch -- he was, of course, dealing with 22 insurance, wasn't he? 23 A. Alasdair Marnoch was the Chair of the Audit and Risk 24 Committee. 25 Q. Absolutely but he was also dealing with the notification 132 1 issue to the insurers, together with Chris Day? 2 A. In his -- yes, he was, yes. 3 Q. Yes, copied to you, obviously to the Company Secretary 4 as well, and then could we scroll up, please, and then 5 this: 6 "Most of the note [so this did come to you] should 7 be self-explanatory, although I should explain the 8 rationale behind our proposed timings. As we discussed 9 last week, there is a choice between proceeding with the 10 review in the near future, while the experiences are 11 still relatively fresh in our memory, or waiting until 12 early 2014 (when we expect [Second Sight] will no longer 13 be involved in the process). Having de-risked the 14 review by narrowing its scope and running it as a short 15 internal exercise, on balance I think it is more 16 important to capture our insights sooner rather than 17 later. We are therefore proposing to commence the 18 process in October (not earlier because it would be more 19 appropriate for both sides to wait until Susan is no 20 longer working in the building). 21 "Alice and I had chance to discuss at our 121 this 22 morning and we are both comfortable. I would welcome 23 any comments you have." 24 Why was it so important for Susan Crichton to be 25 gone? 133 1 A. I think -- I mean, I don't remember this, the reasoning 2 behind the change in the scope of the Lessons Learned 3 Review. I have wondered about that in recent weeks 4 myself. I think the key point about Susan was that she 5 had been -- I mean, this a Lessons Learned Review about 6 the way in which Second Sight had been appointed to run 7 this review. It was about things such as the absence of 8 an engagement letter, things that we've talked about to 9 do with the timetable, the costs, the lack of proper 10 liaison with them, and Susan had been the person who was 11 in charge of that. 12 Obviously, as long as she was employed in the 13 business, it was going to be a much more sensitive issue 14 in respect of her and her personal position than it 15 would be once she had decided to go. But the need, in 16 my view, to look at how that had been handled and learn 17 lessons from it was just as great, after she had gone, 18 as if she hadn't gone, because the point was that it was 19 about improving the way the Post Office, in its newly 20 separated state, went about doing things like that. 21 And I was aware of the fact that this wasn't -- 22 I mean, in a lot of organisations, it's absolutely 23 normal for people to do lessons learned reviews after 24 something has gone wrong or even when things -- 25 important things have gone right, and I didn't see that 134 1 happening in the Post Office, and this seemed to be 2 a good example of a way of introducing that. 3 Q. No, no, Ms Perkins, this intimately connected to the 4 advice given from Andrew Parsons and also Hugh 5 Flemington, 3 September, about the risk: proactive 6 criminal disclosure. Now, we know that Ms Crichton knew 7 from an early stage, even before the drafting of the 8 Clarke Advice, that she knew about the unsafe witness. 9 I, again, want to ask you, please, why it was so 10 important for Ms Crichton to have left the business 11 before embarking on this de-risked, internal, much 12 narrower in scope Lessons Learned Review. 13 A. I can't add anything to what I have already said. 14 Q. I see. 15 SIR WYN WILLIAMS: Can we just look at -- I am sorry, I may 16 have missing the threat of this, Mr Henry, it's my 17 fault. 18 The reference at the beginning "Most of the note 19 should be self-explanatory", can I just be sure what the 20 note is that it's talking about? Is it an attachment to 21 this email or what? 22 MR HENRY: No, sir. 23 SIR WYN WILLIAMS: So it's just that expression that you 24 were exploring? 25 MR HENRY: Yes, I'm afraid I may be wrong and I would be 135 1 very happy to be corrected. 2 SIR WYN WILLIAMS: No, that's fine. So the position is you 3 are exploring whether this note referred to the document 4 which Mr Parsons may have been the author of, which 5 makes reference to Gareth Jenkins, in effect, whereas 6 Ms Perkins, as I understand it, is reading that as being 7 a note concerned with lessons learned and something 8 different; that's it, isn't it? 9 A. Thank you very much. 10 SIR WYN WILLIAMS: Fine. As long as I understand what's 11 going on here. 12 A. Yes. 13 SIR WYN WILLIAMS: Fine. Right. 14 MR HENRY: I mean, the position is that you're using Susan 15 Crichton as a lightning conductor, aren't you? 16 A. No. 17 Q. It's really you and Ms Vennells resolving that this 18 contentious material should not come before the Board 19 because the material is so troubling in its implications 20 that it would have forced the Board to make proactive 21 disclosure to convicted defendants, had it seen it; 22 isn't that the position? 23 A. It is absolutely not the position. 24 Q. So as a strategy of managing the risk between you and 25 Ms Vennells, geld or downplay the Second Sight Report 136 1 and keep Gareth Jenkins out of the picture? 2 A. No. 3 Q. I mean, what would have happened on 16 July if -- 4 because of course Ms Vennells spoke to Ms Crichton's 5 report, didn't she? 6 A. She did. 7 Q. Yes. So, therefore, she must have been apprised of the 8 issues and discussed the matter with Ms Crichton 9 beforehand, otherwise she wouldn't be able to speak to 10 the report? 11 A. Well, I don't think you can necessarily infer that 12 because, as we discussed yesterday, it wasn't until the 13 morning of the Board itself that, in the light of what 14 had happened over the Non-Executive Directors breakfast, 15 that I took the decision to start the discussion on that 16 paper without Susan being in the room and, as 17 I explained yesterday, that discussion took off in such 18 a way that it became impossible, really, to get into 19 a situation where we could have that discussion with 20 Susan in the room. 21 But Paula, as she said herself, I think, didn't know 22 that I was going to ask to kick off that discussion 23 without Susan. I didn't know that we wouldn't resume 24 a discussion on the paper without Susan being in the 25 room because it -- events just overtook us -- overtook 137 1 me. 2 Q. You're the Chair; events do not overtake the Chair; the 3 Chair sets the scope and the agenda. 4 A. Yes, that's absolutely true but, on this occasion -- and 5 this does sometimes happen -- you're in a room with 6 a group of people, and they're human beings, and 7 sometimes things kick off and sometimes it isn't the 8 right thing to do to try and ram on with what you had 9 previously thought would be what you would do. You do 10 sometimes have to flex things and, as I said yesterday, 11 I now regret that I didn't, after that Board meeting, 12 after what had happened, think to myself -- and I regret 13 that nobody else thought of it either -- that we should 14 have arranged a separate discussion on that paper, which 15 Susan would have attended. 16 But I'm not -- having said that, none of us know 17 what would have happened had we done that and we do not 18 know what, if anything, more Susan would have 19 contributed to that discussion than was in the paper. 20 Q. It would have been dynamite, wouldn't it, because not 21 only did you have the paper -- and the paper of course, 22 even though she knew about Gareth Jenkins, leaves that 23 out -- 24 A. Yes. 25 Q. -- but you do have her evidence to the Inquiry that she 138 1 had informed your Chief Executive Officer that there 2 were likely to be many, many claims for damages based 3 upon what she was aware of. So it would have been 4 dynamite. What I'm suggesting to you is a cordon 5 sanitaire, it was boxed up and never ventilated before 6 the Board for that reason. 7 A. If it was boxed up, it was not boxed up by me and, if 8 there had been dynamite, we would have dealt with it. 9 That was a group of people who were very independent 10 minded, they were thoughtful people, they had good 11 values. It would have been very difficult but we would 12 have dealt with it. 13 Q. One does continue -- I mean, one does continue to wonder 14 why significant advices of Mr Altman, Queen's Counsel, 15 as he then was, did not percolate up to the Board during 16 the period July to October 2013. Can you think of any 17 reason why those significant advices of considerable 18 importance, in fact momentous importance, didn't 19 percolate their way up to the Board? 20 A. Mr Beer asked me about this yesterday and I reflected on 21 it. I don't know why they didn't. There are all kinds 22 of reasons why they might not have done and I'm not in 23 possession of the facts as to why they didn't. 24 Q. Can you help us, please, though with your 25 contemporaneous knowledge at that time, because, for 139 1 example, the announcement of the flotation of the Royal 2 Mail Group took place on 10 July 2013, did it not? 3 A. I don't remember the exact date but around that time, 4 yes. 5 Q. The fact is that the Royal Mail shares were floated on 6 11 October 2013 at 330p per share but, on the 16th, when 7 they started to trade unconditionally, they were 24 8 times oversubscribed. That was obviously a matter that 9 was in your mind at the time, wasn't it? 10 A. No. Not particularly. I mean, obviously I -- from the 11 emails that we -- I've seen, there was an issue about 12 the Royal Mail prospectus but that was not looming large 13 in my mind at the time. It was just one of those issues 14 that needed to be handled. 15 Q. Well, funding must be very, very important for any chair 16 because, of course, you've got to fulfil the vision of 17 the Government and the vision of the Government was to 18 turn around the business, eradicate losses, and 19 modernise it and, to do that, you needed Government 20 funding and support, didn't you? 21 A. Yes, but I don't see what the connection is between that 22 and the flotation of Royal Mail. 23 Q. Well, the reason why is because, after the flotation, 24 which raised nearly £2 billion -- 1.98 -- the Government 25 announced 640 million to be invested in the Post Office, 140 1 and that was on 27 November 2013. I mean, there is 2 a connection, isn't there? 3 A. I have no idea. I really don't see that connection. 4 The fact is that we had been -- the Government's policy 5 in relation to the Post Office, the continuation of the 6 subsidy until the point at which we broke even and the 7 investment made in the Post Office, in order to break 8 even, was something which was being discussed, as far as 9 I was aware, completely separately from the Royal Mail 10 Group flotation. 11 I never heard anybody make that connection and I had 12 discussions myself with officials in the Treasury and 13 with the Chief Secretary; nobody ever made that 14 connection. I think that there were two completely 15 separate things going on there. 16 Nobody knew, at the time when the policy in relation 17 to the modernisation of the Post Office was announced, 18 whether Royal Mail would float. I mean, there had not 19 been a very successful history of that, in the past. So 20 I may be completely wrong about this but I personally do 21 not see those two things as being connected in that way. 22 Q. From July 2013, the green light was on, because that was 23 the announcement by Vince Cable, the Secretary of State 24 and, of course, that coincided with the perfect storm of 25 Second Sight Interim Review and, also -- although 141 1 I understand your denials on the point -- the emergence 2 of Gareth Jenkins as a serious problem for the Post 3 Office. So, I mean, you have seen, surely, the 4 statement to Parliament by the Minister of State, 5 9 July, which was stressing that none of the issues in 6 the Second Sight Report have any impact on the Royal 7 Mail, which is an entirely separate business: Jo 8 Swinson. You probably also saw the whip's briefing, 9 which stated that Mr Arbuthnot's support for the 10 subpostmasters could be distracting to the flotation. 11 A. I've been reminded of those things but you were making 12 a completely -- what I thought -- I'm sorry if I've 13 misunderstood you. I thought you were saying that the 14 Post Office wouldn't have got its money from the 15 Government if Royal Mail hadn't floated so successfully. 16 That's what I was arguing with you about. 17 Q. No, no, I'm not saying that, but it's obvious, however, 18 that, if nearly £2 billion comes in to the Treasury, it 19 makes it a lot easier for 640 million to go out to the 20 Post Office and these things cannot be looked in 21 hermetically sealed boxes, as it were. 22 But I want to come to this: if you're saying that 23 Post Office Limited had really absolutely nothing to do 24 with this, then, surely, you must have been extremely 25 concerned by the intervention of your CEO with the 142 1 prospectus? 2 A. I've seen -- recently re-seen those emails, and it 3 wasn't -- I mean, clearly, I was involved in discussions 4 with the CEO about that. 5 Q. Yes, "I have earned my keep on this one". Did it not 6 occur to you -- I mean, from the point of view -- and 7 I don't know your experience in this field, although 8 I know that you do coach and lecture on corporate 9 governance -- but, surely, the whole issue of 10 a prospectus is that you load the prospectus with 11 risk -- you load the prospectus with risk, so that 12 nobody is misled or nobody is, as it were, induced to 13 invest on a false basis. Yet we know for a fact that 14 the Post Office was in the process of notifying its 15 insurers concerning the prospects of civil litigation 16 regarding wrongful convictions. 17 I mean, do you not see the extraordinary 18 contradiction there with your CEO, who knows about 19 disclosure to the insurers and yet she's having matters 20 removed from the RMG prospectus? 21 A. I don't know the full -- I haven't got the full 22 documentation on this issue. It is, however, clear from 23 the email that this was an issue which had been being 24 discussed, both within the Government machine and within 25 the Post Office, that this prospectus was in draft, 143 1 representations from various different organisations 2 connected with the Royal Mail would be invited on that 3 draft, and the Post Office had -- and the officials in 4 the Business Department were thinking about the way in 5 which this was described and made some representations 6 to the Royal Mail Group about that. 7 The ultimate -- the process of putting a prospectus 8 together is highly regulated. Slaughter & May were in 9 there and, in the final analysis, it was for the Royal 10 Mail Group to decide what was in its prospectus or not 11 within its prospectus. 12 Q. The problem, however, cannot be separated from the fact 13 that the Royal Mail Group had been historically 14 responsible for prosecutions before separation, had it 15 not? 16 A. Yes, it had. 17 Q. No need to take you to it, but that was a document that 18 you saw earlier today, and you were enquiring as to 19 liability for the Post Office as well before and after 20 the split. Do you remember that? 21 A. Would you mind taking me back to that, please? 22 Q. Yes, certainly. 23 SIR WYN WILLIAMS: Does this add to the point, Mr Henry? 24 MR HENRY: It doesn't really add to the point. 25 Those are my questions, sir. 144 1 SIR WYN WILLIAMS: Thank you very much. 2 Now then, I know that Ms Patrick is going to ask 3 some questions. 4 I understand that Ms Leek wants to ask questions, 5 and I further understand, Ms Leek, that you're going, 6 please, be about ten minutes, is that right? 7 MS LEEK: That's right. 8 SIR WYN WILLIAMS: Well, let's have that now, if that 9 doesn't inconvenience Ms Patrick, and when we can have 10 our afternoon break. 11 Just for you to know -- well, she'll introduce 12 herself. Why am I speaking? 13 MS LEEK: Thank you, sir. I think I said 10 to 15 minutes. 14 SIR WYN WILLIAMS: Well, we'll see how we go. 15 MS LEEK: Thank you. 16 Questioned by MS LEEK 17 MS LEEK: Ms Perkins, I ask questions on behalf of Paula 18 Vennells. I am Samantha Leek. 19 I just want to ask about one issue and I want to try 20 and clarify with you when you first knew about the 21 existence of bugs. I'm going to ask Mr Enright to move 22 a little to the left so we can see each other, thank 23 you. 24 Mr Beer asked you yesterday if the two exceptions or 25 anomalies, to use the preferred language, as he said, 145 1 regarding Horizon, were not passed on to you at 2 an earlier stage. You will remember that was before 3 3 July. You said you couldn't remember if you were 4 irritated, there was a lot going on. 5 A. Mm. 6 Q. I just want to show you a series of emails that suggest 7 that you were told about bugs before 3 July. Can we 8 start with POL00098797. If we go down to the bottom, go 9 down to page 2 -- thank you -- there's an email from 10 Alwen Lyons to Paula Vennells on 28 June, and we will 11 have a look at that in a moment but we can see, if we go 12 up a little bit, that that was sent to you by Paula 13 Vennells on the same day, in fact just a couple of 14 minutes after she was sent that email by Alwen Lyons. 15 A. Can I look at Alwen's email for a bit longer, please? 16 Q. Yes, I'm going to take you through that. 17 A. Okay. 18 Q. The first thing Alwen says here, subject, "next steps on 19 Horizon issues -- update": 20 "Paula 21 "Rod Ismay and Lesley" -- 22 MR BEER: Can we ask for the thing to be scrolled down? 23 MS LEEK: I'm so sorry. Could we bring that back up on the 24 screen and scroll down to page 2. Thank you: 25 "Paula 146 1 "Rod Ismay and Lesley working the detail of the 2 2 bugs, to understand them and then get them into language 3 that is clear and can be communicated. 4 "Mark is putting in place expert external comms 5 resource to be dedicated to this issue from Monday ..." 6 If we go down a little, to the bottom bullet point: 7 "We think [Second Sight] will present the 4 cases, 8 some of which will not be finished, but we are not sure 9 yet. They will also raise the issue of the 'bugs' which 10 were outside the cases but which we disclosed to them." 11 If we can then scroll up to the email that was 12 forwarded to you from Ms Vennells: 13 "Alice hi. I do hope your Friday is good." 14 We go down to the next paragraph: 15 "You will see below Alwen's proposed next steps. It 16 covers all the ground at present. We may update 17 following today's phone call with [Second Sight] in 18 an hour; and certainly will update post-Alwen's meeting 19 with Janet on Monday." 20 "Alwen and I are staying close (two calls already 21 today) and I'm expecting an update later this 22 [afternoon]. So no need to bother you today." 23 If we go to the email above, which is your reply to 24 Ms Vennells within the hour. You say: 25 "Thanks for the updates. I am glad we have the best 147 1 people on this." 2 We looked at the rest of this yesterday, about 3 Maxwellisation/Salmon letters angle. So it seems clear 4 from this email that you already knew about the bugs at 5 this point because you don't reply "What are you talking 6 about? What bugs? I've no idea what you're going on 7 about here"; you say, "Thanks for the update". 8 A. I do say that but I'm not sure what con -- you can't -- 9 I can't draw a definitive conclusion from that, as to -- 10 I don't recall ever having heard about these bugs before 11 that. 12 Q. Had you received an email from Ms Vennells on 28 June, 13 at the point at which you knew Second Sight was about to 14 report, setting out what she has said here about Rod 15 Ismay and Lesley working out the details of the two 16 bugs, surely you would have said, rather than "Thanks 17 for the update", you would have said, "What are you 18 talking about? I don't know anything about bugs"? 19 A. I'm really sorry. I mean, I can see absolutely why 20 you're saying that but I don't remember -- I'm not sure 21 what I can add to this, I'm afraid. 22 Q. Of course. Thank you. 23 Perhaps we can now go back another six weeks to 24 emails that took place on 16 May 2013, and if we could 25 look at POL00098278. Ms Vennells sent you an email on 148 1 16 May: 2 "Hi Alice, lovely day! 3 "Just to let you know I haven't forgotten about 4 Vanquis -- I have an approach, which I have sent to Nick 5 and Chris. I should get back to you shortly. 6 "Also re James Arbuthnot -- I have asked for 7 an update on our work plan by the end of this week, to 8 make sure we are [on] track. (JA is away in committee 9 business, so we are meeting post-Whitsun recess.) 10 "One other issue arose overnight, which I may need 11 to brief you on over the next couple of days, so will 12 try to get a phone slot." 13 If we scroll up, you send an email back: 14 "Fine thanks. I am now unexpectedly freer this 15 afternoon. 16 "So if someone let's me know when you are able to 17 talk I'll try and fit round that." 18 Can we then go to POL00029587. By this point, 19 a call has been arranged between you and Ms Vennells for 20 the afternoon and Alwen Lyons sends to Paula "speaking 21 notes for your call with Alice this afternoon". Can you 22 just scroll up a little -- scroll down: 23 "Paula here are my speaking notes for your call with 24 Alice this afternoon. 25 "I have a call with James on 23 May, next Thursday 149 1 at 10.30, when we will discuss how he wants the 2 investigation to continue ..." 3 Just scroll up bit more, please. 4 "Alwen will ..." 5 We go down to the sixth bullet point -- I'm so 6 sorry, the second bullet point: 7 "... some instances are coming to light where there 8 is evidence that there are bugs in Horizon, which I am 9 being told is normal in any large computer system. But 10 I am still being assured that the system's integrity is 11 not in doubt. 12 "Lesley is meeting Fujitsu tomorrow morning to go 13 through the technical assurance that the subpostmaster's 14 trading statement cannot be changed without their 15 knowledge. 16 "Alwen is meeting them on Monday to look at with 17 a layman's eyes and understand what it might have looked 18 like for a subpostmaster using the system. 19 "The Good News is that where we have found bugs 20 since HNG-X (new Horizon) they have been detected and 21 put right with no also for the subpostmaster, and 22 Fujitsu now monitor the suspense account for any such 23 problems." 24 "Alwen will specifically ask on Monday if anything 25 could be happening we do not know about eg too small to 150 1 register at the office, and old Horizon bugs. 2 "This is not good Alice, but from what we have seen 3 so far our response to bugs has been effective. 4 "I have asked for some time in our diaries next week 5 to talk through our approach, and would welcome your 6 counsel before the James meeting." 7 Do you recall a conversation that afternoon in which 8 you were told about those bugs? 9 A. No, I don't. 10 Q. So when you received the email on 28 June, giving you 11 an update about what was going on with the bugs, are you 12 saying that you hadn't been told about that beforehand 13 or you simply can't remember? 14 A. I can't remember, I'm really sorry. I've only -- some 15 of this documentation has -- only came to me at 16 lunchtime today. So, you know, I have had a look at it 17 but I'm afraid I have absolutely no recall. 18 MS LEEK: Okay. Thank you. 19 Sir, I have no further questions. 20 SIR WYN WILLIAMS: Thank you, Ms Leek. 21 So we'll take our afternoon break now, and resume at 22 3.30 when Ms Patrick will ask her questions and, if they 23 are so advised, your legal representatives may wish to 24 ask a few questions of you but that's up to them, not 25 me. Then that will be it. All right? 151 1 THE WITNESS: Thank you very much. 2 SIR WYN WILLIAMS: So 3.30. 3 (3.13 pm) 4 (A short break) 5 (3.30 pm) 6 Questioned by MS PATRICK 7 MS PATRICK: Good afternoon, Ms Perkins. My name is Angela 8 Patrick and I ask questions on behalf of 86 9 subpostmasters who were convicted by the Post Office and 10 have since had their convictions overturned, including 11 Mrs Hamilton, who I'm sure you can see is sitting to my 12 left. 13 A. I do see. 14 Q. We want to cover three topics. 15 A. Yeah. 16 Q. First, we're going to look at the Royal Mail Group 17 prospectus, which you've just covered briefly with 18 Mr Henry. 19 A. Yes. 20 Q. Second, Mr Beer has talked to you a little about 21 Mr Davies and publicity around Horizon and I want to 22 come back to one example of the Post Office's approach 23 to subpostmasters in the media; and, finally, I want to 24 look again at one of the first documents that Mr Beer 25 took you to, and I'm going to call it the Zetter notes 152 1 if you'll remember it from yesterday morning. 2 A. You'll have to remind me, I'm sorry. 3 Q. I'll refresh your memory, when we get that far. If we 4 can start with the Royal Mail Group prospectus and 5 Mr Henry has raised the flotation and you've talked 6 about it not really being a topic that was looming large 7 but you have mentioned a few emails. 8 A. Mm-hm. 9 Q. If we can look at a few of those, just to see where you 10 were coming in. 11 A. Yeah. 12 Q. If we can start with POL00372265, please, and I want to 13 start about halfway down page 1, if we could. 14 A. Can you say just give me the context of this? 15 Q. I will. This was an email sent on 16 August 2013 and, 16 don't worry, I was only waiting for it to be on 17 screen -- 18 A. Of course. 19 Q. -- so we could look at it together. 20 A. Okay, great. 21 Q. I won't leave you hanging as to what we were looking at. 22 There is an email here, you can see, at the top. It's 23 Paula Vennells to you on 16 August and, if you see, 24 she's messaging at the top looking for a time when you 25 can have a call. I don't want to look at the detail but 153 1 she wants to catch you up on some issues and, if you can 2 see, there's a list of four? 3 A. Mm-hm. 4 Q. If we go to the fourth bullet point and, if somebody 5 could expand that, I'd be grateful. It says, "RM 6 Prospectus"; can you see that one? 7 A. Yes. 8 Q. "... the language in the risks section, which refers to 9 [the Post Office] is very negative. We are on the 10 case -- it is being handled through external lawyers, 11 and I have asked for a revised draft by Monday. I am 12 not suggesting we flag this to the Board yet but you 13 need to be in the picture. Susan has picked this up and 14 insisted inaccuracies are removed and the tone improved. 15 However, this is in the risk section, my guess is we may 16 still be uncomfortable with final draft and so I have 17 already asked Susan to flag to Will that we may want to 18 escalate it to HMG. We will need to brief the Board 19 properly at some stage but probably best when we have 20 something to send out." 21 Now, I only have a few questions about it. 22 A. Okay. 23 Q. You were, it appears, being briefed on this as an issue 24 as early as mid-August in 2013? 25 A. It does look like that, yes. 154 1 Q. The issue you were being told was arising it risks 2 section of the prospectus. 3 A. Yes. 4 Q. It was very negative about the Post Office and Susan -- 5 I presume that might be Ms Crichton? 6 A. I can't think -- well, it wouldn't have been Susan 7 Barton. 8 Q. It wouldn't have been Susan Barton. Ms Crichton was to 9 flag that it might need to go to HMG, Her Majesty's 10 Government, and Ms Vennells thought you might need to 11 brief the Board properly at some stage. But she was 12 saying, aside from whether the Board needed to be 13 briefed, she was giving you this information now, wasn't 14 she? 15 A. She was. 16 Q. Right. Can we look at the second document, a second 17 email, and it's POL00419640. This is an email which 18 moves us on a little -- and I'll wait for it to come 19 up -- and I want to start at the bottom of page 1, where 20 you'll see there's an email from you? 21 A. Yes. 22 Q. We're now a little while on, a few weeks on, three weeks 23 on, 9 September 2013. 24 A. Yeah. 25 Q. You are sort of responding "Thank you for your previous 155 1 emails". We don't need to spend much time on your 2 response, I just want to note what you say to start 3 with: 4 "... I appreciate no surprises even if the news is 5 unwelcome!" 6 So that was the first message you were giving to 7 Ms Vennells that day. 8 A. Yeah. 9 Q. Can we scroll up, the rest I don't think we need to look 10 at in detail. I want to look at Ms Vennells' reply 11 above, and it is the last paragraph of Ms Vennells' 12 reply: 13 "On the prospectus, now Mark is back I have him, 14 Martin and Hugh meeting this pm and they will speak to 15 BIS today." 16 Would that be Mark Davies, Martin Edwards and Hugh 17 Flemington? 18 A. It could have been. I mean, I don't know. But that 19 sounds -- you know, that sounds a perfectly reasonable 20 suggestion. 21 Q. So they were going to speak to BIS: 22 "I am still not happy with the content: although it 23 may be legally accurate, it is not helpful 24 reputationally." 25 Then she goes on to say, ironically, Post Office has 156 1 enough branches signed up to cover the distribution of 2 the prospectus and she is going to keep you posted. 3 I only have a few questions about this one. She's 4 telling you, even if the content was legally accurate, 5 her concern was primarily reputational risk, wasn't it? 6 A. Yes. 7 Q. Whose? Logically, would it follow she was concerned 8 about the reputation of the Post Office? 9 A. I don't know what she had in mind but it's a reasonable 10 interpretation that she's thinking about the Post 11 Office, yes. 12 Q. Could it be the reputation of the Royal Mail Group? 13 A. It could be. 14 Q. The Government? 15 A. No -- 16 Q. Anyway? 17 A. -- I -- 18 Q. You don't know, you're just speculating. Logically, it 19 could be the Post Office? 20 A. Yes, it could be. 21 Q. If we could scroll up little. 22 I'm sorry, Mr Henry was trying to attract my 23 attention, sir. 24 If we could just scroll a little, we see the next 25 section. 157 1 A. What do you mean by the "next section"? 2 Q. I apologise, can you see "No I didn't mean that", where 3 you reply at the bottom of the part you can see on 4 screen there Ms Perkins, "No I didn't mean that"; can 5 you see? 6 A. I didn't mean what, sorry? 7 Q. I'm just trying to attract your attention. It's now 8 highlighted in yellow. You reply at 2.11: 9 "No I didn't mean that." 10 We don't need to look at the first line, it's the 11 second line. 12 A. Okay. 13 Q. "On the content of the prospectus, Will was absolutely 14 clear that this would be and should be properly sorted. 15 You only need to read the Hansard of last week's 16 Parliamentary debate to see how important that will be 17 politically. So I am sure Jo S would swing into action 18 on this if it were necessary." 19 So Will had given you some assurances, was that Will 20 Gibson at ShEx? 21 A. I should imagine so. I don't know. 22 Q. "Jo S", is that likely to be Jo Swinson? 23 A. I would think so, yes. 24 Q. Thank you. We don't see any challenge by you, in this 25 message, of Ms Vennells' view of the issue being 158 1 reputational and not one of legal or technical accuracy, 2 do we? 3 A. No, no, you don't. 4 Q. Your focus was on how important it was going to be 5 politically; getting this sorted for Post Office was 6 politically important wasn't it? 7 A. Well, I think we've had this discussion a great deal 8 over the last two days, haven't we, and the inference is 9 often being made -- 10 Q. Ms Perkins, can I stop you. 11 A. Yes, you can. 12 Q. I don't want you to draw any inference. 13 A. Okay. 14 Q. I just want you to reflect on what's in the email -- 15 A. Okay. 16 Q. -- that what was being exchanged contemporaneously, 17 here, you were sending a message here that the 18 importance was political, weren't you? 19 A. Yes, I -- yes, I was. 20 Q. It was so important, you were sure you could rely on the 21 Minister to step in? 22 A. Yes, well, that I thought she would, yes. 23 Q. Indeed. Now, can we look at the third document. It is 24 POL00381730. Thank you. I want to start at the bottom 25 of page 1 again. Having scrolled to the very bottom, we 159 1 can see the email that's from you. Can you see that, 2 Ms Perkins? 3 A. Yes. 4 Q. We're on Monday, 16 September now and you're writing to 5 Jorja Preston, who, I can see at the top there, that's 6 your PA; is that right? 7 A. Yes. 8 Q. The subject is "Mark Russell". We've hearing that name 9 earlier; was he the Head of ShEx? 10 A. He was. 11 Q. Great. You told Mr Beer that you would have regular 12 meetings with him. We'll see in the message here you're 13 talking: 14 "I think my main question is: what should my 15 objective be in talking to him about the Strategy and 16 Funding", I need to know the position, so that he is 17 aware of the Board and the package and what might be 18 needed to get the Fed on side. 19 You go on to talking about strategy and funding and 20 a number of other matters, until the second line from 21 the bottom, and you say -- sorry, third line from the 22 bottom: 23 "Also the update on where we are on Second Sight 24 etc. And the latest on the RM prospectus. So 25 basically, all the current hot topics." 160 1 You say: 2 "I would like to talk to Paula about this at my 1:1 3 with her." 4 This is you, I think, talking about preparing for 5 a meeting with Mr Russell? 6 A. It looks like it. 7 Q. Is that fair? 8 A. It does look like that, yes. 9 Q. A number of topics, and the Royal Mail prospectus was 10 a hot topic by this point, wasn't it? 11 A. That would be the inference of this, yes. 12 Q. If we can look at the fourth document, please, it's 13 UKGI00002057, please. This is 18 September and it's not 14 necessarily a message you would have seen, and you see 15 it's a series of exchanges between Will Gibson and Tim 16 McInnes. 17 I would like to look very briefly -- it's a long 18 message, I don't want to look at a lot of it, I just 19 want to see where you're mentioned. Can we go to 20 halfway through page 2, please. You can see there 21 there's a message from Mr Gibson, we've heard him 22 mentioned this morning, and I think we've heard Tim 23 McInnes mentioned this morning also. But you see there 24 he says: 25 "... just to echo Tim's point re sign-off, I have 161 1 just come from a meeting with POL's CEO where she was 2 voicing her concerns that not [all] POL's comments had 3 been picked up and they have definitely not been signed 4 off their wording! That said, we will ensure that we 5 have chapter and verse from POL on what's outstanding." 6 If we can scroll up from there to the bottom of 7 page 1, I'd be very grateful. 8 We can see there, there's a message from Mr McInnes 9 back to Mr Gibson: 10 "Yes. And I just had Martin on the phone ... Alice 11 is properly up for a fight. I've bought some time but 12 let's see what Emma can set up." 13 Now, if we scroll up again, Mr Gibson replies, and 14 you can say what he says: 15 "Alice is coming in to see Mark tomorrow ..." 16 That would fit with the timing of your preparation 17 for a meeting, and, above, we can see the message 18 continues. Were you up for a fight, Ms Perkins? 19 A. I simply don't remember all of this, and those are not 20 my words. I mean, what you're getting there is you're 21 getting Tim McInnes reporting to Will Gibson something 22 that somebody else has said to him. 23 Q. Entirely. I wouldn't expect you -- as I said at the 24 outset, you hadn't seen this message. But that was, it 25 appears, how your position was being presented by 162 1 Martin -- I presume Martin Edwards -- in advance of your 2 meeting with Mark Russell; is that fair? 3 A. It would appear as though that is how it's been 4 described but we don't know what Martin said to Tim 5 McInnes and we don't know -- I mean, we -- there's a lot 6 we don't know. 7 Q. He may come to give evidence and we may be able to ask 8 him about that and, if we scroll up a little way 9 further, you can see there on the screen -- actually, 10 I can see it now, please stop scrolling, it's now moved 11 to the bottom -- the reply there: 12 "Not unhelpful -- I just don't want things to go 13 nuclear until that's all we have remaining." 14 Does that fit with your recollection of this 15 discussion at the time? Was this discussion on the 16 verge of nuclear status, for the relationship with Royal 17 Mail Group and the Post Office? 18 A. No, absolutely not. No. I'm sure that it wasn't. 19 However, I mean, that is just my reaction based on what 20 I know about how I would be thinking about something 21 like this. But, just to be completely clear, until 22 I saw these documents, either earlier today or 23 yesterday, I can't even remember when I first started 24 seeing this email chain -- I had -- I simply hadn't 25 remembered anything about this issue at all. 163 1 Q. Okay. Well, if we can look at the last document, 2 I just -- this is the last one I think I need to take 3 you to, and it may refresh your memory a little bit 4 about what was being discussed. It's POL00381747. It 5 takes us forward to 20 September, and it's not, again, 6 a message you would have seen, I just want to see if it 7 will help your memory. It's a message you can see there 8 from Mr Edwards to Paula Vennells, copied to Mr Davies. 9 Again, it says, "Prospectus update". 10 I'm sorry, I'm going to have to bring it up on my 11 screen because that one is a little bit far away for me 12 to read. I apologise. You'll have to bear with me for 13 a moment. He's updating Ms Vennells. I won't read it 14 all but I'm going to read the first bullet point 15 a little. Focusing on the first bullet point: 16 "Latest draft attached -- overall it has improved 17 and addresses some of our concerns, although the risks 18 section still, intrinsically, negative in tone. The 19 ShEx POL team have pushed hard for additional language 20 to be inserted on the strength of the relationship to 21 contextualise these risks, but have received firm push 22 back that this wouldn't be appropriate for this element 23 of the document. Such language is however covered 24 elsewhere in the document. My sense is we are going to 25 have to accept this position and focus now on making 164 1 sure the positive story is brought out in the wider 2 comms materials -- the marketing materials for the 3 transaction, our own lines to take and Ministers' 4 statements." 5 Now, focusing on that, the first bullet, it seems 6 there were concerns about language in the risks section, 7 but POL, Mr Edwards was saying, could just accept the 8 position and then deal with it in comms; is that a fair 9 summary? 10 A. I think so, yes. 11 Q. So it would go on Mr Davies' desk, possibly? He was 12 copied in on them? 13 A. Yeah. 14 Q. Yeah, and if we scroll down, can we skip to bullet 15 three. It seems -- except one issue is outstanding by 16 this point. He writes, in the third bullet: 17 "I think the one remaining issue we might want to 18 seek to change now is the sentence on the [Second Sight] 19 review, copied below. Ideally this would just be 20 deleted because it is misleading in the context of 21 a section on IT risks, as we discussed before. 22 "'In July 2013 [(this is the sentence he's talking 23 about, the part], an Interim Report was published into 24 alleged problems with [Post Office's] "Horizon" computer 25 system, which is used to record transactions in its 165 1 branch network. The report confirmed that no system 2 wide problems had been found in relation to the 3 "Horizon" software, but suggests that [Post Office] 4 should examine its support and training processes for 5 subpostmasters'." 6 Now, I read that in full just to see if it helps 7 with your memory but, in summary, Mr Edwards was saying 8 that the Post Office wanted that deleted entirely, 9 ideally; is that right? 10 A. I think he is saying it would be deleted in the context 11 of a section on IT risks. That's what he seems to be 12 saying. 13 Q. That ideally this would be deleted. We could skim the 14 rest but we can get to the very bottom, and last four 15 bullet points, I think we can see, he says -- and we've 16 had this all before, the Inquiry has had this issue 17 raised with Ms Vennells -- ShEx had been working on it 18 and he says: 19 "... we've reached the end of the road in terms of 20 ShEx's ability to influence this", and he references 21 that the prospectus is essentially going in on the 22 Monday, so it's imminent. 23 He says Alwen could pick it up but they were much 24 more likely to listen to -- and this is a message to 25 Paula: 166 1 "... more likely to listen to you ..." 2 Was this him, at this point, when the prospectus was 3 imminent? Do you recall it being bumped up to 4 Ms Vennells to deal with? 5 A. I don't, I'm sorry. 6 Q. Okay. Now, we know and the Inquiry has heard that 7 Ms Vennells later reports to you by email that she 8 thought she had earned her keep on this and she puts it 9 in her review for the key achievements for the year. By 10 this point, we know that when she reports to you it is 11 going to be removed. You'd been involved, ShEx had been 12 involved, you'd mooted something going up to the 13 Minister; Ms Vennells, she did earn her keep on this 14 one, didn't she? 15 A. Well, it looks as though she got agreement to what it 16 was that she was proposing. Those are her words; 17 they're not my words. 18 Q. Okay. No problem. We shall move on to the next topic, 19 then, Ms Perkins, and I think these can be shorter. The 20 next topic I wanted to look at was Horizon publicity. 21 Now, Mr Beer covered Mr Davies' appearance on the 22 Today Programme very briefly with you this morning. 23 I remember you saying at home you listened to Radio 4 24 Today every morning, and we talked about the appearance 25 he made in December 2014. Now, Mrs Hamilton is sitting 167 1 next to me. She also appeared on that programme that 2 day and she listened live, as Mr Davies pointed to 3 subpostmasters experiencing "lifestyle issues". Now, 4 when Ms Vennells gave evidence, Mr Moloney asked her 5 about a late evening message she sent later that month, 6 on 17 December, having watched an episode of the One 7 Show. 8 A. I vaguely remember -- 9 Q. Do you recall? 10 A. Vaguely. Only vaguely. 11 Q. I might be able to refresh your memory. Can we look at 12 POL00150352. If we could start -- it's a multiple-page 13 document, if we could start at page 3, we can find the 14 email from 17 December. 15 You see there there's a message from Ms Vennells and 16 it goes to Mark Davies, to Belinda Crowe, Gavin Lambert, 17 Patrick Bourke and it's cc'd to you and it's sent in the 18 late evening, at around 9.45. 19 The Inquiry is very familiar with this. I'm not 20 going to read much more than I need to but I think it is 21 worth repeating. She writes: 22 "Hi all, I managed to catch The One Show on iPlayer. 23 "Not denying the fact that it is unhelpful and 24 inaccurate (especially the focus on Horizon -- but see 25 below re thoughts on that), Mark has achieved a balance 168 1 of reporting beyond anything I could have hoped for. 2 The statements stamped across the screen with the [Post 3 Office] sign as a backdrop were really powerful. They 4 emphasised everything we have done, and came across as 5 ... fact! Very good. 6 "The rest was hype and human interest. Not easy for 7 me to be objective but I was more bored than outraged. 8 The MP quoted (who?) was full of bluster, and 9 inaccurate. Jo Hamilton lacked passion and admitted 10 false accounting on TV. [James Arbuthnot] was nowhere 11 to be seen. And the bulletin was too long. 12 "What I thought was helpful was that it presented 13 Horizon as the problem, which is exactly what [Second 14 Sight] say they haven't found. And so easier for us to 15 refute. There was nothing about intimidation, poor 16 coaching and the message about not knowing how to use 17 the system, in my eyes made the [subpostmasters] look 18 inadequate." 19 Now, we can pause there and we can come back to the 20 language. Mr Moloney asked Ms Vennells if she might 21 have regretted that message the morning after she'd sent 22 it and copied it to you. I'd like to look at the day 23 after. If we could scroll up through this message 24 slowly, I'd be grateful. 25 We can see the next morning, Belinda Crowe 169 1 circulates it to Angela van den Bogerd, if we can scroll 2 up. What happens is Mrs van den Bogerd engages with 3 a request from Ms Vennells about one of the 4 subpostmasters who appeared in the programme, not 5 Mrs Hamilton. I'm not suggesting we look at that 6 detail, I just want to see where it goes next. 7 Can we scroll up a little way. We see Ms Vennells 8 replies. I just want to stop there one moment. I don't 9 want to look at the detail but I just want to raise 10 a point which Ms Vennells uses about the language she 11 used here. This isn't copied to you at this moment but 12 it is later. At the very last paragraph of this, she 13 says, "Chris," and it's copied to Chris Aujard: 14 "... If you didn't see The One Show, please can you 15 watch the clip -- again I expect we are best to do 16 nothing at this stage but [references the subpostmasters 17 name] is completely out of order, inaccurate at best, 18 lying at worst." 19 This is the part I want to look at, whether it is 20 right or wrong, she says: " 21 "And has wilfully collaborated to [I presume that's 22 'bringing'] us into disrepute." 23 Now, briefly, and we don't have to look at the 24 detail, is this just another example of the belligerent 25 language we had seen being used in the business when 170 1 talking about campaigning SPMs? "Wilfully collaborated 2 in bringing us into disrepute", what do you think of 3 that language? 4 A. Well, looking at this now, obviously it looks absolutely 5 dreadful. 6 Q. This is language being used by Ms Vennells herself, 7 isn't it? 8 A. Yes, in this email it is, yes. 9 Q. You weren't copied in on this email but, if we can 10 scroll up, we see Thursday, 18 December, 7.24, very 11 early in the morning after the original message: 12 "Hi Alice, if you get the chance probably worth 13 a view of The One Show. (From both your directorships, 14 actually -- the BBC produced a very viewable 5-minute 15 bulletin, pity it is so wrong.) 16 "The note below refers." 17 There's some personal message: it's very close to 18 Christmas and she's talking about some cards getting 19 off. 20 Now, she writes to you again, directly copying the 21 whole of that thread, including her message from the 22 last night. She sent you her One Show (unclear) twice. 23 Now, if we can turn back to that original message on 24 page 3, just so we have it in front of us. Did you take 25 issue with what Ms Vennells was saying? 171 1 A. I don't -- I'm afraid I'm really sorry, but I've not -- 2 I don't think I've seen this before. I may have done 3 but I simply do not remember this. 4 Q. We've seen the first and I've read it out, she was 5 congratulating Mark Davies for a job well done. This 6 was a win she wanted you to see, wasn't it? 7 A. It would look like it, yes. It would look like it. 8 Q. She was saying Mrs Hamilton lacked passion, 9 subpostmasters looked inadequate. Did this simply 10 reflect the attitude that was being adopted by the Post 11 Office leadership team at that time in late 2014 to the 12 campaigning SPMs, the subpostmasters? 13 A. I can't add anything to this, I'm afraid. I mean, it 14 looks -- as I've just said, it looks absolutely 15 dreadful, given what we know now, and I am -- I'm 16 very -- 17 Q. I'm going to stop you there, Ms Perkins. 18 A. Oh, I'm sorry. 19 Q. Not dreadful according to what we know now. Looking 20 back, she sent it to you twice? 21 A. She sent it to me twice? 22 Q. Yes. She sent it to you on 17 December when she copies 23 you in, she sent it to you the next morning, with the 24 rest of the thread. Did you have any issue with the 25 language she was using at the time? Can you remember 172 1 taking it up with her? "Oh Paula, what have you done?", 2 can you remember? 3 A. I'm terribly sorry, I simply cannot remember any of 4 this. I do remember the Today Programme because 5 I remember hearing it but I don't remember this. 6 SIR WYN WILLIAMS: Is there any written response? 7 MS PATRICK: I haven't found one, sir. 8 SIR WYN WILLIAMS: Okay, fine. 9 MS PATRICK: Looking at Ms Vennells' language, she says she 10 is "more bored than outraged". Had the business become 11 bored by the subpostmasters campaign by this point? 12 A. That's not how I would describe how I thought about it. 13 Q. Did the business simply just want to move on and get on 14 with the job of making the Post Office sustainable for 15 the future? 16 A. Well, the business did want to make the Post Office 17 sustainable for the future but, as far as I was 18 concerned and as far as I am aware my Board colleagues 19 were concerned, we weren't wanting to do anything 20 different from what we'd wanted to do all along, which 21 was to handle the issues properly. 22 Q. Handle the issues properly, but your CEO is "more bored 23 than outraged". 24 We can move on. Can we look at the final topic and 25 that is the Zetter note, and I do want to help your 173 1 memory. Mr Beer started with this very early on 2 yesterday and you said when you were looking at it -- 3 you were looking at handwritten notes, if you remember. 4 A. Oh, yes. 5 Q. You can be sure, of course, that you said in meetings 6 sometimes you'd scribble on the papers and sometimes 7 you'd go back and add a note afterwards to keep your 8 memory fresh. 9 A. Mm-hm, yeah. 10 Q. Mr Beer took you to a lot of notes, and I just want to 11 look at one scribbled note that he didn't look at and, 12 if we look at the document, it's POL00413669, and that 13 should bring us up with the diary page, if you remember, 14 which referred to the Bistrot at The Zetter. If you 15 remember, the date was 19 March, this was yesterday 16 morning Mr Beer brought this up. It's between your 17 first meeting with James Arbuthnot -- I think was 18 13 March, and you were preparing for a meeting on 19 28 March, which Paula couldn't attend, Ms Vennells 20 wouldn't be able to go to. There was a pack of papers 21 disclosed to the Inquiry behind this diary entry. 22 I'd like to scroll -- we don't need to scroll, but 23 if we could go to page 5 of the pack, Mr Beer skimmed 24 through this yesterday to get to the main note but this, 25 I think, was described as a meeting prepared by 174 1 Mr Arbuthnot's office, as he was then, Lord Arbuthnot. 2 A. Mm-hm. 3 Q. If we skim through, we see some notes on the side, we 4 see some handwritten notes there, if we scroll up, skim 5 through 6 -- I don't want to go all the way to page 9, 6 which is where Mr Beer took you yesterday. I want to go 7 to page 7 in the little pack. Ah, it may be page 8 but 8 I think it's page 7. 9 There's a page, if we keep scrolling up, you see 10 "Faults with Horizon", there, somebody has annotated it 11 on the right with a little mark next to it. Scroll up 12 a little further, keep going, please -- stop. 13 We see a little scribbled note there and I want to 14 look at it from the bottom up, it says, I think, there's 15 a helpline -- it says, "There is a helpline available". 16 It's underlining there is a helpline available. The 17 Inquiry has heard a lot about the helpline. I don't 18 want to go to that. 19 The next one up, "Much cash around". Now, you told 20 Mr Beer yesterday you'd been taken aback by the fact 21 that there was so much cash in the business. 22 A. This is not my handwriting. 23 Q. It's not your handwriting. Is it possibly a note that 24 was scribbled at some point during the meeting? 25 A. It's not my handwriting. 175 1 Q. Not your handwriting. Can we just explore the top 2 message there "Reputation key"? 3 A. It's not my handwriting. 4 Q. Can you help with whose handwriting it might be? 5 A. I'm sorry, I don't know whose handwriting that was. All 6 I can tell you is that it's not mine. 7 Q. It's in a pack of notes behind the same diary entry and 8 with the same notes that you were taking, and you can't 9 assist us on who took it? 10 A. Well, it obviously, it could be Paula's writing. All 11 I can tell you is that it is not my writing. 12 Q. Okay, was this a message you were being given from 13 within the business by Ms Vennells, or somebody else, 14 that reputation was key, even at this time in 2012? 15 A. I don't remember this coming up at this meeting. 16 I mean, it is a responsibility of any Board to protect 17 the reputation of the organisation. It's one of the, 18 you know, it's one of the many responsibilities a Board 19 has, and I think we have talked a lot in the last two 20 days about why I thought, and other people thought, it 21 was important to protect the reputation of the Post 22 Office business, on the basis that I believed that the 23 Horizon system was sound and that we didn't -- that -- 24 and the prosecutions had been properly conducted. 25 Q. We've looked reputation in the context to of the RMG 176 1 prospectus. We've looked at fighting -- we've talked 2 about fighting for the reputation of the Post Office 3 this morning. This is 2012, before your bulk of 4 engagement with James Arbuthnot. I'm going to suggest 5 reputation really was the key question for the business, 6 not just as -- 7 A. Not mine. 8 Q. -- a responsibility, it was a goal from the start, and 9 throughout, wasn't it, Ms Perkins? 10 A. Not mine. I've made absolutely clear what my motivation 11 was in relation to Lord Arbuthnot's concerns. 12 Q. Thank you. 13 A. I wanted to set up an independent review to get to the 14 bottom of it and I made it clear in a number of 15 contemporaneous documents that I wasn't afraid of 16 getting bad news, if bad news were to come. 17 Q. Can we stop and pause there for a minute. Others have 18 talked to you about the future of the Post Office, all 19 the work that was going on, the Network Transformation, 20 the shareholder, the Government's real goal for the 21 business was to get to profitability and a mutualised 22 Post Office that could stand on its own feet with less 23 dependence on Government subsidy, wasn't it? 24 A. It was, yes. 25 Q. Would that be made more difficult if the Post Office was 177 1 no longer the nation's most trusted brand but, instead, 2 faced public investigation and opprobrium for the 3 wrongful prosecution of hundreds of its own people? 4 A. Of course it would but -- I'm sorry, I am repeating 5 myself, but this is really, really important. 6 Q. Ms Perkins, I don't want you to repeat yourself. 7 SIR WYN WILLIAMS: I think I've got this point. 8 A. Okay, thank you. 9 MS PATRICK: I just want to ask one last question, sir. 10 Was this prospect that the Post Office was 11 responsible for wrongfully criminalising people like 12 Mrs Hamilton something that, during your time in the 13 chair, the business simply could not or would not 14 contemplate? 15 A. Not as far as I was concerned and, as far as I can 16 possibly be aware, that was not the position of my 17 fellow Non-Executive Board Directors. 18 Q. Looking back, do you think the Board might or ought to 19 have been less bored by the subpostmasters and more 20 outraged by the possibility of miscarriages of justice 21 that had ruined hundreds of its own people? 22 A. The Board was not bored of this issue. I have said on 23 a number of occasions over the last two days that 24 I think that there were inns instances where the Board 25 should have acted differently. 178 1 MS PATRICK: Thank you, Ms Perkins. I have no further 2 questions. 3 A. Thank you. 4 MR BEER: I have spoken to Ms Berridge, who represents 5 Ms Perkins, and she said, as long as I deal with one 6 issue, which will take about three minutes; she is 7 content not to ask questions. 8 SIR WYN WILLIAMS: Fine. 9 Further questioned by MR BEER 10 MR BEER: It's a very small point of detail, and I don't 11 think it will stop the world turning, but it's 12 an important point of detail, perhaps. 13 Can we look, please, for the last three minutes of 14 questions, Ms Perkins, at POL00029587. You remember you 15 were shown this email -- 16 A. Yes. 17 Q. -- about half an hour ago, an hour ago -- 18 A. Yeah. 19 Q. -- by Ms Leek? 20 A. Yeah. 21 Q. When she was introducing it to you, she said -- and the 22 draft transcript reference is page 148, line 12: 23 "Alwen Lyons sends to Paula, 'speaking notes for 24 your call with Alice this afternoon'." 25 A. Mm-hm. 179 1 Q. In fact, if we look at the email, we can see that, on 2 the face of the email, it's not sent to Paula Vennells. 3 It's sent by Alwen Lyons to Alwen Lyons. Can you see 4 that? 5 A. Yes, I do see that. 6 Q. The first sentence reads: 7 "Paula, here are my speaking notes for your call 8 with Alice this afternoon." 9 So it could be, I suppose, that this is a draft that 10 didn't get sent. It could be a way of sending something 11 to yourself for printing off and handing over? 12 A. Mm-hm. 13 Q. But, on the face of the document, it wasn't sent to 14 Paula Vennells, can you see that, as a speaking note, 15 for her -- 16 A. I do see that. 17 Q. -- conversation with you? 18 A. Yes. 19 Q. We haven't got any other evidence that this email was 20 sent to Paula Vennells as a speaking note prior to the 21 conference call that had been teed up with you. 22 A. I see. 23 Q. I should say, if we just look lastly at WITN01020100 -- 24 this is Ms Vennells' witness statement -- 25 A. Right. 180 1 Q. -- at page 168 -- 2 A. Mm-hm. 3 Q. -- paragraph 360, she says, "At 13.05", that's the time 4 of the email. 5 A. Right. 6 Q. "At 13.05 on 16 May, Alwen sent me a speaking note to 7 use on a call with Alice that afternoon", and then she 8 gives you the reference -- 9 A. Okay. 10 Q. -- or gives us the reference to the document we've just 11 looked at. 12 A. I see. 13 Q. So it looks like the mistake was made there, as well, 14 that this was a note sent to Paula Vennells at 1.05 pm. 15 A. But in fact it was Alwen sending it to herself. 16 Q. Alwen sent it to herself. 17 A. Yes, I understand. Thank you. That's really helpful. 18 I'm sorry, I have got a bit -- I think I'm suffering 19 from brain fog. 20 MR BEER: Sir, they're the only questions I ask. Thank you. 21 SIR WYN WILLIAMS: So that brings an end to the questioning 22 of you, Ms Perkins. I am very grateful to you for 23 having provided a very detailed witness statement, and 24 for giving evidence over the last two days. 25 THE WITNESS: Thank you very much. 181 1 SIR WYN WILLIAMS: Right. So we will adjourn now until 2 Tuesday at 9.45, when we will resume. 3 MR BEER: Thank you very much, sir. 4 (4.12 pm) 5 (The hearing adjourned until 9.45 am on Tuesday, 6 11 June 2024) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 182 I N D E X ALICE ELIZABETH PERKINS (continued) ...........1 Questioned by MR BEER (continued) .............1 Questioned by MR JACOBS ......................88 Questioned by MS WATT .......................115 Questioned by MR HENRY ......................122 Questioned by MS LEEK .......................145 Questioned by MS PATRICK ....................152 Further questioned by MR BEER ...............179 183