1 Friday, 21 June 2024 2 (9.45 am) 3 MR BLAKE: Good morning, sir, can you see and hear me? 4 SIR WYN WILLIAMS: Yes, thank you very much. 5 MR BLAKE: Thank you very much. This morning we're going to 6 hear from Mr Thomson. 7 GEORGE RITCHIE THOMSON (sworn) 8 Questioned by MR BLAKE 9 MR BLAKE: Can you give your full name, please? 10 A. George Ritchie Thomson. 11 Q. Thank you very much. Mr Thomson, you should have in 12 front of you a witness statement -- 13 A. I do. 14 Q. -- with the Unique Reference Number of WITN00970100. 15 It's dated 23 May 2024; is that correct? 16 A. That's correct. 17 Q. Could I ask you to turn to the final substantive page, 18 page 31. 19 A. I'm there. 20 Q. Can you confirm that is your signature? 21 A. That, indeed, is my signature. 22 Q. Thank you. Is that statement true to the best of your 23 knowledge and belief? 24 A. It certainly is. 25 Q. Thank you very much. 1 1 Mr Thomson, you joined the Post Office at 18 years 2 of age as a Postal Officer; is that right? 3 A. That's correct. 4 Q. You became, at some stage, branch manager? 5 A. That's correct. 6 Q. You joined the NFSP as a member in 1992? 7 A. That's correct. 8 Q. You became a member of the Executive Council from 2004? 9 A. Yes. 10 Q. You were elected General Secretary in 2007? 11 A. Yes. 12 Q. When did you finish your term as General Secretary? 13 A. Early 2018, I was planning to go home, I was planning to 14 leave anyway but I probably left about six months before 15 I was going to because my family needed me back in 16 Scotland. 17 Q. Thank you. I'd like to bring back up on to screen your 18 witness statement, please. It's WITN00970100. I'm just 19 going to take you through some passages from your 20 statement. 21 Paragraph 1, you say: 22 "In my estimation well over 100,000 people have used 23 the Horizon system between 1999 and 2004 and only 24 a small amount of users have had problems with the 25 system." 2 1 Can we turn please to paragraph 25, that's on 2 page 9. Halfway down page 9, thank you. You say there: 3 "We have always known that the Horizon system is 4 systemically robust and is still giving a great service 5 to our clients ..." 6 You carry on to say: 7 "Only a very small number of users of the Horizon 8 system over the last 25 years have claimed problems and 9 any time these problems were raised, in particular 10 remote access, admin reversals, [Post Office] denied 11 this could happen." 12 Over the page, please, 26. You say: 13 "The NFSP under my stewardship believed 14 fundamentally that Horizon was a robust system without 15 any systemic fault issues. In my estimation over 16 100,000 people have used the system since 1999 carrying 17 out billions of transactions worth hundreds of billions 18 of pounds with only a tiny percentage claiming to have 19 problems with Horizon." 20 Moving on to paragraph 33, please, page 12. Bottom 21 of page 12 and into page 13, please. At the bottom of 22 that paragraph, over the page slightly, you address 23 Mr Castleton's case. If we scroll down you say: 24 "On the issue of Horizon, I completely disagreed and 25 still disagree with Mr Castleton that the Horizon system 3 1 is not robust." 2 34, if we scroll down, you say: 3 "Subpostmasters were always very uptight when the 4 Audit Team turned up because they knew they would go 5 through everything to make sure that it was all 6 accounted for." 7 A few sentences on, you say: 8 "When this happens it always brings angst to the 9 subpostmaster community, and significant discrepancies 10 can lead to a major change in the subpostmasters life 11 circumstances." 12 Page 15, paragraph 37, still on Lee Castleton. You 13 say: 14 "Lee Castleton came to us I recall after he was 15 terminated and was therefore no longer a subpostmaster. 16 He had never been a member. If no one paid their 17 membership dues until they were in trouble, there would 18 be no organisation." 19 Paragraph 38, we scroll over the page, please. The 20 bottom of the page, you say: 21 "Firstly, I don't believe that the actual operating 22 Horizon system is covered in scandal but instead is 23 a robust operating system without systemic problems. As 24 I write this statement it is being used every day for 25 millions of transactions and for an ever-increasing 4 1 proportion of the nation's banking needs." 2 Paragraph 39, over the page. 3 "It is blindingly apparent to me from the volume of 4 transactions carried out by the network and the very 5 small number of users of the system that claim problems 6 that it is a tiny fraction of the transactions that 7 Horizon has processed over its lifetime that went 8 wrong." 9 Paragraph 45, that's over the page, please. You 10 say: 11 "Funds owed to [Post Office] growing significantly 12 as any shortage is now mostly blamed on Horizon [you're 13 talking about the present day Post Office]. Indeed, 14 [Post Office] management were instructed to write off 15 300-400 convictions by the government as part of the 16 general amnesty they announced for affected 17 subpostmasters. 18 "Let me reiterate that the NFSP under my leadership 19 that Horizon was robust without systemic weaknesses, the 20 sheer volume of transactions against the small 21 percentage of claims proves beyond any doubt that the 22 system was robust." 23 Over the page, please, paragraph 49: 24 "I stated previously, over 100,000 people worked on 25 the Horizon system between to 1999 and 2024 doing 5 1 billions of transactions worth hundreds of billions of 2 pounds including Government benefit work, DVLA work, 3 Passport Office work, Royal Mail letters and parcels 4 over the same period. A very small number of our 5 members complained that Horizon was faulty." 6 Moving on a couple of sentences, you say: 7 "At audit it was business as usual and some 8 subpostmasters were unhappy that discrepancies had been 9 discovered by the [Post Office] team." 10 Paragraph 54, page 21. You say: 11 "As previously stated, the NFSP believed that 12 Horizon was systemically robust and I believed when 13 I left in early 2018 and still do as a private 14 individual." 15 Paragraph 59, that's over the page, page 22, you say 16 there: 17 "As previously stated, over 100,000 people have used 18 the system from 1999 to 2024 carrying out billions of 19 transactions worth hundreds of billions of pounds and 20 only a tiny proportion had complaints regarding faulty 21 Horizon usually verbalised at audit." 22 Paragraph 60: 23 "I once again reiterate that the systemic robustness 24 of the system was never in question in my eyes ... 25 I have always believed that JFSA and many of the news 6 1 items have always painted Horizon as not fit for 2 purpose, systemically faulty, and that every single 3 mistake made in the [Post Office] network is the fault 4 of Horizon. This viewpoint is not only factually 5 incorrect but has damaged the brand and post offices all 6 over the UK. This is my reason for the strong words 7 I used." 8 You're referring there to a particular document. 9 Finally, paragraph 67, that's page 25, again you're 10 referring to a document I'll take you to in due course. 11 You say: 12 "My concern is that the Horizon programme, the 13 Panorama programme, ITV's docudrama and ITV's news 14 coverage in particular since then had given the 15 impression that the Horizon system is systemically 16 faulty and not fit for purpose. This is of course 17 nonsense which, in hindsight, would have been a better 18 word to use instead of 'BS'." 19 Looking at your statement and those passages that 20 I've taken you to, do you think there might be something 21 in the suggestion that you lacked sympathy for the 22 accused subpostmasters? 23 A. No, it's just a fact. It's a fact of life. Horizon was 24 dealing with billions of pounds worth every week of 25 Government benefits when it first came in. Two weeks 7 1 ago, it was announced that, in April this year, the same 2 system did just short of £3.5 billion of banking 3 transactions. So it's a strong system, it's a well-used 4 system and I still support it systemically as being very 5 robust. However, we're going to touch on other issues. 6 It is very robust. 7 And if I can just go back to -- it was close run 8 thing if we even had the Horizon system. So Peter 9 Lilley in the mid-'90s announced a benefit card and, 10 when the Labour Government came in in '97, Horizon was 11 over budget by a significant sum. It was a year behind 12 schedule and, for a period, the Labour Government was 13 going to push everybody to automatic credit transfer 14 into the bank. And we fought a rearguard action to do 15 two things. I wasn't General Secretary at the time but 16 I was very active in Scotland at the time and we fought 17 a rearguard action, including the Federation down at 18 Shoreham, to make sure Horizon went ahead. And I think 19 Royal Mail ended up buying Horizon for £500 million or 20 £600 million and to make sure that the Government still 21 allowed people to get their benefits at the Post Office. 22 So the Federation has always been supportive of 23 Horizon because Horizon was the difference between half 24 the network being closed down by the Government and no 25 benefits being paid at the Post Office from the year 8 1 2000 onwards, so we've been very supportive of its 2 necessity for the Post Office Network for the last 3 25 years. 4 Q. Mr Thomson, this Inquiry has heard about lives ruined, 5 people who have taken their own lives, bankruptcies, 6 imprisonment. Having looked at those passages that I've 7 just read to you, do you think that there might be 8 something in the suggestion that you lacked sympathy for 9 those accused subpostmasters? 10 A. No, I don't but what makes me angry is that the Post 11 Office on every occasion denied -- so in terms the 12 system being robust, it always has been. But the Post 13 Office always denied that there could be issues like 14 remote access or administration reversals, every time we 15 raised them. So the Post Office not telling the truth 16 is what annoys me, and the outcome, and the implication 17 that's had on individual subpostmasters who are still in 18 the network, and the people that had to leave for 19 various reasons and who are -- a lot of them are here 20 today. 21 Q. Do you think you may have become too close to the Post 22 Office in your time as General Secretary of the National 23 Federation? 24 A. We always worked closely with the Post Office. The 25 issue -- and the Inquiry has not shown it and the press 9 1 haven't shown it, our members were never workers. Our 2 members were self-employed business people who purchased 3 a franchise off the previous subpostmaster and, on many 4 occasions, had to give the Post Office 25 per cent when 5 the network was doing very well and the franchise was 6 doing well; they had their own staff, they had to 7 dismiss some of their staff if there were errors; they 8 had their own lawyers; they had their own accountants. 9 So our people were never workers in the sense of 10 working directly for the Post Office. They actually are 11 small business people who went into a contract with 12 their eyes wide open, and we believed that the Horizon 13 system -- and I still do -- it wouldn't be doing 14 £3.5 billion a month banking, as we speak, if it was not 15 a robust system. In fact, I believe that there's 16 probably going to be a three or four-year extension to 17 the Horizon system for the next three or four years and, 18 no doubt, the business transactions will be increasing 19 dramatically. 20 So I wouldn't say I was close to the Post Office 21 over it. I've always been as supportive of Horizon, or 22 more supportive from the very get-go. In other words, 23 some senior managers in the year 1999 or 2000 would have 24 been far less affected than my members if Horizon had 25 never been implemented in the first place. So I've been 10 1 a very, very strong supporter of Horizon to keep the 2 network open, to keep income running to subpostmasters, 3 and I'm still a strong supporter because it is still -- 4 banking is bringing in, into the postmasters' packets, 5 as we speak, just now, into their salaries, about as 6 much as Royal Mail, in some branches. So banking is 7 becoming the number 1 issue for our members in terms of 8 banks closing and our members doing the banking for the 9 UK. 10 Q. Mr Thomson, I want you to give full and frank answers 11 today. 12 A. Yes. 13 Q. But, if we are going to finish today, I think could 14 I ask you to keep your answers relatively short? 15 A. Well, I'm here to tell the truth and I'm here to explain 16 the background for everything as well. 17 Q. And I'm asking the questions and the question that 18 I just asked you was: were you too close to the Post 19 Office; and I think your answer to that is "No, 20 I wasn't". 21 A. No, I wasn't. 22 Q. Let's look at funding of the NFSP. 23 Can we turn to NFSP000009591. This is the first 24 topic, funding. I'm going to move on chronologically to 25 development over time. This a letter from 2013, sent by 11 1 the Certification Office -- or, sorry, a response to the 2 Certification Office. Can you recall in 2013 the issue 3 of the NFSP's independence being questioned by the 4 Certification Office. 5 A. I certainly can. 6 Q. Who were the Certification Office? 7 A. Well, basically, they decide if you qualify to be 8 a trade union or not and, at that time, we had a small 9 section of postmasters who have broken away and joined 10 the Communication Workers Union, as is their right to do 11 so, and, not that long after that happened, someone 12 wrote in to the Certification Officer to say that they 13 did not believe that we qualified as a trade union, and 14 that happened to be the case and it happened to be the 15 case because, to be a trade union, the majority of your 16 members must be classified as workers. 17 So, unfortunately for the Federation, all our 18 members, every one of our members, was a self-employed 19 entrepreneur, a self-employed businessperson, so 20 therefore, we were delisted by the Certification 21 Officer. We did not want that to happen. It may have 22 happened further down the line, if we had instigated it, 23 maybe another two or three years, but it was pre-judged. 24 Someone put -- I don't know who it was, I've got my 25 suspicions, it doesn't really matter now -- but a letter 12 1 was put in and, unfortunately, I remember speaking to 2 the Certification Office, they said, "Look, you almost 3 certainly shouldn't have been recognised as a trade 4 union in the first place because you've always 5 represented self-employed people, rather than workers". 6 Q. Thank you. Mr Thomson, it would be nice if I could get 7 a question in from time to time today. 8 Let's stick with this document. This document isn't 9 addressing that issue. So there were two issues with 10 independence: one was whether subpostmasters satisfied 11 the legal requirements as employees or workers, 12 et cetera. But this was a first issue and that was 13 actually about the independence of the NFSP; do you 14 recall that issue? 15 A. Yes. 16 Q. This is your response to that complaint, is it? 17 A. That's my response, yes. 18 Q. So I'm just going to take you through this letter. It 19 starts as follows: 20 "Thank you for your letter of 9 May, notifying me of 21 correspondence received by your office that raises 22 concerns about the NFSP's status as an independent trade 23 union within the meaning of Trade Union and Labour 24 Relations (Consolidation) Act 1992." 25 Then you go on to address each of the complaints. 13 1 If we could scroll down, the first is union facilities 2 and you say as follows: 3 "The NFSP is currently in receipt of an annual grant 4 of £175,000." 5 Pausing there, May 2013, was that the main grant you 6 received from the Post Office, £175,000? 7 A. I can't recall because, during Network Transformation, 8 there were significant grants because our team were out 9 in the field at meetings virtually every night of the 10 week, up and down the UK. So there was significant 11 funds that way. However, most years it was the money 12 paid in lieu of union facility time that was our biggest 13 grant from the Post Office. Not every year but was 14 years that was the case. 15 Q. That's this, the 175,000 -- 16 A. That year. Some years it was higher than that. 17 Q. Thank you. You say there: 18 "The grant enables an official to pay for 19 a substitute post office clerk whilst they undertake 20 union duties." 21 Did that cover anything for yourself in terms of 22 substitution of Post Office work. You didn't actually 23 run a Post Office, I don't believe, at this time, did 24 you? 25 A. Our rules at the time is you couldn't run a Post Office 14 1 and be General Secretary. My wife became the 2 postmistress she already worked there. I think the 3 rules have changed now. I don't really know because 4 I really don't have much to do with the Federation. 5 Q. So would that amount pay for your wife. Where would 6 that go, that £175,000? 7 A. My wife wasn't active in the Federation, so it would 8 hardly pay for her. It's a strange question. 9 Q. The suggestion here is that the amount pays for somebody 10 to work in the Post Office covering your duties? 11 A. Not me, all of our Executive Council are branch 12 officials or branch officers or chairmans of branches, 13 the actual structure of the Federation, not the General 14 Secretary. I got my wage from the Federation. 15 Q. Thank you. If we scroll down, we then come on to other 16 commercial arrangements: 17 "The NFSP has for many years been in receipt of 18 commission income from the sale of insurance and other 19 finance service products." 20 It says there: 21 "NFSP's initial agreement is for five years at 22 a commission rate of £80,000 per annum." 23 So you received £80,000 from commission from 24 insurance, so that's not related to income from the Post 25 Office; is that right? 15 1 A. It's right and it's wrong. We had a contract with 2 Zurich Insurance and we got significant funding from 3 Zurich commission because, obviously, we introduced them 4 to subpostmasters. The Post Office came along and said 5 they were going to launch -- as part of the financial 6 products they were launching, they were going to be 7 launching business insurance and they wouldn't like 8 a situation where they were competing with us pushing 9 forward Zurich. 10 So it was just a straightforward transaction, okay, 11 we get £60,000 or £80,000 a year from Zurich into the 12 Federation, if you want us to push the Post Office 13 business insurance, you've got to match that or we're 14 not going to do it, and that's what they agreed to do. 15 Q. So there was also income relating to insurance 16 commission from the Post Office? 17 A. That's what I'm saying, yes. So it was Zurich for 18 a long time and then the Post Office, for a good few 19 years, were giving us about £60,000 or £80,000 a year, 20 I can't recall, it was 10 or 12 years ago, but it was 21 a significant sum of money. But it just replaced the 22 lost commission from Zurich. 23 Q. So at this time, 2013, it seems as though you are 24 receiving income from Zurich. Oh, no -- so that was 25 terminated and then the £80,000 at this stage was paid 16 1 by the Post Office? 2 A. I think that's correct and that's certainly what did 3 happen. I don't know if the dates were correct there. 4 Q. Then advertisements in the SubPostmaster journal, it 5 says: 6 "The NFSP has a monthly members' journal in which 7 advertising space is sold on a commercial basis. From 8 time to time [the Post Office] place advertisements and 9 is invoiced under normal commercial arrangements. 10 Invoiced advertisements for the year ended 31 December 11 2011 [nearly £13,000]", 2012, £11,000. 12 So a further, £11,000, £12,000 from the Post Office 13 for advertisements in the SubPostmaster journal -- 14 A. Yes, that could be things like they had a savings 15 product and -- a savings product at the time they were 16 pushing, Instant Saver, it was called. I think it were 17 things like that. General Post Office products they 18 wanted us to push to our members but also to the wider 19 community as well. 20 Q. Then the "NFSP conference": 21 "Representatives of [the Post Office] regularly 22 attend the NFSP's annual conference as visitors. 23 Additionally, in recent years, they have taken a stand 24 as part of a small exhibition held for the benefit of 25 members at conference, and have also sponsored the 17 1 annual conference gala dinner. The total amounts 2 received from [the Post Office] in relation to these 3 items was [£7,000] and [£6,500] for the years ending 4 2011 and 2012 respectively." 5 So there's further income from the Post Office in 6 relation to the NFSP conference and also the sponsorship 7 of the dinner. Then you say: 8 "Turning now to the specific amount of £341,850 for 9 'Network Transformation and support activities' referred 10 to in your letter, I comment as follows ..." 11 You set out there the various payments from the Post 12 Office to the NFSP: £250,000, £22,000, nearly £70,000. 13 Can you assist us, NFSP Trading Limited, what was that? 14 A. It was, if you like, a subsidiary of the main 15 organisation, dealing with retail and commercial. It 16 was never particularly successful but it was always 17 there and it has been -- I don't know if they've wound 18 it down now or if it's still there. But all these 19 figures you've given, they've been on the accounts for 20 years. Any member of the public could have read these. 21 We represented members who ran franchises for the 22 Post Office and we worked closely with the Post Office 23 because we both needed to have a successful franchise, 24 which is -- you know, that's the reality and it's not 25 surprising we worked closely with the Post Office as we 18 1 had a franchise. 2 Q. In terms of your own personal income, I think you said 3 you received an income from the NFSP. Did you also 4 receive an income from NFSP Trading Limited? 5 A. Never. I got my salary from the company and it was 6 a decent salary, so I didn't need it to be, you know, 7 supplemented elsewhere. Even though, I must say, that 8 when we were cutting back some of the costs, I actually 9 doubled up and was doing the retail side for a year. 10 I was never out of the Institute of Directors about 7.00 11 at night in London after my day job. But again, that 12 was me, you know, looking after the Federation, as the 13 Federation looked after me. 14 Q. So 2013 we have the £175,000, £80,000; we have 15 an additional £12,000, or so from the advertisements; we 16 have the £7,000; we have the nearly £342,000 in relation 17 to the Network Transformation Programme. So in the year 18 2013, do you think the income from the Post Office would 19 be somewhere between £500,000 and £1 million or would it 20 be -- 21 A. It might have been and, if you take into account, as 22 well, the fact that one of our key arguments for trying 23 to retain a bit of union status was because the Post 24 Office carried out check off for us, ie they took money 25 every month from our members' remuneration and they sent 19 1 it to the Post Office. And, actually, if we had to put 2 something in place, it would have probably cost us maybe 3 ten times more than the Post Office could do it for. 4 But it's the same with the CWU. The CWU, they've 5 still got check off, which is worth a fortune to the 6 CWU. That means money every month or every week is 7 taken of your members' salary and paid to the 8 organisation. So there's nothing that -- there's 9 nothing big there. And, as for the value of union 10 facilities -- and the CWU do a good job, I'm not 11 knocking them for a minute -- but their union facility 12 time, at the time you're talking about there, was many, 13 many millions of pounds a year more than the Federation. 14 Q. Mr Thomson, can I just stop you there? I haven't made 15 any criticisms, I'm just taking you through the figures. 16 A. Yeah, I know. I'm trying to give you a better 17 understanding of the situation. 18 Q. Could we please turn to NFSP00001464, please. This 19 a letter of 13 January 2014, and this is addressing the 20 point you made at the beginning. It's from the 21 Certification Office and, if we scroll down, we can see 22 it says: 23 "The Certification Office has now considered your 24 representations ..." 25 That's not just the representations we've just seen 20 1 but further representations addressing the separate 2 matter that you've addressed. They say as follows: 3 "He has determined that National Federation of 4 SubPostmasters does not meet the definition of a trade 5 union provided in section 1 of the Trade Union and 6 Labour Relations (Consolidation) Act. Accordingly, 7 I must inform you that ... the National Federation of 8 SubPostmasters was removed from the list of trade unions 9 today, 13 January 2014." 10 So after an issue was raised about independence and 11 then a further issue was raised as to whether, in fact, 12 you could be a trade union in itself, it seems as though 13 the NFSP was removed from the list on 13 January 2014; 14 is that correct? 15 A. That's correct but I had a conversation -- I've got the 16 advantage over you -- I had a conversation with the 17 Certification Office and they told me it was because we 18 should never have been a trade union in the first place 19 and it was because our members were self-employed. 20 Because, if you use your logic for the first part of 21 your evidence, every trade union in Britain has check 22 off, you could argue are they totally independent? But, 23 of course, that would be a nonsense, wouldn't it, 24 because it doesn't stop them being independent just 25 because they've got a value of check off: the National 21 1 Health Service, all the unions there, the Royal Mail, 2 the local authorities. So I understand what you're 3 saying but I disagree with your logic. 4 Q. Mr Thomson, were there implications, negative 5 implications, for the NFSP, of being removed? Might, 6 for example, there have been a possibility that you'd 7 have to give funds back to members -- a possibility? 8 A. There was no advantage whatsoever and, in fact, looking 9 at what we did, because it came as a shock the fact that 10 someone -- you know, we'd been a trade union for years, 11 and years, and years, albeit we operated like a trade 12 association, many, many aspects, retail advice, HR 13 advice, all these different things. So it came as a big 14 surprise, and I actually sat in my office with the 15 Finance Director, Philip Bloor, and I said to Philip, 16 you know, "The implications here, have we got a future?" 17 And I said, "We've got about a year and a half to make 18 our mind up what we're doing", and Philip said, "Look, 19 George, if you're looking after the staff and everything 20 in this building, make sure they get what they're due 21 and everything else, we've not got much more than half 22 a year to go". 23 So we certainly did not want to lose our trade union 24 status at this time. We were worried about check off, 25 losing the ability to get check off, which to put 22 1 something else in its place would have cost us 2 a fortune. We would worried about our officials and our 3 branch secretaries being able to get money for being out 4 and about and having to cover their staff themselves. 5 So no. But that's not to say, that's not to say, 6 that two or three years time down the line, as we looked 7 at our future, then we may have decided to become 8 a trade association without that, you know, punch -- and 9 the bat that we had from the Certification Officer after 10 someone had complained. 11 Again, I've got my feeling that it was to do with 12 the group that went to the CWU but that's just my 13 thoughts. 14 Q. Can we turn to POL00004484, and it's page 2. By the 15 summer of 2013, if we scroll down, you were negotiating 16 with the Post Office with regards to the future. This 17 is an email sent on your behalf. Who were Sue Barton 18 and Nick Beal, very briefly? 19 A. Post Office officials that we dealt with on a regular 20 basis. Sue was quite senior. Nick was less so. 21 Q. So the summer of 2013: 22 "Dear Sue and Nick, to facilitate the best use of 23 time during the conference call this afternoon, I would 24 like to lay out a framework for potential agreement as 25 follows ..." 23 1 There's there the following various items, and it's 2 number 4 that I'd like to look at, please: 3 "[The Post Office] and the NFSP to sign a 15-year 4 contract for the NFSP to represent all post office 5 operators. This will include: 6 "Financial agreement 7 "£500,000 payment [in] 2013-14 8 "£1.25 million payment 2014-15 9 "£1.25 million payment 2015-16 10 "[Going up to] £2.5 million payment [from] 2017 to 11 2028 12 "This process allows for the drop-off of our present 13 membership fee, and facilitates the change from check 14 off towards [Post Office] charging a fee from all agents 15 which is passed directly to the NFSP. 16 "Memorandum of Understanding to be worked on with 17 rights and responsibilities on both sides. 18 "If necessary, NFSP will drop the union badge to 19 sign contract." 20 Now, pausing there, when you say "drop the union 21 badge", in fact, by this stage, you didn't have the 22 union badge or soon after, by early 2014, you didn't 23 have the union badge. 24 A. Yeah. 25 Q. "Please note -- a signed agreement with the blood of 24 1 both myself and Paula is necessary on the future of the 2 NFSP before any agreement is granted on either [Network 3 Transformation] and other points." 4 Now, at this point, the numbers of subpostmasters 5 was getting somewhat smaller, wasn't it? 6 A. Yes, it was, but there's other issues as well. The 7 franchise over -- from about the end of the '90s, the 8 franchise was struggling. Government were withdrawing 9 work, people were moving to the banks, particularly with 10 their benefits, automatic credit transfer. So the 11 franchise had not been as attractive as it used to be. 12 So what we did, working with Royal Mail Group, 13 working with Post Office Limited, we had Urban Network 14 Reinvention, that was the first one, we had 2,500 15 postmasters left with up to 26 months' compensation. 16 The alternative was a lot of them would have went 17 bankrupt so they were quite happy. We then had Network 18 Change, again, roughly about another 2,500 left. And 19 then Network Transformation, which brings me right to 20 your question. 21 And what happened is for the majority of our 22 members, the biggest part of their business was the Post 23 Office income and that's how they were struggling. Some 24 of them had retail but our members tended to have small 25 retail. So we were losing people who were Post Office 25 1 specialists, who had a bit of retail, who were active in 2 the Federation, who knew their councillors, who knew 3 their MPs. And they were all leaving, and it was 4 apparent to me that, if you were then transferring 5 a very small post office into a big convenience store 6 and it was, say, only one-tenth of his income, these 7 people were more involved in retail and they wouldn't 8 join a specialist organisation. 9 So every meeting I was at, for about two or three 10 years, every conference, every special conference, most 11 of the meetings with the Post Office, I would say, 12 "Look, we have saved the Network, we've saved the Post 13 Office but, as a result, it's the Federation that, in 14 effect, has killed itself off. That is not acceptable", 15 and when I at first -- 16 Q. Mr Thomson, I'm going to have to stop you there. 17 A. That's fine. 18 Q. All of we're addressing here is the finances and all my 19 question was was, at this time, the numbers of 20 subpostmasters was some what getting smaller? 21 A. Yeah, but -- 22 Q. Do you agree with that or disagree with that? 23 A. I'm giving you the reason why it's getting smaller -- 24 Q. I didn't ask for the reason, I just asked whether it was 25 increasing or not? 26 1 A. It was decreasing not increasing. 2 Q. Thank you very much. The figures that we see here, 3 they're quite significant figures, raising from £500,000 4 to £2.5 million by 2017 -- 5 A. That's because we -- 6 Q. -- is that correct? 7 A. That's correct but we took on few functions and it was 8 to help postmasters to grow their income and to become 9 less reliant, so, within that money, what does it 10 include? 11 Q. I didn't ask what it included, all I'm asking is about 12 the figure, purely the figure. The figure is increasing 13 quite a significant amount, is your proposal, over 14 a small number of years, reaching £2.5 million from the 15 Post Office by 2017; do you agree with that or disagree 16 with that? 17 A. I was giving you a reason why -- 18 Q. I didn't ask for the reason. 19 A. Well, that's what you're getting. 20 SIR WYN WILLIAMS: Well, Mr Thomson, I understand that 21 you're anxious to get across your point of view but, in 22 truth, it's much easier for me if Mr Blake asks the 23 question, you answer it, and then, if, at the end of 24 Mr Blake's questions, you feel that there are other 25 things that you want to say, then within reason, I will 27 1 permit you to say that. All right? 2 But it will be much easier for today's progress if 3 you simply answer the question put to you and then, as 4 I say, if necessary, I'll afford you some time to wrap 5 up, so to speak. Okay? 6 A. Okay. 7 MR BLAKE: Let's move to POL00424024. Now, there are 8 meetings between yourself and the Post Office leadership 9 during the period 2013/2014, to discuss the future. 10 This is a briefing for the CEO of the Post Office. So 11 we're at 11 December 2014, and a meeting between 12 yourself and Paula Vennells; do you recall that meeting? 13 A. Yes, I had many, many meetings with Paula and Moya. 14 Yeah. 15 Q. Thank you. The purpose of the meeting is as follows: 16 "Purpose of meeting is to discuss current/emerging 17 strategic relationship with NFSP senior members." 18 There's further background if we scroll down, 19 please, "Grant agreement .../Network Development". 20 So we are going to see "MOU" mentioned a few times, 21 Memorandum of Understanding. Was that the proposal 22 we've just looked at, the emerging proposal that we've 23 just looked at? 24 A. Yeah. 25 Q. Thank you: 28 1 "NFSP has now returned their marked-up diversion of 2 the MOU/Grant Agreement and there are a number of key 3 elements within their proposed changes to take account 4 of. Critically, as expected, they are asserting 5 a position that they will not engage in any detailed 6 discussions related to Network Development until the 7 [Grant Agreement] is signed and that the [Grant 8 Agreement] sets out clear parameters that do not provide 9 their support for any Network Development beyond that 10 defined in the current [Network Transformation] plan 11 ..." 12 The next paragraph I'll just read the final sentence 13 or a couple of sentences there: 14 "Signals from George privately are that he 15 understand the reality of the market and uncertainty in 16 the business around signing an agreement binding [the 17 Post Office] to make payments to NFSP without prior 18 agreement on Network Extension, albeit he is formally 19 asserting a position that the [Grant Agreement] is part 20 of [Network Transformation] and a dependency on them 21 supporting compulsion in [Network Transformation]." 22 So that's the status of the negotiations as at 23 11 December 2014. I'd like now to turn to POL00386638, 24 please. This is another brief for Paula Vennells, 25 5 February 2015 so these negotiations are going on 2013, 29 1 2014, into 2015; is that your recollection? 2 A. That's my recollection, yes. 3 Q. We can see in brackets there, halfway down this page, it 4 says: 5 "Intent is not to discuss the MOU/Grant Agreement 6 but in the event this is raised, update as follows ..." 7 There are bullet points there for Ms Vennells. One 8 of them is: 9 "We believe, with careful consideration and 10 crafting, a suitably framed agreement that clarifies 11 termination events and has a break clause linked to 12 a review and termination payment will be a good deal for 13 NFSP and one that will ensure they have an independent 14 future." 15 So, by this stage, I think one of the main topics of 16 discussion between yourselves and the Post Office was 17 termination events, so whether and in what circumstances 18 the Post Office could terminate the agreement and also 19 whether they had to pay you money if they did so; is 20 that right? 21 A. That's correct. 22 Q. If we scroll down, we can see "Further Background". 23 "Current NFSP position", as believed by the Post Office, 24 was that: 25 "The Grant Agreement is a given -- it was part of 30 1 last year's [Network Transformation] discussions." 2 So it seems, by that stage, you've already agreed to 3 support Network Transformation; is that right? 4 A. Yeah, we were very supportive of Network Transformation 5 because of the conditions facing subpostmasters. The 6 franchise was becoming a busted flush, people couldn't 7 make a living and we got hundreds of millions of pounds 8 of Government funding to give people compensation to 9 leave or to give them big funds to stay and modernise, 10 and there was modernisation funds available, as well, 11 under Network Transformation. 12 Q. It says: 13 "However NFSP have introduced a clause that requires 14 [Post Office] to pay 3 years (£7.5 million) in the event 15 of termination -- which, from NFSP's perspective, could 16 only occur for a material breach." 17 So part of that discussion, as late as 2015, was 18 still about the financial position and how much money 19 the NFSP would have to be paid in the event that the 20 Post Office terminated the agreement; is that right? 21 A. It was, and it was important because it took a lot of 22 badgering for Paula to agree to the 15-year deal. And 23 I was wanting to make sure that if Network -- once 24 Network Transformation had finished, that the Post 25 Office couldn't just come along and get rid of the Grant 31 1 Agreement. I think, having a Federation made 2 a difference, albeit -- albeit -- can I just say on that 3 particular point -- although I left six months before 4 I was going to, I had already decided that the new 5 world -- because I can be quite outspoken and 6 vociferous -- that the new world with a grant for me 7 wasn't a world I wanted to be part of. 8 So I'm being honest here, I'm here to be truthful, 9 I'm not here to make friends. So I already had some 10 concerns that some of my teeth were being pulled when we 11 moved to the 15-year deal, maybe another operator could 12 do it, you know, maybe someone more compliant could do 13 it but I had decided that it wasn't for me and I was 14 going to move on. 15 So even though I left six months earlier for family 16 reasons, I'd already indicated -- so everybody in the 17 Federation new I was leaving anyway but I just left 18 a bit quicker. 19 Q. Sticking with the bullet points: 20 "NFSP will not accept the principle of a break 21 clause linked to agreement to a termination payment. 22 "If no agreement is reached, NFSP have options -- 23 most likely a merge with CWU." 24 Now, I don't need to take you to another document 25 but it looks as though merging with the CWU was, in 32 1 reality, a bargaining chip on your part; would you agree 2 with that? 3 A. No, because the difficulty -- as an individual, I've got 4 a lot of -- massive respect for Billy Hayes, who was the 5 retired General Secretary, and massive respect for Dave 6 Ward, who is the present General Secretary. The big 7 reason -- I actually spoke to hundreds of postmasters 8 during this period and I always asked, "If we were going 9 to join, or in future if things were changing, would you 10 join the CWU?" And maybe one in four said they would, 11 but three-quarters made the point, "Look, George, we run 12 a franchise, we're business people, we don't want to 13 join the CWU". 14 So my concern was always that, if we joined the CWU, 15 I would have no problem with that but we probably would 16 not have taken much more than a quarter of our 17 membership. That was my concern. So, no, it wasn't 18 just a bargaining chip. 19 Q. Perhaps we could keep this document on screen and I will 20 take you to that document. It's NFSP00001079. Perhaps 21 we can keep it up on screen as well. Thank you very 22 much. 23 This is a document that has 29 July at the top and, 24 if we scroll down, we see there a paragraph that begins 25 "30 July, Camden", and it's that last sentence there 33 1 that I would like to read to you. It says: 2 "We are getting closer and closer to tipping point 3 of lack of influence, and [the Post Office] getting 4 closer to completion of [Network Transformation]." 5 So this is slightly earlier: 6 "If CWU is rejected our biggest bargaining chip is 7 gone!" 8 It seems there to be there suggested that the CWU is 9 being used as a bargaining chip against the Post Office. 10 A. I dispute that. I know what it says there but I dispute 11 that. 12 Q. If we take that down, please, and stick with the one on 13 the right-hand side. If we scroll down, please, "Our 14 position/Next steps", this is the Post Office: 15 "We remain of the view that a strong relationship 16 with NFSP is the right outcome -- but not at any price." 17 Then that final paragraph there, it says: 18 "Although we have yet to position it as follows, the 19 reality is that we need to convince George that 20 a 15-year deal fully independent and funded by Post 21 Office with a 5-year break clause with a termination 22 payment that equates to a 1-year notice period is a far 23 better deal than a merge with CWU that simply promises 24 5 years in an organisation that cannot afford to 25 subsidise the NFSP with a declining membership, is 34 1 frankly bankrupt and likely to merge with Unite within 2 that timescale." 3 Can we please turn to CWU00000011. This is an email 4 to members, 29 May, so we're now in the summer of 2015. 5 It is a letter from yourself. You say, as follows: 6 "I am very pleased to report that we have, after 7 protracted negotiation, reached a prospective agreement 8 with Post Office Limited, under which the NFSP will be 9 provided with grant funding for a period of 15 years. 10 This will allow for a period of stability for the NFSP 11 and enable it to continue to represent and promote 12 members' interests. The detail of the prospective 13 agreement will be explained at the Conference." 14 So it seems that, by the summer of 2015, you had 15 agreed with the Post Office in principle; is that right? 16 A. My team and some of Paula's team could not believe that 17 the Post Office would concede to grant funding. You 18 know, some people would say "They can't agree to it, 19 George, because it's akin to creating a closed shop, 20 where everybody, in effect, has to join". That's 21 been -- we got round that. So it was never a given, it 22 was never given we would get that off the Post Office 23 and I know, for a fact, that a lot of Paula's team were 24 against it, a lot of Paula's team would have preferred 25 that the NFSP withered on the vine and went away. 35 1 But -- however, we got it. So it was always 2 a possibility we could have joined the CWU because, 3 actually, joining the CWU would have been a far easier 4 thing to achieve than what we got, and so, to some 5 extent, I was futureproofing the Federation going 6 forward. 7 Q. So by 2015, May 2015, you had the agreement in principle 8 for 15 years. Was it similar to those figures that we 9 discussed at the beginning? 10 A. It could have been. There was -- some of these figures 11 went up because we took new teams on. That's what I was 12 trying to explain. We took on a six-man retail team to 13 go out to branches to help people explain the retail. 14 We put a six months mail segregation team on because 15 people were missing the targets and our members were 16 losing millions of pounds of payments for Royal Mail, so 17 we put a team in the field, which I believe is still 18 there, to help our members get it. 19 Q. Purely in terms of figures though, we're talking over 20 £1 million initially, rising to over £2 million plus? 21 A. Because of these reasons, yes. 22 Q. There's then the conference in June 2015. Could we, 23 please, turn now to NFSP00000957. There was a special 24 conference on 18 June convened for this purpose; is that 25 right? 36 1 A. That's correct. 2 Q. These are the minutes of that conference. Can we please 3 turn to page 15, and there's a section that I'd like to 4 read out to you -- slightly further down, please. It's 5 an exchange between yourself and somebody called Robert 6 Cockburn from the Scottish Northern Branch. He says, as 7 follows, "Good afternoon". 8 Just pausing there, there were options presented at 9 this conference: there was the option that we've just 10 seen, there were other options relating to, for example, 11 merging with the CWU; is that right? 12 A. That's correct. 13 Q. "Good afternoon. I'd just like to ask the Executive 14 Committee if this is such a frightfully important day 15 for our organisation why we haven't been allowed to 16 question the CWU and National Federation of Retail 17 Newsagents today." 18 That's met with applause. The national Federation 19 of Retail Newsagents was a third option, wasn't it? 20 A. That's correct and, at one time, so was the Association 21 of Convenience Stores but they backed out quite early. 22 Q. You respond as follows: 23 "I think that's a good question Robert asks and he 24 asked it in Scotland we've had it in a few areas as 25 well. The position of the Executive Council, the 37 1 Executive Council are the ruling body of the 2 organisation and obviously they listen to the membership 3 and they are elected from the membership. It was felt 4 quite strongly that the best option by a proverbial mile 5 was the MOU and that if we were to join another 6 organisation, particularly a trade union, we would leave 7 the whole playing field empty and someone like the NFRN 8 would come along to the Post Office and say 'They'd 9 joined the CWU, they're a union, why don't you deal with 10 us as a trade association?' And the reason that we felt 11 quite strongly that we would not get someone along from 12 the National Federation of Retail Newsagents or the CWU, 13 is that the best option and the preferred option for 14 this organisation is the MOU and the Conservative Party 15 wouldn't have, you know, Ed Balls comes along to their 16 conference, maybe now they would right enough, but we 17 decided as the leadership organisation on your behalf 18 that the MOU is of the best, you have the vote on it, 19 but to bring the CWU along or NFRN, then we do not think 20 that is a wise thing to do." 21 So, essentially, although there is a vote and there 22 are a number of options, the only one that you are, in 23 fact, presenting is the MOU that you have agreed? 24 A. Well, the executive had many meetings and the 25 negotiating team had meetings and we decided how to run 38 1 the conference and that was accepted. But, again, 2 I have to reiterate the point, I did have numerous 3 conversations with postmasters regarding the CWU and, if 4 we had been able to take more people with us than what 5 I anticipated, then it was more of an option, but it was 6 becoming quite clear. And what was also clear and what 7 put a lot of postmasters off, there was already a CWU 8 subpostmaster section that I believe never went above 9 200, and I think that showed the difficulty we would 10 have taking a significant amount of subpostmasters with 11 us into the CWU. 12 Q. Thank you. The response then from Mr Cockburn, he says: 13 "George, that's all very well and good to say that 14 the Executive Committee support the MOU, that may well 15 be the best option, but everybody here runs their own 16 post office and they know what's best for them, and with 17 all due respect to listen to you guys presenting for the 18 CWU and the National Federation of Retail Newsagents, 19 it's secondhand, you want the MOU and you're presenting 20 their options as secondhand options", et cetera. 21 Again, met with applause. 22 Apart from the money from the Post Office, there 23 were some significant advantages to the NFSP. One of 24 them was, for example, automatic enrolment for all new 25 model operators; is that right? 39 1 A. That's correct. 2 Q. Membership fees paid by the Post Office, so not from the 3 members? 4 A. Yeah, and that was for a lot of members, the bigger 5 branches, that was roughly £200 a year saving. For the 6 smaller branches, roughly about £60 a year. 7 Q. Also sole recognition was also part of the deal, wasn't 8 it? 9 A. Well, we always had recognition. The CWU wanted 10 recognition, particularly after we lost union status, 11 and they were told no. We -- thinking back, we were 12 never recognised for negotiation rights as a trade 13 union. But the Post Office recognised us as the only 14 organisation it could represent subpostmasters. So, 15 even though we had been a trade union for a long time on 16 paper, on that particular point, the Post Office didn't 17 recognise we were a trade union in terms of real 18 negotiation rights. And that's probably because we had 19 to work with them all the time. 20 We were -- we both needed the Post Office to be 21 doing well, we both needed the network to be strong, of 22 a decent size and we all needed Government work coming 23 in. So we had -- our interests were totally aligned 24 with the Post Office on the day job that I was doing all 25 the time. 40 1 Q. Tying all of that that I've just taken you to from the 2 beginning of your evidence until now, tying that all 3 together, we've seen, 2013 to 2015, negotiations about 4 the future, significant sums of money being agreed and 5 negotiated and agreed with the Post Office; do you think 6 that there might be something in the suggestion that you 7 were financially dependent on the Post Office, 8 especially at an important time in the life of the 9 Horizon scandal? 10 A. Well, nothing to do with the Horizon scandal but, 11 because we were losing membership with transformation 12 programmes and restructuring, our membership dropped to 13 something like 5,000, and we had loss about 8,500 14 subpostmasters over the last 12 or 13 years before that 15 and, a large majority of them, probably 6,000 or 7,000 16 were our members at the time. 17 So, basically, the Post Office money that we were 18 going to get was, if you like, replacing what used to be 19 membership money that we had lost because we had 20 supported -- it comes back to my argument -- we had 21 supported three restructuring programmes, we had saved 22 the network, we had saved the company and we were going 23 to be the ones that actually had to fall on our sword 24 and not exist any more. And that was the logic. The 25 logic of a deal with the Post Office, it was tied to 41 1 Network Transformation, Urban Network Reinvention and 2 Network Change. It was never ever tied to Horizon 3 because my support for Horizon, even though we'll come 4 on to it later on, has never wavered since the year 5 2000. It's never wavered. 6 Q. We'll look at your support for Horizon, I'm going to 7 take you very shortly chronologically thorough that, 8 but, if we look at the 2013 to 2015 period especially, 9 it was a time at which the NFSP's situation was 10 financially precarious and a time at which you are 11 negotiating significant sums of future funds with the 12 Post Office; do you agree with that? 13 A. That's got absolutely nothing to do with Horizon, yeah, 14 I'd agree with that but how that's linked to Horizon, 15 I've not got a clue. I don't know how you come to that 16 conclusion. 17 Q. Let's look at issues with Horizon chronologically and 18 we'll start in 2006. Could we please look at 19 NFSP00000555. As you say, we're going to go quite far 20 back in terms of your support for the Horizon system. 21 A. I wasn't General Secretary until 2007 but I know I've 22 answered some questions before that because I was on the 23 Executive Council. 24 Q. Absolutely. We'll see a report of a meeting of the 25 Executive Council on 9 January 2006. If we turn over 42 1 the page, we can see Colin Baker was, at that time, 2 General Secretary. We do have your name there as 3 a member who was present; is that right? We can see 4 there on the right-hand side at the bottom, the very 5 final name of those present is yours. 6 A. Yes, I see it, yeah. 7 Q. You were there because you were a member of the 8 Executive Council? 9 A. That's correct, yes. 10 Q. Page 8, please. If we scroll down, there's a section 11 where subpostmasters' pay is discussed and we see there 12 it says as follows: 13 "There followed some discussion on the situation 14 regarding long-term Horizon failures around the 15 country." 16 Now, this wasn't a time of rollout, it was 2006. Do 17 you recall in 2006, at the Executive Council meeting, 18 the matter being raised that there was long-term Horizon 19 failures around the country? 20 A. If I recall, the Horizon system, in effect, is our Post 21 Office EPOS system, Electronic Point of Sale. That's 22 what it is, and what was happening in certain branches, 23 the screens were going dead, the chip and PINs were 24 going dead, people couldn't transact. So it wasn't like 25 this was something hidden. Actually, it was a pain in 43 1 the backside. People couldn't operate their branches so 2 we actually -- we were able to put goodwill payments in 3 place. But this happens, you know, it happens with 4 supermarket tills, EPOS, it happens with chip and PINs, 5 even as we speak. It happened last week in my shop, 6 last week. 7 Q. NFSP00000517. This is another meeting in 2006, now 8 March 2006. Can we turn, please, if we look over the 9 page, you're present. Page 20, "Horizon Service 10 Improvements": 11 "An update on service improvements had been 12 circulated. 13 "Concerns were raised on how robust the Horizon 14 system was." 15 So you were present at a meeting of the National 16 Executive Council in March 2006 where concerns were 17 raised on how robust the Horizon system was; do you 18 recall that? 19 A. Yes, pertaining to a particular issue, which was that 20 screens were going blank, chip and PINs weren't working, 21 postmasters were aware of that because they couldn't 22 actually open their post offices. This is a particular 23 thing and we negotiated a Google payment based on the 24 volume of your customer transactions and the length of 25 time they were out, so this was something that was quite 44 1 apparent. It's a bit like your EPOS system -- if you've 2 got a Spa or you've got a Premier, if your EPOS system 3 goes down, you physically can't serve your customers. 4 So this wasn't something that was heading away, it 5 was in your face, it was a technical difficulty that 6 they had resolved. 7 Q. Is it beyond comprehension that there may have been 8 other technical issues at that time with the Horizon 9 system? 10 A. Well, as far as we, as an organisation were concerned, 11 this was a till system, this was a computer system that 12 was doing, at one time, about 70 million transactions 13 a day -- a day -- and, if there had been a systematic 14 failure or a systematic problem with the computer 15 system, we would have been inundated. We could not have 16 done our day job and that simply was not the case. So, 17 if you want a definitive, I can't give you a definitive 18 but logic would suggests that there was no significant 19 systemic issues with Horizon. 20 Q. You've used the word "systemic"; I haven't used the word 21 "systemic". All I've asked is: concerns are being 22 raised about how robust the Horizon system was, is it 23 beyond comprehension that it wasn't just screen freezes, 24 that there may have been other technical issues that you 25 weren't aware of? 45 1 A. It's always a possibility, given the Post Office's 2 stupidity on steroids how they've handled the case in 3 the last couple of years, yes, it could be the case but 4 nothing I was aware of. And, certainly, when branches 5 were closed because their screens were blank and because 6 their chip and PINs were down, there was certainly no 7 big chunky people coming forward saying, "I've lost 8 a lot of money because my screen was blank". So this 9 was about a goodwill payment on something that was 10 relatively easy to resolve. 11 Q. You were aware that there were helplines for technical 12 issues? 13 A. Yes, of course. 14 Q. Were you aware of people complaining about those 15 helplines? 16 A. Well, some people could go direct to the helplines, 17 others -- quite a few people went thorough my Assistant 18 General Secretary, a very good colleague, Marilyn 19 Stoddart, who had a team of people working with Horizon 20 issues, as we all did, yeah. 21 Q. Can we turn to NFSP00000491. We're still in 2006. 22 We're now in June 2006. If we turn over the page again, 23 you're present. Can we go, please, to page 10. About 24 three-quarters of the way down page 10, please. Thank 25 you. If we scroll down towards the bottom, there's 46 1 a bullet point there that begins "Npower". I think it's 2 the one just below -- thank you -- yes: 3 "Npower issuing cards that would only swipe at 4 PayPoint. When customers call Npower, they were being 5 told it was because Horizon was unreliable." 6 Are you aware that Npower had been telling people 7 that Horizon was unreliable? 8 A. I'm not aware of that but, however, again, I reiterate 9 my point, the system was dealing with hundreds of 10 millions of transactions a week and we were not having 11 the kind of level of complaints that would indicate if 12 there was significant failures within the system. 13 That's a fact. 14 Q. If we scroll over, please, over the page. There's 15 a section on "Network". There is a heading "Horizon 16 Failures", it's page 13. The third bullet point under 17 "Horizon Failures", it says: 18 "The failure after the Bank Holiday has been 19 explained and contrary to popular belief it was not 20 caused by overload, it was caused by an individual 21 accidentally switching something and messing up the 22 system." 23 Were you aware in 2006 of complaints about the 24 system being messed up? 25 A. Well, I wasn't, but I wasn't General Secretary. But 47 1 nothing that I'm aware of, but what I will say is that 2 Marilyn Stoddart and Lynda Willoughby were excellent at 3 dealing with Horizon complaints, as was my PA at the 4 time, Sharon Merryweather, so they dealt with any 5 complaints that came through, they would speak to Rod 6 Ismay, you know, all the Post Office staff. But I was 7 certainly at that meeting, yes. 8 Q. POL00041564. We're now into 2009. This is the Computer 9 Weekly article of 11 May 2009. It begins by reference 10 to Lee Castleton, and we'll address Lee Castleton's case 11 shortly. If we go over the page, please. We also see, 12 if we scroll down, reference to Jo Hamilton signing her 13 accounts, even when she knew they were wrong because she 14 says calls to the Horizon helpline didn't stop the 15 deficits occurring and she felt backed into a corner. 16 Noel Thomas, reference to him; fourth postmaster, 17 Amar Bajaj; over the page, please, fifth, Alan Brown; 18 sixth, Judy Ford; seventh, Alan Bates. It says: 19 "All of the postmasters we spoke to say that their 20 union, the National Federation of SubPostmasters, has 21 refused to help them investigate their concerns." 22 Some of those who I've just mentioned were members 23 of the NFSP. Why weren't you helping them at that time? 24 A. Well, there are two things that I'd answer to that. The 25 first thing is that if you look at where the suspensions 48 1 have taken place of people over a period, only about 2 30 per cent of them were our members. There was a big 3 chunk of postmasters' staff who were suspended. There 4 was a big chunk of directly employed staff, ie Crown 5 Offices, and, obviously, a big chunk of non-members 6 because we only represented about 60 per cent. So in my 7 calculation, before I came here today, I reckon that 8 less than 30 per cent of the people who ended up being 9 suspended were subpostmasters -- sorry, our members. 10 That's the first thing I'd like to say. 11 But, certainly, we would always investigate but, if 12 the Post Office -- and it comes back to the issue that 13 makes me annoyed about the Post Office, I absolutely was 14 aligned with them in the systemic reliability of the 15 system, and I still am. However, I think their 16 behaviour in taking postmasters -- firstly, suspending 17 them and taking postmasters to court, when they 18 apparently knew that there was backdoor access, there 19 was admin reversals, there was bugs, that they never 20 ever made us aware of. 21 So I'm supporting the Horizon system but these 22 issues that they denied are unforgivable, and they're 23 unforgivable because we could have resolved them quite 24 easily. I don't know if I'm allowed to expand on this 25 because, if we had been told that there was backdoor 49 1 access, we would have worked out a protocol with them, 2 right: you need the postmaster's permission. 3 Q. Mr Thomson, that's something I think you've addressed in 4 your witness statement. 5 A. Yeah, but are you bringing that up, that I've addressed 6 it? 7 SIR WYN WILLIAMS: Yes, I have that point, Mr Thomson, I can 8 assure you. 9 THE WITNESS: Thank you. 10 MR BLAKE: You've said that 30 per cent, approximately, on 11 your calculations, would have been members of the 12 National Federation. 13 A. Yes. 14 Q. Why not fight for those 30 per cent at that time? 15 A. But you didn't let me expand on my answer. The 16 reality -- 17 Q. You're talking about backdoor access, which is one issue 18 of number of different issues that this Inquiry has 19 heard about. You have complaints from a number of 20 people, you're saying that 30 per cent of whom would 21 have been your members -- 22 A. Yes, and we took -- and we took -- 23 Q. -- why not fight their cases? 24 A. We did fight their cases but we asked the Post Office. 25 Now, what are we to do as an organisation? So we were 50 1 a small body, you've got a Government-run company where 2 the managers at senior level are telling you that, if 3 a postmaster has that kind of error, that kind of value, 4 it has to be them, because the computer is systemically 5 robust, there's no backdoor access. If you have 6 a Government director on the Board from the Department 7 of Business, on the Post Office Board, they're telling 8 you -- or they're on the Board so you're assuming the 9 same thing, when you've got a big trade union like CWU 10 having hundreds of members over the period suspended as 11 well, and they're not taking court action, what do you 12 mean: stand up for our members or represent? 13 We took -- every case that was brought to us, we 14 took it up with the Post Office, right? What we didn't 15 do, is -- 16 Q. Can I pause you there. You said every case that was 17 taken up with you, you took to the Post Office. Let's 18 scroll back on this page, let's start at page 2. Jo 19 Hamilton, who sits here today. Did you fight her case 20 with the Post Office? 21 A. Well, fighting your case is different from taking it up, 22 so -- 23 Q. What did you do in relation to Jo Hamilton? 24 A. Well, it would be Marilyn, Linda or Sharon would 25 undoubtedly contact the Post Office at various levels to 51 1 try and find out and, if the answer was, "This is a set 2 of circumstances" -- and given we didn't know the full 3 picture in terms of what could be done and what could 4 not be done, then there's nowhere else for us to go. 5 Now, if you're suggesting that we should have spent 6 hundreds of thousands of pounds on every legal case 7 against the Post Office, we didn't have the funds and 8 it's something we had never provided in membership. 9 Q. Mr Thomson, we've been over the funds. You were 10 receiving millions from the Post Office. The evidence 11 that the Inquiry has heard is that Jo Hamilton was 12 told -- 13 A. I don't agree with you. You're talking -- 14 Q. -- "You're on your own". 15 A. The timeline for the funds from the Post Office and the 16 timeline for the funds from some of the members, you're 17 trying to make out that some how me were flush with 18 money because we were always getting these types of sums 19 from the Post Office. That's not correct. We were 20 a small membership organisation, we're losing members 21 because of three structuring programmes. So what you 22 said there is factually not correct, we werenae 23 wallowing around in money as you're implying. 24 Q. No one is necessarily asking you to fund legal 25 challenges but did you ever issue any press releases 52 1 supporting any of these individuals, asking the Post 2 Office to thoroughly investigate? 3 A. Well, given that we supported it as a robust system, and 4 the Post Office lied to us regarding some of the things 5 that were happening, I don't know -- if we're getting 6 assurance from the Chief Executive of a Government run 7 company with a Government representative on the Board, 8 and another trade union with £250,000 members, the CWU, 9 who -- I don't know if they took any kind of action 10 against the Post Office, I do not know -- but then 11 expecting an organisation that had fell to below 6,000, 12 5,000-and a bit to have that kind of resource, quite 13 frankly, we didn't. 14 Q. How many resources would it require to issue a press 15 statement? 16 A. A press statement saying what? 17 Q. Urging the Post Office to -- 18 A. No, because -- 19 Q. -- urgently investigate -- 20 A. No, many, many of these ex-members believed, like Lee 21 Castleton -- he was never a member, we'll come on to 22 that -- but many of these people -- and it's still the 23 same now, and my criticism of Justice for Subpostmasters 24 was that they gave the impression and stated that this 25 basically system was kaput, it wasn't fit for purpose, 53 1 it should be replaced. I think Alan Bates even goes as 2 far as to say that the Post Office should be wound down. 3 So we did not know there was some issues because the 4 Post Office didn't tell us. So how you then expect us 5 to take some kind of action based on a big lie that has 6 taken place, ie the Post Office withholding all this 7 information, I do not understand. 8 MR BLAKE: Thank you, sir. That might be an appropriate 9 moment for our first morning break. 10 SIR WYN WILLIAMS: Yes, by all means. What time shall we 11 resume? 12 MR BLAKE: Could we resume at 11.10, please. 13 (11.00 am) 14 (A short break) 15 (11.10 am) 16 MR BLAKE: Thank you. Can we turn to NFSP00000347. 17 Mr Thomson, you mentioned the case of Lee Castleton 18 and we'll address that now. This is a letter to the 19 National Executive Council regarding the case of Lee 20 Castleton. This is sent on 29 September 2009 and it 21 says, as follows: 22 "Dear Executive Officer 23 "Please see the email below from ex-subpostmaster, 24 Lee Castleton, which has already been forwarded to you. 25 Both myself and my predecessor have in the past 54 1 investigated the issue and corresponded with 2 Mr Castleton regarding his belief that the system was 3 not robust and failsafe. This issue has now been placed 4 on the agenda for discussion at our forthcoming 5 Executive Council meeting." 6 If we scroll over the page, we can see the email. 7 He says as follows: 8 "I am writing to you as you are an Executive Council 9 member of the NFSP. 10 "My name is Lee Castleton ... I used to own a sub 11 post office until I had a problem in 2004. I do not 12 wish to burden you with my own personal story in this 13 letter but I am more than willing, if you wish, to go 14 into great deal at a later date. I have been asked to 15 ask you if you feel any responsibility with the safety 16 of your members that you were elected to represent? 17 "I am part of a growing group of postmasters who are 18 both serving and ex-serving and we have all suffered 19 problems with the Horizon system. Our goal is to 20 publicise the belief that the Post Office Horizon 21 accounts system is flawed, and that the way in which 22 this problem is dealt with is systematically heavy 23 handed and is effectively swept under the carpet, the 24 public in our opinion should be allowed to hear all 25 sides and decide for themselves. We have evidence of 55 1 Horizon not performing properly and we have evidence 2 from IT technical experts who support our claims. 3 "We as a group are actively looking for 4 opportunities to publicise the problems that we feel are 5 not being dealt with by the Post Office and are being 6 ignored by the NFSP. We have had numerous amounts of 7 column inches and various magazines and of course the 8 BBC have now shown the Taro 9 programme on BBC Wales. 9 Again, as a group, we are now embarking into mainstream 10 media coverage with BBC Watchdog preparing a programme 11 along with various radio shows asking for interviews. 12 At least one MP is to approach the Government and ask 13 them to launch an enquiry. 14 "This is of course very good for our group and the 15 publicity is good for our cause. Clearly you as 16 a senior person within the NFSP will be asked for 17 comment on this issue. 18 "It should be of utmost concern to you as a senior 19 official that Horizon can go wrong at the very least 20 your union should be holding its own enquiry to 21 establish the facts. Postmasters are being sent to 22 prison, being given criminal records, and are being made 23 bankrupt. 24 "I have been asked to write to yourself and ask what 25 you are doing with respect to the problem and what you 56 1 are doing as group at the NFSP to protect and educate 2 your membership. I quote from your website." 3 There's a section there from the website, "Help in 4 difficult times": 5 "Our Branch Secretaries provide practical advice and 6 emotional support and are able to represent members if 7 they encounter contractual issues or difficulties. 8 "Read more about how the NFSP can help in difficult 9 times ..." 10 He ends by saying: 11 "We hope that this is a question you wish to answer, 12 and prove with actions that you are facing up to this 13 problem and are doing all you can to protect your 14 members. You do have a personal duty of care to your 15 members. I look forward to hearing from you." 16 I'm going to turn over to the actual meeting that 17 followed. It's LCAS0001376. We start on page 2. 18 Thank you. So this is the report of the meeting 19 that was held on 5 to 7 October 2009. If we scroll over 20 the page, there's a section Lee Castleton. You were, by 21 this time, the General Secretary of the NFSP, weren't 22 you, 2009? 23 A. Absolutely. 24 Q. "Lee Castleton -- Horizon: 25 "Historic case. Lee Castleton had never been 57 1 a member of the Federation and had only attempted to 2 join after he had got into trouble and was therefore 3 rejected. 4 "General Secretary had received the documents 5 relating to Horizon security that was used by [the Post 6 Office] in court cases, but it could not be shared with 7 the Executive Council." 8 Just pausing there, do you recall what it is that 9 you had received? 10 A. I think that was the -- it might have been the previous 11 General Secretary but can I just say on the Lee 12 Castleton issue that you've raised -- 13 Q. I'll ask you a number of questions about the Lee 14 Castleton case. 15 A. Right. 16 Q. I'm just asking about this one bullet point at the 17 moment. Do you recall receiving documents that was used 18 by the Post Office in court cases? 19 A. I may have but, this far on, I don't know for definite, 20 and that's just the truth. 21 Q. It then says: 22 "Lee Castleton had taken [the Post Office] to court, 23 his expert witness was very flawed, hence the case was 24 lost and the court awarded full costs to [the Post 25 Office] of approximately £300,000." 58 1 Are these likely to have been your words your 2 announcements to the meeting? 3 A. They may well have. I undoubtedly would have spoken to 4 the Post Office about the background to the case and 5 I've obviously got notes for Lee -- I don't know how 6 much you're going to allow me to say but Lee Castleton 7 was appointed on 18 July 2003, four years before I was 8 General Secretary. But that's not the issue. I'm not 9 hiding anything. He was suspended on 24 March 2004 and 10 the email that was taken when he actually -- it was 11 I think it's -- his father-in-law -- 12 Q. I'll take you to that document. 13 A. Okay. 14 Q. Let's go -- 15 A. Thank you. 16 Q. -- step by step: 17 "Press have got involved over the past few weeks. 18 "Clarified that the Federation had to be very 19 careful. Our job was to protect subpostmasters. It was 20 important not to create a situation where hares were 21 sent running by encouraging members to believe Horizon 22 had faults." 23 Now, is that likely to have been your words? 24 A. Absolutely, systemic faults, yeah. 25 Q. "If [Post Office] customers believed the system was 59 1 error ridden they would be reluctant to do business at 2 a time when the contracts were desperately needed by the 3 network." 4 Again, likely to have been your words or a summary 5 of your words? 6 A. That would be in line with my broad support for the 7 system, yes, absolutely. 8 Q. Not only your support for the system but the importance 9 of public perception of a system that worked? 10 A. And the reality on the ground because we were dealing, 11 as I said, with hundreds of millions of transactions 12 a week, and very few complaints. That's just a fact of 13 the situation. 14 Q. You go on to say that: 15 "Over 37,000 subpostmasters and clerks had used the 16 system since its implementation. Billions of 17 transactions had taken place. It was easy to blame 18 Horizon when a shortage occurred." 19 If we scroll over the page, please: 20 "The simple fact was that Lee Castleton did not have 21 a case. Both the current and the previous General 22 Secretary had made that clear to him on numerous 23 occasions after investigating the circumstances, however 24 the case was yet again doing the rounds of the Executive 25 Council." 60 1 Now, what exactly did you do to investigate the 2 circumstances? 3 A. I contacted and had discussions with the Post Office. 4 But can I just say, as well, we've been -- Lee Castleton 5 was never a member of the Federation. We -- we -- 6 Q. We will get to that? 7 A. -- we didn't even have to have it on our agendas. We 8 had something to do with a non-member, who had never 9 been at a member, and we had it at the highest level 10 with the operation, and I dealt with the highest level 11 of the Post Office. So these criticisms that we did 12 nothing for our members when we're doing all that for 13 a non-member. 14 Q. Mr Thomson, Mr Castleton's letter that I've just shown 15 you was asking you what you were doing for your members. 16 It wasn't asking for you to help Mr Castleton. It was 17 asking "What are you doing to help your current members 18 who may be experiencing the same problems as 19 I experienced?" What is it, looking at that first 20 bullet point, that you did to properly investigate the 21 circumstances of his case, so that you could have some 22 reassurance in respect of all of your members at that 23 time? 24 A. I raised it, once again, with the Post Office and, for 25 the life of me, I don't expect -- I don't understand 61 1 what further action you would expect us to take. So, if 2 you're going to a company that's Government owned that 3 has a Chief Executive that's telling you one thing, that 4 has a director on the Board from the Department -- from 5 BIS, from the Department of Industry, then where are you 6 going to go with it? That's what I fail to understand. 7 And because of the volume of transactions that were 8 being done properly, we knew it could not be systemic. 9 So I don't know where you expected us to take it and, 10 more importantly, I don't know if an organisation, 11 230,000 people, CWU, if they took any action that 12 involved taking somebody to court. 13 Q. Next bullet point -- well, we'll look at some CWU 14 documents in due course: 15 "There followed considerable discussion on the 16 subject." 17 It then says: 18 "Though a couple of Executive Officers had some 19 minor misgivings regarding Horizon, the vast majority 20 were happy that it was accurate." 21 So there is a recognition that some members were 22 concerned regarding the accuracy of Horizon; do you 23 recall that? 24 A. When I took over on the Executive Council and then 25 became General Secretary, it was settled policy, both 62 1 from the previous General Secretary and the executive 2 teams -- and my executive teams -- that we supported 3 Horizon, because it was a robust system. Was there any 4 person in particular? I don't think so. It might have 5 been Mark Baker(?). Mark was probably away with it and 6 Mark was the only one that criticised Network 7 transformation, sometimes he criticised Horizon but not 8 all the time, it was usually Network Transformation Mark 9 criticised. 10 Q. Generally, when you have a policy, a policy will be 11 based on some research, some investigation, and then you 12 formulate the policy, and, perhaps, if circumstances 13 change, you revisit the policy. Did you, at this stage, 14 revisit the policy, carry out any investigation? 15 A. We carried out an investigation with the Post Office. 16 In terms of revisiting the policy, I've told you, only 17 a tiny fraction of postmasters were ever having problems 18 with Horizon and the settlement group that took place, 19 and everything that's happened recently, it's a small, 20 small group of subpostmasters. If you compare that to 21 the billions of transactions that took place, it's 22 a tiny, tiny fraction. 23 But you, of course, are investigating Horizon, you 24 should be able to tell that. It's a very small amount 25 of people who claimed that Horizon caused massive 63 1 problems for them. 2 Q. Some of whom went to prison, some of whom took their own 3 lives -- 4 A. I've got that in my witness statement. I've been around 5 a long time. Postmasters have always been -- and you 6 keep quiet about things because (a) you want to protect 7 the brand but you want to protect the postmasters, as 8 well, the reputation of the community, the postman as 9 well. I've been around a long time: suspensions have 10 always taken place, prosecutions have always taken 11 place, under the manual system as well, hundreds of 12 subpostmasters suspended. 13 We had a franchise that was in crisis and we always 14 tried to help people, of course we did, try and find out 15 what had happened, spoke to -- speak to Chesterfield to 16 see if they've sent too many pension dockets away or if 17 they went missing. We did all these things, we helped 18 people that had been suspended but I've got that in my 19 witness statement and I hope we get onto it because my 20 witness statement gives the reason why it's a tiny 21 percentage and why this happened before computerisation, 22 well before computerisation. 23 Q. "Lee Castleton had wanted the Federation to back his 24 court action that would have run into six figures, 25 stressed again he had never been a member and as such, 64 1 it was requested that Executive Officers did not respond 2 to his correspondence. 3 "If there had been systematic problems with Horizon 4 over many years the Federation would have taken action 5 as a whole. All the cases investigated in depth so far 6 had proven the error was on the part of the 7 subpostmaster or their staff." 8 How many cases did you investigate in depth? 9 A. With these numerous issues, I can't recall, but we 10 raised numerous issues -- 11 Q. Did you investigate any cases in depth? 12 A. When you say "in depth" what do you mean? We took it up 13 with the company that employs them, the Post Office. We 14 took it up -- I spoke to Paula, on numerous occasions 15 about Horizon being robust, particularly regarding 16 backdoor access. And, if the people at the top of the 17 company are telling you that it cannot be accessed apart 18 from the people on the counters, at the Horizons -- on 19 the Horizon terminals how do you possibly disprove that 20 when you've got a Government -- and how does the CWU 21 disprove that when you've got a Government director on 22 the Board as well? Where are you meant to take it, 23 a small organisation of 6,000 people? 24 And we're talking about a non-member. So, you know, 25 the reality is, we're accused of not representing 65 1 members and then you accuse us of not representing 2 non-members. It's quite staggering, frankly. 3 Q. "The General Secretary gave an undertaking that in cases 4 where a member believed the problem was Horizon, he 5 would raise the case with [the Post Office] at the 6 highest level. Executive Officers to notify such cases 7 to Shoreham." 8 How many cases did you raise at the highest level 9 with the Post Office? 10 A. Over the years, maybe 20 or 30 but, again, I would go in 11 there with John Scott, Head of Security, with Paula, 12 with other people on the team and say, "Look, we've got 13 noise about this particular case. What's the 14 background? Is it possible -- is it possible that it 15 could be the computer system?" And we believed it was 16 systemically strong, and I still do, my wife uses it, 17 our family has used it for -- since its inception, you 18 know, 20-odd year ago. But if they're telling you on 19 some of the smaller issues that they didn't 'fess up 20 about as I've mentioned, you know, backdoor remote 21 access, then how are we meant to disprove that when 22 you're getting that from the very top and you also know 23 that BIS has got someone on the Board? Where are you 24 meant to take that? 25 Q. So, if it was the case that you were told of a number of 66 1 bugs in the system -- 2 A. I wasn't. 3 Q. -- would you change your position? 4 A. If I was told -- so if I was told that there was 5 backdoor access -- 6 Q. Forget backdoor access -- 7 A. -- or bugs -- 8 Q. You've said "backdoor access" a number of times but 9 let's focus on bugs, bugs in the system, something that 10 affected balancing. If you were told there is a problem 11 in the system that has, in some cases, let's say 60-odd 12 cases, affected the balancing in branches, would that 13 have changed your position? 14 A. It could well have done and a combination of everything 15 else. I certainly -- 16 Q. What would you have done in those circumstances? 17 A. Well, eventually, we probably would have tried to employ 18 a computer expert. If we believed that the Post Office 19 were covering up to the degree it now looks like they 20 were -- and it's stupid because we could put a protocol 21 in place, hopefully allowing me to explain that later 22 on, but I've got my doubts -- then we could have -- then 23 we could've worked something out, yes. But if we knew 24 these things, we certainly would have done something 25 about it. So -- 67 1 Q. Mr Thomson, just stopping you there. If you were told 2 that there was a bug that affected 60-odd branches and 3 that it affected the balancing of their accounts, you've 4 said you would have tried to employ a computer expert? 5 A. No, let me -- let me -- what I've said there -- if we 6 realised it had been a big problem, in the first 7 instance, we would have obviously sat down with the Post 8 Office, right, "We've been told there's bugs. How is 9 this possible? How are you dealing with it? Are you 10 making postmasters aware? Are you getting the -- what 11 did you do to the computer to rectify it? Did you get 12 permission? What was the outcome?" 13 Q. You would have grilled the Post Office in those 14 circumstances, would you? 15 A. Of course we would have done it more, yeah. But when 16 you get people just saying to you, "I think it was bug 17 George", where do you take that? 18 Q. Okay, well, we have your evidence. 19 NFSP00000256, please. I'm very briefly going to 20 finish the Lee Castleton issue, page 8, please. You 21 were mentioning an email or a complaint, I think, from 22 his father-in-law. That's this email perhaps. It's 23 an email that says it's November 2004. This is the 24 original complaint: 25 "Last night around 4.50 I had a call from 68 1 a gentleman asking if we could help his son-in-law who 2 has been in his office since 18 July 2003. He has been 3 suspended since March 2004 and was terminated on 4 14 July. 5 "His problem was that he originally had a loss of 6 £1,000 which he put in himself. Then a few weeks later 7 down the line he was £2,500 down and the following week 8 he was another £4,200 down. By the end he was told that 9 he was £27,000 down. 10 "He would like to know if we could help him. I told 11 him it would be very doubtful as he has never been 12 a member." 13 If we go to page 7, please. There's an email that 14 says: 15 "David Milner called today if we had heard from 16 Marine Drive Post Office and the problems they'd been 17 having. I said I spoke to the subpostmaster and his 18 father-in-law about it and passed it on to Kevin." 19 There's a little note there: 20 "Advised Mr Castleton cannot help because he's not 21 a member. He claims he sent in an application." 22 I think, if we turn to page 3., we can see, if we 23 look at the bottom of that page, there's a little note 24 there, 8 November 2004: 25 "Sent in £157.08 for membership, Kevin declined it." 69 1 Then if we turn, please, to page 4. We see the 2 communication to Mr Castleton, from Kevin Davis, senior 3 assistant General Secretary: 4 "I'm returning your postal order to the value of 5 £157.08 because I cannot accept your application for 6 membership." 7 Now, I think you want to deal with this issue 8 because I think it may have been -- well, it was your 9 evidence that he wasn't a member and, therefore, you 10 didn't have to deal with him. This is the relevant 11 correspondence. Do you think that that explanation 12 that's set out in that letter is sufficient to 13 Mr Castleton -- 14 A. Well, this was before my time but I'm going to answer 15 it. The reality is no membership organisation -- 16 a membership organisation is a bit like having 17 insurance. You can argue how good or bad that insurance 18 is, that's why we're here today but, if you have 19 household insurance and your house burns down or you go 20 on holiday and break your leg, you can't claim after 21 it's happened and Mr Castleton came to us after he had 22 been suspended and one of the conditions of being 23 a member, you have to be a subpostmaster. He wasn't 24 a subpostmaster. Now, that's not a technicality. 25 So when I came -- when I got in, I did speak to 70 1 Mr Castleton on the phone and I might even before it, 2 and he wanted us to fund the case. And he ended up -- 3 you know, it's horrible -- ended up losing £300,000 and 4 that's heartbreaking, and it is, but we did raise his 5 case, he wasn't a member, and to get criticised for not 6 helping a non-member, for someone who used to be 7 a General Secretary of a trade union, albeit, you know, 8 with a retail belts onto it, it's a bit hard to take. 9 He was -- he was never, ever a member and yet we 10 spent time on our Executive Council debating it over the 11 years. And when I did speak to him it was about getting 12 funding to take on the Post Office. 13 Q. That letter, though, that doesn't explain any of that, 14 does it? 15 A. Well, I can't comment on a letter that was taken, you 16 know -- I didn't become -- I'd just become an executive 17 officer. I'm not hiding behind it because I know the 18 general direction of travel. It is what it is. It 19 happened in 2004. I became General Secretary in 2007. 20 I could say "Well, I'm not answering it because I wasn't 21 General Secretary" but I'm trying to help as much as 22 I can. 23 Q. Let's move on to 2012 now. Can we please turn to 24 NFSP00000977. This is the branch secretary's circular; 25 is this something you would have signed off? 71 1 A. I certainly would have been involved with it, yes. 2 Marilyn would have had input, Paul Hook maybe, in terms 3 of the publicity team in that, yes. But I would have 4 been involved in a lot of it. 5 Q. Let's scroll down, there's a section on "Media coverage 6 of Horizon disputes". It says: 7 "As a result of recent media coverage, members may 8 be aware that Post Office Limited has agreed to 9 an independent audit of a handful of cases where Horizon 10 irregularities are claimed to have taken place." 11 That's the Second Sight investigation. 12 A. Yeah. 13 Q. "The National Federation of SubPostmasters is surprised 14 that [the Post Office] has chosen to follow this 15 approach. We have seen no evidence in any of these 16 cases that Horizon was at fault and we believe that the 17 system remains robust." 18 What would be wrong with the Post Office employing 19 an independent company to look into the reliability of 20 the Horizon system? 21 A. Well, firstly, we didn't know, as I said, about bugs, 22 about admin reversals, about backdoor access. But what 23 was more annoying about this is that this was a time 24 when we were looking to move the Post Office in the 25 direction of mutualisation and postmasters having a much 72 1 bigger role in the running of the company, for all the 2 right reasons because, a lot of times in the past, the 3 Post Office hasn't been particularly well run. 4 And I was furious that we had been excluded from 5 such a fundamental decision as taking on Second Sight. 6 That's what most of the anger was about. It was quite 7 incredible that us, as an organisation, who'd been so 8 supportive -- for the reasons I've given, because it's 9 a robust system that I supported from its very 10 inception -- would have been excluded from such 11 a significant decision, it was quite scandalous that 12 we -- 13 Q. The last paragraph on the page: 14 "The NFSP is surprised that [the Post Office] has 15 chosen to follow this approach. We have seen no 16 evidence in any of these cases that Horizon was at fault 17 and we believe the system remains robust." 18 What's being said there is "We are surprised that 19 the Post Office has asked for an independent 20 investigation because we're not aware of any problems 21 with the system"; isn't that what's being said? 22 A. But we were not aware of any problems with the system 23 and -- 24 Q. So what had been wrong -- 25 A. -- we'd been working hand in hand with the Post Office 73 1 for a franchised brand, they should have included us in 2 any decisions they made regarding Second Sight, 3 absolutely. 4 Q. What would be wrong with an independent investigation 5 into the Horizon system? Why were you, the NFSP, 6 surprised and upset by that approach? 7 A. For the reasons I've given, that we were excluded from 8 such a significant decision. 9 Q. Can we please turn to NFSP00001314. We'll start on 10 page 3, please. So we're in June 2012, so the same 11 month. It's over to page, the bottom of page 3, please. 12 There is a letter from somebody called Paul Taylor, 13 drawing your attention to a BBC News article that 14 announces the Second Sight investigation. It's 15 an article that mentions, for example, Seema Misra, 16 somebody who had been convicted and sent to prison. 17 If we scroll over the page, Mr Taylor says: 18 "I have previously written to you regarding 19 a computer errors not balancing correctly at the end of 20 each day and my 63-year-old mother having to use her own 21 money to balance the system. After constant checking, 22 as my mother used to work in a bank and has been 23 a subpostmistress for twelve years, she is more than 24 able to do this basic task, however, the system still 25 did not balance even when on paper it should. Because 74 1 of this she has had to use her own funds to balance the 2 system or be accused of being incompetent or fraudulent. 3 "After weeks of telephone conversations by my Mother 4 with unhelpful staff from nameless Post Office personnel 5 I contacted your organisation in order for your support 6 and advice. 7 "Your advice was close to useless, your support was 8 non-existent and my mother was just insulted by a man 9 stating the obvious over the telephone. 10 "So please explain to me the link I attach below and 11 why after several letters you did not bring this to my 12 attention?" 13 That is the reference to the Second Sight 14 investigation and the reasons for that investigation. 15 Mr Taylor says: 16 "I would like you to contact Mrs G Taylor [and it 17 gives her post office address] and apologise for your 18 lacklustre performance and how you are going to support 19 her further as I thought is the whole point being a paid 20 member of National Federation of SubPostmasters." 21 So here we have somebody who is, in fact, a paid 22 member of the National Federation complaining, raising 23 issues about balancing issues resulting from the Horizon 24 system. If we go on to page 3, please. It's the bottom 25 of page 2 into page 3. Here is the response from you. 75 1 It says: 2 "Dear Paul 3 "Thank you for your recent email regarding the 4 Horizon computer system. 5 "Over 70 million transactions are carried out each 6 and every week at post offices all over the UK and I can 7 assure you that we have only a handful of people who 8 claim the system is [systematically] faulty. If the 9 Horizon system was [systematically] faulty we would have 10 tens of thousands of complaints each and every year. 11 The NFSP continues to believe that the Horizon ... 12 system is accurate, robust and fit for purpose and we 13 believe that the external review of Horizon will come to 14 the same conclusion." 15 Now, we saw in those minutes earlier, you saying 16 that, "If anyone has a problem, I'll take it on, I'll 17 take it to the highest levels of the Post Office". 18 That's not what's happening here, is it? You're 19 providing a standard statement about the number of 20 people using the system and the lack of complaints about 21 the system? 22 A. Was that the admin reversal one? Was that the admin 23 reversal that caused the error? 24 Q. I've shown you the complaint. 25 A. Yeah. Was that the small admin -- was that the 130 -- 76 1 British Telecom -- 2 Q. We -- 3 A. I'm trying to recall. I can't recall. I'm just trying 4 to remember if it was an admin reversal. 5 Q. I will take you to a response from Mr Taylor. It's 6 page 2, that might assist your memory. He responds as 7 follows: 8 "You can keep repeating you are confident that your 9 Horizon system is robust but that doesn't make it true. 10 There is a reoccurring error which is resulting in the 11 Horizon system not balancing transactions to sum of 12 money taken, be it by cash, card or cheque. 13 "This may be a Horizon error, this may be human 14 error, but there is an error. This should be a very 15 simple problem to pinpoint as all transactions can be 16 printed centrally to find an anomaly. I personally do 17 not understand why this is taking such a long time to 18 resolve. 19 "My concern is a sub post office is experiencing 20 a problem balancing the system which the Post Office own 21 and manage and there seems to be no Area Manager, no 22 systems manager, no one to support the sub post office. 23 If such people do exist then why hasn't this resolved by 24 now? 25 "The monitor screens at Thorney Post Office are 77 1 10 inches when modern day working standards clearly 2 state it should be 14 inches. So why have they not been 3 updated in twelve years? Again, who is managing the 4 hardware?" 5 That's the substance of the complaint. Did you 6 raise that at the highest levels of the Post Office? 7 A. I have to recall who dealt with it, if it came into 8 Amanda, if it was dealt with Marilyn, Lynda, Sharon or 9 myself. Again, I don't know if it was a small amount of 10 money. If it was a small amount of money, I almost 11 certainly wouldn't have dealt with it but I can't 12 remember, to be honest with you, because it was about -- 13 Q. I can assist you because you did, in fact, raise this 14 particular issue with Paula Vennells. You forward 15 the -- 16 A. I'm saying I can't remember. It was -- about 12/13, 17 years ago. 18 Q. Let me assist you. It's POL00143243. If we start on 19 page 3 we can see the complaint. The bottom of page 3, 20 we can see this is the email. If we scroll up, please, 21 over to the middle of page 2, we can see an email from 22 you to Paula Vennells, 22 June. You say: 23 "Paula 24 "Sending an example of 6 or 7 people who have 25 contacted us in the last 2 days. Not good." 78 1 Is that "Very best, George"? 2 A. Mm-hm. 3 Q. So there were 6 or 7 people around the same time raising 4 issues with you? 5 A. And was that to do with any programme on TV that I can't 6 recall. It just rings a bell, it -- 7 Q. Mr Taylor had sent you the article on the BBC News -- 8 A. That's why there were six or seven people, that's the 9 point I'm making. 10 Q. If we scroll over to the first page, there's a response 11 from Alwen Lyons at the bottom: 12 "George I am currently on a train so can't speak. 13 I'll be off it in about an hour so will call then. 14 "Thanks, Alwen." 15 Then we see above your comment. You say: 16 "Alwen, who in [the Post Office] had the idea to 17 have a review into Horizon. Given my strong support for 18 the integrity of the Horizon system over 5 years, I am 19 disappointed that my views on this cores of action were 20 not sought. I am also surprised that after leaving 21 emerges with [the Post Office] no one has picked up the 22 phone to talk through this contentious decision." 23 So what you're doing there is you've received 24 a complaint from a subpostmaster and you are absolutely 25 raising it with the Chief Executive of the Post Office 79 1 but the circumstances of you raising it with the Post 2 Office aren't about "Please look into this problem", the 3 circumstances are you are there complaining that they're 4 even looking in a these issues through Second Sight, 5 aren't you? 6 A. I gave you my answer to Second Sight five minutes ago, 7 and the reason for my annoyance at the decision, because 8 it took no account and gave us no input into the 9 decision or the logic behind it. And I've explained 10 that already. So, you know, I will repeat myself again. 11 That was the logic. 12 Q. But you have received six or seven complaints from 13 people -- 14 A. Yeah, based on what was -- yeah, on the TV. Yeah, 15 I just said that. 16 Q. -- you're getting in touch with the Post Office but 17 you're not saying, "Please investigate these problems". 18 You're saying, "I'm very disappointed that there is 19 an independent review going on into Horizon"? 20 A. I've explained why I was disappointed because we should 21 have been in the loop on the decision and the rationale 22 for the decision. And, again, I make no apologies that 23 I am, and I was, a supporter of the Horizon system. And 24 the very fact the Horizon system is still in situ and 25 going to be used for another four or five years and it's 80 1 doing about £3.5 billion a month of banking transaction 2 shows the reason why I'm very supportive of the systemic 3 robustness of Horizon. 4 Q. Mr Taylor's 63-year-old mother, who had previously 5 worked in a bank, was filling the discrepancies with her 6 own money. Why weren't you asking them to investigate 7 that case? 8 A. It depends how much money was missing. I cannot recall 9 how much money was missing but the bigger the loss, the 10 more likely we would get involved because, the bigger 11 the loss and the postmaster has got to make it good, the 12 more potential impact that's going to have on the 13 subpostmaster's life. Marilyn would probably deal with 14 something that was £160/£200. We would try and 15 investigate it. But, at the end of the day, it's part 16 of the contract the postmaster is liable for losses and 17 overages, and they always have been for a long, long 18 time. 19 Q. Can we turn to POL00143305, still in June 2012. If we 20 could start on the bottom of the page, please. This is 21 another complaint, from somebody called Steve Hibberd: 22 "I have information that may potentially be of use 23 regarding the above." 24 That's a potential class action brought by 25 subpostmasters. 81 1 "The following incident suggests to me that the Post 2 Office may be regularly placing the blame for internal 3 errors at the door of the subpostmaster rather than 4 accepting responsibility." 5 He says: 6 "I have an Instant Saver Post Office account into 7 which cash is regularly paid by my tenants via a local 8 sub post office." 9 He explains the issue there. If we scroll down, he 10 says: 11 "As I am aware of the class action being taken by 12 the subpostmasters against the Post Office via 13 Shoosmiths, I felt that this may be useful evidence of 14 blame perhaps being inappropriately laid at the door of 15 the subpostmasters, when there is in fact a fault with 16 the Post Office's own system." 17 If we, please, turn to page 1, that is exactly the 18 same response that had been given to Mr Taylor on 19 21 June, exactly the same response as we saw before. 20 Can we please turn to POL00108106. If we could 21 start on page 5. Do you recall the complaints that were 22 coming in towards the end of June 2012? They were 23 substantive complaints, they weren't just "I've seen 24 this television programme"; they were giving some detail 25 or a fair few of them were giving detail of specific 82 1 problems with the Horizon system, or allegations, 2 specific allegations relating to the Horizon system? 3 A. Well, I recall more of them now because, obviously, I've 4 got all the paperwork from the Inquiry but these things 5 were 10/11 years ago, maybe longer. 6 Q. If we look at the bottom of page 5 into page 6, please, 7 this is an email from Mr Bishop. He says: 8 "We note that the Post Office has commissioned 9 a review of the Horizon system in a small number of 10 cases where serious misaccounting was alleged and the 11 former subpostmaster disputes this. We wondered if the 12 NFSP is taking a view on this as we also have concerns 13 about Horizon and wondered how widespread these 14 misgivings are. 15 "Although we won an A fart this year for Best Agency 16 Branch in the small branch category at the National 17 Network Sales Awards, we have been blighted by a series 18 of three unexplained losses in December, January and 19 April. These occurred at the end of our trading periods 20 and in total have added up to £1,376 since 1 January 21 this year. They are not related to cash handling or 22 stock management. The branch was audited last year and 23 was found to be in good order. They tend to be the kind 24 of issue which appears only when you get to the point of 25 rolling over the account, when a message appears saying 83 1 that losses need to be made good in order to complete 2 the roll over and these then appear as an unexplained 3 item in our branch accounts for the trading period. 4 "Because the branch reopened under new management on 5 31 August 2010 we put our early losses down to our own 6 inexperience and, at first, such losses as did occur 7 were clearly due to staff errors -- [for example] using 8 the wrong exchange rates when purchasing foreign 9 currency from the customer or, on one occasion, remming 10 the cheques out twice! However, we cannot find any good 11 explanation for the losses that have happened this year 12 and our staff are now becoming vastly more experienced 13 in carrying out transactions and using the Horizon 14 system. When they make mistakes, they after usually 15 able to spot them almost immediately and get them 16 resolved. We have asked the NBSC helpline and the 17 Regional Agency Support Team for advice but we have no 18 satisfactory comeback. 19 "We are wondering whether other sub post offices 20 have reported similar experiences and whether, 21 therefore, Post Office Limited are being asked to 22 broaden the scope of their investigation. Our post 23 office is owned by a charitable company and, as you can 24 imagine, the trustees are getting quite concerned. 25 There is even a suggestion that staff might be guilty of 84 1 malpractice, although there is no evidence that this is 2 the case. When they saw the news reports about the 3 external review the trustees account us to enquire about 4 its scope and whether it might address the sort of issue 5 we have experienced." 6 If we scroll up to page 5, please, we can see your 7 response. Again, stock answer provided in your name 8 about 70 million transactions being carried out. 9 This is then followed up, if we look at page 4, 10 halfway through page 4, please. Mr Bishop says: 11 "No worries. I am pleased to hear that you don't 12 get lots of complaints about Horizon, but clearly we 13 will have to look again at our own systems as we have 14 had three unexplained shortfalls in the last seven 15 months." 16 Now, that's in 2012. This chain actually continues 17 into 2013. Can we look at the bottom of page 2 into 18 page 3: 19 "Dear Amanda, 20 "I would welcome your thoughts on the following. 21 Further to our previous correspondence (please see 22 below), we continue to have occasional unexplained 23 shortfalls so we noted with considerable concern news 24 reports that more than 100 sub post offices are now 25 reporting unexplained discrepancies in their Horizon 85 1 balances and that Post Office Limited has conceded that 2 it is theoretically possible for Horizon to arrive at 3 an incorrect balance." 4 So this is about the Second Sight Interim Report. 5 I will get to that shortly. So I'm jumping ahead of 6 time and I'll have to go back, but I'll stick with this 7 chain because it's all on one chain: 8 "The Interim Report seems to imply that there could 9 be a 'small system problem' with the hardware linked to 10 a branch, although it finds that it is more likely that 11 mistakes happen because the system is over complicated 12 and because staff are not following best practice when 13 using the system and need more training to minimise the 14 risks of not planning correctly. 15 "In our case, I don't think any of us feel confident 16 in tracing a problem once it occurs. Sometimes we can 17 find mistakes quickly but more often we cannot find 18 anything wrong at all and the shortfall, or less 19 frequently the surplus, comes as a complete surprise 20 when we press the 'rollover' tab on the screen at the 21 end of the [trading period]. That is to say, cash and 22 stock have appeared to balance correctly up until that 23 point, so that it becomes a 'fingers crossed' moment 24 each month." 25 Now, they are there reporting, not just 86 1 a discrepancy but also, on occasion, a surplus. So you 2 might think that that sounds like quite an honest 3 person; do you recall reading this email? 4 A. I can't recall, no. 5 Q. If we go to page 2, please, halfway down. There is 6 a response from your PA: 7 "Good afternoon Neil and thank you for your email. 8 "Having studied the Interim Report, the NFSP report 9 that the findings are suggesting that the system 10 fundamentally robust, however there have been a few 11 glitches that have subsequently been corrected and the 12 necessary adjustments made. The report is also 13 suggesting that, as the NFSP have told [the Post Office] 14 for many years, the training and back-up for Horizon is 15 somewhat lacking. 16 "However, if you have any specific instances you 17 [would like] to be investigated", and then Paula 18 Vennells' direct contact details are provided. 19 There is a further response on page 1. Mr Bishop 20 says: 21 "You suggested that I send the evidence next time we 22 had a problem with getting Horizon to balance and 23 unfortunately it wasn't too long before this happened. 24 On Saturday we had a new member of staff -- who only 25 began work in August -- working alongside an experienced 87 1 staff member. Saturday is usually a quiet day but this 2 was busier than most. 3 "At the start of the day we were running a loss for 4 the trading period of around [£77], which was itself 5 cause for concern but we usually find that discrepancies 6 of this size often rectify themselves when the coin 7 [stacks] are checked. However, by the end of the 8 session the loss had increased to [around £1,000] and 9 every effort to track the cause of the problem has been 10 unsuccessful." 11 Mr Bishop attaches further information, printed 12 remittance. He says, as follows: 13 "We can't see any obvious errors. Short of the 14 staff taking £1,000 out of the till and splitting it 15 between them -- which we consider most unlikely -- we 16 cannot explain where the money has gone. Can you see or 17 suggest anything that we might have missed? 18 "The stock response from the helpline in these 19 circumstances is that everything will come good when we 20 balance at the end of the next [trading period] but 21 invariably we find that is not the case." 22 So we've had the Second Sight Report by this stage. 23 Now, the Second Sight Report went into detail about two 24 bugs, one of them affected over 60 branches, created 25 discrepancies. It also refers to a third bug in that 88 1 report, so you are now on notice of bugs in the Horizon 2 system causing discrepancies. You have a specific issue 3 raised by Mr Bishop here, detail, evidence. 4 Your evidence earlier, after originally saying that 5 you would have tried to employ a computer expert, you 6 then said you would at least have grilled the Post 7 Office. 8 What did you do to grill the Post Office in relation 9 to this case? 10 A. We were always grilling them about bugs, or backdoor 11 entries, or remote reversals or admin reversals whatever 12 you want to call them. But I can't remember the 13 specifics but what I will say is we had a very competent 14 team at Shoreham and Marilyn dealt with most of the 15 Horizon complaints -- a very good officer -- Lynda 16 Willoughby and Sharon. Obviously my day job was doing 17 everything -- new work, subsidy, compensation levels, 18 all these things. But I was aware of most of the 19 Horizon stuff, absolutely. 20 And again, the reality is that postmasters have 21 always had overages and shortages. Obviously, you hear 22 more about the shortages than overages, for obvious 23 reasons. But one of the easiest ways you could make 24 a mistake on the Horizon terminal is, let's say, 25 Mrs Smith was getting £130 from her pension. So it's in 89 1 the stack and you're meant to finish the transaction but 2 you don't finish -- you're maybe really busy or you're 3 on your own, and you've got a lot of things to do and, 4 rather than clearing that off the stack, you leave it 5 on. So the next customer, if you're not paying 6 attention -- and this does happen, I've done it myself, 7 most of them you can get the money back but sometimes 8 you don't -- if you left the £130 in, and let's say it 9 was another pensioner or a Child Allowance at the time, 10 Child Benefit, then if they were getting £100 11 automatically that would be added to the £130 so the 12 stack was now showing you £230. So if you paid out that 13 £230 because you didn't notice, then that's £130 that's 14 went missing. 15 It's not because you're dishonest in any way; it's 16 because you or your staff have made a mistake, and the 17 reality is that more customers will take an overage than 18 will come back about a shortage, rather than an overage. 19 Some will come back. Good customers will come back. 20 Q. Mr Thomson, did you dismiss the concerns of 21 subpostmasters, just like the one we've just been 22 reading, in exactly the same way when they complained: 23 user error, your fault? 24 A. Well, we believed that postmasters were responsible for 25 losses and overages in the branches, and that small 90 1 shortages are -- were quite a common thing, yes. 2 MR BLAKE: Thank you, sir. That might be an appropriate 3 moment to take our second break of the morning. Can we 4 come back at 12.10, please. 5 SIR WYN WILLIAMS: Yes, certainly. 6 (12.00 noon) 7 (A short break) 8 (12.10 pm) 9 MR BLAKE: Thank you, Mr Thomson, we had a small excursion 10 into 2013 but I'm going to go back to 2012. Can we 11 please start with NFSP000005473. This 25 June 2012, 25 12 to 27 June, and it's a meeting of the National Executive 13 Council. Can we please turn to page 5. We can see 14 there that you are in attendance as General Secretary. 15 Can we please turn to page 9. There is a section on 16 Horizon. This is before the Second Sight Report has 17 been published. 18 If we scroll down, "Horizon", "The NC"; what would 19 "NC" be a reference to? 20 A. Negotiating Committee. 21 Q. "The [Negotiating Committee] will have a meeting at 22 Fujitsu at Bracknell in July to ascertain why the system 23 falls over and what can be done to solve problems. 24 "Need to ascertain what detections are in place when 25 failures occur. 91 1 "The [Negotiating Committee] will report back to the 2 [Executive Committee] on what improvements will be made. 3 "[Post Office] has called for a full, external 4 forensic accountants [Second Sight], review into the 5 Horizon system. This is because pressure had been put 6 upon Paula Vennells by MPs who are challenging that the 7 system is flawed. This has emanated from 10 cases where 8 people have contacted their MPs after audits had taken 9 place and losses found. Some of these have had their 10 contracts terminated and some have been to court. [The 11 Post Office] are only reviewing the 10 cases. 12 "The Federation has never been consulted on the 13 review. 14 "The NFSP has always defended the robustness of the 15 accountancy of the system. 16 "There are 70 million transactions conducted on the 17 Horizon system every week." 18 Looking at those last two bullet points, it seems 19 as though they are related to your concerns about the 20 review in that it's still your position that: Horizon is 21 robust, no need for a review. 22 A. No, I mentioned there, we were not consulted. My main 23 angst is we were not consulted on such a fundamental 24 policy. 25 Q. Why would it then be necessary to have those last two 92 1 bullet points? 2 A. Because it's -- 3 Q. What would the point be, at the time that the Post 4 Office has called forensic accountants to look into the 5 robustness of the system, to reiterate that the NFSP has 6 always defended the robustness and that 70 million 7 transactions are conducted every week? 8 A. We're defending the systemic robustness of the system, 9 as I've done all morning. The system is systemically 10 robust; that's a fact. Now, bugs can occur. We know 11 that now. We know that -- all the other things I've 12 mentioned this morning. We were not told about that. 13 We were not told by the Post Office management about 14 these other things that would have opened their eyes to 15 some of these issues that were going on. And I find it 16 quite remarkable that the Post Office were prosecuting 17 people, given they knew that their witnesses and their 18 teams knew this was an issue. So they were going into 19 court on a pack of lies, and that's unforgivable. But 20 robust, the system is. 21 Q. Why, after email, after email, after email that we've 22 already seen this morning, would you not simply be 23 welcoming an external independent review of the Horizon 24 system? 25 A. We put out -- we put out a -- I think, a press release 93 1 or we put something out which was basically reinforcing 2 our belief that the system was systemically faulty (sic) 3 and we were doing two things there -- not ignoring the 4 postmasters caught up in it but doing two things: 5 protecting the brand but protecting the reputation of 6 all the postmasters who were actually in situ as well. 7 And, again, as I've mentioned all morning, these were 8 a tiny, tiny fraction of the transactions that were 9 taking place and no doubt the Inquiry has probably done 10 some work on that. You could show me how small the 11 percentage is, if you wanted to. 12 Q. Could we please turn to POL00004486, 27 June 2012, this 13 is a news article: 14 "Post Office hires firm to investigate Horizon IT 15 systems", so it's an article about Second Sight being 16 appointed. 17 If we turn to the second page, we can see the 18 announcement that you're mentioning just now. It says: 19 "Meanwhile, George Thomson, General Secretary of the 20 National Federation of SubPostmasters, backed the Post 21 Office: 'We continue to have complete confidence in the 22 Horizon system which carries out hundreds of millions of 23 transactions every week at 11,500 Post Office outlets 24 across the country. 25 "'The NFSP has seen no evidence to suggest that 94 1 Horizon has been at fault and we believe it to be 2 robust'." 3 You had received those emails that I took you to 4 raising concerns: a lady who had previously worked in 5 a bank was experiencing problems, filling up 6 discrepancies with her own money; another complaint, 7 another complaint. Wouldn't it have been pretty 8 straightforward at this stage to say, "We welcome 9 an independent investigation"? 10 A. If I knew what the Post Office did at that stage 11 I probably would've, but I was not aware -- as I've 12 reiterated five or six times this morning, I was not 13 aware of some of these major issues, particularly the 14 issues that were -- I'd imagine remote access seems to 15 have been done on almost an industrial scale that we 16 were not aware of. So I may have nuanced it slightly 17 different but I would have still stipulated that it was 18 a robust system, and it still is. 19 Q. How are you so confident that remote access took place 20 on an "industrial scale", as you say? 21 A. Well, it's -- what I've heard in the last few months, it 22 would suggest maybe it has. 23 Q. Why were you so willing to accept that and not accept 24 that there were serious problems with the Horizon 25 system? 95 1 A. Because there's not. There is not serious systemic 2 problems with the Horizon system, and the reason I'll 3 say that, and I'll say here quite clearly, is because 4 the volumes concerned, we would have been snowed under. 5 We would not have been able to do any other work with 6 the Government, with the Post Office, anything at all. 7 Billions of transactions, and if a tiny fraction of 8 them -- if it had been systemic, we'd have been snowed 9 under. It has not been systemic. 10 It is operating and still is operating well. But 11 there is issues, and you've identified them to the Post 12 Office in the last four or five weeks, as -- because 13 I've been watching more of the Inquiry than I used to, 14 obviously. 15 Q. Mr Thomson, you said, if you knew what the Post Office 16 knew, you'd have welcomed the independent investigation. 17 A. No, I said my views would have been different. It would 18 have been a lot more nuanced. A lot more nuanced, yeah. 19 But I would have still stipulated that systemically it 20 was a robust system because -- what I didn't want -- 21 Q. If I can stop you there. What is the point of 22 an independent investigation if the conclusion has 23 already been reached that there were no systemic 24 problems? 25 A. Well, that's why I was so annoyed at the Post Office not 96 1 bringing me in to their decision to bring Second Sight 2 in because, if they had given me their reasoning, then 3 we will have accepted that that was the need for it. 4 Q. Can we, please turn to POL00184392. If we start at the 5 bottom of the page, an email from Alan Bates, now 6 Sir Alan Bates, 20 December 2012: 7 "Dear Mr Thomson. 8 "So close to Christmas and with delays in the mail, 9 I have attached a pdf of a letter to you which is 10 self-explanatory about a forthcoming investigation into 11 the Post Office Horizon system which I believe will 12 benefit your members. If you so wish, it could be 13 published in the SubPostmaster Magazine. 14 "Once January arrives there will be significant 15 press coverage about this investigation in order to 16 ensure the widest possible audience is reached. 17 "If you have any questions about this, please do not 18 hesitate to contact me." 19 If we scroll up, it's an email from you to Nick 20 Beal, Paula Vennells, Kevin Gilliland, so sending it to 21 the Post Office: 22 "I have just received this rubbish from [the Justice 23 for Subpostmasters Alliance], obviously I'll tell him 24 that Horizon is secure and robust and to go away. Just 25 keeping [Post Office] in the loop." 97 1 The Post Office had announced an independent 2 investigation to look into the reliability of the 3 Horizon system. Why were you so quick to dismiss this 4 as rubbish from the Justice for Subpostmasters Alliance? 5 A. As far as I'm concerned, Alan Bates has always implied 6 that the Horizon system is systemically faulty. I've 7 always disagreed with that point of view. He's 8 basically said Post Office is not fit for purpose, as 9 well, and that it should be done away with and 10 I disagree with him on that as well. 11 That was my concern with everything that Justice for 12 Subpostmasters Alliance did, that they basically were 13 making out the whole Horizon system was systemically 14 broken and that, basically, you couldn't trust anything 15 it did, and I fundamentally disagreed with that. So not 16 having a nuance -- it's a bit like getting asked about 17 shortages under the computerised system. I've got in my 18 witness statement that these things happened under the 19 old manual system but it doesn't suit the narrative that 20 Horizon is systemically faulty and every complaint could 21 be about Horizon. 22 Q. He wasn't saying Horizon was systemically faulty, 23 though, was he -- 24 A. Oh -- 25 Q. If we scroll down, what he's saying to you is that 98 1 an independent investigation is being carried out and it 2 might be of interest to your subpostmasters. It says, 3 "I believe will benefit to your members". He's talking 4 there about the investigation. 5 I'll take you to the actual letter itself. It's 6 POL00184393. This is the letter that was attached to 7 his email. He said as follows: 8 "I am writing to you to offer the members of the 9 NFSP an opportunity to engage with the investigation 10 into the reports of faults with the Horizon system." 11 He's not saying there it is a robust system, he's 12 saying your members can engage with the investigation 13 into reports of faults with the Horizon system: 14 "It has taken a number of months for all parties 15 involved (Post Office, Second Sight, the firm 16 undertaking the investigation and ourselves, Justice for 17 Subpostmasters Alliance) to agree a document which 18 provides a safe and secure route for people to raise 19 issues without fear of any comeback because of having 20 done so. As ex-subpostmasters we are only too aware of 21 the problems involved with a serving subpostmaster 22 trying to raise Horizon issues, and I can assure your 23 membership that we would not have accepted anything less 24 than a guarantee of total protection." 25 "The agreement which is in place not only covers 99 1 serving subpostmasters but also applies to all [Post 2 Office] employees, contractors", et cetera. 3 If we scroll down, please: 4 "The investigation wants to obtain information and 5 supporting documentation about unexplained Horizon 6 problems that subpostmasters have noticed or have 7 suffered from, especially those that are current. This 8 investigation does not replace the normal route for 9 dealing with problems, it is there to investigate 10 historic issues where there is supporting documentation 11 and live problems that cannot be explained. 12 "I hope you will take this opportunity to inform 13 your membership of the forthcoming opening for them to 14 raise their concerns with the Horizon in an environment 15 that has been created to alleviate any concerns they may 16 have about retaliation from [the Post Office], as it may 17 be the only chance they ever have to do so." 18 All he seems to be doing there is asking you to 19 notify your members to take part in an independent 20 investigation that had been commissioned by the Post 21 Office. Why would you send that to the Post Office 22 saying: 23 "I have just received this rubbish from the JSA, 24 obviously I'll tell them Horizon is secure and robust, 25 and to go away ..." 100 1 A. I've already given my answer on that. As far as I'm 2 concerned, Alan Bates' whole narrative over the last so 3 many years has been that the Horizon system is basically 4 kaput, and that, basically, everything that goes wrong 5 in the Post Office is based on Horizon. So I make no 6 apologies for that. And, again, he also basically 7 mentioned evidence here that the Post Office Network 8 isn't fit for purpose it should be scrapped. I totally 9 disagree with that as well. So I've got fundamental 10 disagreements with Sir Alan Bates. 11 Q. Where does it say that in this letter? 12 A. I'm talking about in general, not just this letter, his 13 whole demeanour. 14 Q. You're referring to this being rubbish. What in this 15 letter is rubbish? 16 A. That was my opinion at the time and much of what Alan 17 has said since then I disagree with. 18 Q. Let's zoom out a little bit so you can see the whole 19 letter. Can you point us to the part of this letter 20 that is rubbish? 21 A. It's my words at the time. 22 Q. But what in this letter is rubbish? You were describing 23 in the letter as rubbish. Your response was "It's 24 robust, it's all fine". What's rubbish here? 25 A. It wasn't just about the letter, it was obviously my 101 1 understanding and my views on what Alan Bates stood for 2 at that particular time. And, again, if you fast 3 forward that up to date, I've got major issues about 4 what he thinks about the Post Office Network. 5 Q. The Post Office had commissioned an independent 6 investigation into the Horizon system. Why would it 7 need for you to go back to Alan Bates and say, "Horizon 8 is secure and robust and go away"? Why was that your 9 job? 10 A. I've just answered -- well, I've answered you. I've 11 answered you about three times. I'll keep saying it if 12 you want me to. I disagreed with him on the robustness 13 of Horizon and always have done, and I disagree with him 14 right up to date now about the comments that he made 15 that the Post Office should basically be scrapped and 16 done away with, not fit for purpose, and all these 17 things. And, again, I disagree with him and that was 18 just recently as well, so that doesn't bother me. 19 Q. Moving on, NFSP00000680. We're now moving onto the 20 summer of 2013, 8 July 2013, and this is an email from 21 Matt Adams to Paul Hook. Matt Adams seems to have 22 worked at a PR agency? 23 A. Yeah, we use Cobb PR. 24 Q. Was that an agency that the National Federation 25 instructed to assist them with -- 102 1 A. We used them for many years, yes. 2 Q. "Hi Paul, 3 "Below is a very brief draft statement which George 4 may want to add to. Just to recap, I think there is 5 a danger of the NFSP appearing to be slightly misaligned 6 now from [the Post Office] on this issue so I think the 7 second part is important." 8 This is the proposed statement: 9 "George Thomson, General Secretary of the NFSP, 10 said: 'While we have never been presented with clear 11 evidence that the Horizon system had failed to meet its 12 primary purpose, we are nonetheless reassured that the 13 system has been found to be robust in an independent 14 survey, and we continue to have confidence in it. 15 "'We are also encouraged to see that Post Office 16 Limited does concede that there is always room for 17 improvement and scope for learning and we look forward 18 to hearing from our members that support levels have 19 increased as they continue to use Horizon'." 20 Do you recall being involved in this statement? 21 A. Well, if it was in my name, of course I would be, yeah. 22 Q. What would be the process of drafting? He says it's 23 a draft statement for you, you may want to add to it; 24 was there typically a toing and froing between the two 25 of you to finalise a statement? 103 1 A. Sometimes, I would say, yeah. Other times, no. 2 Q. Okay, well, this was 8 July 2013, at 3.41. Can we, 3 please, turn to NFSP00000681. Thank you. We now have 4 an email from Mark Davies from the Post Office, the same 5 day, but approximately an hour later. He says: 6 "Hi Paul 7 "Here is the statement. 8 "Will forward report shortly." 9 Then he sets out the Post Office's response to the 10 Second Sight Report. If we scroll up, we can see that 11 Mr Hook has forwarded it to you and others. 12 It looks, from this email, as though where he says, 13 "We will forward the report shortly" that, by this 14 stage, you hadn't yet received the Second Sight Report; 15 do you recall that? 16 A. I can't recall, no, but, as I said earlier on, we 17 represented agents who had contracts for services, 18 a franchise, if you like, and we worked closely with the 19 Post Office to make that franchise as beneficial as we 20 could for everyone concerned. 21 Q. What it looks like is that you have drafted 22 an announcement in respect of the Second Sight Report 23 without, in fact, having received the report itself, 24 prior to receiving the report. 25 A. I couldn't give you a definite. As I said, it's a long 104 1 time ago. 2 Q. You're reassured the system has been found to be robust 3 in an independent survey; is it likely that you hadn't 4 actually read the report by the time that that 5 announcement was being drafted? 6 A. I probably have read it but I couldn't say, it's 7 12/13 years ago. I mean, I've read it a good few times 8 but -- 9 Q. Mark Davies is here forwarding the report. Did you 10 ultimately read the Second Sight Report? 11 A. Yeah, of course I did, yeah. 12 Q. Could we, please, turn to NFSP00000682. Thank you. 13 This is an email with the actual ultimate statement that 14 was made on behalf of the NFSP. This is the next day, 15 9 July: 16 "Dear Executive Officer 17 "George has asked me to follow up his earlier email 18 by resending the report, which it appears a few people 19 are having difficulty opening. Please find attached", 20 and the report is circulated on 9 July. 21 "In addition, please see below the statement placed 22 this morning on the NFSP website ..." 23 This the final statement that was uploaded onto the 24 NFSP's website: 25 "The NFSP has responded to the publication of 105 1 an independent ... report on Horizon, the Post Office IT 2 system. 3 "George Thomson, NFSP General Secretary, said: 4 'While we have never been presented with clear evidence 5 that the Horizon system had failed to meet its primary 6 purpose, we are nonetheless reassured that the system 7 has been found to be robust in an independent survey and 8 we continue to have confidence in it.' 9 "He added: 'We are also encouraged to see that Post 10 Office concedes that there is scope for improvement [so 11 these are the words we saw earlier] -- issues which the 12 NFSP has raised repeatedly with [the Post Office]. We 13 look forward to working with members and with [the Post 14 Office] in the coming months to increase those support 15 levels'. 16 "Post Office has also issued a statement on the 17 report's findings." 18 Could we now, please, turn to UKGI00001839. We're 19 still going chronologically. The bottom of page 1, 20 please. You're contacted by a lead commercial 21 litigation lawyer within Anderson Strathern. Were they 22 the NFSP's lawyers at the time? 23 A. We used them on a semi-regular basis and one particular 24 case was some postmasters were being held liable for 25 fraudulent Green Giros, welfare benefit cheques, and we 106 1 used Anderson Strathern and we got a good result and 2 Post Office had to reimburse many subpostmasters the 3 money. So we were aware of them and we used them for 4 a few things, yes. 5 Q. So he's getting in touch with you, and he says: 6 "I have seen/heard/read the detail of the computer 7 system fallout. 8 "Do you need any advice on the legals here? I would 9 be pleased to assist/advise as appropriate." 10 You then forward that email to Paula Vennells if we 11 scroll up, and you say: 12 "Hi Folks 13 "This is the type of mess we have created with the 14 Horizon debacle. 15 "Our tactics were totally misguided." 16 You're not copied into the top email but this is 17 Mike Whitehead from the Shareholder Executive saying: 18 "Ambulance chasing lawyers circling!" 19 You say "the type of mess we have created". What is 20 that, the mess you -- 21 A. I believe that the company we used, Anderson Strathern 22 were very good, that obviously the Federation tactics 23 were wrong if they actually thought that we were wanting 24 them to take the Post Office to court. 25 Q. Was "the mess you created" or that "we created" the 107 1 instruction of Second Sight? 2 A. No, not -- 3 Q. -- and their report because this comes just after the 4 publication of their report? 5 A. The mess we created was basically giving our lawyers the 6 actual thoughts in their head that they thought we would 7 engage them to take some kind of action against the Post 8 Office. 9 Q. What's the "Horizon debacle", though? This is shortly 10 after publication of the Second Sight Report. 11 A. The whole situation. 12 Q. Are you there referring to the fact that the Second 13 Sight Report has identified issues with the Horizon 14 system? 15 A. No, the Federation's tactics, in my opinion, are the 16 Horizon debacle for us, that lawyers that we're using 17 for other things actually would think that we were 18 coming from another direction from where we were, which 19 was systemic -- that the Horizon system was systemic and 20 robust. 21 Q. Sticking with July 2013, can we please turn to 22 POL00173773, and we start on page 2, please. At the 23 bottom of this page there's an email from Mr Hook to 24 yourself, and he says: 25 "Hi both -- Matt has been contacted by a producer at 108 1 BBC Panorama ... which is considering running 2 a programme on the Horizon/Justice for Subpostmasters 3 issue. 4 "To inform their decision on whether to run with the 5 programme or not, he's keen to talk to someone at the 6 NFSP in more detail about our take on the issue, and 7 about our experience of Horizon more broadly. 8 "I don't feel confident enough in my knowledge of 9 the system to do this. Therefore, would one of you be 10 willing to talk to him?" 11 If we see above, you sent it to Paula Vennells and 12 others, and you say: 13 "Please see email below [for your information]." 14 So Panorama are considering running a programme, 15 you're being asked for a comment, and your reaction to 16 that is to forward it within 11 minutes to Paula 17 Vennells and others. 18 A. As I've mentioned on numerous occasions today, our 19 members were franchise holders, small business people. 20 We worked closely with the brand that we worked for. 21 I make no apologies for that. And the reason where I'm 22 quite hard line about things like Panorama is it didn't 23 try -- and ITV programmes -- they didn't try and give 24 a rounded picture about the volumes being done 25 correctly, they didn't try to give a rounded picture 109 1 regarding that we had problems with balancing under the 2 old manual ledger system. 3 Now, all of this is in my witness statement and I'm 4 a bit concerned that you've virtually paid no attention 5 to my witness statement because it doesn't suit the 6 narrative. 7 Q. Mr Thomson, your witness statement is in evidence, it's 8 going to be uploaded to the Inquiry's website, the Chair 9 has read your witness statement and considered it. We 10 are dealing with things additional to your witness 11 statement today and I'm taking you through a number of 12 documents to ask you questions about them. 13 A. But my witness statement answered quite about a lot of 14 the things you've been asking again. 15 Q. Can we please turn to page 1, the bottom of page 1, 16 please. Mark Davies, the Communications Director at the 17 Post Office says: 18 "George 19 "Many thanks for forwarding this. As you can see it 20 was sent on to me. 21 "I'd like to contact Panorama. Are you okay with me 22 doing so?" 23 Then your response was as follows: 24 "Mark 25 "If you contact Panorama, would it not be apparent 110 1 to them that I had passed on their details, would look 2 bad. 3 "I will speak to them tomorrow, I will be very clear 4 that the system is robust, but that we need to be better 5 and more consistent when responding to claims of Horizon 6 faults. In addition I will say better training is 7 required. 8 "If we are not careful these Horizon shenanigans 9 will turn into a cottage industry." 10 Earlier, I asked you, if bugs were brought to your 11 attention, what would you do? Your answer was, at the 12 very least, you would have grilled the Post Office. 13 This is days after the Second Sight Interim Report where 14 it mentions bugs, errors and defects; it mentions issues 15 affecting branch accounting; it mentions three bugs. It 16 doesn't look very much like, on 11 July, you are giving 17 the Post Office much of a grilling, are you? 18 A. We worked closely with the Post Office as well but, when 19 evidence came up, I would raise it with them, yes, but 20 I make no apologies for working with the Post Office on 21 publicity regarding the brand. None at all. And, 22 again, as I mentioned two minutes ago, that there was -- 23 it was always about just the Horizon errors. It was 24 never about the volume going through the system that was 25 being done correct and it was never about that we had 111 1 problems under the old manual system as well and people 2 were suspended under the old manual system, people lost 3 their houses under the old manual system, nothing really 4 changed moving from manual to Horizon. 5 Q. Can we please turn to NFSP00001385. You're emailed the 6 day after, 12 July, by somebody called Keith Richards. 7 He says: 8 "Hi George 9 "Don't know whether this has been sent to you 10 already. It stinks of so much misinformation and 11 untruths which is not unusual from someone who does not 12 know the full picture." 13 It's an email that has been sent from somebody 14 called Chris Neill. It's an open letter to the 15 Executive Committee. He says as follows: 16 "You may all be aware of certain threads on the NFSP 17 forum regarding recent events. It was suggested that 18 members should write to their ..." 19 Is that Executive Officers, "EOs"? 20 A. Yes, that would be Executive Officers. 21 Q. "... [Executive Officers] and express their feelings and 22 concerns. I have taken the step of copying this email 23 to all the [Executive Council] with published email 24 addresses (please copy to those who I have missed) in 25 the hope that the message might actually get through. 112 1 I have also published this as an open letter on the 2 forum." 3 A. Yeah, Keith Richards is a -- he still works for the 4 Federation, he is a very good officer of the Federation. 5 He still works there. 6 Q. The open letter says as follows: 7 "Out here there is a lot of bad feeling towards the 8 Post Office and we all feel helpless and in some cases 9 abandoned by our General Secretary and Executive Council 10 who fail to communicate with us at any meaningful level. 11 The General Secretary could almost be accused of 12 complicity with [the Post Office] and has a habit of 13 seemingly announcing and changing NFSP policy via 14 Twitter. No one likes being treated like a mushroom but 15 that is how we are feeling at the moment with our 16 destiny being controlled by [the Post Office] and an 17 [Executive Committee] that has secretive meetings and 18 fails to communicate and respond to our needs or 19 wishes." 20 If we scroll over the page, please, there's a 21 section there on the Horizon investigation. He says as 22 follows: 23 "The Federation's response to this report is 24 appalling and makes it look like we did not even bother 25 to read it at all and just accepted [the Post Office] 113 1 press release and the first conclusion." 2 The first conclusion being the interim finding that 3 there were no systemic problems: 4 "The report highlights many failings within [the 5 Post Office] regarding its dealings with subpostmasters 6 as well as admitting to bugs in the software. The GS 7 ..." 8 That's you, is it? 9 A. Yeah, it will be. 10 Q. " ... said '... we are nonetheless reassured that the 11 system has been found to be robust in an independent 12 survey, and we continue to have confidence in it'. This 13 is totally out of step with most people's and the press 14 reach to the report. 15 "Ken Parsons, Chief Executive of the Rural Shops 16 Alliance, said: 'The fundamental problem is that Horizon 17 does not have sufficient failsafe or backup facilities 18 to cope when these inevitable but rare problems occur. 19 And, unfortunately, even a few system errors a year can 20 wreck the lives of the subpostmasters involved'. This 21 is the very least I would have expected our own union to 22 have said." 23 Let's just pause there. There has been a common 24 theme throughout your evidence today that it worked 25 overwhelmingly for a large number of people, the number 114 1 of errors must have been very, very small. What do you 2 say about the announcement from the Chief Executive of 3 the Rural Shop Alliance, who said that the problem is 4 that, even if they are rare, unfortunately, even a few 5 system errors a year can wreck the lives of the 6 subpostmasters involved; what is your view on that? 7 A. Is that Ken Parsons? 8 Q. I'm not asking about the individual, although it is from 9 him, I'm asking about the announcement he has made that, 10 even if there were only a few errors a year, it can 11 wreck the lives of postmasters? 12 A. Making a mistake can wreck their lives. Ken can tell to 13 people what he wanted, he was representing his 14 organisation and I was representing our organisation. 15 And you've went over this a few times: billions and 16 billions of transactions, with a tiny volume of 17 mistakes. 18 Q. Why weren't you looking out for those tiny volume of 19 people, who -- as Mr Parsons has said -- potentially 20 their lives have been ruined? Why didn't you see it as 21 part of your job, even if it was only a small number, to 22 look out for that small number? 23 A. Probably because of defending both postmasters' 24 reputations and the new work we were trying to get as 25 well. So I was careful not to be seen to be crying 115 1 wolf. 2 Q. What about the reputations of that small number? What 3 about their lives? 4 A. Well, their lives, obviously, have been -- some of them 5 have been dramatically destroyed, I accept that. But 6 again, as I've reiterated time after time, if you have 7 Government directors on the Board and you have a Chief 8 Executive tell you one thing, then it's very hard to 9 change. 10 Q. "Post Office has admitted to past 'bugs' in Horizon and 11 the authors of the report stated there is problems with 12 the hardware and communications. The authors also 13 indicated there is a lack of information provided to 14 subpostmasters to adequately defend themselves. These 15 are our colleagues who have lost everything as a result. 16 The fact that [the Post Office] do not keep their 17 records for longer than 7 years and failed to supply the 18 investigators with proof of their guilt seems to have 19 completely been disregarded in our response. All these 20 issues are ones that should be and perhaps should have 21 been taken up by the Federation. 22 "It is interesting to note that the NFSP was not 23 mentioned at all in the report and perhaps that is 24 because the Federation took the stance of complete and 25 blind trust in Horizon without full and proper 116 1 investigation and support on behalf of the affected 2 subpostmasters. If the convictions of these individuals 3 are found to be unsafe at a later date this stance may 4 come back to haunt us." 5 That's quite prescient, isn't it? 6 A. Well, I think, looking from where we are now and given 7 what I know about the Post Office and what they were 8 saying, yeah, we were probably much too trusting of the 9 Post Office, yes, that's probably the case. 10 Q. You received this communication on 12 July. Why didn't 11 you do something about it? 12 A. I can't recall what happened to it. I'm not -- 13 Q. Why don't we see a single statement from yourself that 14 is similar to that that was made by Ken Parsons? 15 A. Well, I've just made a point that we were probably, 16 given what we know now, too trusting of the Post Office, 17 yes. 18 Q. NFSP00000536. This is a meeting of the National 19 Executive Committee on 3 September 2013. If we look at, 20 please, page 11. We spoke first thing this morning 21 about the stages of the negotiations with the Post 22 Office. There's a section here on Horizon. 23 "Horizon 24 "The Post Office Interim Report on Horizon had 25 concluded that there was nothing fundamentally wrong 117 1 with the Horizon system, however it highlighted the fact 2 that training and support for subpostmasters was not all 3 it could be. [Post Office] are in discussions with the 4 Negotiating Committee on providing training and support. 5 "Wendy Burke reported that there has been an issue 6 with the prompts on one of her screens in relation to 7 postage not being consistent. The Horizon system 8 helpline were aware of this issue. Ian Park will raise 9 this although it did not affect any balancing on the 10 system. 11 "Believed there was no systemic problem with 12 Horizon." 13 It says this: 14 "People are jumping on the bandwagon and blaming 15 losses on the Horizon system. 16 "Since the report was published Shoreham HQ have 17 advised those that blame Horizon to write to Paula 18 Vennells, Post Office Limited. 19 "Bad publicity could prevent some customers using 20 Post Office and affecting the future of the Network." 21 Was that one of your big concerns, that bad 22 publicity could stop people from coming to the Post 23 Office? 24 A. Well, part of it was that but, also, I had two phone 25 calls from -- one was a postmistress, one was 118 1 a postmaster, one who was in 1996 and one in '97, and 2 they were both blaming Horizon for losses that they had 3 when they were in the Post Office. And, obviously, 4 that's the kind of situation they were in because I had 5 to explain to them that, you know, Horizon wasn't in 6 place in 1996 or '97. 7 So I was -- I was aware of that and it was on the 8 back, also, of a situation in Scotland where there was 9 a £100,000 shortage in one branch, and the -- it was -- 10 the son admitted that he had a gambling problem and he 11 had taken it. The father knew nothing about it. So 12 that was happening about the time when I was talking 13 about jumping on the -- that every single error or 14 mistake gets blamed on Horizon being faulty, and that 15 was always the danger in a system that's dealing with 16 tens of billions of pounds in short periods. 17 Q. We see below, "Trade Union Status", and we discussed 18 that this morning: 19 "The General Secretary reported that recent 20 paperwork received had been circulated. 21 "The NFSP had been a trade union for some 22 70-80 years ... 23 "The NFSP is at present an unincorporated 24 association ... 25 "The Certification Office was set up", and then it 119 1 gives the date: 2 "It is believed that disaffected ex-members with the 3 backing of the CWU, had questioned the NFSP's status 4 with the Certification Officer. 5 "The [Certification Office] intends to delist the 6 Federation on 4 October 2013. Will no longer be a trade 7 union within the next two months but will still remain 8 as an unincorporated association. 9 "Currently have 6,100 real members of whom all are 10 self-employed." 11 If we scroll over the page, if we go down three 12 quarters of the way, please. There's an entry there 13 that, by this time, it says: 14 "Believed joining with the CWU will not be an option 15 as they represent Crown Offices etc and the NFSP 16 believes that these are not viable to the network." 17 If we scroll down, the bottom two bullet points: 18 "Questioned if the NFSP's funds would need to be 19 paired back to members. 20 "Suggested to try and extend the date of 4 October 21 for the NFSP being delisted as trade union. Confident 22 will have influence with [the Post Office] for the next 23 year because of [Network Transformation]." 24 Over the page, please: 25 "Possibly realise the ambition of representing all 120 1 subpostmasters and operators through auto enrolment once 2 the NFSP is not longer a trade union because there would 3 no longer be the threat of being a closed shop." 4 Then we have: 5 "Bhavna Desai [the third from bottom bullet point] 6 asked if any letter to members could be sent sooner 7 rather than later as she believed there would be motions 8 to say all the assets will have to be dissolved and the 9 members will not see any of the money." 10 So it seems as though, at the very time when you are 11 dealing with the fallout from the Second Sight Report, 12 there are also some serious concerns about the future 13 funding of the National Federation; do you agree with 14 that? 15 A. Not in particular, but there was discussions regarding 16 did the Federation have a long-term future? Did it have 17 enough resources to go on and, as I said to you earlier 18 on today, I had a meeting with the -- well, a lot more 19 than one -- with Philip Bloor, the Finance Director, 20 where I said would we be able to go on independent for 21 about a year and a half, and Philip quite categorically 22 said to pay -- "to wind everything down, George, people, 23 when they've got their money back, there will be no 24 money left because the staff will have been looked 25 after" and, because we'd been around a long time and all 121 1 the staff in Shoreham had been around a long time, 2 I made sure we changed the contracts and every member of 3 staff who was in Head Office, if we had ended up 4 folding, were -- an extra year's compensation was put in 5 for them, if they was -- if they were going to be sacked 6 or made redundant, whatever you want to call it. 7 So, again, the money wouldn't have lasted very long. 8 There wasn't very much. I was making sure that the 9 staff, some that had been there 20/30 years, were all 10 going to be looked after if we ended up having to call 11 it a day. 12 Q. The suggestion, though, that may be made is that it was 13 very important for you at that time to keep the Post 14 Office on side to ensure that they could fund the future 15 of the NFSP? 16 A. You see, I disagree with that because my support of 17 Horizon has -- I know in some of the evidence -- I think 18 Mark Baker said something that my support for Horizon 19 was stronger than, when we were in the mutualisation, 20 trying to get that. That's not the case because I've 21 always supported Horizon. I've made that quite clear. 22 I was told today to do the opposite of what I've 23 done, "Just come along, George, blame the Post Office 24 for everything, sorry, sorry, sorry, sorry", but I'm too 25 open for that. The reality is that we did not change 122 1 our view on Horizon because we were looking at our 2 future and we were going to go absolutely not. And 3 I probably support the Horizon system as much now as 4 I did then. Obviously, I'm furious about the 5 shenanigans of the Post Office, the holding back of all 6 this information but, more importantly, I'm furious at 7 the Post Office for taking people to court and people 8 giving professional expert witness statements, knowing 9 that people could access your computer. That's 10 scandalous. 11 But in terms of, as I said before, it being 12 systemically robust, it is. The Post Office were crazy 13 to take people to court knowing that they were lying on 14 a regular basis about being able to get into the Horizon 15 system. Quite bizarre. 16 Q. Mr Thomson, you said that you were furious at the Post 17 Office for withholding information. But now, July 2013, 18 you had information. You that the Second Sight Interim 19 Report, which, in fact, raised bugs that talked about 20 discrepancies. Why at this stage were you still 21 promoting the Horizon system? 22 A. As being systemically robust, yes, because having bugs 23 in the system does not show the Horizon system was not 24 systemically robust because what you'd been doing now is 25 saying the same thing even now. 123 1 Q. Can we turn to UKGI00005002, and it's page 2 I'd like to 2 look at. We're going to move on now in time quite 3 considerably to 2015. If we scroll down, please. Your 4 PA is writing to George Freeman, who I think was 5 a minister at the time. She says: 6 "I write on behalf of George Thomson, leader of the 7 organisation representing the subpostmasters in the UK. 8 He would very much like to meet with you to explain 9 exactly why, as an organisation, we believe the Post 10 Office Horizon compute is robust, secure and accurate." 11 Why, as late as 2015, did you feel the need to have 12 to promote to a minister that the Horizon computer 13 system is robust, secure and accurate? 14 A. I've answered you loads of times but I'll do it again 15 for the benefit of doubt: because I've always believed 16 that the Post Office Horizon system and EPOS system is 17 a robust system. Now, having bugs in the system, the 18 postmaster should have been told about and they should 19 have been rectified, I agree with that, but having some 20 bugs in the system does not stop it being a systemically 21 robust system. In fact, the Second Sight Report makes 22 that point, yet you're trying to imply it does. 23 Q. You've used the word "accurate" there as well. You're 24 not just saying it's robust, you're saying it is both 25 also secure and accurate; does that make a difference? 124 1 A. It's what I said at the time, yes, so I'm not going to 2 dance on a pinhead about that. 3 Q. Can we please turn to POL00152986. This is the final 4 document we'll go to before lunch. We're still in the 5 summer of 2015, can we start on page 4, please. If we 6 look halfway down page 4. There's a Panorama programme 7 in 2015, August 2015. If we scroll down, you say: 8 "Our reply will be consistent, Horizon is robust, 9 last night's programme was bullshit. 10 "George." 11 Page 3, please, bottom of page 3., from you to Mark 12 Davies -- well, Mark Davies responds: 13 "Good to see George. I was surprised they didn't at 14 least reflect your view in the programme as 15 representative of most postmasters." 16 You respond: 17 "Hi Mark 18 "Similar to requests for Paula to resign, I have had 19 two subpostmasters so far demanding my resignation, any 20 attempt to now soften both our instances on Horizon 21 would be catastrophic for the Network and company." 22 If we scroll up, please. We have Mr McConnell on 23 page 2 emailing Mark Davies, and he says: 24 "Hi Mark, 25 "We have issued the statement below to members -- we 125 1 remain firm on Horizon, you'll appreciate too we need to 2 remain the 'critical friend' stance." 3 If we scroll down, this is a statement that you put 4 out following that Panorama programme in 2015. If we 5 scroll down the page and over to the next page, there's 6 just one paragraph I'll read to you there: 7 "Put simply, the NFSP has not received calls from 8 subpostmasters querying Horizon and alleging systematic 9 failings. If there were a widespread problem, our 10 subpostmasters would have made us aware of it. As 11 a result, we have no choice but to conclude that Horizon 12 is a fundamentally sound and safe system." 13 Now, Mr Thomson, we saw those complaints. We saw 14 them go to your inbox in 2013. We saw quite a number of 15 quite detailed complaints. How is it you felt 16 comfortable, following that Panorama programme, to say 17 that you've not received calls from subpostmasters 18 querying Horizon and alleging systematic failings and 19 that, if there were, the subpostmasters would have made 20 you aware of it? You had, in fact, received -- 21 A. I don't believe these were querying systematic failings. 22 They were sent on individual cases. I think the only 23 people that were claiming, in my opinion, that there 24 were systemic failures were people like Alan Bates and 25 probably people like Mark Baker and Helen Baker who were 126 1 querying it. The vast majority of subpostmasters never 2 queried it had systemic -- there's a lot more now -- 3 systemic failures. 4 Q. I will actually take you to one more document before we 5 break for lunch because you've mentioned Mark Baker. 6 Could we please turn to CWU00000013. This is the press 7 release from the CWU of the same time, 17 August 2015: 8 "Dear Colleague. 9 "Post Office: Panorama Programme on Horizon Issues 10 "I'd like to advise branches and members that the 11 BBC's 'Panorama' programme ... will highlight the issues 12 faced by many postmasters in relation to alleged 13 problems with Horizon system." 14 So their acknowledgement there is that there are 15 issues faced by many postmasters in relation to alleged 16 problems with the Horizon system. 17 The announcement then sets out the synopsis of the 18 programme, and then it quotes from Andrew Bridgen. If 19 we scroll down, it says: 20 "The subject was also raised during Prime Minister's 21 Questions on 1 July 2015, when Andrew Bridgen ... asked 22 the following: 23 "'Owing to ongoing issues with the Post Office's 24 Horizon software accounting system, I believe that many 25 honest, decent, hard working subpostmasters and 127 1 subpostmistresses have lost their reputations, their 2 livelihoods, their savings and, in the worst cases, 3 their liberty. This is a national disgrace. Will my 4 Right Honourable friend consider the request from 5 Members across the House for a judicial inquiry into 6 this matter and bring it to a conclusion?'" 7 It has below the Prime Minister's response 8 acknowledging the service that Mr Bridgen had carried 9 out in campaigning tirelessly on the issue. 10 Why couldn't NFSP announcements be as balanced as 11 this announcement? 12 A. Because we were closer to the issues than the CWU and, 13 again, the CWU had -- over 200 members were convicted, 14 and I don't know what the CWU did about that in terms of 15 courts, or anything like that, or -- what's the 16 phrase -- put the money where their mouth is and did 17 something about that, I'm not sure. About 200 staff 18 were convicted over that period, and -- 19 Q. What they don't do, though, at any stage in these -- 20 certainly not in any documents that we have, is 21 an announcement that says that Horizon is 22 a fundamentally sound and safe system, like you did, 23 after the Panorama programme. Why is there such 24 a difference between yourselves and the CWU on this? 25 A. Well, I think it is sound, systemically sound, but also 128 1 I believe that -- and that's when I should have used the 2 word "nonsense" rather than "BS" on a few things but 3 it's about the lack of balance and -- ie there's nothing 4 in any of these programmes or ought the ITV documentary, 5 there's nothing at all that mentions that problems that 6 happened before Horizon, the old manual system, many, 7 many of them, and the sheer volume of transactions that 8 were going through the Network that were spot on, the 9 overwhelming majority. 10 So that's all the programmes that have come out I've 11 always been very critical of because they haven't given 12 a balance. It's been one side of this system is 13 rubbish, you know, we've all been let down with it, and 14 part of the let down by it is true, of course, because 15 of the Post Office's actions, but there has never been 16 a balance explaining that, yes, we had as suspensions 17 under the old manual system, we had people going to jail 18 under the manual system, we had people losing their 19 houses under the manual system and, God forbid, in the 20 old days as well, there were some suicides as well. 21 I understand that and that is heartbreaking but there 22 was no balance it's almost like all these problems 23 began, the losses, when Horizon came along, and that's 24 simply not the case. 25 MR BLAKE: Sir, I think that's an appropriate moment for us 129 1 to take our lunch break. 2 SIR WYN WILLIAMS: Yes. 3 MR BLAKE: Could we come back slightly before 2.00, could we 4 perhaps come back at 1.55? 5 SIR WYN WILLIAMS: Certainly. As you know, Mr Blake, our 6 normal finishing time on a Friday is 3.00 and, as it 7 happens, for personal reasons, I can't go beyond 3.00 8 today. Are we still likely to finish this witness in 9 that period or may we need to think about -- 10 MR BLAKE: No, sir, we will finish. I only have five or ten 11 minutes, and questions from -- 12 SIR WYN WILLIAMS: Right. All right. Well, 1.55 then, 13 that's fine. 14 MR BLAKE: Thank you very much. 15 (1.04 pm) 16 (The Short Adjournment) 17 (1.55 pm) 18 MR BLAKE: Good afternoon, sir. 19 SIR WYN WILLIAMS: Good afternoon. 20 MR BLAKE: Can we please move to NFSP00000500, we're now 21 moving on to the summer of 2016, June 2016, and 22 a meeting of the council. If we scroll over the page, 23 please, over to page 5, we can see that, by this time 24 you are Chief Executive Officer, I think, did the title 25 change over time? 130 1 A. Yes, it did. 2 Q. Could we now turn to page 22. There is a section on 3 "Any Other Business". If we scroll down, we have there: 4 "Peter Montgomery asked what the policy of the NFSP 5 was in regard to Freeths Solicitors who are asking 6 subpostmasters that they believe suffered losses as 7 a result of Horizon to allow Freeths to work on their 8 behalf and take the Post Office to court. 9 "The CEO [that's you] explained that Freeths are 10 basically ambulance chasers. Freeths are desperate to 11 get subpostmasters to engage with them. 12 "Freeths also maintain that subpostmasters contract 13 is unfair with regard to the subpostmaster being 14 responsible for losses. 15 "It is up to the individual to decide whether they 16 wish to sign a contract or not. 17 "Legally a contract does not have to be fair." 18 So is that your view as expressed at that meeting? 19 A. Yes, but we'd been told -- we'd actually taken advice 20 about the contracts some years before and we were told 21 that -- we engaged solicitors in London -- that 22 a contract doesn't have to be fair because, you know, if 23 you sign it, it doesn't -- it has been unfair. I think 24 everybody feels for a long time that the contract has 25 been too one-sided towards the Post Office and members 131 1 expressed that on regular occasions, yeah. 2 Q. Were you upset with Freeths because they were 3 undermining the position of the NFSP at this stage? 4 A. Well, we'd never had much engagement with Freeths 5 whatsoever but I do -- you know, the -- when I say 6 ambulance chasers, they did end up -- if it wasn't for 7 Government intervention, the subpostmasters that had the 8 case ended up getting very little money, you know, and 9 I think what little money there was was swallowed up in 10 costs, wasn't it? 11 Q. At the bottom: 12 "The NFSP's policy has always been that it is 13 a robust system and we have full confidence in it." 14 That was the policy that you explained earlier. 15 If we scroll over, please: 16 "Do not believe that the system is systemically 17 faulty. 18 "Most people that blame Horizon for losses are 19 overinflating their cash declarations, false 20 accounting." 21 Where did you get that from? 22 A. The reality is, is there some people that have lost 23 money because of Horizon bugs and faults and the Post 24 Office's stance are criminal cases? Absolutely, there 25 has been. However, and I've not been given -- you've 132 1 been very careful in not allowing me to say this, but 2 this has always been the case: postmasters -- everything 3 has always been kept in-house within the Post Office 4 industry, same with Royal Mail, and I've been at cases 5 over the years even when it was the old manual system, 6 where errors are sometimes mentioned on the stack, 7 just -- in the old days you had to do things with 8 pencil, you had to add up two pensions, if you got that 9 wrong you could lose money. 10 So there's always been mistakes made. Most of the 11 errors that postmasters have are genuine mistakes by 12 them or their staff. That goes for the old manual 13 system, the ledger system, and the Horizon system. The 14 vast majority of complaints about Horizon were nothing 15 to do with Horizon. They were basically just things 16 being done wrong, not by intention, but by mistake. 17 Q. How did you form the opinion that most people that blame 18 Horizon for losses are overinflating their cash 19 declarations? How did you come to that conclusion? 20 A. One of the key red flags the Post Office used to use, 21 they couldn't do it so much under manual system, but it 22 was about cash declarations. Under the old manual 23 system you are meant to put your cash declarations in 24 every night as well but lots of people didn't put them 25 in. No one really checked the old ledgers until 133 1 Auditors came out, so you might have had a situation 2 where you hadn't put the overnight cash holding in for 3 ages and you do the balance once a week or once a month 4 but, with Horizon, you had to make your cash declaration 5 every night, so a lot of the times -- and I remember 6 an office, who were claiming extra fivers all the time 7 and, when Auditors went out, instead of having 8,000 or 8 9,000 fivers in the branch, there were none at all. 9 And the reality is that the vast majority 10 postmasters and the vast majority of claimants on the 11 Horizon Inquiry are decent, honourable, honest people. 12 I won't dispute that for a minute. But it's a franchise 13 that's been struggling for -- even before the Horizon, 14 and people -- that's why we used to encourage people to 15 take the compensation and leave with the restructuring 16 programmes. So yes, so the Post Office were aware, 17 when -- and it was a red flag -- when it seemed to be 18 the money they needed for running the branch, they were 19 ordering more in than what the cash declarations would 20 suggest. So if your cash declaration said you had -- 21 Q. Mr Thomson, we need to move on. 22 A. Well, you've asked -- I have to give a bit of background 23 and, you know -- 24 Q. We don't have time for the level of detail that you're 25 going into right now, in respect of a simple question, 134 1 which is how you personally formed the opinion most 2 people -- 3 A. Well, I'm giving you that background of why I formed 4 that opinion. 5 Q. Let's move on to the next bullet point: 6 "Subpostmasters take money sometimes and members of 7 staff also take money. 8 "Reminded that members of the Council should adhere 9 to collective cabinet responsibility." 10 Is that, in effect, saying that all members needed 11 to tow the line in respect of the line regarding the 12 Horizon system? 13 A. Well, you make a collective decision and it is like the 14 British cabinet, or it should have been like the British 15 cabinet. You make a collective decision and that 16 becomes the policy of the organisation, yes, that's 17 correct. 18 Q. Can we please turn to POL00248962. Moving now to 2017, 19 27 April, page 5, please. If we start on the bottom of 20 page 5, there is an email from Andrew Parsons, who was 21 an external lawyer advising the Post Office. If we 22 scroll down, please. He is emailing Thomas Moran and 23 Rodric Williams at the Post Office. He says: 24 "Please see attached a letter from Freeths 25 [regarding] advertising the GLO. Most of this is just 135 1 process points which we will deal with in due course, 2 however in the penultimate para they ask for [the Post 3 Office's] consent to place an advert in SubPostmaster 4 Magazine." 5 He says, in the final paragraph: 6 "Are the NFSP still generally supportive of [the 7 Post Office] and Horizon? If so, it would be quite 8 a powerful message if Freeths approached the NFSP and 9 the NFSP refused to allow the advert on the grounds they 10 thought the litigation was meritless. This type of 11 message would have to be reported up to Freeths' 12 insurers and funders, and it would perhaps knock their 13 confidence if a key 'Union' was standing by [the Post 14 Office] rather than the Claimants." 15 If we scroll up to page 4, please, the middle of 16 page 4., Mr Moran responds to Mr Parsons, and he says: 17 "Thanks. George is very negative about Freeths' 18 approach and I do not think will accept this in his 19 publication. It is not our decision. 20 "For the avoidance of doubt, we have no direct 21 control over the magazine which is edited independently 22 by the NFSP. So the obvious approach would be to inform 23 them of that and redirect them to contact the NFSP 24 direct. In the meantime, I would inform George of the 25 [possibility] by forwarding the letter, which I'll do 136 1 now." 2 Scrolling up, Mr Parsons then advises the Post 3 Office, he says: 4 "Tom -- be careful about emailing George. Your 5 email may not be privileged. Keep it neutral." 6 Mr Moran responds: 7 "Nick Beal will be speaking to George on a planned 8 call later today so will note this to him. He's 9 absolutely confirmed that the magazine is entirely NFSP 10 so our letter should simply make that clear and redirect 11 to them." 12 If we scroll up to page 2, Mr Parsons responds and 13 he says: 14 "A call with George is better than an email -- no 15 audit trail to disclose." 16 If we turn to the first page, please, Mr Moran 17 reports back after having had a conversation. He says: 18 "I can confirm that we have made George Thomson at 19 NFSP aware, and the response should be as advised to 20 redirect Freeths to NFSP directly as we have no control 21 over the publication." 22 Do you recall a conversation with the Post Office 23 regarding the approach from Freeths to advertise in the 24 NFSP magazine? 25 A. I think we did discuss it. We worked -- as I said 137 1 before, I make no apology, we worked very closely with 2 the Post Office on behalf of the franchise holders and 3 that's quite common. If you have a franchise, you work 4 with the company that gives you the franchise. That's 5 common behaviour. 6 Q. Did you refuse to advertise the Group Litigation in the 7 magazine? 8 A. Well, this is where I'm not sure. I don't know what -- 9 I've got a feeling that -- I've got a feeling it went in 10 but I'm not 100 per cent. I really can't recall but 11 I've got a feeling they maybe did get an advert in the 12 Subpostmaster but I'm not 100 per cent. I could be 13 wrong on that. 14 Q. Can we turn to POL00162362. I'm now going back in time 15 slightly to 2015. I just want to ask you a few 16 questions very briefly about the relationship between 17 yourselves and the Post Office's Communications Team and 18 their senior executive. This is 2015, in relation to 19 the Mediation Scheme. If we scroll down, there is 20 an email from Angela van den Bogerd to Mark Davies at 21 the Post Office, and it's a paragraph that I'd just 22 like -- it's that middle -- the bottom paragraph now, 23 the final sentence. She says to Mark Davies, in 24 relation to this particular issue, she says: 25 "I have discussed this issue with George Thomson and 138 1 we are to agree an approach using the [SubPostmaster] 2 Magazine to try to rebuild the confidence in Horizon." 3 Do you recall a conversation with Angela van den 4 Bogerd about using the SubPostmaster Magazine to try to 5 rebuild the confidence in Horizon? 6 A. I don't recall it but, given my strong support for the 7 systemic nature of Horizon, it wouldn't surprise me, no. 8 But I can't recall it but I'd imagine it's correct. 9 Q. Can we turn to POL00314729. 19 April 2015, Mr Davies 10 emails you: 11 "Hi George 12 "BBC planning to go to town on Second Sight Report 13 tomorrow, really attacking Post Office. 14 "The journos dealing with it are", and he gives 15 their details. 16 "Up to you of course if you want to get involve but 17 wanted to let you know." 18 Did Mark Davies see you as a convenient voice in 19 favour of the Horizon system? 20 A. I've got a lot of time for Mark Davies. We worked 21 closely and, again, I make no apologies, not just on 22 Horizon, that's one of the things that I've got in my 23 witness statement. We have to work closely with the 24 Post Office on Government work, Network restructuring, 25 all the issues. So we were used to dealing with it. In 139 1 fact, one of the -- I think it was David McConnell, he 2 had -- the Post Office were cutting back staff and we 3 had a vacancy in our Communications Team and David 4 McConnell, because he knew the Post Office inside out 5 because he was working there, David McConnell joined us 6 as one of the -- I think he was press officer, I think. 7 So, you know, that was a close tie. We had good working 8 relationships with the Post Office and, again, as 9 I said, as a franchise -- as an organisation who 10 represents the franchise holders, who have all got lots 11 of money invested in the company, we obviously have to 12 work closely with the company. That's common sense. 13 Q. If we turn to POL00315623. If we look at the bottom 14 email on that page, 29 April 2015, there is an email to 15 you: 16 "Hi George, 17 "Roland Gribben at The Telegraph is enquiring about 18 whether there is an update about Horizon (see below). 19 "I haven't spoken to him yet. Is there anything 20 further to say at the moment ..." 21 If we scroll up, you respond to the Post Office and 22 you say: 23 "Hi Guys 24 "Are we still battening down the hatches. 25 "[Very best], George." 140 1 Mark Davies responds: 2 "Hi George 3 "We are being pretty robust in pushing back to be 4 honest -- not necessarily always reported! 5 "Not really sure what he is getting at here?" 6 Was this a typical -- 7 A. Was this after Paula and Angela van den Bogerd gave 8 evidence to the Select Committee in 2015, was that after 9 it or before it? Was that after it? 10 Q. I can show you. If you turn to the second page, there's 11 a little more detail. 12 A. I'm not 100 per cent but -- 13 Q. It says, "Here's the statement we received after the 14 Select Committee"? 15 A. To be honest with you, within Post Office Limited, I was 16 up at meetings, you know, a couple of days after the 17 Select Committee. My view was quite clear and 18 I expressed it very strongly, that the performance of 19 Angela and Paula -- and I'm not decrying them, they've 20 got a job to do, but they should have been open and 21 honest with these committees and the Inquiry. I thought 22 it was a car crash of a performance and that was well 23 shared by many people at senior level, and that's -- 24 I think that "batten down the hatches" was the feedback 25 from that. 141 1 When I went in -- and this is truthful -- I was so 2 concerned with how it -- how they didn't have a grip of 3 it, that I said they should basically -- anybody who had 4 something in the system for a claim, they should settle 5 the claim and get this brought to a head, get this 6 brought to a close because it was so damaging for the 7 brand and these people who were genuinely making these 8 claims should be just settled and get it brought to 9 a conclusion, get it done. And if they'd done that 10 eight or nine years ago, it probably would have been 11 better for everybody, including people who were affected 12 with it. 13 That's how bad -- that's what -- that's what -- I'm 14 pretty certain that's what -- 90 per cent certain that's 15 what it refers to, battening down the hatches -- 16 Q. Can we please turn to POL000228278, the next month, 17 10 May, halfway down the first page, please, an email 18 from Mark Davies. He says: 19 "Our media relationships with George and team are 20 very good at present -- he has been tipping us off, 21 privately, about people sniffing around Horizon and 22 I genuinely don't see this as coming from him." 23 It is in relation to a negative article. Were you 24 tipping off the Post Office privately about people 25 sniffing around Horizon? 142 1 A. I've made the point, time after time today, that Horizon 2 is a robust system and that working with the Post Office 3 as of -- as an organisation that represents postmasters 4 with the franchises and having a lot of money invested 5 in the branch, I worked closely with the post office. 6 But I've told you that about seven times or eight times 7 today, so it shouldnae come as a surprise. 8 Q. Can we please turn to POL00162628. If we start on 9 page 2, please. 19 August 2015, an email from Calum 10 Greenhow who was, at that point, NFSP Branch Secretary 11 South of Scotland Branch. If we scroll down, he says: 12 "George, 13 "I have received the BSC from you yesterday in 14 response to the recent programmes aired by the BBC on 15 the Post Office." 16 He addresses the Panorama programme. 17 Can we scroll over the page, I'll read to you 18 three paragraphs from his email. He says at the top 19 here: 20 "Imagine for a moment if what was highlighted 21 through the programme was true? Where would that leave 22 those subpostmasters affected, where would it leave [the 23 Post Office] and where would it leave the NFSP?" 24 If we scroll down to the final two paragraphs, he's 25 highlighting there the developments over time, and he 143 1 says: 2 "There are just too many impartial experts that cast 3 doubt on [the Post Office's] and subsequently the NFSP's 4 position. It's the criminal justice expert, the 5 computer expert, the forensic accountant, the computer 6 programmer and of course 144 MPs. The NFSP should be 7 echoing the Prime Minister in calling for every 8 assistance to get to the bottom of this issue to ensure 9 once and for all on behalf of all members, past, present 10 and future, that there categorically is no issue now, 11 nor has there ever been a problem with Horizon. 12 "It would be encouraging if the NFSP showed support 13 for those 20 subpostmasters that are currently having 14 their cases reviewed. None of us would wish any 15 innocent individual to have their reputations, 16 livelihood and liberty ruined incorrectly. Sometimes 17 things go wrong and let's face it we've been around the 18 Post Office long enough to know it often does." 19 Your response to Mr Greenhow is on the previous 20 page. You say as follows: 21 "Thank you for sending me your individual thoughts 22 on Horizon and sharing further individual thoughts on 23 our forum. My statement, comments over the last 24 12 years on Horizon have been on behalf of the Executive 25 Council, both as an Executive Officer and then General 144 1 Secretary, my comments however are on behalf of 2 Executive Council, I can assure you that the [Executive 3 Council] still believe that the Horizon system is robust 4 and safe. 5 "Once again thank you for contacting me on this 6 important subject." 7 A strong rebuttal to Mr Greenhow there. 8 A. Well, can I -- do you want me to answer that? 9 Q. Yes. 10 A. I'll come onto that in a minute but Calum actually 11 was -- words are cheap, actions are difficult. Calum 12 was in place for over a year and a bit before Justice 13 Fraser, and the Federations position, so when he was in 14 a position to change anything, he didn't. Basically, he 15 was in a position for a year and a half to change the 16 Federation's support on Horizon, and he didn't. 17 Now, turning to the email, it was always believed by 18 many of the officers on the Executive Council, that 19 Calum, at that particular time, was close to a few 20 people around about the CWU postmaster section and we 21 believe that he obviously spoke to other people, and 22 that they were not necessarily coming direct from Calum 23 but on behalf of a small group around of the CWU. 24 Q. Isn't it reasonable, what he's suggesting to you there, 25 that all the NFSP really needed to do was show support 145 1 for a small number of subpostmasters who were currently 2 having their cases reviewed? 3 A. I've answered the question. The question was that 4 Calum, at that time, we believed, was quite supportive 5 of some of the people who joined the CWU and that was in 6 the background of that answer as well. 7 Q. What we see at page 1, at the bottom of page 1, is what 8 you did with that information. You sent it to David 9 McConnell and Mark Davies at the Post Office, "For your 10 information". Why would you send that email from Calum 11 Greenhow and your response to the Post Office 12 Communications Director? 13 A. I've made the point many times today. Our job was to 14 protect subpostmasters' franchises, make them as 15 valuable as we could. There was a small amount of 16 postmasters who claimed to have problems with Horizon in 17 comparison to the billions of transactions and, working 18 with the owners of the brand that you worked for, is 19 what I would expect a good trade association to be 20 doing. We never seen them as the opposition, as the 21 enemy. Sometimes unions may see it that way. 22 We always worked with them and, now and again, there 23 would be spats, and I'd have fallouts with Paula but we 24 worked with the company that held the franchise of our 25 members and there's absolutely nothing wrong with that 146 1 because the better you can make a franchise, the theory 2 is, the more -- the better rewarded your members will 3 be. 4 Q. Did you see Mr Greenhow as the enemy? 5 A. Not in particular because I was a supporter of Calum 6 becoming the Chief Executive after I left. So not 7 particularly. People can have views, people can change 8 their views and, as I said, Calum was part of the team 9 and, when I left, there was no change at all to the 10 Federation's position until I believe they got a -- they 11 got quite a rough -- well, they weren't invited but 12 Justice Fraser gave the Federation a bit of -- I believe 13 a bit of a kicking. 14 I wasn't there at the time and I think that's when 15 the Federation's position changed to basically, you 16 know, it's all the Post Office's fault, which it is, and 17 sorry, sorry, sorry, sorry. But I'm try and to give it 18 more nuance. There was more going on than just the Post 19 Office making a Horlicks of taking people to court on 20 duff evidence where they knew people were lying. 21 I mean, I could sit here all day and just repeat that: 22 it was their fault, you know, it was their fault, it was 23 their fault; and it was but it's more nuanced because 24 losses and suspensions happened long before Horizon. 25 The volumes are massive, and you show eight or nine 147 1 emails at me. We were dealing with billions of 2 transactions: billions of transactions. 3 Q. Mr Thomson is it just a coincidence that these emails of 4 the very close relationship between yourself and the 5 Post Office's Communications Team, is it a coincidence 6 that they were occurring around the time that you were 7 negotiating these significant sums of money -- 8 A. Absolutely not. I've said to you before, countless 9 times, my support for Horizon didn't get worse or better 10 at the time of these discussions. It never changed. 11 And I've been as big a supporter, and -- what you don't 12 get from this is that yous cannae answer why Horizon now 13 is doing 3.5 billion pounds of banking transactions 14 a month for a system that has been rubbished and kicked 15 to hell over the last seven, eight years and, in 16 particular, the last three years. 17 MR BLAKE: Thank you, sir. Those are all the questions that 18 I have. 19 SIR WYN WILLIAMS: Thank you. 20 MR BLAKE: We have some questions from Mr Stein, followed by 21 Ms Page, followed by Ms Watt. 22 SIR WYN WILLIAMS: Right. I take it, ladies and gentlemen, 23 that you can accommodate my timetable this afternoon. 24 MR STEIN: (Off microphone) 25 SIR WYN WILLIAMS: You're on now, Mr Stein. 148 1 MR STEIN: I'm afraid, we can't hear you. 2 SIR WYN WILLIAMS: You can't hear me? Right. Well, then, 3 just ask the questions -- 4 MR STEIN: We still can't hear you, sir. 5 SIR WYN WILLIAMS: Well, that's very strange. 6 MR STEIN: Sir, can you hear me? 7 SIR WYN WILLIAMS: Yes, clearly. 8 MR STEIN: We can how hear you, sir. 9 SIR WYN WILLIAMS: If I've learned one thing about the world 10 in this Inquiry it's that, occasionally, there are 11 glitches, Mr Stein. 12 MR STEIN: Perhaps that's a surprise to Mr Thomson. 13 Questioned by MR STEIN 14 MR STEIN: Mr Thomson, many of our clients have been 15 watching your evidence today and are of the view that 16 you got into the Post Office bed with Paula Vennells and 17 did whatever she wanted you to do; is that a fair 18 description of what was going on? 19 A. No, it's nonsense. 20 Q. You've given evidence and you've spoken about the fact 21 that -- and I quote, this is about 12.38 today -- "We 22 had problems under the old manual system as well", you 23 said, "People were suspended under the old manual 24 system. People lost their houses under the old manual 25 system. Nothing really changed." 149 1 A. Yes. 2 Q. I see. So that's something you were aware of when you 3 went into the post at the National Federation of 4 SubPostmasters, is it? 5 A. Of course it was, yes. 6 Q. What did you do to try to change that position under the 7 old system, so that people did not lose their houses, 8 did not lose their livelihoods, Mr Thomson? 9 A. No one ever wants someone to get in that position, 10 however, cash is a tool of the trade of the Post Office 11 industry and we used to do billions of pounds of value 12 transactions a month, just for the DWP alone. So the 13 difference between our owners and, say, a shopkeeper or 14 a newsagent was there was always significant sums of 15 cash around and the vast majority of postmasters -- the 16 vast majority of postmasters -- were straight as a die. 17 Mistakes could be made before, of course, as I said 18 before, people adding things up, but you were 19 responsible for it. 20 I could give you so many cases, for example the 21 Federation would send someone along, say, on a Thursday 22 morning, on a Friday morning? The Auditors would phone, 23 we would go along and we would try and get a resolution 24 but, depending on the kind of money that was missing, 25 that's when it could have life changing implications, 150 1 both under the old system and the new system. 2 Q. Right. Well, can you try answering my question. 3 A. I was answering your question. 4 Q. Now, what I asked was this: that you were aware under 5 the old system that people lost their houses, under the 6 old manual system. Your evidence is that that continued 7 under the Horizon system, that's what you're saying? 8 A. Absolutely, yes. 9 Q. What did you, when you were at the National Federation 10 of SubPostmasters, do about that, Mr Thomson? 11 A. Well, when we were -- for example, when we were changing 12 to Horizon Online, I sent an email out to our members 13 reminding them that the Auditors were coming and, when 14 you were changing from the first stage of Horizon to the 15 second stage of Horizon, there would be a full cash and 16 stock declaration. That was me warning them to make 17 sure it was right, and it goes back to when it was 18 manual. 19 We always told members, "You have to make sure that 20 the cash in stock that you have there is correct because 21 your contract is liable for it". 22 And to be honest with you, given the volumes of 23 business we were doing, particularly for the Government, 24 the Government knew it was -- Auditors were a deterrent, 25 it was a deterrent for postmasters not to borrow or take 151 1 Post Office money, and every year, there was two or 2 three -- it's just a fact of life, I know you're shaking 3 your heads -- 200 or 300 people under the old manual 4 system were suspended, not prosecuted. Some were 5 prosecuted, 200 or 300 were suspended. It was ongoing, 6 and it was the same with postmen. Now, we tried to keep 7 that as in-house as much as we can because it's not just 8 about protecting the brand, it was about protecting 9 postmasters standing in their community but you always 10 get -- postmasters that are decent people but, if your 11 circumstances change and let's say someone lost their 12 job or you were going to lose your house -- 13 There was a case of an old postmistress in Scotland, 14 under the manual system, they did an audit and she was 15 £6,000 short and she to admitted to them that the postal 16 salary had become so low and unaffordable that she had 17 been paying her electricity bill and gas bill for the 18 last five years and she said she always intended to put 19 it back -- she never got prosecuted, I may add -- always 20 intended to put the back "but I could never afford to do 21 it" so this I part of what -- there's no balance to the 22 thing. It's almost like the Post Office problems and 23 balancing problems only started with Horizon; that's 24 an absolute nonsense. 25 Q. Now, Mr Thomson, we need to finish by 3.00, can we have 152 1 a go at that? 2 A. I'll come back if I have to. 3 Q. The position in relation to subpostmasters, are you 4 trying to say that the ones that fell foul of the system 5 under the old manual system and the Horizon system, are 6 you trying to say they're collateral losses, like you're 7 a World War I general ordering the troops over the 8 Somme; is that what you're trying to say -- 9 A. No, it's a fact of life, if you use Post Office and 10 Government money, either taking it for yourself or staff 11 take it, you're liable for it. Now, if you didn't have 12 that, the Government used to pre-fund the benefits to 13 the tune of hundreds of millions of pounds a month. If 14 you didn't have that kind of deterrent, then you 15 couldn't have run your company, for obvious reasons. 16 But that money is a tool of the trade and the money is 17 still a tool of the trade. And that's what concerns me 18 going forward because, at the moment in time, the Post 19 Office, basically, have got a company that, if it wasn't 20 owned by the Government, would be bankrupt, as we speak, 21 and that would be collateral damage. 22 Q. So your view and your evidence is that the contract and 23 the interpretation of the contract by the Post Office, 24 which is that subpostmasters must pay up, regardless, of 25 fault, your view -- 153 1 A. No, I never said "regardless of fault", I never said 2 that. Don't put words in my mouth, please! 3 Q. Well, I was going to put the words back into your mouth 4 by repeating what you said, which is that it was 5 a deterrent, the system was a deterrent, putting the 6 onus, it seemed to be, what you're talking about 7 regarding audits, on the subpostmaster; was that your 8 view? 9 A. Having an audit, having Auditors was a deterrent, yes, 10 it was well known, and it was -- I joined the Post 11 Office at 18 and I knew from the age of 19 that the Post 12 Office done private prosecutions. Royal Mail still do 13 some private prosecutions, as we speak, but that's 14 mostly against dog owners that have been warned and 15 warned about their dogs biting postmen. So I knew from 16 19 years old, 18/19 years old, that we done private 17 prosecutions because we had hundreds and millions of 18 pounds of Government money sloshing about in Post Office 19 safes. Now, that's a fact. 20 Now, in an ideal world, in an ideal world, we want 21 nobody to take it but, when you get to cases where you 22 turn up, and postmasters are met, "You're should have 23 £60,000 cash, why you got £30,000?" This was before 24 Horizon -- 25 Q. Mr -- 154 1 A. Wait a minute, let me finish -- 2 Q. We need to make progress, Mr Thomson. I think even you 3 know that. Can we go to a document please, can 4 POL00189165, page 3 of that document, please. 5 If we go to page 3, and scroll down, please. Right. 6 Thank you. That's ideal. Okay. 7 Now, this relates to a subpostmistress called 8 Jennifer O'Dell and we can see the dates that we're 9 concerned with in 2009. I'm just going to point out 10 couple of examples but all of the examples, essentially, 11 are very similar. So this is Mrs O'Dell talking to the 12 Post Office helpline, and these are notes that are made 13 by a Post Office Investigator. Okay? All right. 14 So, let's look at the 5 November entries, as 15 examples. 5 November 2009: 16 "Spoke to Mrs O'Dell today." 17 Now, this is talking about the helpline, the Post 18 Office helpline; do you understand that, Mr Thomson? 19 A. Yeah. 20 Q. Okay: 21 "Spoke to Mrs O'Dell today. Office has a loss of 22 £7,000. She has been carrying the loss since May. 23 Explaining to [postmistress] that this also should have 24 been made good when she's been rolling her TP but she 25 refuses to make it good as she said the loss is not 155 1 hers." 2 Then the second, 5 November: 3 "[Subpostmaster] reports having £1,000 loss a month 4 since May now totalling £7,000+ that she refuses to make 5 good as she blames the system for the losses." 6 All right? So we can see what's happening here, 7 Mrs O'Dell is phoning up the Post Office helpline and 8 saying, "Look the system, I don't know what's wrong, 9 there's something wrong with the system, it's adding up, 10 keeps on building up, to substantial losses of thousands 11 of pounds, as you can see." 12 Do you understand that's what she's saying? Do you 13 understand that, Mr Thomson? 14 A. Yeah, I do. 15 Q. Okay. She's being told, as we can see by the helpline 16 "Look you need to make up for these losses". Did you 17 know that that was what was going on with the Post 18 Office helpline? 19 A. Postmasters were responsible -- I did -- 20 Q. Did you know that was going on with the helpline 21 organised by the Post Office? 22 A. I'm not sure. 23 Q. Well, it's a bit of a black or white answer, isn't it? 24 You either did or you didn't, Mr Thomson. Did you know 25 that the Post Office helpline was deterring people by 156 1 saying, "You pay up for shortfalls, it's up to you to 2 pay"; did you know that? 3 A. I probably did, yeah, but can I just come back on that 4 point? It was in the contract, it's -- people make -- 5 people make mistakes. The attitude -- the questions 6 you're giving is that every single mistake that was made 7 and every single shortage that a postmaster had, and you 8 started off manually and you've now onto Horizon, must 9 have been because of the Horizon system. That's 10 fundamentally incorrect, what you're saying there. 11 SIR WYN WILLIAMS: Well, I don't think that's what Mr Stein 12 is saying but the question is simply this: were you 13 aware, Mr Thomson, that, generally speaking, if 14 a postmaster rang up the helpline and said, "I've got 15 this problem and the result is I've got a shortage of 16 £6,000", the stock answer from the helpline would be 17 "Well it's your responsibility to make that good"? 18 A. Myself or some of the team would be aware of that 19 without a doubt, yeah. 20 SIR WYN WILLIAMS: Fine. Thank you. 21 MR STEIN: So the situation that you accept was that 22 subpostmasters were being told to pay up, despite the 23 fact, as Mrs O'Dell did, she was saying, "Look I don't 24 know what's going on it's not my fault, it's the 25 system". You knew that; is that right? 157 1 A. Anybody could blame Horizon on a mistake that they made 2 or their staff could make and, in fact, I think there 3 was over 200 subpostmasters' staff were actually 4 prosecuted not the postmasters, not the CWU members, but 5 their staff. So staff can take money as well, of 6 course, they can. But what's coming across is that 7 every single mistake that was made or every single claim 8 mistake was down to Horizon and, again, that is wrong. 9 Q. Do you now accept, Mr Thomson, that there were a number 10 of bugs, errors and defects in the Horizon system that 11 had the potential to affect and did affect the integrity 12 of Post Office branch accounts; do you now accept that? 13 A. I now accept that all the prosecutions that took place 14 were unsafe because the Post Office were aware of the 15 things that you are saying, yeah. 16 Q. Do you now accept the -- 17 SIR WYN WILLIAMS: That's not Mr Stein's question, 18 Mr Thomson. 19 If I tell you that, in this Inquiry, both the Post 20 Office and Fujitsu have formally admitted that there 21 existed bugs, errors and defects which had the 22 capability to cause balancing losses, do you dispute 23 what they admit? 24 A. No, I'm not disputing that. 25 SIR WYN WILLIAMS: Fine. Thank you. 158 1 MR STEIN: Because, in fact, I was reading a quote from 2 Fujitsu, the people that run the system, that owned the 3 system. They accept that those types of bugs, errors 4 and defects existed within the system. 5 A. But the point you make is that any single -- regardless 6 of what you said there, any single mistake that was 7 made, even if it wasn't Horizon, as long as it was 8 blamed on a potential bug or a potential glitch in the 9 system, would be down to the system's fault. That means 10 that the company couldn't run, even now. If every 11 single mistake was blamed on a glitch in Horizon, and 12 everybody blamed that, then, quite frankly, why would 13 you not be tempted? 14 Q. The Post Office and the NFSP were tied together, weren't 15 they? The survival of the Post Office meant the 16 survival of the NFSP but without the Post Office, the 17 NFSP couldn't survive? 18 A. Well, I've already said -- 19 Q. You agree with that? 20 A. I've already said that because we lost that many 21 members, we did the right thing for the network, we got 22 about 8,000 members out with big chunks of compensation, 23 so they got their investment protected, right, some 24 people had had Horizon problems as well. We got -- we 25 got a temporary in there or got them reinstated, so they 159 1 could get out of money. So, yes, after the three 2 closure programmes or three restructuring programmes 3 whatever you want to call them, yes, our organisation 4 basically either had to do a deal with the Post Office 5 or merge into the CWU or -- 6 Q. That deal, Mr Thomson, that deal included contractually 7 accepting that the NFSP should not do anything to 8 criticise or undermine the Post Office. You essentially 9 betrayed your own membership, didn't you, Mr Thomson? 10 A. I don't accept that for a minute. My position on 11 Horizon changed not one jot with any work we did on 12 a deal with the Post Office but, as I said earlier on, 13 I did realise that it was forcing us to pull our teeth 14 in other directions, on paying things and, actually, for 15 me, I no longer wanted to do it. 16 Q. Did you tell the membership of the NFSP that a deal had 17 been struck, in exchange for the Post Office shilling, 18 that you would be gagged from criticising and 19 undermining the Post Office? Were they told about the 20 details of that deal? 21 A. We weren't gagged and it was passed at the -- 22 Q. Did you tell them the details? 23 A. We weren't gagged and it was passed at the special 24 conference by the membership. That's the reality. It 25 wasn't George Thomson that passed it, it wasn't the 160 1 Executive Council, it was the membership that passed it, 2 at a special conference. 3 Q. Now, you've demonstrated, Mr Thomson, in your evidence, 4 that you're aggressive, you're belligerent and that your 5 work on behalf of the Post Office, it seems, ignored the 6 very subpostmasters that you represented through the 7 union of which you were a member; do you accept that? 8 A. I dispute that and, you know, to be called belligerent 9 by yourself is a bit strange. 10 SIR WYN WILLIAMS: All right. 11 MR STEIN: One last question, sir. 12 SIR WYN WILLIAMS: Right, yes. 13 MR STEIN: Do you think if you turned your aggressiveness 14 and belligerence on the Post Office, actually, you might 15 have done some good for subpostmasters? 16 A. I don't accept your question. It's a nonsense. 17 MR STEIN: Thank you, sir. 18 SIR WYN WILLIAMS: Thank you. 19 Questioned by MS PAGE 20 MS PAGE: Do you know an NFSP representative called Norman 21 Bradbrook? 22 A. Yeah, for long time. Norman was -- yeah, he's a good 23 age now. Yeah -- or he was -- it was a long time ago, 24 yeah. 25 Q. Did you say -- did I catch that right -- that he was 161 1 a good agent? 2 A. Age, sorry. 3 Q. Oh, good age? 4 A. Yeah, he was quite a lot older than most of the team. 5 Q. Right. What sort of a person was he, from your point of 6 view? Did you like him? Did he fit in at the NFSP? 7 A. I've not really got a view on that. I knew of him. 8 I knew he could be seen as being a bit -- not eccentric, 9 he was a nice old guy. 10 Q. All right. Well, in July 2001, one of my clients, 11 Mr Parmod Kalia, he was a member of the NFSP and he 12 sought assistance from the NFSP when he was being 13 investigated over a shortage. The representative who 14 attended his interview was Norman Bradbrook. At that 15 time, 2001, you'd have still been Area Secretary; is 16 that right, you weren't yet on the Executive? 17 A. Yes, I was Area Secretary for Scotland, yes. That's 18 correct. 19 Q. Mr Colin Baker was General Secretary; is that right? 20 A. Yeah, Colin would have been General Secretary then, 21 yeah. 22 Q. The NFSP was already clear, under his leadership, that 23 Horizon was a good thing; is that fair? 24 A. That is correct. 25 Q. Now, bear in mind Mr Kalia that been a postmaster for 162 1 11 years at that point without any difficulty, and this 2 was 2001, so not long after Horizon was rolled out. 3 Mr Bradbrook attended Mr Kalia's interview and gave 4 him this advice. He said: 5 "Mr Kalia, you should admit that you've stolen the 6 money. That's the best way of keeping your office and 7 keeping out of being prosecuted. Admit you've stolen 8 the money. Give them a story. Pay the money back." 9 Was that the sort of advice that you might have 10 given, as an Area Secretary, to anyone who sought your 11 assistance? 12 A. No, we would tell people to come clean about it and we 13 would try and get a solution to that. And most of the 14 time it was -- depending on the money but most of the 15 time it was -- you'd get a hardship payment to pay it 16 back. In other words, get it deducted every month from 17 your salary and, that way, you kept your position. In 18 particular, when people were going to leave under 19 Network Restructuring, under Network Reinvention and 20 Network Change, Network Transformation, we would always 21 try and help them make sure they could get out with 22 their compensation, if possible. 23 Q. All right but, in this instance, you're saying that, 24 perhaps, if somebody comes clean, that's the right 25 thing, you think, is it? 163 1 A. Only if they did it, yeah. 2 Q. Only if they did it. All right. Well, do you accept 3 that sort of advice is pretty helpful to Post Office 4 Investigators? 5 A. Well, I don't know; I didn't give it. You're asking me 6 something that happened six -- you know, I was the Area 7 Secretary. Colin Baker was the General Secretary. 8 Q. No, no, that sort of advice. That sort of "Come clean" 9 advice; "Tell them you did it" advice. Helpful to the 10 Investigators, no? 11 A. Only tell them you did it if you did it. You know, what 12 kind of justice would that be, telling somebody to do it 13 if they didn't do it? Sometimes it was -- I mean, 14 I gave the example in Scotland. It was the father -- 15 the father was absolutely wonderful -- about £100,000, 16 and he said, "I haven't taken £100,000", and he hadn't. 17 It was his son and it was found out his son had 18 a gambling problem. 19 These things happen, and this is why, in my 20 statement, I've tried to give a lot of nuance and 21 I haven't been allowed to obviously go on to it because 22 that's not the narrative. But the reality is that, when 23 money is there, there's a temptation. The vast majority 24 of subpostmasters didn't succumb to temptation but some 25 did, because the franchise was struggling. That's why 164 1 we needed three restructuring programmes. 2 People couldn't make a living. They couldn't pay 3 their bills. That example I gave in Scotland of the old 4 lady up north. 5 Q. Mr Thomson, can you accept that, if you gave advice for 6 somebody to make an admission, that was helpful to the 7 Investigators? Can you accept that, or not? 8 A. Not necessary -- it would depend on the circumstances if 9 it was helpful or not. Telling the truth is the best 10 help you can give somebody if they're due the Post 11 Office a lot of money. 12 Q. All right. You see, on the one hand, it can leave 13 somebody like Mr Kalia high and dry, yes? Because he 14 goes to prison, he's disgraced, his family savings are 15 gone. But, on the other hand, Mr Bradbrook's presence 16 in the interview, it gives the Investigators cover, 17 doesn't it, because it gives the appearance of being 18 fair, doesn't it; do you see that? 19 A. I can see that but, you know, this is what I found 20 difficult to accept. People say, well, for example, 21 "I was £30,000 short. How could that happen if it 22 wasn't Horizon?" It could easily happen. If there's 23 £60,000 in my safe and I'm desperate, and I take £30,000 24 and I keep it and I spend it -- almost like the 25 questions I've been asked here -- all of a sudden, it 165 1 has to be Horizon because money can't disappear. Well, 2 I'm sorry; that money didn't disappear: it was taken. 3 Q. Well, Mr Thomson, the issues around what happened to the 4 money are perhaps for other people. Let's just come 5 back to the role of the NFSP as representatives in 6 interviews. 7 A. Well, I wasn't the General Secretary in 2001, so you're 8 finished with that question. 9 Q. How about, then, this: your role as General Secretary 10 was pretty much the same but writ large, wasn't it? You 11 provided cover for the Post Office leadership because, 12 on the one hand, you left the subpostmasters who'd been 13 wronged high and dry but, on the other hand, you gave 14 the impression for the Post Office leadership that they 15 were being fair, that they were listening, that they 16 were doing everything that they could to make sure that 17 the subpostmasters were looked after, whilst actually 18 riding roughshod over them, Mr Thomson? 19 A. No, I don't accept that and I was advised that I should 20 come on here and just blame it on the Post Office: 21 apologise, apologise, apologise. I'm trying to give it 22 more nuance. And, in fact, I believe, because the 23 Federation thought I was going to be more robust, that 24 they refused for me to have a lawyer here today. They 25 refused to help me with the legal costs here today 166 1 because they knew I was going to be more robust. 2 So I've come here today without a solicitor because 3 the National Federation of SubPostmasters didn't like 4 the fact that I was going to be robust and tell the 5 truth, not just come along and apologise for the sake of 6 apologising. And, as I said before, the NFSP had a year 7 and a half after I left to change their policy about 8 Horizon and they didn't do it. 9 So I'll have no -- I won't be talked to by the 10 Federation about my position. Their position didn't 11 change for a year and a half when it could have changed. 12 MS PAGE: Thank you, sir. Those are my questions. 13 SIR WYN WILLIAMS: Right. 14 Ms Watt, please. 15 Questioned by MS WATT 16 MS WATT: Thank you, sir. 17 Mr Thomson, I appear for the NFSP. The organisation 18 of today has some questions for you, which I'm going to 19 put. So I'm just going to start by summarising and then 20 I'll have a couple of questions after that. 21 As we've seen and heard in the evidence, you had 22 received numerous complaints about Horizon across the 23 years. People such as Lee Castleton and Sir Alan Bates 24 wrote to you not about their cases but to alert you, as 25 the General Secretary of the NFSP, to Horizon and the 167 1 many issues. What you did was forward Sir Alan's email 2 to Paula Vennells within a very short space of time and 3 describe it as "rubbish". There were questions from 4 your own members asking if there is not something that 5 needs to be looked at. Mark Baker and others tried to 6 raise issues before eventually leaving the organisation. 7 Everyone is shut down. 8 So the question is, as the General Secretary of the 9 membership organisation, how could you have done that 10 instead of ask yourself the question, "Is there not 11 something in this", and do something about it to help 12 your members and others? 13 A. Well, first off, I can take the Mark Baker part there. 14 Mark Baker was more concerned -- I think Mark had some 15 issues with Horizon but Mark's biggest concern on why we 16 left was he felt that the Network Transformation was 17 wrong for the Network and there was more arguments about 18 that. But, again, I've reiterated my point time after 19 time. Our members were franchise holders who had 20 invested significant sums of money and we worked closely 21 with Post Office Limited. And I make no apology for 22 that. Why would the membership organisation of the 23 franchise holders not be working with the company to 24 make the brand the best they could? 25 It's common sense and that's what we did. And 168 1 I make no apology for that. 2 Q. Mr Thomson, it was all there in front of you but you 3 would not see it; isn't that so? 4 A. Well, I worked with the Executive Council, all the Area 5 Officers, the Branch Secretaries, the Executive 6 Council -- it's not just a one-man show -- the Executive 7 Council, and I took on the mantle from Colin Baker. The 8 policy and the position never changed. It never 9 changed. Colin was a big supporter of Horizon because, 10 like myself, he realised that, if we didn't get Horizon, 11 the network would have collapsed. 400 million of 12 Government funding would have left straightaway as 13 pensions were put into the bank. So we've always been 14 big supporters of the Horizon system. 15 But again, the point I've said before already, the 16 Federation had a year and a half after I left to -- and 17 it only moved its position when Justice Fraser, 18 I believe, said some remarks. So, for a year and 19 a half, you could easily have changed your position. 20 But, of course, it's just George Thomson. Well, of 21 course the Fed existed after me and it had, as I said 22 before, a year and a half to do something about it 23 before Lord Justice Fraser and did nothing about it. 24 Q. Mr Thomson, will you not accept that, under the time you 25 were the General Secretary, that, in relation to 169 1 Horizon, your members didn't get the help that they 2 needed? 3 A. Again, I'll reiterate the point. The billions and 4 billions of transactions, a tiny -- and I'm sorry if 5 it's the truth but that's the reality. And I wonder if 6 the Inquiry has done any work about what percentage of 7 transactions -- the billions of transactions that ended 8 up with claims against it, we had a small, small 9 fraction. And over 100,000 people have used the Horizon 10 system since it came in. 11 MS WATT: Thank you, Mr Thomson. 12 SIR WYN WILLIAMS: Thank you. 13 Now, Mr Thomson, you've mentioned your witness 14 statement on a number of occasions. Can I assure you 15 that I have read it twice recently and once when I first 16 saw it, so I'm very familiar with its contents. 17 Further, if it has not already been published, it will 18 soon be published for everyone who is interested to read 19 it. So the points which you have made in your witness 20 statement but which you may not have been asked direct 21 questions about during the course of today will be well 22 known to anyone who wants to familiarise themselves with 23 it. All right? In particular, I am fully familiar with 24 it. 25 THE WITNESS: It would have been nice to be asked some of 170 1 these questions that I've got in my witness statement 2 today but it doesn't serve the narrative. 3 SIR WYN WILLIAMS: That's as may be. The plain fact is 4 that, ultimately, all of your evidence, written and 5 oral, will be taken into account by me when I make my 6 report. 7 That said, if, in the course of the next few 8 minutes, you wish to say to me anything that you think 9 you need to cover orally, I will allow you to speak to 10 me for five minutes or so to make those points, 11 Mr Thomson. 12 THE WITNESS: Here? Open here? Yeah. 13 SIR WYN WILLIAMS: Now. Yes, now. 14 Statement by THE WITNESS 15 THE WITNESS: That's good. Just to repeat what I've said on 16 numerous occasions, my problem always has been that was 17 there some bad justice handed out with the Post Office? 18 Yes, there was. Was there some stupidity on steroids 19 management where you would take people to court and ruin 20 their lives and prosecute them, when you actually knew 21 that your witnesses were lying? That's stupidity. 22 That's absolute stupidity, right. 23 And it would have been easy just to come here today 24 and stick to that script, and everything else was "I'm 25 not sure" or "I can't recall". 171 1 But there's more nuance than that, and the Inquiry 2 is not taking any real account into the fact that you 3 had all these problems before Horizon. You had hundreds 4 of postmasters suspended every year. You had people 5 going to prison before it. And some of the questions 6 it's asked, it would mean like you cannae just have no 7 consequences if you make mistakes genuinely or you take 8 money. There has to be consequences or a business 9 wouldnae be viable. So that's the second thing, right? 10 So they've got some things wrong, absolutely. They 11 prosecuted, which is quite outrageous, based on lies. 12 But there has to be a recognition that these problems 13 did not start with Horizon. You know, I was in the -- 14 three or four years, when I first started in the '90s, 15 I was at a postman's house, because there was a raid 16 with the security branch. He had, in today's money, 17 £50,000 of parcels and money out of letters. Obviously 18 that was in the '90s. 19 I was at a Crown Office where a member of staff had 20 had losses on a regular basis. The auditors wanted to 21 go into a locker up the stairs and she wouldn't let 22 them, and I was almost fighting with them. But when 23 they did get in her locker, she had £1,000 bag in £20 24 notes that had been done to send to the remittance unit 25 and she had kept it. 172 1 We had a small village post office that my staff ran 2 until the postmasters could sell it, who admitted -- he 3 had bought it for £60,000, it didn't make enough money, 4 he had been there three years -- he had taken £30,000. 5 This was in the mid-'90s. So, for me, you know, it's 6 not Alice in Wonderland no one ever, ever would take 7 money or make mistakes. That's Alice in Wonderland 8 stuff. 9 What I'm saying quite clearly, it has to be more 10 nuanced than what you're being and that's why the kind 11 of comments I've made regarding some of the 12 organisations, some of the witnesses, is because it 13 takes no cognisance of that -- and some of the TV 14 programmes. You look at -- for example, you take the 15 ITV documentary. No background, in the sense that these 16 kind of things -- people had losses and it affected 17 their life before we had Horizon. Nothing about that. 18 Nothing about the sheer volumes of transactions. 19 And, again, one of the issues, I would say, about 20 this Horizon Inquiry, have yous actually tried to find 21 out the kind of billions of volumes that were done and 22 the percentage of people claiming there was a mistake? 23 It will be probably less than 1 per cent but yous 24 havenae done any of that. 25 So that's all I want to say: that I think there has 173 1 to be better balanced and better judgement than where 2 we've ended up. 3 SIR WYN WILLIAMS: Right. 4 Thank you very much for making your witness 5 statement. Thank you very much for giving oral evidence 6 during the course of today. 7 So that brings today's proceedings to a close. 8 We will resume again on Tuesday morning at 9.45 9 with, I think, Mr Gareth Jenkins. Is that correct, 10 Mr Blake? 11 MR BLAKE: That's correct, sir. Thank you very much. 12 SIR WYN WILLIAMS: Thank you very much. 13 (2.52 pm) 14 (The hearing adjourned until 9.45 am 15 on Tuesday, 25 June 2024) 16 17 18 19 20 21 22 23 24 25 174 I N D E X GEORGE RITCHIE THOMSON (sworn) ................1 Questioned by MR BLAKE ........................1 Questioned by MR STEIN ......................149 Questioned by MS PAGE .......................161 Questioned by MS WATT .......................167 Statement by THE WITNESS ....................171 175