1 Tuesday, 23 July 2024 2 (9.45 am) 3 MR BEER: Good morning, sir. Can you see and hear us? 4 SIR WYN WILLIAMS: Yes, thank you very much. 5 MR BEER: Thank you. May I call Baroness Neville-Rolfe 6 please. 7 SIR WYN WILLIAMS: Of course. 8 BARONESS LUCY NEVILLE-ROLFE (sworn) 9 Questioned by MR BEER 10 MR BEER: Good morning, my name is Jason Beer and I ask 11 questions on behalf of the Inquiry. Can you tell us 12 your full name, please? 13 A. Baroness Lucy Neville-Rolfe. 14 Q. Thank you. You've kindly made a witness statement. 15 It's 72 pages long and is dated 26 June 2024. Can we 16 look at that, please. It's WITN10200100. Can you turn 17 to page 72, please; is that your signature? 18 A. It is indeed, yes. 19 Q. Are the contents of your witness statement true to the 20 best of your knowledge and belief? 21 A. The contents are true. It was signed on 26 June when 22 I was a Government Minister in the Cabinet Office. I'm 23 now an opposition Member of the House of Lords. 24 Q. Yes, thank you. By way of background, I think you were 25 a civil servant for 24 years between 1973 and 1997; is 1 1 that right? 2 A. Yes. 3 Q. Holding positions, amongst others, as a private 4 secretary, a member of the Prime Minister's Policy Unit 5 in Number 10, and then as a director in the Deregulation 6 Unit in the then DTI. 7 A. Yes. 8 Q. You then worked in the second stage of your career in 9 the private sector, holding positions as a company 10 secretary, a board member and as a NED, a Non-Executive 11 Director, including in FTSE-listed companies; is that 12 right? 13 A. That's correct. I was an Executive Director at Tesco 14 for 15 and a half years and then I also had 15 non-executive roles, at various times. 16 Q. Then, thirdly, you were made a Member of the House of 17 Lords in 2013, and from 2014 until 2017, you were 18 a Government minister in variously the Business, Culture 19 and Treasury Departments? 20 A. Correct. 21 Q. You held ministerial responsibility for postal affairs, 22 is this right, between 12 May 2015 and 13 July 2016? 23 A. Correct. 24 Q. So a period of 14 months? 25 A. Correct. 2 1 Q. I'm going to address matters chronologically, if I may, 2 as you've done in the first part of your witness 3 statement, rather than thematically, because hopefully, 4 in this way, we will explore all of the themes as they 5 arise across the 14-month period. 6 Can I start, however, with a high-level summary of 7 the entirety of your time in office. It's my summary 8 and I want to know from you whether I've got it right. 9 I'm going to split it into four stages or four periods. 10 That may be somewhat artificial, as there was, I think, 11 no neat dividing line in the four stages, no "lightbulb 12 moments", as you say in your witness statement, and the 13 issues appear to have been evolving or developing for 14 you. 15 But is this right: the first period of time, stage 16 one, lasted from appointment in mid-May 2015, until 17 a meeting with MPs and the Post Office in mid-July 2015, 18 and this period, would this be right, would be marked by 19 you being provided with information, principally by 20 ShEx, which information suggested that it was 21 established Government policy that Government maintained 22 an arm's-length approach to the Post Office, that 23 Horizon had been independently and extensively 24 investigated and that no systemic faults had been found 25 with it? 3 1 A. I think that's a fair summary. I mean there was also 2 Criminal Cases Review Commission work into cases that 3 people were worried about. 4 Q. This first stage was marked by you finding that 5 information, reassuring and acting in reliance on it? 6 A. I think that's largely true, yes. 7 Q. Accordingly, at this early stage, you followed the 8 orthodox line that you had essentially inherited as part 9 of Government policy? 10 A. Yes, to the extent I was writing letters to MPs, for 11 example. But, obviously, I was aware that there were 12 murmurings, especially amongst a few MPs who had 13 particularly troublesome cases, like Mrs Hamilton -- 14 I think the Ms Hamilton case and that was one of the 15 reasons I was very pleased that I was going to have 16 a meeting with MPs to discuss some of that. 17 Q. Thank you. Then stage two, as I am going to call it, 18 from mid-July 2015, your faith in ShEx's advice was 19 beginning to wane and this led to a desire in you to 20 hear from different voices and for more independent 21 scrutiny of the Horizon issues to be undertaken than had 22 been offered by ShEx to date; is that fair? 23 A. That is fair, and I was also in receipt of advice -- 24 there was this Second Sight Report that was sent to me 25 by one of the MPs and I was in receipt of advice from 4 1 ShEx on that, which I was troubled by because it seemed 2 to be a very cursory summary of what looked like a very 3 long, complicated report, which I obviously had 4 difficulty in understanding the ins and outs of. 5 Q. Then stage three, from about September onwards, you took 6 the view that ShEx were failing to carry into effect 7 your wishes and, to an extent, seemed to be working 8 against you? 9 A. I think that came a bit earlier, to be honest. I was 10 worried in August that I wasn't getting broad enough 11 advice, I tried to get in officials, without success, 12 from the Department more broadly, and I also then asked 13 the new chair, Tim Parker, of the -- of POL, to take 14 a fresh look and undertake an independent review of all 15 of this. So that was actually in the August period. 16 But, obviously, it was carried through later. I mean, 17 in Government things take more time than in the private 18 sector. 19 Q. Lastly, you determined that the only way forwards was to 20 secure some form of independent investigation into the 21 Horizon issues? 22 A. That's correct, yes, and the question was how could one 23 get this extra work done, recognising that there were 24 arguments on both sides, of course, because I was being 25 told in all directions that, actually, there wasn't 5 1 really an issue, there was no systemic problem with 2 Horizon, and so on. So I was trying to find a way 3 through to get some further work done because I just 4 couldn't believe that these people, who would be 5 seemingly sort of honest, respectable people, were, you 6 know -- so many of them had been prosecuted and that's 7 what the MPs had been telling me. 8 Q. You were engaged, in relation to the Post Office, for 9 a relatively short period of time, 14 months, whilst you 10 held this ministerial brief but, would this be right, 11 you were concerned by the apparent approach of ShEx 12 officials to align their position very closely with that 13 of the Post Office, rather than exercising 14 an independent function? 15 A. Yeah, I think I came to that view gradually because they 16 were obviously departmental officials, albeit slightly 17 separate because they were in this thing called the 18 Shareholder Executive, and I -- in fact, Laura Thompson, 19 who was my main official advice, she seemed, you know, 20 quite like the other officials who worked for me, 21 sounded very satisfactory in other areas, and, you know, 22 she advised me in the classic way. 23 I didn't really realise until later how coordinated 24 that was with the Post Office. Obviously, they needed 25 to go to the Post Office to find out the facts, 6 1 particularly on individual cases, but I was looking to 2 them for, obviously, the kind of independent, objective 3 advice that, as a former civil servant, I knew was the 4 job of civil servants. 5 Q. Thank you. With that overview in mind, can we start 6 with your appointment and initial briefing. I think 7 it's right that you were aware, even before you took up 8 the postal affairs brief, that concerns had been raised 9 by some MPs about the Horizon issue and that that issue 10 had been raised in Parliament; is that right? 11 A. That is right and there'd been a debate, and I'd -- 12 there'd been a piece of correspondence I had, which 13 I had got in my bundle originally, about making 14 a statement about mediation, which I'm not sure was 15 whether it was eventually made, but the convention is 16 that, if a statement is made by a Minister in the House 17 of Commons, it's then repeated routinely in the House of 18 Lords. Although one doesn't have any influence over the 19 content, obviously one's name is put to it. So, out of 20 courtesy, it's sent to you to have a look at. So I was 21 aware of that. 22 Q. So that prior knowledge led you, I think, upon receipt 23 of information from the Secretary of State as to the 24 range of your portfolio and the fact that it would 25 include postal affairs, to seek an early meeting about 7 1 the problems with the Horizon IT System; is that right? 2 A. That's correct, yes. 3 Q. Can we look at that, please. It will come up on the 4 screen for you. You can probably put that witness 5 statement to one side now because I won't be referring 6 to it very often. It will come up on the screen, 7 WITN10200101. 8 If we can go to page 2, please, and scroll down, 9 an email to -- and can you help us -- the email address 10 is "Neville-Rolfe MPST-OLD". An email sent to that 11 email address, where would that go to in relation to 12 you? 13 A. I mean, that's the private office address so all your 14 private secretaries have access to that. 15 Q. So we shouldn't take any email that's to "Neville-Rolfe 16 MPST" as being an email that went directly and 17 personally to you? 18 A. Correct. 19 Q. Is it right that you would see some of these emails if 20 private office chose to forward them to you or to print 21 them and put them in front of you? 22 A. Exactly. 23 Q. Hannah Wiskin, the PPS to the Secretary of State says: 24 "The Secretary of State has considered carefully the 25 [portfolios] across BIS and has decided on the policy 8 1 areas [that are] contained in the attached." 2 If we go to page 1, please, a reply from your 3 private office, if we just scroll down, we can see it's 4 from Harriet Smith. Did you have more than one private 5 secretary? 6 A. She was the main one but there's a guy called Andrew who 7 also features, who was the sort of number 2. 8 Q. Okay, so from your private secretary: 9 Hannah. 10 "The Minister is broadly content -- she has 11 commented as follows", and then about the fifth 12 paragraph down: 13 "The Post Office brief is troubling and I would like 14 an early meeting on the problems with the Horizon System 15 ..." 16 Just stopping there, does this look, therefore, like 17 text that has been cut into the email by your private 18 secretary Harriet, through the use of the word "I"? 19 A. Yes, it does. Most likely, I've written that in 20 manuscript on a document that she'd sent me. One of the 21 problems about this particular Inquiry is that there 22 isn't any proper paperwork on the private office. This 23 has been preserved, no doubt, because it came from the 24 Secretary of State's office but I don't think most of 25 the notes of my meetings and the submissions that came 9 1 and what I wrote on them, none of that seems to be 2 available. 3 It must have all got thrown away at some point but 4 this looks very much like what I said and then I made 5 this point that obviously I know that Post Office 6 closures were a worry because we dealt with those when 7 I -- when some of the post offices -- as part of 8 transition, some of the post offices were coming into 9 our neighbourhood stores, which, I mean, was a positive, 10 to be honest. 11 Q. So you say: 12 "The Post Office brief is troubling and I would like 13 an early meeting on the problems with the Horizon IT 14 system and the losses people are complaining about. 15 This will be a Parliamentary issue and it would be good 16 to know who will answer on postal matters in the 17 Commons. I dealt with Post Office closures a few years 18 ago at Tesco and it was very problematic with local MPs 19 including David Cameron -- whom luckily we were able to 20 help!" 21 So this is 18 May, within six days of you taking up 22 office; is that right? 23 A. That's right, yes. 24 Q. The purpose of this part of the email here, was it 25 simply to work out where the Parliamentary business 10 1 would sit as between the Commons and the Lords, ie who 2 will actually be speaking in the Commons, or was it 3 a deeper issue you were raising than that? 4 A. I think there were couple of things happening here. 5 First of all, I'm being allocated my portfolios, some of 6 which I was already doing, which were quite busy, and 7 obviously the Bills that I had to do, I don't think, are 8 mentioned here, perhaps maybe they're in an annexe. 9 Secondly, I knew that taking the Post Office portfolio 10 wasn't without difficulty. I've recorded that. And 11 then for good order, I needed to know who would be 12 answering if there were a commons debate, for example. 13 It turned out to be Minister Freeman, in due course. 14 I was always on to this point because I had to answer in 15 the Lords for all my other colleagues, that's one of the 16 sort of challenges of being a Lords minister, just the 17 sheer scale of work you have to do, which is not in 18 areas that you're responsible for. 19 Q. I think at the end of the month, at the end of May, you 20 had an introductory meeting with members of ShEx -- 21 A. Yeah. 22 Q. -- and that was ahead of a meeting specifically about 23 the Post Office on the 2 June 2015. I think you've got 24 a background briefing. Can we turn that up, please. 25 Firstly, the covering email -- UKGI0004415 -- 29 May 11 1 from Laura Thompson and, as you've said already, she was 2 your principal contact, is this right, within ShEx? 3 A. Yes. 4 Q. To your private office, with the subject of "Briefing 5 for Baroness Neville-Rolfe" again, "ahead of 6 introductory meeting on Post Office": 7 "... please find attached some background briefing 8 for [you] ahead of [your] introductory meeting on 9 Tuesday of next week." 10 Can we turn to the briefing itself, UKGI00004416. 11 This is page 1 of the attachment. It's a 28-page 12 document and we can't do it justice by going through all 13 28 pages here. I think you say in your witness 14 statement that, overall, you found this to be a well 15 prepared, clear and helpful briefing? 16 A. Correct. 17 Q. Can we look, please, at page 2. This is the first 18 substantive page and is essentially an executive 19 summary. If we look at the last paragraph on that page, 20 it says: 21 "A small but vocal number of mostly former 22 subpostmasters have raised concerns about [Post 23 Office's] Horizon IT System, which they claim has caused 24 their businesses losses. Over two years' worth of 25 independent investigation has found no systemic faults 12 1 in Horizon and there is a mediation scheme to consider 2 individual cases, but campaigning and media interest 3 persists and BBC's Panorama is due to broadcast 4 a programme on this on 22 June. See slide 13." 5 If we, just before we go to slide 13, look at 6 page 3, please. Do you see in the bottom left-hand side 7 of that slide, in bold italics the last entry: 8 "Government does not seek to influence [Post 9 Office's] day-to-day operations." 10 Have you got that? 11 That's it. 12 A. Yeah, thanks. 13 Q. Maybe, if we can just look at that in context we can see 14 it's essentially a running summary. 15 A. Yeah. 16 Q. Was that the orthodoxy that ShEx told you was the 17 essential operating position? 18 A. I think they explained, as I probably already knew, that 19 it was at arm's length, and we tried not to interfere 20 because we were trying to make them behave commercially 21 and that was how the model worked, and it followed from 22 that that we weren't influencing day-to-day operations. 23 I mean, that didn't rule out them asking many -- if you 24 look further on in the document, there's a sort of 25 programme of things that I should do as a new minister 13 1 for the Post Office and I think that included -- 2 certainly I made, you know, visits to post offices on 3 visibility. So but the day-to-day operations, how 4 things run, what the IT system did, you know, which post 5 offices you closed, how rapidly we transformed from the 6 old model to the new model, they regard that as a matter 7 for the Post Office. And I mean I supported that, as 8 I think I've said in my statement, that there can be 9 a lot of merit in allowing, you know, people to get on 10 with it. 11 Q. I think you say in your witness statement that the model 12 of an arm's-length body operation with Government is not 13 inherently defective but it depends on the honesty and 14 reliability and competency of the people operating it? 15 A. It does, people on both sides, yeah. 16 Q. Can we go to slide 13, which is on page 14, please. 17 This is the slide concerning the Horizon system and the 18 Mediation Scheme. On the left-hand side, it records 19 that: 20 "There has been over two years of independent 21 scrutiny of [the] system and no evidence of systemic 22 flaws has been found." 23 Then in the body of the text, if we look at the 24 first paragraph: 25 "Following complaints from a small number of (mostly 14 1 former) subpostmasters about the ... system, in 2012 the 2 Post Office commissioned an independent firm, Second 3 Sight, to examine the system for systemic laws that 4 could cause accounting discrepancies. 5 "Second Sight's Interim Report, published in July 6 2013, and the final report published in April 2015, both 7 make clear that there is [and this is underlined] no 8 evidence of system-wide problems with Horizon." 9 At this time, did you have a copy of either the 10 Interim Report or the final report that are mentioned 11 here? 12 A. I don't think so. 13 Q. Therefore, did you rely on what was said; in particular, 14 did you rely on what we know to be a false statement 15 that the final report makes it clear that there was no 16 evidence of system-wide problems in Horizon? 17 A. Yeah, obviously, I believed that and that was -- that 18 line was -- continued to be taken for some months by 19 ShEx and, no doubt, the Post Office. 20 Q. At this point you had no information or material to know 21 that that was a false statement, insofar as it applied 22 to the final report? 23 A. No, and if you look at the pack, you know, it looks 24 considered, they've gone through the various things that 25 are going on. I mean, it looks orderly and well 15 1 organised. 2 Q. The rest of the slide concerns the Mediation Scheme? 3 A. Mm. 4 Q. I am going to take that as read. 5 I think you asked for a further briefing 6 specifically concerning Horizon; is that right? 7 A. Yes. 8 Q. Why was that? 9 A. I think it probably dated back to that original exchange 10 that we looked at, you remember, that I had known on 11 appointment that Horizon was a problem area and so I -- 12 and I think it was -- I felt that it was a slightly 13 different subject to the sort of commercial and 14 transformational issues that are looked at, at the rest 15 of the pack. So it made sense to have a separate 16 session and I wanted a bit more information. I think 17 they sent me a longer submission. 18 Q. We're going to look at that now, UKGI00004453. This is 19 the longer submission, dated 2 June 2015. It is 20 a six-odd page document. So the fuller briefing about 21 the Post Office generally was dated 29 May. We're now 22 on 2 June. The "Purpose" of this document is recorded 23 to be a "Further briefing on the Post Office Horizon IT 24 System and associated Mediation Scheme, and seeking your 25 views on handling this matter in future", with 16 1 a recommendation that you firstly note the briefing; 2 secondly, that you agree that Government should maintain 3 distance from this matter and resist calls for further 4 independent investigation; and, thirdly, that you agree 5 that officials, rather than ministers, should respond to 6 future correspondence from the JFSA. 7 Do you, as well as obviously noting the briefing, 8 agree those two recommendations, essentially? 9 A. I mean, I think certainly the third one, a letter went 10 off to Sir Alan Bates from an official. So, implicitly, 11 it's clear that I did agree that, and I think it would 12 fit in with my general approach. You have to look at it 13 in the context of how many portfolios I've got and 14 therefore how much correspondence and requests -- it was 15 a request for a meeting, I think, and I -- my general 16 approach was to see -- if MPs asked to see me, then 17 I would try and have an MP or a fellow peer, and if the 18 Department recommended a meeting, particularly if it was 19 from somebody like a trade union, then I would try and 20 fit those in. 21 I was advised, I think -- you'd have to go elsewhere 22 in this document -- that Justice for Subpostmasters 23 weren't sort of the equivalent of an accredited trade 24 association/state trade union, that they were 25 individuals and, therefore, I agreed that it made sense, 17 1 within the spirit of how we organised correspondence, 2 for that to go from officials. 3 Q. Can we look at the substance of the briefing, then, 4 paragraph 2: 5 "[Post Office] commissioned an independent firm of 6 forensic accountants, Second Sight, to examine the 7 system for evidence of systemic laws which could cause 8 accounting discrepancies. Their initial report (in June 9 2013) found no evidence of systemic flaws that could 10 cause the issues raised. The report did find that in 11 some cases [Post Office] could have provided more 12 training and support to subpostmasters, and [Post 13 Office] have since made changes to address these. [Post 14 Office] also established a mediation scheme and invited 15 current and former subpostmasters to come forward ..." 16 Then, in paragraph 3, there's some numbers given -- 17 136 applicants versus an estimated 68,000 users in 18 11,700 branches -- and: 19 "The vast majority of subpostmasters are using 20 Horizon effectively every day." 21 Was that a series of statements that ShEx officials 22 made regularly to you: a comparison of the number of 23 people who had come forwards, either to JFSA or through 24 the Mediation Scheme, against the balance of users who 25 were operating the system, it was said, effectively 18 1 every day. 2 A. Yes, certainly, they'd put the numbers in context, but 3 of course the Mediation Scheme was set up because there 4 were sort of acute problems in a few cases. So it's 5 important context but not definitive. 6 Q. Paragraph 4: 7 "... Second Sight began their investigations in 8 2012, producing their initial report in June 2013 and 9 their final report in April 2015. They've also 10 undertaken separate investigations into each of the 136 11 cases in the scheme. There has therefore been over two 12 years of independent scrutiny and in that time no 13 evidence of systemic flaws in Horizon has been found." 14 Then, if we go forwards to paragraph 7: 15 "Despite JFSA's complaints and calls for a new 16 investigation, it is our strong recommendation that 17 Government should maintain the position that this is not 18 a matter for Government, and increase our distance from 19 the matter ... attempts to prolong this matter do damage 20 to [Post Office's] brand and cost [Post Office] 21 significant amounts of money in funding Second Sight and 22 operating the Mediation Scheme. We also recommend that 23 Government should resist any calls for further 24 investigation -- the matter has been comprehensively 25 investigated over several years and the complaints of 19 1 JFSA have borne no fruit. Reinvestigation would be 2 neither value for money nor in the public interest ..." 3 Then it's repeated, I think, for the third time: 4 "There is no evidence of systemic flaws in Horizon ..." 5 Second bullet point: 6 "There is no evidence that any of [Post Office's] 7 prosecutions against subpostmasters for either false 8 accounting or theft are unsafe. [Post Office] has got 9 a duty to disclose any new material that comes to light 10 that could support a subpostmaster's defence, and none 11 has emerged." 12 At this time, had you got any material that 13 suggested to you that that was a false statement? 14 A. No, I mean, I knew there were sort of enduring concerns, 15 but I found this reassuring, in that the Criminal Cases 16 Review Commission are looking at applications for review 17 from subpostmasters and that POL has a duty, which 18 obviously I was aware of from my corporate background, 19 to disclose material that comes to light. I mean, 20 that's a very important principle of British justice. 21 Q. But, in particular, my question was slightly imprecise, 22 the statement that no material -- none -- no material 23 has emerged that could support a subpostmaster's 24 defence. I mean, you now know that, by this time, June 25 2015, much material had emerged within Post Office that 20 1 might support a subpostmaster's defence, in particular, 2 you now know, I think, the advice that had been written 3 about the principal expert witness, Gareth Jenkins, that 4 the Post Office had relied on and the Post Office's own 5 conclusion that he had given evidence that was 6 materially misleading and in breach of his duties to the 7 court. At this time, did you know any of that? 8 A. Obviously, I didn't know any of this at this time, 9 although I would have pursued, you know, more detail. 10 This is very strong advice, you know, it's not "on the 11 one hand ... on the other". ShEx haven't sought to go, 12 you know, into the detail of the individual cases and 13 explain, you know, what the concerns are. I did ask for 14 material on that, but that was later on in August. 15 We'll come to that in due course. As far as I can see 16 here, there's a very strong advice that there isn't 17 a problem, they looked into it all, there is no 18 evidence, and even if there is and some material comes 19 up, then that's going to be shipped straight off to the 20 Criminal Cases Review Commission. 21 I mean, that would have been the way I would have 22 read that. Obviously, we're looking back at hindsight 23 at the moment and I was getting this unending and, you 24 know -- you know, always the same advice on all of these 25 points from ShEx. 21 1 Q. Is the point you're making that this, even as a piece of 2 advice, contains no shades of grey: it's very black and 3 white? 4 A. Very black and white yes. 5 Q. No evidence, no evidence, no evidence? 6 A. Correct, and, you know, these were civil servants. I'd 7 been a civil servant. You know, you have a duty to be 8 objective and truthful as a civil servant, so obviously, 9 you know, Government can't cope if, you know, the civil 10 servants aren't looking at things, you know, honestly, 11 which of course they may have been. You know, this is 12 maybe what -- this is presumably what they believed. 13 Q. Over the page, please. The top bullet point, which 14 picks up a point you made earlier, Baroness 15 Neville-Rolfe: 16 "It is important to note that the [Federation], 17 which is the recognised representative organisation for 18 subpostmasters, does not support JFSA's arguments. The 19 ... General Secretary, George Thomson, has publicly said 20 that he considers JFSA members to be 'trying it on' and 21 there are their complaints are doing damage to 22 subpostmasters' businesses." 23 Then if we go on to paragraph 8, please: 24 "To date, [Post Office] have generally sought to 25 address JFSA's concerns where possible, and throughout 22 1 the process have maintained the confidentiality of all 2 members of the scheme, even where individuals have 3 waived their own anonymity and spoken to the press or 4 where documents have been leaked by [Justice for 5 Subpostmasters Alliance]. There has been some attention 6 on this matter, mostly BBC's The One Show and local news 7 programmes. Subject to taking legal advice [Post 8 Office] are now in favour of taking a more robust 9 approach to handling JFSA, given that it is clear JFSA 10 wish to derail the Mediation Scheme and prevent the 11 final cases from being mediated." 12 Then lastly paragraph 13, please -- sorry, I should 13 have read paragraph 9: 14 "We consider that a more robust and proactive 15 approach from [Post Office], together with a more 16 detached stance from Government, would be the right 17 approach to minimise negative press and ensure the 18 scheme can complete its work and close as swiftly as 19 possible ... Are you content with this approach?" 20 I think you indicated that, in the light of what you 21 were told, you would have been content with that 22 approach? 23 A. I think there was a -- I mean, obviously I may have read 24 this afterwards but the Mediation Scheme had been 25 subject to a sift, originally and then I think, as part 23 1 of the closing it all down, anybody who wanted to have 2 mediation could have mediation. So, you know, that 3 looks like an improvement to me. 4 And on the trying on, which we passed over rapidly, 5 when I was preparing for today, I discovered that 6 Thomson had actually told the Committee and the Commons 7 that he thought that I think, was it Mr Ridkin (sic) had 8 been trying it on. So there was quite recent evidence, 9 if you like, that no doubt officials were looking at, to 10 say that perhaps, you know, there was some issue. So 11 that's the background to that is. 12 But, for me, sitting and looking at all of this, 13 coming, I suppose, as you saw when I first got the role, 14 with a little bit of concern, this seemed to be very, as 15 you said, you know, very strong advice. 16 However, you know, I was a new Minister. I didn't 17 really decide anything definitively. We'd got BBC 18 Panorama coming up and also a debate, perhaps more 19 important, in the House of Commons. 20 Q. If we go over the page, please, to paragraph 13: 21 "ShEx recommended that correspondence from JFSA is 22 handled at an official level, on the basis that they are 23 not a recognised organisation and that continued direct 24 engagement with ministers will serve to prolong their 25 campaign. We propose to send the response [and there's 24 1 a draft letter at annexe C] from our team. If you would 2 prefer to reply personally we can adapt the response to 3 come from you, or (preferably) we can prepare a short 4 response from you politely declining the offer ... Are 5 you content for officials to respond from Mr Bates?" 6 I think you indicated that, in the light of the 7 draft letter and in the letter out that you've seen, the 8 answer is that you were, at this stage, content for 9 officials to respond? 10 A. I felt officials should deal with it. Obviously, 11 I hadn't been given all the background to Mr Bates 12 because, actually -- Sir Alan, as he now is -- had had 13 various sort of interactions with ministers over the 14 years. It would perhaps have been helpful to have known 15 a bit more about that but that isn't in any of the 16 paperwork. 17 Q. No. In your -- 18 A. So I obviously wasn't aware of it at that time. 19 Q. Thank you. In you witness statement, you rely on, 20 I think, five points to stand up the reasonableness of 21 you relying on the advice given in this submission to 22 you. Can I summarise them and see whether I've got it 23 right. 24 First, ministers are, as a matter of principle, 25 entitled to rely on the advice of officials and do so on 25 1 the basis that the advice they are receiving is itself 2 objective and thorough; is that right? 3 A. That's certainly my understanding, my approach, my 4 assumption in dealings with the Civil Service and the 5 Government, yes. 6 Q. Secondly, in this case, the author of this document, 7 Laura Thompson, appeared to you to be both competent and 8 across the detail? 9 A. True. 10 Q. Thirdly, you were new in post and what you were being 11 asked to do was essentially continue what you were 12 advised was an established Government line? 13 A. True, and that, you know, tends to happen, that you have 14 these established lines which, you know, have gone -- 15 a lot of work goes into and, as a new junior minister, 16 you know, you inherit those. 17 Q. Fourthly, the very structure that was embedded was one 18 of an arm's-length body which could operate free from 19 political interference and, therefore, the approach 20 suggested was consistent with had embedded position? 21 A. Correct. I mean, I'm not so sure whether that's -- 22 that's not particularly to do with whether you write to 23 Mr Bates or not but it's my whole approach to the 24 subject, which is to try and allow the Post Office, as 25 well led as we can make it, to get on and improve 26 1 things, you know, for the post offices, both 2 commercially and for the postmasters -- 3 Q. And -- 4 A. -- and for society because the Post Office -- this is 5 the thing you've got to remember: the Post Office is so 6 important in almost every village in the land. 7 Q. Lastly, on the substance, you were informed that there 8 were no systemic problems with the system, despite years 9 of investigation and that the recognised union supported 10 the Post Office and didn't support the subpostmasters? 11 A. Correct. 12 Q. In the course of the briefing, it's mentioned that the 13 Post Office prosecuted its own subpostmasters and that 14 the CCRC was reviewing some cases. You tell us in your 15 witness statement that you took comfort from the fact 16 that the CCRC was considering some convictions and that 17 Post Office had agreed to preserve documents 18 accordingly. When were you first aware that the Post 19 Office conducted its own prosecutions? 20 A. I think I would have been aware of that probably even 21 before I took over because there are various bits of 22 Government -- I mean, private prosecutions can be done 23 by organisations and the Post Office did their own in 24 the same way as something like the DVLA or the RSPCA, 25 which isn't even a Government body. 27 1 Q. So you were aware, even before you took up this post, as 2 to the Post Office's private prosecutorial function? 3 A. It isn't something I queried. I mean, I did, in my 4 statement at the end, question it should have continued 5 in quite the way it did once you've moved from a public 6 sector organisation to a more private sector one, but 7 that's a completely different point and perhaps for 8 later. Obviously I knew that they were doing that. 9 But, obviously, they had a large Legal Department, 10 no doubt inherited from the conglomerate that was 11 originally Royal Mail plus the Post Office, and indeed, 12 I think we'd discovered elsewhere, that they'd recently 13 put in charge a new general counsel, which sounded like 14 a good idea at the time. 15 Q. Did you have any concerns, therefore, that the Post 16 Office that a private prosecution function? 17 A. No, I don't think I'd have concerns in particular at the 18 private prosecution function. Although, with the 19 benefit of hindsight and knowing what I now know, 20 I think it's important that institutions like that -- 21 you know, the thing about the -- I'm perhaps 22 anticipating -- but the thing about the CPS when they 23 took over from the police is that the CPS can look in 24 the round at all these cases and say "Is this sensible?" 25 Now, there's no reason why the Post Office couldn't have 28 1 done that themselves and you have -- obviously, if 2 you're a prosecutor you have to abide by various codes 3 and behave properly and look at evidence and worry about 4 disclosure. So all of that can be done by the Post 5 Office. But, as I've said elsewhere, once you're 6 a private operation, the incentives are slightly 7 different and so that would be the -- that would be the 8 worry. 9 But you're asking me, at that time, the fact that 10 they did private prosecutions I noted, I think I knew 11 about it and, in any event, they have got audit 12 committees and all the rest of it to look at, you know, 13 at the progress of legal cases and prosecutions, which 14 I obviously knew about from having been a Non-Executive 15 Director and indeed an Executive Director in lots of 16 companies. The Prosecution Policy is something, you 17 know, that you would routinely take a look at, make sure 18 it was being done properly. 19 Q. You're referring to your time in -- 20 A. At Tesco but also in other companies, where I've sat on 21 the audit committee. 22 Q. Did Tesco have a Prosecution Policy? 23 A. We certainly prosecuted quite a low of shoplifters, and 24 so on, and we would have -- the Compliance Committee 25 would have -- obviously, from time to time, would look 29 1 at the number of cases and the Security Officer would 2 come and talk to us about that sort of thing. 3 Q. Was that a function of Audit and Compliance or Audit and 4 Risk Committee? 5 A. We didn't have a Risk Committee, we had an Audit 6 Committee, which was made up of Non-Executive Directors, 7 but I attended in my capacity as Company Secretary. And 8 then we also an Executive Compliance Committee, which 9 during the period I was Company Secretary, I used to 10 chair. So, you know, I was knowledgeable about that 11 sort of thing. 12 Q. Just help us, the document can come down from the 13 screen, it may be an interesting point of comparison, 14 what level of scrutiny in a fully private company, 15 Tesco, was given in that committee to prosecution? 16 A. I think it would tend to look at numbers but, if you had 17 a sort of difficult case and arguably what we're talking 18 about here were quite a lot of difficult cases with 19 publicity, then they would have been looked at by the, 20 you know, by Non-Executive committees, as well as 21 Executive committees, and we'd have a sort of legal 22 annexe and, I mean, I've had that in other companies 23 which I've chaired or sat on as a Board. You would know 24 what was going on in the legal area and that would be 25 a combination of tribunals, prosecutions, et cetera. 30 1 Q. You mentioned that the -- I think did you say the 2 Security Director would come and report to you? 3 A. Yes. 4 Q. What would he or she report? 5 A. Well, they'd write a paper on these are the things that 6 had happened over the last year or six months, or 7 whatever the period was, and, you know, we've had X 8 prosecutions and successful or unsuccessful, and we've 9 nagged away at the Home Office to help a bit more and 10 all that sort of stuff. 11 Q. Thank you. You tell us -- and you mentioned it a moment 12 ago -- at paragraph 290 of your witness statement, that 13 the arrangements allowing the Post Office to pursue 14 their own prosecutions should have been ended at 15 privatisation when they ceased to be part of Government: 16 "Prosecution decisions should be made independently 17 and impartially whereas here there were financial 18 incentives for prosecuting." 19 Firstly, I take it that's a view that's emerged 20 after your time in office -- 21 A. Correct. 22 Q. -- in the light of the events which have happened -- 23 A. Correct. 24 Q. -- and been revealed. But, secondly, why do you draw 25 the link between the ending of the prosecution function 31 1 and the event of privatisation? 2 A. Well, I think, obviously, if you're a governmental body 3 it's fair enough that, if there is fraud or harassment 4 or whatever, that, you know, you would have a Legal 5 Department and that could bring prosecutions or you 6 could take them to the CPS if you wanted them to do it. 7 I think once, you know, you've privatised a whole thing, 8 you know, you've got to set up -- you've got to have 9 a proper Legal Department and, as I said, I think it 10 must have been split between the two bodies and, in 11 a commercial operation, especially where there seemed to 12 be some sort of benefit to the Post Office from the 13 prosecutions in that, you know, the money -- they were 14 recovering money which then goes into their bottom line, 15 or it was sitting in an account, then that -- the, you 16 know, the -- there's a slight -- a sort of slight 17 inherent conflict of interest would be my concern. 18 So either you could stop prosecuting and I think 19 they did stop prosecuting all the Horizon related one 20 I even took over. I may have to check that. So it's 21 important that either you don't prosecute and you get 22 the CPS to do it or you set up a proper system of kind 23 of reviewing the cases to make sure that you're learning 24 from mistakes. And, in a commercial company like the 25 ones I was used to, you know, learning from mistakes was 32 1 one of the big features that a Compliance Committee 2 would always look at, you know, have we done it this 3 right way? You lost a case, you know, why was that? Or 4 there seems to be an awful lot of these different 5 things. 6 I remember, for example, on slips and trips in 7 stores, we actually changed the whole system because we 8 discovered we were having a great many cases on that, 9 and people perhaps slipping over, hurting their foot, 10 and then coming back and taking a legal case against us, 11 which took ages. 12 So we changed the whole system so that remedies 13 could actually be addressed straight away in the store, 14 that you would apologise to the person, take them home, 15 send them flowers, if necessary give them some sort of 16 minor element of compensation. And that stopped -- that 17 stopped -- it's an example of learning from mistakes -- 18 it stopped us having so many cases and, you know, 19 customers getting a remedy much more quickly. 20 Q. You mentioned that, by the time that you were in office, 21 the Post Office had stopped prosecuting cases based on 22 Horizon. 23 A. Mm. 24 Q. Did you know that at the time? 25 A. I mean, I'm not sure when I learnt it but I did find 33 1 that out. So, given there was an uncertainty, which 2 became more and more apparent as we went through the 3 year, that was obviously good news that they weren't 4 continuing when you've got these outstanding cases which 5 were before the Criminal Cases Review Board. So that 6 was extreme -- obviously a sensible thing to do. 7 Q. Was it revealed to you that the reason that the Post 8 Office stopped prosecuting, or the reasons included, 9 that the Post Office could not find any expert witness 10 who would testify as to the integrity of Horizon or the 11 data that it produced? 12 A. No, I wasn't aware of that until this Inquiry. 13 Q. We saw that the -- 14 SIR WYN WILLIAMS: Before we leave prosecutions, Mr Beer, 15 can I just -- it's a very minor point but I wanted to be 16 clear about it. When you were talking about your time 17 at Tesco, Baroness, you said, "We prosecuted 18 shoplifters". Just so that I'm clear, do you mean by 19 that that Tesco took out private prosecutions or do you 20 mean you reported them to the police, who then 21 instigated a prosecution via the CPS? 22 A. It's a very good question, Sir Wyn, which I'd like to 23 come back to you on because I wouldn't want to mislead 24 you. I mean, obviously prosecutions were taking place. 25 SIR WYN WILLIAMS: Sure. 34 1 A. The individual detail of who exactly did it. There 2 weren't as many prosecutions as I know many store 3 managers wanted, which perhaps suggests to me we were 4 using CPS rather than doing it ourselves but perhaps 5 I could come back to you on that point, if that's 6 permitted? 7 SIR WYN WILLIAMS: Yes, of course it is. Thank you. 8 MR BEER: Thank you. 9 We saw very briefly that the second annexe to the 10 briefing note of the 2 June 2015 was the draft letter to 11 Alan Bates declining a meeting with you and you accepted 12 the advice that you should decline the meeting and 13 therefore didn't meet him. You had, however, been asked 14 to meet Paula Vennells, by this time the CEO of the Post 15 Office; is that right? 16 A. Yes, the original briefing had a sort of table of things 17 that I should do as Minister, and that included meeting 18 the CEO, which seemed very sensible. 19 Q. That meeting occurred relatively early in your period in 20 office; it was 11 June, I think, 2015, and you received 21 a briefing for it two days beforehand on 9 June. Can we 22 look at that, please. It is UKGI00001074. 9 June. 23 Again, it's from Laura Thompson to you, for a meeting on 24 11 June. You'll see the proposed attendees additionally 25 included Al Cameron, Kevin Gilliland and Mark Davies. 35 1 Tim McInnes from ShEx would also attend. 2 Under "Background": 3 "This is your first meeting with Paula Vennells 4 since you became the Minister for the Post Office. 5 Paula has tended to meet with ministers 2-3 times per 6 year." 7 It says: 8 "[She] will want to give you an overview ... 9 "... will also want to discuss the [away day]." 10 Then over the page, please. "Main issues to 11 discuss", I'm going to speed through these: long-term 12 strategy; financial performance; Network Transformation; 13 banking; then over the page, Horizon: 14 "Paula may want to reassure you that [Post Office] 15 are handling the issues relating to the Mediation Scheme 16 set up in connection with their IT system, particularly 17 the forthcoming BBC Panorama programme ... 18 "It remains the case that there is no evidence of 19 systemic fault within the IT system. We ... have 20 communicated to [Post Office] that the Government 21 maintains that the Mediation Scheme and cases within it 22 are independent of Government. [Post Office] are 23 supportive of that approach." 24 So essentially a repetition of the briefing we saw 25 in the 2 June 2015 pack? 36 1 Now, there is no surviving minute of this meeting, 2 we are told. Have you any reason to believe that the 3 meeting didn't track the briefing and, therefore, 4 firstly, Horizon formed only a small part of your 5 discussion; and, secondly, that you weren't told 6 anything other than is set out here? 7 A. Yeah, I mean, on Horizon, this would be my recollection 8 of what I was told by Paula and others from POL at that 9 time and the meeting will have -- I think was more 10 wide-ranging and I was interested in the transformation, 11 the commerce, how they were going to retail and more 12 general issues and the Premium Bonds were at some 13 stage -- I remember agreeing to go and see the Treasury 14 Minister, very unsuccessfully, to get the Treasury to 15 continue to use post offices for their -- for selling 16 some of their products. 17 Q. Thank you. Can we move forwards in the chronology then 18 to the BBC Panorama programme, the Adjournment Debate, 19 which eventually led to a meeting between MPs and the 20 Post Office. Can I use your witness statement to track 21 this part of the chronology please, page 12, 22 paragraph 46. 23 Paragraph 46 is at the foot of the page and you say: 24 "On 24 June 2015, Laura Thompson sent a submission 25 to both me and George Freeman ... regarding a BBC 37 1 Panorama programme ... which was due to be broadcast on 2 29 June (though it did not in fact air until 17 August) 3 ... This was in timed to coincide with an Adjournment 4 Debate called by Andrew Bridgen MP, and the submission 5 indicated that both Mr Bridgen and James Arbuthnot were 6 understood to be involved in its making. It stated that 7 the programme was expected to be 'highly critical' of 8 [Post Office]. Ms Thompson again advised that Horizon 9 'is a matter for Post Office and subpostmasters and it 10 would be inappropriate for Government to intervene'." 11 Then over the page, please, paragraph 47: 12 "The Post Office had fallen within my portfolio for 13 around seven weeks by this time and I could see 14 a pattern emerging: it was the consistent advice of ShEx 15 that these matters were independent of Government, that 16 [Post Office] was dealing with the various matters 17 appropriately, and on Horizon that there was no evidence 18 of any systemic problem despite rigorous independent 19 testing, and that I should not be interfering." 20 Then if we go further down the page to paragraph 50 21 you say, although you didn't see it at the time: 22 "... I have since been provided with a letter dated 23 26 June from Paula Vennells to George Freeman in advance 24 of the Adjournment Debate, in which she stated that 25 [Post Office] had gone to 'great lengths' to investigate 38 1 the problems with Horizon and that 'the past three years 2 have underlined the confidence we have always had in 3 Horizon -- it has been found to work as it should'. 4 Ms Vennells set out in her letter that [Post Office] had 5 found nothing to suggest that any conviction was unsafe, 6 and that [Post Office] took 'great care' regarding its 7 continuing duty of disclosure on all matters including 8 full cooperation with the CCRC ... This was of a piece 9 with the information I was being provided by ShEx. We 10 now know, of course, that it was seriously misleading." 11 Moving on, you tell us in paragraph 51 that on the 12 29th Andrew Bridgen called an Adjournment Debate: 13 "... a number of MPs called constituents' 14 complaints. Mr Bridgen stated that he and a number of 15 colleagues had 'lost all faith and trust in the Post 16 Office's willingness to investigate the issue ...' 17 criticised the Mediation Scheme, and called for a public 18 inquiry. George Freeman ... referred to the striking 19 degree of concerning expressed by Parliamentarians at 20 and in the lead-up to the debate, and offered to convene 21 a meeting between MPs and [Post Office] executives in 22 which the issues could be discussed." 23 Then moving on, please, to paragraph 52. You say: 24 "I understood that at least some subpostmasters were 25 losing, or had lost, trust and confidence in the 39 1 Mediation Scheme, whilst at this time ShEx officials 2 were telling me that 'Post Office have put a great deal 3 of effort to be helpful and transparent here, yet are 4 constantly denounced for their approach and their 5 apparent 'contempt' for MPs without any real evidence to 6 demonstrate why. They accepted the seriousness of the 7 situation and are committed to resolving it but are 8 becoming increasingly frustrated by the attacks ...'" 9 You say: 10 "I was keen to preserve the Mediation Scheme, see 11 the CCRC reach conclusions and encourage engagement 12 between the subpostmasters and Post Office. I agree 13 with George Freeman that the way forward was to bring 14 the interested parties together and at least provide 15 a forum for open, frank and sensible discussion [that] 16 would not have happened had [you followed] ShEx's 17 advice." 18 Can I look at the exchange in which you agreed with 19 Mr Freeman's approach. WITN10200103, please. 20 Can we start with page 3, please. There's an email 21 from 1 July from Laura Thompson to your private office 22 and Mr Freeman's private office, amongst others; can we 23 see that? Ms Thompson says: 24 "Andrew ..." 25 He was one of those that worked in your private 40 1 office, the person you referred to earlier; is that 2 right? 3 A. Yes. 4 Q. "Please see attached submission [sent to the pair of 5 you]. It follows up on Monday's Adjournment Debate in 6 the Commons on the Post Office Horizon system, which is 7 Baroness Neville-Rolfe's policy lead but the debate was 8 taken by George Freeman. 9 "The submission recommends how we meet the 10 commitment made by Government (and repeated at [Prime 11 Minister's Questions] today) to convene a meeting on 12 this matter. There are draft letters for [you] to send 13 to Andrew Bridgen (who called the debate) and Paula 14 Vennells, Post Office CEO." 15 Then if we go to the bottom of page 2, please -- 16 thank you -- can you explain who the email is from and 17 to here? 18 A. So that's to me, myself, from my private secretary -- 19 Q. So -- 20 A. -- attaching a submission, yes. 21 Q. -- Andrew Smith, your private secretary, using your 22 private office email address, sending it to you, in 23 a personal email; is that right? 24 A. In a personal email, probably my Parliamentary account 25 but obviously it's not clear from there, yes. 41 1 Q. Yes. 2 "Minister, 3 "Please find attached a submission on the Horizon 4 Adjournment Debate outlining next steps. Officials are 5 keen for the draft letters to issue [ASAP]." 6 Skipping a paragraph: 7 "George Freeman's comments as relayed by his private 8 office are 'The Minister considered your advice and he 9 is somewhat content. However, he feels strongly that 10 Second Sight and George Thomson (NFSP) should be 11 invited. He commented that the MPs focused on Second 12 Sight and it would not be a satisfactory meeting without 13 them. He agrees that JFSA should not attend'." 14 So here you're being told that there's a submission, 15 including draft letters, to go out to Paula Vennells and 16 Andrew Bridgen, who called the debate, that this has 17 been run past your colleague in the Commons, George 18 Freeman, and he said that he felt strongly that Second 19 Sight should be invited to attend the proposed meeting, 20 correct? 21 A. Correct. 22 Q. Then, if we scroll up, please. 23 Mr Smith writing to you, about half an hour later on 24 the same day, saying that he had just had a call from 25 officials who recommend strongly that Second are not 42 1 invited to the meeting. So officials, in this context, 2 would that be from ShEx? 3 A. Yeah. 4 Q. So, so far we've got Mr Freeman and his antennae maybe 5 twitching a little by him saying, "I think it's 6 important, I strongly believe that Second Sight should 7 attend this meeting"; ShEx recommending strongly that 8 they're not, to your private office; and then you reply 9 about an hour later, we can see it at the top there: 10 "I am uneasy about overruling George Freeman and am 11 not sure about excluding others." 12 So, at this point, officials were trying to persuade 13 you to exclude Second Sight from the proposed meeting; 14 your ministerial colleague and you disagreed? 15 A. I disagreed, although in the end I think I agreed to 16 a meeting without Second Sight, but we'll -- 17 Q. But we will develop. 18 A. -- come on to that, because they went on nagging away at 19 it and I was keen to get the meeting to happen. Anyway, 20 perhaps we can -- but that's right, I was uneasy, you 21 know but then they had reasons, which presumably we'll 22 come on to. 23 Q. If we scroll up, please. Your private secretary sends 24 your reply back to ShEx, in particular Laura Thompson. 25 Then scroll up, please, and then a little further, about 43 1 an hour later, a long email from Laura Thompson. So 2 she's called in, or somebody from ShEx has called in, 3 saying, "We think it's a bad idea that Second Sight are 4 invited to this meeting", and then this is followed up 5 by a long email we'll see, taking the same point. 6 Laura Thompson says: 7 "I understand the Minister's concerns about 8 excluding people, and that George Freeman is in favour 9 of inviting Second Sight because MPs focused on them. 10 However, I would still recommend strongly that they are 11 not invited to the meeting. The legal risk to Post 12 Office (and, potentially, Government) is significant if 13 this meeting prejudices the work of the [CCRC]." 14 So, at this point, ShEx had had an attempt to 15 exclude Second Sight by calling your private office, and 16 they're trying again in this email, and raise a point 17 that there's said to be a significant risk to the Post 18 Office, legal risk to the Post Office, and indeed to 19 Government, by prejudicing the work of the CCRC by 20 meeting Second Sight; did you or do you understand the 21 logic of that position? 22 A. I mean, I don't know what I thought at the time but what 23 I would say is, if I'm told that something prejudices 24 the work of the Criminal Cases Review Commission, I take 25 that seriously and, clearly, officials, who at that time 44 1 I had no reason to believe were not doing anything that 2 was not in my own interest, were saying that we 3 shouldn't have Second Sight and it seemed to me that the 4 key thing was to see the MPs and hear what they'd got to 5 say and to get them to actually talk to the Post Office, 6 because there seemed to be something of a stand-off 7 between these MPs and the Post Office, which was why 8 I was keen to have a meeting and hoped that it would be 9 constructive. Perhaps over-optimistic at the time, but 10 that was my approach. 11 Q. Ms Thompson continues: 12 "... we have very grave concerns that, based on 13 Second Sight's conduct to date, they will not respect 14 confidentiality or the terms of their engagement either 15 during the meeting or afterwards. We understand 16 (although cannot confirm) that they have links in to 17 JFSA and strongly believe their presence in the meeting 18 will do more harm than good." 19 Then she adds a second point that: 20 "... the Post Office are extremely worried about the 21 risk to their business from this meeting, particularly 22 around legal issues like the CCRC. I'd be concerned 23 that inviting Second Sight could be a red line for 24 them -- we would have to consider what would happen if 25 this were the case, but I think it is important to 45 1 remember that Post Office have put in a great deal of 2 effort to be helpful and transparent here, yet are 3 constantly denounced for their approach and their 4 apparent 'contempt' for MPs without any real evidence to 5 demonstrate why. They accept the seriousness of the 6 situation and are committed to resolving it, but are 7 becoming increasingly frustrate by the attacks against 8 them and it is not clear what more they can do -- 9 remembering, as we mentioned to the Minister, that [Post 10 Office] are effectively fighting with one hand behind 11 their back because they are respecting confidentiality 12 when others are not." 13 So this is taking a separate point: never mind the 14 merits of the situation, the Post Office might consider 15 this a red line and this is another reason to exclude 16 Second Sight? 17 A. Yeah, I think the main point is about prejudicing 18 criminal work somewhere else or civil work somewhere 19 else. Obviously, this is perhaps the first example of 20 Post Office -- of ShEx very much taking strongly a Post 21 Office line and bringing that through, which is 22 interesting. 23 But I took the view that we'd promised a meeting, 24 a meeting promise had then been repeated by the then 25 Prime Minister, David Cameron, and that I was keen to 46 1 meet the MPs and talk to them about their concerns and, 2 you know, not actually having Second Sight present. 3 I mean, that didn't seem to me to be a killer point. 4 The key point was to get on and have the meeting. We 5 could always have another meeting with Second Sight on 6 another occasion, if that's what turned out to be 7 necessary. 8 Q. Thank you. 9 A. But, I mean, I have to say, in a busy day, this is going 10 backwards and forwards, it was probably, you know, 11 a snap judgement, "Let's get on, let's have the meeting 12 and let's invited the Post Office to come", although 13 they didn't in fact send the CEO, which was 14 a disappointment to me, as you'll see from later 15 documents. 16 Q. We're going to come to that after the break. 17 Before we do, can we see what happened by looking at 18 your witness statement, page 16, paragraph 58, please. 19 Much as you told us, you say: 20 "The key thing, from my perspective, was to get the 21 MPs together in a room with Paula Vennells and [Post 22 Office] executives and hear what they had to say. I was 23 aware that the relationship between [Post Office] and 24 Second Sight was not healthy, and thought it would be 25 easier to get Ms Vennells to attend if they were not 47 1 there. I also took at face value the concern that 2 Second Sight presented a risk of leaking what was said 3 at the meeting, and also thought it was important to 4 avoid the meeting descending into a discussion of 5 individual cases. The point was to have a productive 6 discussion between MPs and [Post Office] senior 7 management as part of a process to 'get to the bottom of 8 the matter', and it seemed most likely that that would 9 happen without Second Sight at this stage." 10 Then you tell us you did later subsequently meet 11 with Messrs Warmington and Henderson. So some letters 12 went out, can we look at those, please, UKGI00004820, 13 a letter of 2 July to Andrew Bridgen. Scrolling down, 14 thank you -- just a little bit further -- sorry, no, 15 further up: 16 "I am writing as the Minister responsible ... 17 further to your Adjournment Debate ... I would like to 18 follow up on the offer [of George Freeman] by inviting 19 you to attend a meeting at the Department to discuss 20 this matter." 21 You mention in the next paragraph the Mediation 22 Scheme, and confidentiality and the importance of 23 maintaining it. 24 In the third paragraph, the fact that the CCRC has 25 received applications from individuals in the scheme. 48 1 Paragraph 4, you say: 2 "The Government acknowledges the concerns that [MPs] 3 raised during the Adjournment Debate." 4 Paragraph 5: 5 "The Government wants to ensure that MPs take the 6 opportunity to raise their concerns directly with Post 7 Office. At the same time, the Government would like to 8 allow the Post Office a further opportunity to address 9 the very serious accusations that have been made against 10 it. The meeting will provide an opportunity for both 11 MPs and Post Office to understand each other's views 12 better, while maintaining the confidentiality of 13 individual cases and respecting the work of the CCRC." 14 Then over the page: 15 "This will be a private meeting and I will be 16 writing in similar terms to the Post Office to invite 17 them to attend." 18 Then can we look at POL00027164, a letter on the 19 same day to Paula Vennells, the CEO of the Post Office. 20 If we just scroll down, you'll see it's in very similar 21 terms, so an equivalent letter. Both letters were, in 22 fact, silent, I think, on the issue of Second Sight 23 attendance. 24 A. I think they did say we might have another meeting or 25 something, on a future -- I mean, there's 49 1 a possibility -- silent, if you go over -- keep going. 2 Q. So if we scroll down a little further. 3 A. Yes: 4 "Following this meeting we will consider whether any 5 additional further action or meetings required." 6 I think I kind of might have put that in to -- 7 I can't remember but that -- 8 Q. But it doesn't explicitly say -- 9 A. It doesn't explicitly -- 10 Q. -- Second Sight will or will not -- 11 A. It doesn't say Second Sight are being invited, it 12 doesn't say Second Sight aren't being invited, but it's 13 trying to set up a constructive conversation, try and 14 get two sides a little bit closer together. 15 Q. Can we look at the reply from Paula Vennells. 16 UKGI00000026, her reply of 10 July to you. 17 "Thank you for your letter of [the 2nd]. 18 "Post Office is, of course, willing to attend 19 a meeting to discuss these matters and I note that it 20 has been set up for Wednesday. Unfortunately, this 21 coincides with a Post Office Board meeting; therefore 22 I hope you will accept my apologies. My colleagues, 23 Mark Davies, our Communications and Corporate Affairs 24 Director, and Patrick Bourke, who leads the Post Office 25 team dealing with the Scheme, will be pleased to 50 1 attend", and that you found some time to speak on 2 Tuesday morning in advance of the meeting. 3 Ms Vennells continues: 4 "As you know, we have been open and transparent with 5 MPs throughout this important process and have met 6 Mr Bridgen previously with some of his fellow MPs. 7 "Regrettably, it is clear our engagement has done 8 little to address his concerns. Since our last meeting, 9 Mr Bridgen has on he occasions refused our offer of 10 a further meeting, most recently last week. We have 11 also offered every MP with a constituent in the Scheme 12 the opportunity to discuss with us, subject to 13 [consent]. Just three MPs have taken up this [offer]. 14 "... over the last three years, the Post Office has 15 been trying to address a small number of individual, 16 private, complaints brought to it by (mostly) former 17 subpostmasters about problems they experienced whilst 18 working in their post offices. Despite the finding of 19 an initial investigation that our computer system did 20 not suffer from systemic flaws, we established a scheme 21 ... 22 "... all cases have been comprehensively 23 reinvestigated and independently reviewed and all of 24 this work has been shared with individual applicants ... 25 It is worth reiterating that in none of the cases has 51 1 our computer system been shown to have caused the losses 2 complained of and in none of the cases has any evidence 3 medicine to suggest that convictions are unsafe." 4 Then over the page. 5 "Instead, in a majority of cases, it is clear from 6 the evidence that errors made in branch are responsible 7 for the problems that arose. In some other cases, the 8 Post Office acknowledges it might have done more to 9 support individual subpostmasters ... In a last group of 10 cases (thankfully a minority), regrettably, 11 subpostmasters have committed criminal offences, either 12 by dishonestly covering up losses, or by stealing money, 13 or both." 14 Skipping a paragraph: 15 "In cases involving a criminal conviction, our 16 investigations reveal that the facts on which the 17 convictions were based cannot be distinguished from the 18 says raised by applicants to the scheme. Therefore, 19 mediation is not appropriate as it is not capable of 20 producing the principal outcome sought ... because only 21 the courts can overturn a conviction." 22 Skipping a paragraph: 23 "As you note, a number of these applicants have 24 asked the [CCRC] to look into their cases and it would 25 be highly inappropriate to do anything which might 52 1 interfere in its work ... 2 "In short ... applicants to the Scheme have a choice 3 to sit down and mediate their case with the Post Office, 4 litigate the civil courts or pursue any claim of 5 miscarriage of justice through the established 6 processes. Given these clear choices ... it is not 7 immediately clear what the Post Office could offer 8 beyond restating the choices ... However, we will try to 9 address as many of the concerns expressed by MPs as we 10 can. 11 "Finally, and while you do not mention them in your 12 letter, there have been suggestions that Second Sight 13 should attend a meeting. As Second Sight has no 14 standing in the disputes between the Post Office and 15 applicants ... we do not consider their involvement to 16 be necessary or appropriate." 17 So Ms Vennells seems emphatic that you and the MPs 18 should not meet Second Sight, yes? 19 A. Certainly she doesn't want Second Sight at that meeting. 20 Q. We know that, by this time, Post Office knew there were 21 bugs, errors and defects within the Horizon system and 22 that Second Sight had discovered some of those bugs. We 23 know that the Post Office, by this time, knew that forms 24 of remote access by Fujitsu to the system were possible, 25 including a form of remote access by which financial 53 1 data at branch level could be amended by the insertion 2 of transactions into an account, without the 3 subpostmaster's knowledge, and that Second Sight, on the 4 basis of some whistleblower evidence, had discovered 5 some of this. 6 We know that, by this time, the Post Office knew 7 that its principal expert witness in criminal 8 prosecutions was said to have breached his duties to the 9 court and to have given misleading evidence to the 10 court, but the Post Office had decided not to reveal 11 that information either to Second Sight or to convicted 12 defendants. 13 Did you know any of those things? 14 A. I didn't know any of those things, no, but I'd also note 15 that Paula Vennells didn't come to the meeting. 16 I suppose if she knew -- and she's written this letter, 17 which, certainly, if that was known to her, is odd that 18 there's absolutely no suggestion of any hesitation or 19 concern on any of those points at that point in time. 20 She didn't come, she sent the -- Mr Davies who was 21 communications person. 22 Q. And Mr Bourke, the Corporate Affairs Director? 23 A. And Mr Bourke. At that time, I remember that, I asked 24 who was this person, and I was told, well, he was the 25 person in charge of the Mediation Scheme but, actually, 54 1 you're describing him -- I think later he's described as 2 the Government Affairs Director -- 3 Q. Yes. 4 A. -- whereas obviously my hope would have been that Paula 5 Vennells herself would have turned up, so that one could 6 have made some progress, rather than people who were, as 7 it were, managing the MPs and managing -- you know, even 8 tying to manage the ministers. So that -- so that was, 9 I think, regrettable. 10 Q. We have seen the reason that Paula Vennells gave for not 11 being able to attend was a diary clash? 12 A. That's what that says and that's what I took at face 13 value -- 14 Q. Yes. 15 A. -- although -- 16 Q. Have you seen information since then? 17 A. Well, I think somebody mentioned to me, but I can't give 18 you chapter and verse, that, actually, there was advice 19 that she shouldn't attend the meeting, which is 20 a slightly different point, clearly. I understand the 21 importance of Board meetings. I don't know what the 22 exact timing clash was. 23 Q. Let's just look at that, please, POL00388295. 24 And look at page 2 first, please. If we scroll 25 down, please: 55 1 "Please see attached that has just arrived." 2 That's your letter. 3 "I assume we should seek to respond quickly. 4 "It is still my view that Paula should not attend 5 but should perhaps speak to [Baroness Neville-Rolfe] 6 beforehand? I am very open to contrary views." 7 That's Tom Wechsler, Ms Vennells' then Chief of 8 Staff. 9 Then scroll up, please, to see what the 10 Communications Director said. 11 "I agree re Paula point and this was also her view 12 when we spoke this morning. And I also agree that she 13 should speak to her in advance." 14 I think that means "I agree that Paula Vennells 15 should speak to Baroness Neville-Rolfe in advance": 16 "I suggest we reply as warmly as possible, 17 especially as the letter is from [you]." 18 Then scroll up, please. 19 "I share that view re Paula", says Patrick Bourke. 20 Then scrolling up, please, Tom Wechsler then agrees 21 re attendees and I think that's the end of it. 22 So, at the time, you wouldn't be aware, presumably, 23 that various Post Office PR and communications people 24 were providing advice behind the scenes to Paula 25 Vennells that she should not attend the meeting with 56 1 you? You took at face value what was said in her 2 letter, that she had a diary clash. 3 A. I took it entirely at face value and, of course, it's 4 a Board meeting and you do try to respect -- if you're 5 a Director, you do tie to make sure you do go to Board 6 meetings. So it was a perfectly valid excuse but I was 7 somewhat perturbed when I subsequently saw this, that 8 actually it was strategic rather than a diary clash. 9 Because I think, having her there would have been good, 10 because she would have had to listen to the MPs' 11 concerns and answer them herself. 12 MR BEER: Thank you. 13 Sir, that is an appropriate moment for the morning 14 back. Could we break until 11.25, please? 15 SIR WYN WILLIAMS: Yes, certainly. 16 MR BEER: Thank you, sir. 17 (11.11 am) 18 (A short break) 19 (11.25 am) 20 MR BEER: Good morning, sir. Can you continue to see and 21 hear us? 22 SIR WYN WILLIAMS: Yes, thank you. 23 MR BEER: Thank you. 24 Baroness Neville-Rolfe, can we turn briefly to what 25 happened at the meeting between Post Office and the MPs. 57 1 Is it right that you essentially chaired or facilitated 2 the meeting? 3 A. Yes, I chaired it, as would be normal with a ministerial 4 meeting. 5 Q. Can we turn to page 17 of your witness statement, 6 please, and look at the foot of page 17. At 7 paragraph 62 you say: 8 "The meeting between MPs and [Post Office] was 9 attended by Andrew Bridgen, Kevan Jones [they're the 10 MPs] Mark Davies ... Patrick Bourke ... Laura Thompson 11 ... and [you]. A note was drafted by Ms Thompson ..." 12 You give the reference to it, I was going to give 13 your witness statement instead to address what happens. 14 You say: 15 "The note records that Messrs Bridgen and Jones 16 outlined their concerns relating to some individuals. 17 The concerns focused on the length of time the issue had 18 been ongoing and the view of the MPs that [Post Office] 19 had acted with a lack of transparency in dealing with 20 the claims that there had been problems with Horizon; 21 the way in which [Post Office] had used its powers of 22 prosecution; the length of time it took for cases to 23 progress through the Mediation Scheme; concerns about 24 miscarriages of justice where individuals had been 25 advised to plead guilty to false accounting by their 58 1 legal representatives. I believe they also raised 2 concerns about document destruction. 3 "63. I recall thinking that the concerns expressed 4 by Andrew Bridgen and Kevan Jones needed to be taken 5 extremely seriously." 6 You say, skipping a paragraph: 7 "This meeting, which took place within 2 months of 8 my taking up the postal affairs role, was an important 9 step. Amongst other things, it brought home that the 10 processes in place -- including mediation and the CCRC 11 process -- were not working satisfactorily. More 12 generally I was from the start surprised that so many 13 people from normally reliable sections of the community 14 were being convicted of dishonesty. This was 15 troubling." 16 On that last sentence there, can you explain more 17 generally what you meant, please? 18 A. As I got into the individual cases, which earlier on I'd 19 been discouraged from thinking about, it became apparent 20 that these were honest citizens who perhaps had, on 21 retirement, bought a -- I think if you buy a Post 22 Office -- I'm not quite sure what the arrangements 23 are -- people like Lord Arbuthnot's constituency, 24 I think is in Hampshire, you know, leafy, middle-class 25 people, who suddenly, out of the blue, with no even 59 1 suggestion that they had either themselves or any of 2 their friends and relations been involved in anything 3 dishonest, was suddenly ending up in court and being 4 convicted, mainly, I think, on grounds of false 5 accounting but in some cases of theft, and that just -- 6 I'd got all this evidence that everything was fine, that 7 there was nothing wrong, that there'd been 8 an independent inquiry which actually told us that the 9 Post Office was right, and yet the people who were, as 10 it were, going down were terribly honest citizens. 11 I have to say this is the thing that worried me. 12 You know, I have come from business and I'd also come 13 from the Civil Service and, you know, it's not -- it's 14 not only keeping the business going, it's having 15 an element of common sense and thinking about your 16 staff. So that -- so that was what worried me, but 17 I didn't actually have any information to support my 18 case until I had this meeting and Andrew Bridgen and 19 Kevan started to, you know, list some of these points. 20 That was my sort of road to Damascus, if you like, 21 beginning to realise that there were quite small 22 numbers -- we were talking about I think about three or 23 four MPs at that time -- who'd had these very 24 unsatisfactory experiences with what I call Middle 25 Britain. 60 1 Q. Thank you. Can I check with you whether a couple of 2 issues were addressed at the meeting, by firstly looking 3 at POL00027729, which is an email -- you wouldn't have 4 seen this at the time, it's internal to the Post 5 Office -- from Mark Davies on 15 July, at 8.17 in the 6 evening, to, amongst others, Jane MacLeod, Paula 7 Vennells, Angela van den Bogerd and he says, if we 8 scroll down: 9 "All 10 "Patrick and I met with Andrew Bridgen and Kevan 11 Jones today, at a meeting chaired by [you]. 12 "The meeting was held up as Mr Jones was late. 13 Mr Bridgen then ran through his central points. 14 "This included no new allegations and was broadly 15 a repeat of his Adjournment Debate script. He raised 16 some new unnamed cases ... 17 "He accused the Post Office of: 18 "Abusing its prosecution powers and using plea 19 bargaining to 'cajole' people into accepting guilty 20 pleas. 21 "Curtailing Second Sight's work and the Mediation 22 Scheme. 23 "Reducing scope of [Second Sight's] work and forcing 24 [Second Sight] to moderate its reports. 25 "Not cooperating with [Second Sight]." 61 1 Then this: 2 "Having 'Dickensian' contract arrangements with 3 postmasters, 'suspicious' suspense account procedure and 4 an inadequate helpline." 5 Have you any recollection that the contract itself, 6 said to be Dickensian, which was rather prophetic 7 because that's how the Court of Appeal was subsequently 8 to describe it in similar terms many years later, 9 whether that was raised? 10 A. Well, I have no reason to believe that it wasn't. After 11 all, it's on a memo from POL saying what came up, which 12 disturbed them and, clearly -- I probably knew at the 13 time that the way it works is that a subpostmaster is 14 almost like -- is a kind of agent responsible for all 15 their -- you know, for everything that they do and that 16 was no doubt incorporated into the contract. It's 17 a very one-sided arrangement but then, I think, to be 18 fair, post offices entered into that knowing that it was 19 a one-sided arrangement and thinking that they would be 20 able to cope with that because, you know, often they had 21 a lot of experience of running small businesses and 22 things when they took over post offices. 23 You weren't -- didn't become a subpostmaster 24 overnight. You know, there was some sort of, I assume 25 there was some sort of vetting procedure before you 62 1 actually got given the keys to Horizon. 2 Q. So did you know about the one-sided nature of the 3 contract at the time? 4 A. I think I knew after this meeting. It wasn't referred 5 to in any of the briefing that I'd had prior to that 6 from ShEx, that I've noticed. But I mean, obviously 7 it's difficult for me to remember 10 years hence when 8 I learnt what I learnt. But it was a sort of -- I was 9 gradually learning, from listening to these outsiders, 10 what their problems were, and one of the problems, it 11 seemed, was the contract arrangements. And, of course, 12 I know now because I have been given information about 13 what eventually happened that was that the contract was 14 a key issue in the Fraser judgment. 15 Q. Lastly, Mr Bridgen accused the Post Office of: 16 "Using Bracknell and remote access to target and 17 implicate postmasters of wrongdoing." 18 Then: 19 "[Kevan] Jones endorsed the above and accused the 20 Post Office of: 21 "Using the Mediation Scheme as a smokescreen to pass 22 the Statute of Limitations. 23 "A deliberate and planned cover-up. 24 "'Leaning' on [Second Sight]. 25 "'Gagging' Panorama. 63 1 "He accused Patrick and I of lying to him and 2 Mr Bridgen in the meeting. We did not. 3 "The MPs asked the Minister: 4 "To call an independent inquiry. 5 "To meet with Second Sight. 6 "They asked us: 7 "To provide details of how much we paid out to 8 settle claims. 9 "We agreed: 10 "To write to both MPs reiterating our offer to meet 11 ... 12 "It was a very unpleasant meeting at which Patrick 13 and I were robust but respectful in making our case in 14 [the] face of an approach which was volatile and at 15 times aggressive." 16 Do you remember these two MPs being volatile and 17 aggressive? 18 A. To be honest, this isn't my note of the meeting and 19 I didn't see it at the time and, if I had, I think that 20 was probably a little bit unfair on them. They were 21 actually explaining clearly what their concerns were in 22 detail, which frankly was exactly what I wanted in 23 having the meeting. 24 Q. Scrolling down under "COMMENT", Mr Davies says: 25 "This was a very difficult meeting. We now need to 64 1 ensure that the Minister [that's you] understands the 2 position. While she was supportive, there is a risk 3 that the complexity of the issue, plus MP interpretation 4 of that complexity, causes the search for simple 5 'solutions' which we know do not exist." 6 Then, at the foot of the page, second paragraph up: 7 "The Minister did appear to agree that it would be 8 rather difficult to make progress if the MPs refused to 9 engage with the rest of the story." 10 Can you recall which commitments you made, if any, 11 at the conclusion of the meeting? 12 A. I'm sure I will have said that I would reflect further 13 because that would have been standard practice and 14 I think I encouraged the MPs to talk to the Post Office, 15 because there'd been the stand-off between them and it 16 looks from this as though there was some acceptance by 17 Mr Bridgen. There was also a point about documents. 18 There seemed to be concern that documents were being 19 shredded, which would be helpful to the unfortunate 20 people who'd been prosecuted, and I do recall -- I don't 21 know -- probably as a result of this meeting -- that 22 took some steps to do something about that, because 23 obviously, given my commercial background, I was very 24 aware of the importance of not shredding documents, even 25 very old documents, and of your legal duty, particularly 65 1 if you were an actual trained lawyer, you know, 2 a barrister or solicitor, not to shred documents. 3 So I think I recall that coming out of it and, 4 obviously, I went away and, you know, wanted further 5 meetings to discuss what might be done. 6 Q. Thank you. That can come down. 7 You tell us in your witness statement that at about 8 this time -- it's paragraph 65, no need to turn it up: 9 "All of the advice I was receiving regarding Horizon 10 was from ShEx. This was supposed to be impartial and 11 balanced. However, my faith in that advice was 12 beginning to wane. I now wanted to hear different views 13 and wanted to apply some more independent scrutiny to 14 the issue than had been offered to date by ShEx and, at 15 that meeting, I agreed with Andrew Bridgen that I should 16 meet with James Arbuthnot MP." 17 Because this meeting therefore one of the turning 18 points in the unfolding picture? 19 A. Definitely. I think the MPs played an important role, 20 you know, in articulating the issues and articulating 21 the problems in a way that perhaps the experts, Second 22 Sight and things, were not able to do, and I think James 23 Arbuthnot was probably -- may have been invited to the 24 original meeting and hadn't been able to come, I don't 25 know. But it became apparent from that meeting how 66 1 important and pivotal he was. So I was obviously keen 2 to talk to him, and I did later meet him, and, you know, 3 he's played a crusading role in all of this. 4 Q. Can we see what ShEx's follow-up was to the meeting by 5 looking at UKGI00015226. This is 17 July, so two days 6 later. The "Purpose", says Ms Thompson, is the: 7 "Next steps following your meeting on Wednesday, 8 with MPs [with a recommendation] That you: 9 "Note that the Post Office will write to 10 [Messrs Bridgen and Jones] to reiterate the offer of 11 a meeting and provide information relating to some of 12 their concerns. 13 "Agree that you would like to meet James Arbuthnot, 14 as discussed in the meeting and confirm whether [or not] 15 you would like officials and/or Post Office to attend. 16 "Decide whether you would like to write to 17 Sir Anthony Hooper ... 18 "Agree that you should write to the Prime Minister 19 following your meeting with James Arbuthnot ..." 20 I just want to explore the last of those, please, by 21 looking at paragraph 9 of the note, which is over the 22 page. Ms Thompson says: 23 "Following your meeting with Mr Arbuthnot and, if 24 appropriate, Sir Anthony, we recommend that you should 25 write to the Prime Minister, to set out your assessment 67 1 of the situation and the Government's position, having 2 'got to the bottom of the matter', to use his words." 3 I think they're the words that he used in PMQs. 4 A. Yes. 5 Q. "We strongly recommend that the Government comes to 6 an agreed position, and ideally should communicate 7 whether it will take any action. We advise that the 8 priority should be to put this issue to bed -- continued 9 uncertainty and allegation does damage to Post Office's 10 business and prevents those individuals with cases from 11 reaching a resolution. We will provide further advice 12 on this [and] propose your office sends a short note of 13 the meeting ... to the Private Secretary at Number 10." 14 What did you think to this suggestion that you 15 should write to the Prime Minister to set out your 16 assessment of the situation, having got to the bottom of 17 the matter? 18 A. Well, I think I had two concerns about this. One was 19 I wasn't sure I'd yet got to the bottom of the matter, 20 and the second is, it's not really appropriate for 21 a Parliamentary Under-Secretary of State to write to the 22 Prime Minister. I'm not sure that's -- perhaps 23 Ms Thompson didn't really know that. That is something 24 that would go through the Secretary of State or the 25 Secretary of State's office. 68 1 Q. So, for those two reasons, did you ignore the 2 suggestion? 3 A. So I said -- I'm sure I didn't agree to it although it 4 comes back because they then produce draft and it goes, 5 takes days on end to go round through lots of different 6 people and then comes back to me to sign off, to look at 7 anyway, but it's not my note. So clearly the Prime 8 Minister had been involved at PMQs, so it's not 9 unreasonable that there should be feedback to Number 10 10 but certainly I wasn't in a position to write saying I'd 11 got to the bottom of it and, more important, it would 12 have been a first time that somebody, you know, 13 a Parliamentary Under-Secretary, had kind of written to 14 a Prime Minister on a business issue from their 15 Department because that seemed to me to be not what 16 normally happens. 17 Q. So there a protocol or convention issue but then there 18 was an issue of substance as well? 19 A. There was substance and protocol which came together, 20 which means I, in your words, probably for that time 21 ignored paragraph 9. 22 Q. Thank you. 23 I think it's right that the next step in the 24 chronology -- that can come down, thank you -- is 25 essentially the provision of the Second Sight Part Two 69 1 Report to you, towards the end of July. Can we look at 2 some material that relates to that. 3 UKGI00005133. Can we start by looking at page 3, 4 please. If we scroll down, please. Thank you. We'll 5 see Mr Warmington's email in his familiar font, of 6 22 July 2015, to George Freeman. You're not copied in 7 at this time. The subject is "Second Sight's Briefing 8 Report -- Part Two", and he says, Mr Warmington: 9 "I am puzzled, and not a little distressed, by your 10 summarisation in your recent email to Ian Warren [no 11 need to look at that], and more importantly to 12 Parliament [we're not going to look at that either], of 13 my firm's Interim and Part Two Reports (there were, in 14 fact, three reports). You have summarised our Reports 15 with the following words: 'Second Sight have produced 16 two independent reports, in 2013 and 2015, both of which 17 demonstrate that there is no evidence of systemic flaws 18 within the Horizon system which could cause the issues 19 reported'. That is NOT a correct statement. 20 I respectfully draw your attention to paragraphs [then 21 he lists some] of our Report, and to the following 22 additional paragraphs [then he lists some]. 23 "You may have noted from reading our Reports, and 24 also from Post Office's Rebuttal Documents, that Post 25 Office has continually focused attention on the system 70 1 itself (ie 'Horizon' and ... 'Horizon Online'), and even 2 more narrowly on the software, rather than the entirety 3 of the platform used by its subpostmasters. It follows 4 that even if there had never been any systemic flaws in 5 either version of the system (that being a contention 6 with which we do not agree), that would not mean that 7 the operational platform as a whole was always fit for 8 purpose for all of the tens of thousands of users. As 9 we have stated in our Report, it was not. 10 "I have attached here a copy of our Briefing 11 Report -- Part Two." 12 Then scroll down: 13 "I am available at any time." 14 So he is attaching the Part Two Briefing Report, he 15 is drawing specific attention to some paragraphs within 16 it. If we go back to page 3, please, thank you. In the 17 middle of the page, we can see an email from Andrew 18 Bridgen MP to Andrew Smith, your private secretary; is 19 that right? 20 A. Yes. 21 Q. "... please see that the email below reaches the 22 Minister as it contradicts statements [made] by the Post 23 Office." 24 Then if we scroll up, please. He, Mr Smith, 25 forwards the chain to Laura Thompson. You'll see that 71 1 it CCs the same email address as he is sending it from. 2 Is there something that we are missing there, as to why 3 that would be done? 4 A. No. I think it might be to do with, if you've got 5 an attachment, if you copy it, does it -- is it 6 retained, or something. That's still the private office 7 address. It's not an address I've got access to. 8 Q. No. Then scroll up, please. We can see that 9 Ms Thompson replies to Mr Smith: 10 "1. Ron Warmington ... has emailed George Freeman 11 regarding Second Sight's Reports ... Mr Warmington 12 states that he disagrees with the summary that Second 13 Sight's reports demonstrates no evidence of systemic 14 flaws within the Horizon system which could cause the 15 issues reported by applicants to [the] Mediation Scheme. 16 [He] directs the Minister to several paragraphs in the 17 final report which he feels demonstrates that Horizon, 18 in the totality of the user experience, is flawed." 19 Then if we scroll down: 20 "3. ... I would emphasise that our position is not 21 arbitrate in this matter -- it is a commercial matter 22 for the Post Office. As shareholder, we expect the Post 23 Office to operate commercially and to handle operational 24 and legal matters such as this one without Government 25 intervention ... 72 1 "4. Following [the] email, we have looked again at 2 the paragraphs he has highlighted ... The statement that 3 'there is no evidence of systemic flaws within the 4 Horizon system' remains correct." 5 That does appear to be arbitrating: 6 "This is a position we have stated repeatedly, 7 including in Parliament, so it is unclear why Second 8 Sight are choosing to raise this now. We are happy to 9 provide further detail on the ... points raised if 10 Ministers require." 11 So how would you have read this kind of commentary 12 from Laura Thompson on the Second Sight Report that was 13 being sent through to you? 14 A. Well, I'm not sure whether I saw it at that time 15 although I certainly saw if it later in the month and 16 had a look at those paragraph numbers. I'd got 17 concerned by that time, which is why I wanted to have 18 a policy meeting to discuss what we should do about all 19 of this and that's what happened on 4 August. I'm not 20 sure I've got a lot to add. I mean, we can talk about 21 the Second Sight Report if you want, here or later. 22 I mean, they refer to all these paragraphs. If you 23 go through those particular paragraphs, it doesn't bring 24 out nearly as clearly as the session I had with MPs what 25 the issues were, particularly if you're not technical, 73 1 you read through and you look at all those different 2 paragraphs and then you look at the POL response, which 3 is even longer -- 4 Q. The 83-page rebuttal? 5 A. -- and comes back on it and, to be honest, for somebody 6 who is not expert and not meant to be expert, it's 7 actually quite confusing. And it was that -- you know, 8 so I've got this milling about. Obviously, you've got 9 somebody writing in saying that what Freeman had been 10 advised to say looked -- I think they're actually saying 11 was misleading, which is obviously a serious matter. 12 So, for me, I wanted to try and find a way through but 13 obviously the advice that I'm getting here is "Stay at 14 arm's length, you know, we haven't got any reason to 15 think that our advice is wrong, that the Second Sight 16 Report demonstrated no evidence of systemic flaws within 17 the Horizon system". 18 Q. When did you receive the second Second Sight Report? 19 A. I'm not convinced I saw it before that meeting of the 20 4th -- I mean, I may have been aware of it. What 21 normally happens with a box is you read the top papers 22 and, if you've got time or reason, you might read some 23 of the annexes. It's one of the things that you that to 24 explain to civil servants, actually, I've found, because 25 I've had these different jobs, both inside and outside, 74 1 is the key points need to be in the covering memo. So 2 Warmington's covering memo was helpful because a couple 3 of the key points came out but I don't think I actually 4 read the full report until later in the month, and you 5 will recall that I then -- Mr McInnes sent me a memo 6 saying "Well, there's nothing new here", and I asked for 7 further advice, hoping that I would get further advice 8 on the detailed allegations in the Second Sight Report, 9 which at the time I didn't get. I got another note from 10 the Post Office. 11 Q. So just dealing with the extent of your reading of the 12 second Second Sight Report, can we look, please, at 13 UKGI00005504. We are skipping ahead in the chronology 14 a little here but it is because of what is said in the 15 body of the email. If we scroll down to the second 16 email down, there's an email from your office to 17 Mr Warmington of 14 August. You say in the second line, 18 last two words: 19 "I have read with interest your 'Part Two Briefing 20 Report' as well as the response from Post Office 21 Limited." 22 Was that correct: that, by this time, 14 August, you 23 had read the Second Sight Report and Post Office's 24 83-page rebuttal? 25 A. I had certainly looked through it and, later on, I think 75 1 I say I've kind of looked through it. It's convention 2 that if somebody writes to you as a Minister and they 3 send you a report -- it happens all the time, they send 4 you a report on accidents, statistics or procurement -- 5 then you write back saying, "I've read with interest" -- 6 this is a standard reply "I've read with interest your 7 report" and, in this case, I have mentioned the two 8 reports. That will have been drafted for me by 9 officials of some kind and I have no reason not to quote 10 it in a conventional way. 11 So it's not that I wasn't aware of the Second Sight 12 Report and was aware that it had got important things in 13 it but the idea -- it's perhaps slightly misleading, the 14 idea that I would have been on top of all of it, but 15 what I have said is they've committed to addressing them 16 and making improvements, on training, which of course 17 I think they had done but, obviously, I've stuck to the 18 line of the parties involved. 19 But behind the scenes, you will know that I'd asked 20 Tim Parker to, you know, do some sort of independent 21 investigation of all of this, of which Second Sight 22 would be at the heart. 23 Q. So just focusing at the moment then on the extent to 24 which you read Second Sight's Part Two Briefing Report. 25 In your witness statement, you tell us that you would 76 1 have read the report or at least the passages which 2 Mr Warmington had listed? 3 A. Yeah, yeah. 4 Q. I don't suppose you can remember which is the case? 5 A. Well, I certainly read the passages which were listed 6 and those were the ones I was commenting on: that, if 7 you go through them, you don't get quite the same 8 tonality as if you read the whole report from beginning 9 to end. And then, of course, you turn to the POL 10 response, and you're actually confused as to what you 11 know, what you need. So, I mean, to some extent, 12 I think you have to understand, I was concerned about 13 this. There wasn't that much I could personally do, in 14 terms of getting on top of this. I therefore wanted to 15 make sure that a proper piece of work was done on this, 16 which is what eventually became the Swift Report. 17 Q. The Second Sight Part Two Briefing Report in summary 18 finds that some form of unauthorised remote access may 19 have occurred; that amounts in excess of £100,000 had 20 been taken into Post Office's profit and loss accounts; 21 that the Post Office operated contracts to the detriment 22 of subpostmasters; and provided them with no automatic 23 entitlement to data upon which properly to judge whether 24 or not they were liable for the losses alleged against 25 them; and that some prosecutions appear to have been 77 1 focused more on debt recovery than in the interests of 2 justice. 3 A. That comes out very well from the Swift Report, which 4 summarises -- which I only saw when I was preparing for 5 this hearing, summarises it very well. But, at that 6 time, I had asked ShEx for advice on this, you may 7 recall. So I'd said, "I'd like some advice, please", 8 and I had then been sent a memo by Mr McInnes which 9 repeated the usual mantra and didn't go into the 10 details. I never actually got proper briefing on that 11 report, and I don't think it's unreasonable for 12 a Minister to ask officials to look at and summarise 13 something of that importance, particularly as it turns 14 out they'd had it for about a year, so presumably they 15 could and should have read it in great detail, and when 16 I asked for an analysis of it, I actually should have 17 had an analysis of it. But I didn't get that, and so 18 I then moved on, and accelerated the work being done by 19 the new Chair of Post Office. 20 Q. Do I take it from that, Baroness Neville-Rolfe, that 21 your reading of either the report or the identified 22 paragraphs in the report didn't highlight to you that 23 what you had been consistently told by Laura Thompson 24 and others, that that second report had revealed no 25 systemic problems with Horizon, was untrue? 78 1 A. I think -- unfortunately I haven't got it with me but 2 I think there is a reference somewhere, because what was 3 done by POL, and perhaps by ShEx, was to pick up from 4 the work that Second Sight had done this sort of magic 5 sentence that there wasn't a systemic flaw. But, 6 actually, there were lots of other things in the report, 7 like the fact that obviously they'd had a really crummy 8 foreign currency scheme, which ended up losing money, 9 either for the unfortunate postmaster or indeed for the 10 Post Office itself, it's not too clear. 11 So there were these various different points in 12 those reports, which I didn't have the time or expertise 13 to really look at properly. And what they seemed to be 14 just doing was repeating this mantra that Second Sight 15 was fine and they'd gone native, and we should just 16 ignore that report. And I was -- I didn't really like 17 that approach to things. But I have to say, I think 18 perhaps Second Sight -- you know, they weren't 19 experienced, they weren't lobbyists, they hadn't brought 20 out into the front of the report, in a way that might 21 have helped them a bit more, you know, the key things 22 that you have now summarised so beautifully and -- you 23 know, as Counsel to the Inquiry. They didn't do that. 24 But the MPs had talked to them and they did bring 25 out strongly exactly these points that you're -- that 79 1 were actually quite well summarised in the note from POL 2 of the meeting that I had, which obviously wasn't 3 an official note. 4 Q. You tell us in your witness statement -- it's 5 paragraph 88 -- that you received a briefing note from 6 Laura Thompson. Can we look at that, please. 7 UKGI00001067. Going back a little bit to 31 July, but 8 it's a passage that I want to pick up, and if we scroll 9 down, please -- and again -- yes, (6). 10 "Individuals who have a criminal conviction already 11 have a suitable independent route of appeal through the 12 courts or the [CCRC]. That is the appropriate course of 13 action for those individuals to take if they feel their 14 convictions are unsafe." 15 Then over the page. Yes, nothing else on that. The 16 briefing note appears to be advising you not to 17 interfere in cases where there had been criminal 18 convictions because that was a matter for the CCRC and 19 the courts. What was your view on that aspect of the 20 advice that you were receiving? 21 A. Well, obviously the line that I should respect the CCRC, 22 who, at that -- you know, were well -- I think were well 23 viewed at that time, seemed to me to be a reasonable 24 one, especially as I'd been told by -- with -- including 25 a letter from their General Counsel, that they weren't 80 1 holding any papers, which actually turned out to be 2 untrue. When you eventually read the Swift Report, you 3 find there were sort of Deloitte papers and things, 4 which I was completely unaware of, which other people 5 hadn't had, and so the CCRC should be allowed to get on 6 with it seemed to be not an unreasonable point. 7 Having said that, I was -- and obviously, they were 8 the particular population I was worried about, but, 9 equally, there were these points by Second Sight that 10 had been raised about how -- I mean, what seems to have 11 been happening was the Post Office had an awful lot of 12 lines for a poor subpostmaster in a small rural post 13 office and so it was really, really important that 14 Horizon worked properly when they, you know, had to deal 15 with all of these things. And the Second Sight Report 16 is quite good, and it takes you through all these 17 different lines and explains the difficulties. 18 Now, if you've got a really good IT system and 19 really good IT support, you can bring online new 20 products and people who are selling them, you know, can 21 be ushered in to making it work. But the Second Sight 22 Report suggested that there were some wider problems, 23 and we kept being told there weren't systemic problems 24 but there were obviously, you know, bugs and the odd 25 problems, as you can see from what the MPs were telling 81 1 me and, indeed, from the Second Sight Report. If you 2 could find the right bits. 3 Q. Can we turn back to your witness statement -- 4 A. I'm sorry, does that answer your question? 5 Q. Yes, it does. Can we turn back to your witness 6 statement, please, and page 34. In fact, if we start at 7 page 30, and paragraph 110, you say: 8 "I did feel at this stage [that's mid-August 2015] 9 that I was fighting ShEx." 10 Then if we go forwards, please, to page 34, you say: 11 "By this time I had lost confidence in the quality 12 of ShEx's advice. We were going round in circles, and 13 they were unwilling to engage with the issues in the way 14 I felt they needed to. In my view ShEx had lost 15 objectivity, and its officials were unable or unwilling 16 to scrutinise [Post Office] properly -- even though that 17 was an essential part of their role. The advice they 18 gave seemed close minded, deaf to the issues and 19 constantly repeating the same mantra. As time went by 20 I felt as though they were trying to obstruct, or shut 21 down, my efforts to get to grips with the issues. This 22 may have been connected in some way to a dogmatic belief 23 that [arm's-length bodies] should be entirely free of 24 Government interference; and certainly I was repeatedly 25 advised that [Post Office] should be left alone. I do 82 1 recall feeling the pressure of the consistent advice 2 from ShEx that these were not matters for Government and 3 to hold that official line, but based on what I now 4 knew, that was no longer a tenable position." 5 Had this happened in either your Civil Service or 6 political career to date, ie by mid-August 2015, the 7 officials that were advising you were fighting you, they 8 had lost objectivity, they seemed closed minded? 9 A. I mean, the answer is no. I mean, I did deal with the 10 Green Investment Bank -- and, funnily enough, that was 11 ShEx as well, although a different cast list -- where we 12 had a problem of trying to reassure people that green 13 credentials would not be sort of completely lost, and 14 the advice there was it was privatisation, so that was 15 tough, eventually, we found a solution, which was to 16 been trustees who were slightly outside the structure, 17 and, you know, could be turned to, in the event of, 18 I think, an onward sale or whatever. 19 But to start with, I'd found ShEx quite difficult on 20 that subject, although we did get a resolution to that 21 in the end. But, on the whole, you know, if you're 22 clear you want something -- 23 I mean, the other thing the officials do is go to 24 the Permanent Secretary or go to the Secretary of State 25 and, to some extent, obviously, there was this 83 1 understanding that there was operational separation, and 2 that certainly had the endorsement of the Secretary of 3 State, but I probably would have mentioned by 4 frustrations, but the way I dealt with the frustration 5 rightly or wrongly, I wanted to do something, was 6 I moved forward and I got the new Chairman to take 7 a look at this, I explained that it was, you know, 8 reputationally and organisationally important for the 9 Post Office, and I encouraged him. 10 My recollection is I encouraged him actually to use 11 lawyer, a QC, because that's what -- the sort of thing 12 that I had experience of in the private sector. Where 13 you've got a really big problem, if you bring 14 an independent leading member of your profession, they 15 provide clarity, they make sure you know what the facts 16 are, and then that enables you to move forward and do 17 the right thing. 18 But if what you're asking me about was had I lost 19 confidence in ShEx advice, the honest truth I had, 20 I tried at an earlier junction to get some Business 21 Department officials to come along to a meeting and they 22 sent along a lawyer. So I had a lawyer and I had two 23 Special Advisers at the meeting but I didn't have, you 24 know, a senior Business Department Official who I felt 25 might be a little bit more understanding of the fact 84 1 that you've got MPs -- I mean, MPs are really important 2 in our democracy because they sometimes bring, you 3 know -- they bring unwelcome bits of information to you. 4 I wasn't an MP, but I was at a major retailer. We had 5 the same system. You've got these letters coming in to 6 the CEO, which were an excellent source of stones in the 7 shoe, and that's what we were getting from these MPs, 8 and I didn't feel that ShEx really wanted to listen to 9 that. 10 They wanted to make sure that the line that they 11 took prevailed, and they worked with POL to try and make 12 sure that that's, you know, what I was being told. And 13 then I bought in Oliver Letwin -- see paragraph 125 -- 14 which was obviously helpful. 15 Q. Yes. If we skip forwards to paragraph 239 on page 61, 16 please, you say: 17 "My relationship was mainly with Laura Thompson who 18 was, for the most part hardworking, helpful and 19 effective. However, she followed party lines decided 20 above her by Richard Callard, the [Post Office] Board 21 member, and others. In retrospect, ShEx was too close 22 to [Post Office] for effective scrutiny and I was at 23 times frustrated by their unwillingness to question the 24 status quo." 25 Who within ShEx did you have concerns about, by 85 1 reference to the words "and others"? 2 A. Well, I had -- I didn't see much of Richard Callard but, 3 to the extent, I did have a little bit concern about 4 him, and clearly we've got -- we've had evidence 5 separately that he was working very closely to POL, 6 which I mean is understandable, he was on their Board. 7 And then I had this exchange with Mr McInnes, who 8 I think was -- I don't know where he slotted in but 9 maybe above Callard, and I'd asked him specifically for 10 a proper submission on Second Sight, and I ended up not 11 getting a reply from him at all, but getting a reply 12 from Laura Thompson, saying the same thing and 13 forwarding a piece of paper from POL, annexe B, which 14 was missing when I saw all these papers initially. 15 Q. What was the nature of your interactions with 16 Mr Callard? 17 A. I think he came to the meeting at the beginning of 18 August. I met him when I went on the away day in June, 19 because he was the Board member. 20 Q. Did you communicate your concerns directly to 21 Mr Callard? 22 A. Well, certainly on 4 August I communicated my concerns, 23 and he saw -- the thing about the Civil Service is 24 there's a lot of reading of paper, and civil servants 25 are very good at reading paper, and he was receiving 86 1 copies of all the exchanges I was having with Laura 2 Thompson, who knew of my concerns. I mean, one 3 difficulty we've got -- and I now know why -- is that we 4 haven't got any notes of my meetings by my private 5 secretaries, except where they ended up somewhere else 6 and one of the documents you've just flashed up says 7 it's not the responsibility of a private office to keep 8 any copies; it's the responsible of the divisions. 9 So that's the problem we've got. Sorry, I'm not 10 really answering the question, but those were the 11 concerns I had. I think I had one meeting with 12 Mr Russell, who was the top honcho, and that was later 13 on -- I think he came to I see me to ask about how I'd 14 found ShEx. 15 Q. Given the concerns that you have mentioned in the 16 passages of your witness statement that I've shown to 17 you, in particular that ShEx was being obstructive, that 18 you had lost confidence in it, that it lacked 19 objectivity, what steps did you take to address those 20 issues? 21 A. Well, the main step I took was to ask the new Chairman 22 of Post Office to bring an independent person to have 23 a good look at the whole thing and provide us with 24 advice and then I pushed back on ShEx in the normal way, 25 where they gave me advice that I didn't like. But, you 87 1 know, they were the officials. I had a go, at the 2 beginning of August, at bringing in officials from 3 elsewhere, but I was told that -- and remember, I was 4 a relatively junior minister, I was told that that 5 wasn't appropriate. 6 I mean, I did have updates with -- quite short 7 updates, always -- with the Secretary of State and I'm 8 sure I will have -- I know I explained to him that I was 9 planning this review by Parker, obviously, who he was 10 partly responsible for bringing in, which my 11 recollection was he supported. 12 Q. Was that Sajid Javid? 13 A. Yeah. 14 Q. Did you ever consider -- escalating might not be the 15 right word -- but raising the problems that you were 16 encountering with the Permanent Secretary? 17 A. The honest truth is I can't remember but if I had had 18 a meeting with the Permanent Secretary, which I did 19 occasionally have at that time, I'm sure I would have 20 said "Well, it's all very frustrating but what we're 21 going to do is get -- we've got these two or three 22 avenues, we're going to add the extra avenue of having 23 an independent look at it by Parker, and he would have 24 probably agreed that was a good idea". 25 You have to remember that I tried to be 88 1 constructive. I tried to actually do something, which 2 was why I got this extra piece of work done, which 3 I think, if it had become public, would have been 4 extremely transformational. 5 Q. Given your concern that the party line was being decided 6 by individuals, including Mr Callard, did you consider 7 it was appropriate for Mr Callard to have been the 8 Government's representative on the Board? 9 A. I mean, that was not a decision for me. My 10 understanding of the structure was that I was 11 responsible for postal affairs, but who -- you know, how 12 the Shareholder Executive worked -- and, you know, the 13 Permanent Secretary sat -- the permanent secretaries, 14 I think, sit on the TopCo in the Shareholder Executive 15 and it is for them to decide who the individuals are. 16 It is important who the individuals are but it is not 17 part of the constitution that we, as ministers, you 18 know, decide which civil servants have which jobs. And 19 when that works well, that's fine. 20 Q. Which Permanent Secretary had functional responsible for 21 ShEx? 22 A. Well, that will have been the Business Permanent 23 Secretary, who I think -- it was first Martin Donnelly, 24 and then it became Alex Chisholm, but I think that 25 was -- Alex came in with the climate change and energy 89 1 work, which was the time I was moved, so I think Martin 2 Donnelly would have been the Perm Sec at that time. 3 Q. Thank you. 4 A. I did have meetings with him on European issues quite 5 a lot because one of the points I haven't made is 6 obviously, although the Post Office was very important 7 to me, I was quite heavily occupied on other matters, 8 notably going to Brussels, probably once or twice 9 a month. I think I was in Asia in this summer period on 10 intellectual property and, you know, that was the most 11 important -- those were the -- those, plus the Bills, 12 were the most important part of my portfolio, important 13 though this obviously is. 14 Q. You've referred to having a meeting at the beginning of 15 August with Paula Vennells. Can we look, please, at 16 UKGI00005261. If we scroll to the foot of the page, 17 please. This is an email exchange not including you, 18 and is in the run-up to the meeting. The subject 19 heading is "Sparrow catch-up", it's dated 4 August 2015, 20 from Mr Callard to Avene O'Farrell, who is or was Paula 21 Vennells', essentially, personal assistant: 22 "... we had a catch up with Lady Neville-Rolfe today 23 about Sparrow. Paula is seeing her on Thursday morning 24 [that will be the 6th] first thing(ish) and I thought it 25 might be worthwhile me having a chat with Paula for five 90 1 minutes over the phone tomorrow if there is time -- 2 I appreciate it's her first day back but ... if we could 3 find a slot, it's worth her being aware of [Lady 4 Neville-Rolfe's] mood and position (not that there is 5 too much to worry about)." 6 Can we look, please, at your witness statement at 7 paragraph 102, which is on page 27. At the foot of the 8 page, you say, "I have also been shown a copy of a chain 9 of emails", that's the one I've just shown you. Then 10 fourth line: 11 "Of course I did not see these emails at the time." 12 Then you start quoting from the email and, if we go 13 over the page, please. You say: 14 "I find this troubling. This seems to me to be 15 clear evidence that ShEx -- whose role it was to provide 16 me and other ministers with objective and impartial 17 advice, to scrutinise POL's actions and to hold it to 18 account -- was taking steps to provide advance warning 19 to [Post Office] about my concerns and intended 20 direction of travel. I cannot see any good reason for 21 them to have done so. I am sadly driven to the 22 conclusion that ShEx and [Post Office], perhaps 23 inadvertently, were in effect working together to try to 24 deflect me, and that ShEx were not giving me the 25 independent and impartial advice that I needed." 91 1 What was it about the communication between Richard 2 Callard and Paula Vennells' office that led you to that 3 conclusion? 4 A. I think he and Laura knew that, by that time, I was 5 getting frustrated and wanted more done than the classic 6 Post Office line and so he seems to be ringing them up, 7 to say "Well, there's a meeting coming up", and, as it 8 were, telling them in advance where I was going to come 9 from so that they could prepare for that. That took the 10 element of kind of surprise away from my meeting with 11 Vennells, so instead of being able to take on Vennells, 12 they would obviously pre-brief Vennells, the 13 Communications Director, who was an ex-special Adviser, 14 who will have obviously explained everything that she 15 should do and I didn't really think, given there was 16 a difference between us at the Post Office at that time, 17 that that was a very sensible or wise thing to do. 18 I mean, it is true, sort of Prime Minister's have 19 Sherpas that talk to each other before meetings but, you 20 know, that's where things are, you know, more -- there's 21 more agreement coming along, whereas, actually, you 22 know, this was a slightly rocky patch, and I think that 23 showed a lack of judgement and a wish to be perhaps more 24 aligned with the Post Office than was appropriate. But 25 obviously, Mr Callard had these two conflicting -- he 92 1 was trying to be a good NED to the Post Office, and he 2 was also trying to advise me. So I, you know, well, 3 I can perhaps understand it from that point of view. 4 But I think it was misjudged and it made me feel 5 slightly that those who were advising me have had a foot 6 in the Post Office camp, and it was one of the reasons 7 why, as I alluded to earlier, I wondered if we shouldn't 8 have some more classic Civil Service officials because 9 you remember that ShEx is very much made up of 10 commercial people -- Richard came from Deloitte. You 11 know, they're all a series of people who have come in 12 from the private sector, which of course I do 13 understand, but it does mean that they're not so au fait 14 with these political difficulties which were obviously 15 facing at this time. 16 Q. Why did you consider that ShEx and the Post Office 17 working together to try to deflect you was perhaps 18 inadvertent? 19 A. Well, I was trying to -- obviously, I don't have -- 20 I don't have evidence except the evidence that you have 21 given me in those pieces of paper and, you know, they're 22 civil servants, they try to act with objectivity. 23 That's why I put "perhaps inadvertently". As it is, 24 I think, during the course to your inquiry, this thing 25 that I wrote some weeks ago has become a little more 93 1 believable. 2 MR BEER: Sir, thank you we're about to move to a separate 3 topic. Can we break until 12.35, please. 4 SIR WYN WILLIAMS: Yes. 5 MR BEER: Thank you. 6 (12.23 pm) 7 (A short break) 8 (12.35 pm) 9 MR BEER: Good afternoon, Baroness Neville-Rolfe. Can we 10 just go back -- 11 Assuming, sir, you can see and hear us? 12 SIR WYN WILLIAMS: That is a correct assumption. 13 MR BEER: Thank you very much. 14 Can we go back, please, to the tipping off or 15 priming of Paula Vennells and her staff about your 16 concerns, your mood and your position in advance of the 17 meeting. We looked at that email before the break and 18 you expressed your concerns about it. Can we look, 19 please, at UKGI00001067. We have looked at this note 20 before but I want to ask you a couple of questions about 21 a different issue. It's from Laura Thompson to you of 22 31 July, and you'll see that it refers, under "Purpose" 23 to "ahead of our discussion with you and Nick King on 24 Tuesday (4 August)", and "Timing: To see ahead of our 25 meeting on Tuesday, 4 August". 94 1 Then under 1: 2 "Since we spoke to you earlier this week, we have 3 been exploring options to address the concerns you 4 raised." 5 Then this: 6 "We have also been engaging with Post Office at 7 a senior level to ensure [that] they are aware of your 8 views." 9 Reading that sentence, "engaging at a senior level 10 to ensure they are aware of your views", would you 11 understand that that's a reference to the forewarning of 12 Paula Vennells of your mood and position in the way that 13 we saw in the email that we looked at before the break? 14 A. Well, I think it's a completely fair point, that they 15 did say that. I don't recall that at the time and it 16 says "aware of your views", so I suppose that's fair 17 enough. It doesn't resolve -- obviously it depends what 18 the exchanges were. It doesn't quite resolve the 19 problem that I was looking for independent advice, and 20 they knew that because my private office had been on to 21 them, saying that I wanted somebody outside ShEx to come 22 to the meeting. 23 Q. But the point that we take from this, would this be 24 right, is at least ShEx were being open with you -- 25 A. Yeah. 95 1 Q. -- about the fact of communication over "your views" 2 with Post Office at senior level; it wasn't 3 surreptitious? 4 A. That's true. From that note, yeah. 5 Q. But do I detect that you retain a residual concern, 6 having read the email exchange between Richard Callard 7 and Paula Vennells' -- 8 A. I retain -- 9 Q. -- staff? 10 A. I retain a residual concern, yes. 11 Q. Can we turn to the separate issue -- that can come down, 12 thank you -- you've mentioned it a number of times 13 already: the wish to have separate or independent 14 advice, ie separate from ShEx. Can we turn to your 15 witness statement, please. It's paragraph 99, which is 16 on page 26. Page 26, 99 is at the foot of the page. 17 You say: 18 "... I had agreed to a meeting with Paula Vennells 19 and Jane MacLeod on 6 August. As explained ... by this 20 stage I was dissatisfied with the advice I was receiving 21 from ShEx, and I wanted a senior official outside ShEx 22 to provide support. On 3 August, my private secretary 23 communicated to Laura Thompson my request for support 24 from a senior official from outside [of] ShEx at this 25 meeting." 96 1 So here you appear to be saying that the request was 2 for a senior official outside of ShEx to provide you 3 with support at the meeting with Paula Vennells and Jane 4 MacLeod on 6 August, correct? 5 A. My recollection was the main occasion on which I wanted 6 someone from outside was on the 4 August meeting because 7 we were looking -- we were trying to look forward at 8 options, but I think the private office, perhaps 9 rightly -- it was a long time ago -- took that as 10 meaning that it would be good to have somebody there on 11 the 6 August meeting. I mean, I think that might be the 12 conflation of the two meetings. I'm not sure that that 13 detail matters. It was more that I was hoping to have 14 a different pair of eyes on the issues. 15 Q. Can I just persist with the detail modestly for 16 a moment, by looking at the email, because I think you 17 may be right in what you're saying, that the independent 18 assistance was for the purposes of the meeting on the 19 4th, not the 6th. UKGI00005195. This is the 20 correspondence that you cited in paragraph 99 of your 21 witness statement and if we look at page 2 first, please 22 and scroll down, an email from Laura Thompson to your 23 private office: 24 "Please see attached a short note to the Minister 25 ahead of our meeting with her on Tuesday." 97 1 So Tuesday would have been 4 August. 2 Then if we scroll up, please, revised note sent 3 through. 4 First page, please, at the foot of the page. And 5 scroll a bit more, please. Thank you. Your private 6 secretary replies to Laura Thompson: 7 "Thank you for the note, which [you had] seen. [You 8 were] looking forward to the discussion at Tuesday's 9 meeting. To ensure this meeting was as valuable as 10 possible, she commented that: 11 "It was very helpful [to have] Nick King ... 12 "A lawyer would need to be involved ... 13 "... keen to have a list of the senior officials 14 that would attend. 15 "Grateful if you could advise on who should be 16 invited from legal. On point (c) ... I understand that 17 Richard Callard and Anthony Odgers will attend. The 18 Minister is still keen that a senior official outside of 19 ShEx be involved given that part of this discussion is 20 a policy one that may go beyond BIS's shareholder role. 21 I would be grateful for your steer on how we can address 22 this. I would like to go back to the Minister on this 23 point this afternoon ..." 24 Then at the top of the page, an email from Laura to 25 Richard: 98 1 "Just spoke to Harriet. She thinks [Baroness 2 Neville-Rolfe] still wants a senior official outside of 3 ShEx and not including whoever we get from Legal but is 4 going to go back with the proposal of just three plus 5 Legal and see what the Minister says. I asked Harriet 6 to emphasis that we are taking the policy view not just 7 the shareholder view." 8 So it would appear from your private secretary's 9 email that the request from you was to have somebody 10 from outside of ShEx present at the meeting on the 4th, 11 ie the internal meeting on the 4th; is that right? 12 A. That's right but -- 13 Q. Rather than the meeting with Post Office on the 6th? 14 A. But I only got half a loaf. I got a Legal Department 15 person and I got a more senior person from ShEx, and 16 I got Special Adviser. 17 Q. So leaving aside the detail point and getting back to 18 the point of substance, why did you request the support 19 of a senior official outside of ShEx for your meeting on 20 4 August? 21 A. Because, as I explained in my statement, by then, I was 22 beginning to worry about the advice that I was getting 23 from ShEx, which is very much a single track "everything 24 is fine", and I was seriously concerned about the sort 25 of points that the MPs who I met had been making, and 99 1 I felt that something extra needed to be done so that 2 the line that the things we got, which were the CCRC, 3 the mediation, the SS report, were not enough and that 4 we needed to do something extra. And I thought that 5 somebody from outside ShEx would be more open to that. 6 Q. Do you know why your request was denied? 7 A. I suspect it might be partly to do with the fact that it 8 was August and probably nobody was around, you know, the 9 cock-up theory of history, but also they obviously felt 10 strongly they were going to do the policy view as well 11 as the shareholder view and, you know, when you're 12 a Government Minister, you know, you have to fight the 13 battles you have to fight and we were nearly at the time 14 of the meeting, and it was important that the meeting 15 should go ahead, rather than wait to -- you know, sort 16 of going round the office politics was not what I wanted 17 to do. What I wanted to do was to actually get 18 something done. 19 Q. So you attended the meeting in the end without the -- 20 A. Yeah, I had -- 21 Q. -- independent advice -- 22 A. I had called the meeting. I wanted that meeting to 23 happen before the August break. I wanted to get on with 24 it and make sure that something was done. 25 Q. Can we turn to the meeting on 6 August with Paula 100 1 Vennells, by looking at your witness statement, please, 2 page 27, paragraph 100. You tell us that, in advance of 3 the meeting, ShEx provided you with a briefing note and 4 lines to take, which they drafted and which didn't 5 reflect your concerns at the time nor your intended 6 direction of travel. You say: 7 "I did not want to be told yet again about [Post 8 Office's] side of the story; what I wanted to ensure was 9 that there would be a fresh and independent review to 10 see if issues with Horizon had been missed." 11 101, you say: 12 "Regrettably, I understand that DBT has been unable 13 to locate any minutes or other record of the meeting of 14 6 August." 15 Skipping a few lines, you say: 16 "Whilst I cannot recall whether I said [in the 17 meeting] that I thought a QC-led (or similar) 18 independent review should be commissioned, [you] might 19 not have done as [you] had not yet spoken to Tim Parker 20 ..." 21 Referring to a letter four lines from the bottom, 22 you say: 23 "... this does seem to suggest that I highlighted at 24 the meeting the concerns by MPs previously, including 25 that postmasters felt insulted by [Post Office's] 101 1 approach to mediation. I do recall finding one of the 2 [Post Office] attendees to be particularly overbearing 3 and dismissive of my concerns." 4 Who was that? 5 A. I think it was either Mr Davies or Mr Bourke. 6 I don't -- I haven't got photos of them but what I found 7 was that when I made points and made them to Paula 8 Vennells, there was quite a lot of interrupting by them, 9 giving their view of things and, obviously, I was trying 10 to have a meeting with Paula Vennells to hear her views, 11 and not have the sort of insistent line of these people 12 who were kind of supporting her in this matter. You 13 know, I don't know whether it was -- whether it was the 14 General Counsel, she was obviously there as well. 15 I mean, she might have intervened. 16 Just my memory of that meeting was that it was, you 17 know, sort of almost -- there was a sort of threatening 18 feel that I was trying to do the wrong thing and, you 19 know, I should watch out. It was just, as I said, 20 overbearing and dismissive of my concerns. I was 21 passing on concerns that had been registered by people, 22 you know, the democratic representatives, and I didn't 23 feel -- I felt that they wanted to tell me what they 24 thought the thing was, rather than, you know, explain 25 why the detail of some of these points wasn't right. 102 1 I mean, they sent me a big -- there was a big PowerPoint 2 pack of stuff, some of which was extremely helpful, you 3 know, like the detail on mediation, and things. So it 4 wasn't all negative. But there was just this memory and 5 I was encouraged to put this in, that I'd kind of felt 6 slightly threatened at the meeting. 7 Q. From the Post Office side, what is your recollection as 8 to who led for them: was it Ms Vennells or somebody 9 else? 10 A. Well, Ms Vennells led but she kept -- she got 11 interrupted by other people when questions were asked. 12 You know often, if you're the leader at a meeting, you 13 make the points, you have a speaking note, and then you 14 bring your people in as and when you feel that that 15 would be helpful. It didn't feel like that. It felt 16 the other way round. 17 Q. Thank you. Can we turn to paragraph 103 of your witness 18 statement, please, which is just over the page. You say 19 you recall speaking to Tim Parker, probably later on 20 that same day, 6 August, and you impressed on him that 21 he needed to ensure that the Horizon issues were looked 22 at again and taken seriously: 23 "I just wanted this sorted out properly and believed 24 that he would realise that he and the other Board 25 members had a duty to just that. I recall asking him to 103 1 bring in an independent QC or equivalent to head 2 a review when he took up office, and he moved to do so 3 soon after he took office." 4 You understand that the Department doesn't hold 5 a record of that call. 6 So, by this time, you knew, ie early August, that 7 Mr Parker was to take up the chairmanship of the Post 8 Office. 9 A. Yes. 10 Q. You spoke to him and impressed on him the things that 11 you set out there. Why did you think that Mr Parker was 12 the solution or a solution to the outstanding issue or 13 issues? 14 A. Because he was the new Chairman of the Post Office, he 15 had a background which combined business experience, 16 I think Clarks, Samsonite, various things. I mean, he 17 was a strong candidate for this job -- and National 18 Trust, which is more public sector kind of thing, and 19 I think he was a Treasury official when he started in 20 this life because I had briefly interviewed him early on 21 in my time as a minister because when new appointments 22 were being made to Boards it's classic that the people 23 who come through the system, through the panel, then 24 sort of have a cup of tea with the Minister, before the 25 final appointment is made. And I was quite -- I have to 104 1 say I was quite impressed by him. I thought he had 2 a sort of strength and dynamism and he seemed, when 3 I spoke to him, to very much want to get to the heart of 4 all of this. 5 And I knew from my experience of running Boards that 6 if you have a running sore like this, bring in somebody 7 from outside, like a QC, or it can be a senior civil 8 servant or I think somebody had suggested a captain of 9 industry, which I think probably would work less well, 10 then that was the thing to do. It was also a route to 11 actually getting something done. 12 Q. Can we look, please, at POL00102551. This is your 13 letter to Mr Parker of 10 September 2015, so about month 14 later. You say: 15 "I am writing to you ahead of your taking up the 16 role of Post Office Chairman to confirm our conversation 17 last month regarding [Horizon]. The issues surrounding 18 the Horizon IT system have not been resolved. Indeed, 19 some of the MPs concerned have written to me again 20 following the Panorama programme pressing the case for 21 an independent investigation. 22 "The Government takes seriously the concerns raised 23 by individuals and MPs regarding the ... Horizon system 24 and the suggestions there may have been miscarriages of 25 justice [and] also recognises the commitment that Post 105 1 Office have demonstrated to resolving those issues, 2 including through creating a mediation scheme and 3 appointing independent investigators to scrutinise the 4 system. 5 "As you will be aware, there have been some three 6 years of scrutiny of Horizon and the [CCRC] is 7 considering a number of cases which have been brought to 8 it by individuals, and the Government cannot intervene 9 in that independent process. 10 "As the sole shareholder ... the Government wants to 11 make sure that the Post Office Network is successful and 12 sustainable across the country. We recognise [it] is 13 a commercial business and we allow it to operate as such 14 but, of course, we expect it to behave fairly and 15 responsibly in doing so. I am therefore requesting 16 that, on assuming your role as Chair, you give this 17 matter your earliest attention and if you determine that 18 any further action is necessary, will take steps to 19 ensure that happens." 20 Over the page: 21 "I look forward to hearing your conclusions and to 22 working with you to secure the future of the Post Office 23 Network." 24 Would you agree this letter did not specify how Tim 25 Parker should carry out any review or investigation into 106 1 the issues, whether it was to be conducted by him or 2 somebody else and, if by somebody else, the nature or 3 qualifications of that person? 4 A. I agree that it leaves it open. The letter was, of 5 course, drafted by ShEx for me. 6 Q. Yes. 7 A. And I do recall the circumstances. A whole package came 8 up. I think they'd all been cleared through the 9 Secretary of State by the time they got to me, or anyway 10 certainly by the time I was signing this. I think the 11 letter could have added in something about deadlines, 12 something about publicity, one or two other things, 13 but -- and it's very much written from a ShEx 14 perspective, respecting the ALB character. And I think 15 that, actually, that balance is probably quite sensible, 16 because, you know, if they were concerned, which they 17 always were, about the commercial, you know, operation 18 being separate. 19 But I had a lot of faith in a new chair coming in, 20 who I thought, you know, would take a really good and 21 strong look at this, talk to those concerned, do the 22 sort of forensic work that wasn't appropriate for 23 a minister to do and I wouldn't even have had time for 24 it and the letter, you know, confirmed that that is what 25 I'd asked him to through. 107 1 Q. Can we look, please, at POL00233179. This is an email 2 exchange that you weren't party to, if we scroll down, 3 that's the email from Rodric Williams, a lawyer in Post 4 Office, to Patrick Bourke and Mark Underwood in Post 5 Office, and he says: 6 "... see ... my starter for ten on Jane's speaking 7 notes for her meeting with [Tim Parker]." 8 So this is ahead of a proposed meeting between Jane 9 MacLeod, then General Counsel for Post Office, and Tim 10 Parker, who would by then be Post Office Chairman. If 11 you just look at number 3: 12 "The review will however be creditable if it is: 13 "Undertaken independently from the existing Post 14 Office team; 15 "logical in its approach; AND 16 "delivered against stated objective/s." 17 What would you say to the suggestion that the idea 18 of independence, namely a review undertaken by Queen's 19 Counsel or similar, came from Post Office and not you? 20 A. I mean, I think, when I suggested the thing, I was most 21 keen on having some independence. I don't think I laid 22 down specifically that it should be a QC because there 23 were other options, such as a senior civil servant or, 24 as I say, a captain of industry. But the key thing was 25 to bring somebody in so that there was, you know, 108 1 an independence from existing PO teams. So I agree, to 2 be honest, that seems to me a very fair point, and 3 without, you know, sparing your brushes, if you bring 4 a QC you know they will do a thorough job and that it 5 will be objective and that the facts will be correct, 6 and that they're quite good at marshalling lots of 7 different pieces of paper and summarising things in 8 a way that's understandable and, actually, I would say 9 that the Swift Review, when I eventually saw it, did 10 a lot of those things. 11 So I was entirely in agreement with Tim Parker, and 12 delighted when he wrote to me very soon after his start 13 date, saying that was what he was going to do. And Sir 14 Jonathan Swift, who is now, I think, a High Court judge, 15 seemed up and coming and a very talented person to do 16 exactly what I felt needed to be done, and could be 17 done, you know, at reasonable speed and then we could 18 get on and do something which wouldn't take many years. 19 Q. If we just look over the page, please, at paragraph 6. 20 "Given the volume of material, [Tim Parker] is 21 likely to need 'independent professional assistance' ... 22 "Subject to any procedural requirements, this could 23 be: 24 "a solicitor: 25 "with good document management and summarising 109 1 skills 2 "from a firm which has not been instructed by the 3 Post Office ... 4 "which is on the Government Services Panel if we 5 want preferential rates ... 6 "or completely off panel if we want total 7 independence ... 8 "a barrister: 9 "likely to have a high level of independence 10 "BUT tend to be focused on forensics and outcomes 11 rather than process ... 12 "a management consultant: 13 "likely to be good at understanding the process ... 14 "BUT may not be able to opine on the suitability of 15 the process, or may focus on whether there is a 'better' 16 one 17 "a former civil servant ..." 18 Again, did the idea of independent professional 19 assistance come from you to Tim Parker way back on that 20 conversation in early August? 21 A. That was very much my recollection, that was exactly 22 what I wanted, as I say, and I reference that because of 23 my commercial experience at knowing how helpful that can 24 be to a Board. 25 Q. Can we look, then, at Tim Parker's reply to your letter 110 1 of 10 September. UKGI00006138: 2 "Dear Lucy 3 "Thank you for your letter of 10 September. 4 "Having had my first ... days of induction ... just 5 last week, I am considering how to fulfil the commitment 6 I gave you to take a fresh look at the Post Office's 7 handling of the complaints raised ... in connection with 8 Horizon ... 9 "To this end, and to promote the independence of the 10 exercise, I propose to instruct a QC to advise me as to 11 the appropriate scope of my investigation, how I might 12 best conduct the necessary enquiries, and to assist me 13 in considering how to present and, as necessary, act on 14 my findings." 15 That refers to a slightly different role of the QC, 16 doesn't it? The QC is going to advise on scope, the 17 conduct and presentation of his, Mr Parker's, findings, 18 rather than conducting the investigation him or herself? 19 A. Well, that might be so but, equally, when we eventually 20 had the summary letter later on, explaining what he'd 21 covered, it seemed to me to cover the right area. You 22 have to put a certain amount of trust in a highly paid 23 chairman to a Government ALB and, you know, bringing in 24 a QC to advise seemed a good idea, and there's no 25 suggestion that he's sort of just -- just leaving it to 111 1 the QC, actually he's to assist me in considering both 2 how to present and as necessary react on my findings. 3 I mean, actually, I require -- I think that's 4 a positive, rather than a negative, if I'm honest. 5 I didn't have a concern at the time. I felt a certain 6 weight off my shoulders that we were going to actually 7 bring in somebody different. 8 And, of course, you have to remember that we're 9 now -- we have an inquiry with hindsight. We did not 10 know at the time that there had been these unsafe 11 prosecutions. Everybody was telling me that Horizon was 12 fine, that it was all fine. I was having to tell 13 officials, who didn't like the idea that we were opening 14 up, you know, possible criticisms of them -- they didn't 15 like the idea that the things might have gone wrong. 16 I had to remind them that we, as Government, you know, 17 had to try to make sure the right thing was done. 18 Q. So looking at the episode as a whole, you thought that 19 this was positive, in that he wasn't simply outsourcing 20 this, farming it out to a silk. The references to his 21 involvement in it were a good thing? 22 A. They were. It's a balance. You've got the independent 23 QC coming along and doing a proper forensic job and then 24 you've got the Chairman following through and actually, 25 you know, doing what was necessary. That seemed to me 112 1 what that letter said. 2 MR BEER: Thank you. 3 Sir, that will be an appropriate moment for the 4 lunch break. 5 SIR WYN WILLIAMS: Yes. 6 MR BEER: We will turn next to Baroness Neville-Rolfe's 7 meeting with Second Sight on 19 October 2015. Could we 8 do that at 1.55, please? 9 SIR WYN WILLIAMS: Sure. 10 MR BEER: Thank you very much. 11 (1.06 pm) 12 (The Short Adjournment) 13 (1.55 pm) 14 MR BEER: Good afternoon, sir, can you see and hear us. 15 SIR WYN WILLIAMS: Yes, thank you very much. 16 MR BEER: Good afternoon, Baroness Neville-Rolfe. 17 Can we turn then to the meeting of 19 October 2015 18 with Second Sight and start with a bit of a run into it 19 by looking at some correspondence beforehand, beginning 20 with UKGI00005300. If we turn to the bottom of page 2 21 and on to page 3 -- thank you -- we can see there the 22 Ron Warmington email of 22 July to George Freeman that 23 we looked at earlier, the one that says, "Please look at 24 the following paragraphs of our second report, and the 25 statement that Second Sight in 2015 found no evidence of 113 1 systemic flaws with Horizon is incorrect". 2 If we scroll up, please, we can see that he, 3 Mr Warmington, sends that on to David Cameron, on 4 28 July. Then scroll up, please. Then on 4 August, he 5 sends it to you. 6 "Dear Baroness, 7 "Further to the article written by Tim Ross in this 8 weekend's Sunday Telegraph [and he provides the 9 hyperlink], I have as yet received no acknowledgement 10 from Westminster in regard to my 22 and 28 July emails 11 ... 12 "The possibility seems to exist that Mr Freeman was 13 inaccurately briefed on the results of our firm's 14 investigation. As stated below, we have concluded that 15 there were, and probably still are, systemic flaws in 16 Horizon." 17 Then if we go to page 1 and stop there, thank you. 18 Andrew Bridgen says, in an email to your private office, 19 of 5 August: 20 "Dear Lucy, 21 "I have been forwarding this email ... perhaps you 22 could advise given the seriousness of this allegation 23 that Parliament may have been misled by the Post 24 Office." 25 Your private office send that to ShEx: 114 1 "... another one for response ... we should aim to 2 send a short response on Friday on the back of the 3 response to Ron Warmington." 4 Do you think you got personally to see this 5 exchange? 6 A. I can't be sure. I mean, clearly I must have known 7 during that August period that Warmington was disputing 8 what Freeman had said. 9 Q. Can you recall what your reach was to Mr Warmington 10 saying that Second Sight's Report had been 11 misrepresented in Parliament? 12 A. I think I probably sought advice, that's what I normally 13 did if I got something from outside like that. But 14 I think it also came in from the MP, it did, from Andrew 15 Bridgen, who obviously I had a lot of respect for. And 16 so, you know, that meant there was more work to do. It 17 confirmed my view that we should have somebody else look 18 at this. 19 Q. Had you by this time read the Second Sight second report 20 to see for yourself whether what had been represented on 21 the basis of briefings to Parliament was correct or 22 incorrect? 23 A. I mean, at or around this time I will have got that. 24 I don't recall exactly when the full report was put in 25 my box, if I'm honest. And, remember, this was 115 1 a holiday period, we were travelling about, et cetera, 2 et cetera, but I had taken on board the seriousness of 3 it and we had spoken earlier about how, actually, quite 4 difficult it is. You look at the individual paragraphs 5 and it is quite confusing as to exactly what, but 6 there's certainly a problem there and that I was well 7 aware of. 8 Q. Did that problem being raised by Second Sight constitute 9 a separate and independent reason for an independent 10 investigation being a priority? 11 A. I think it certainly helped to stiffen my resolve. But, 12 as I've said, I thought the key things were well 13 articulated by the MPs that I'd seen and, indeed, by the 14 debate, which we haven't looked at in the House, there 15 was an Adjournment Debate a few weeks earlier, bringing 16 all of these things together. And then you've got the 17 Second Sight Report as well. 18 Q. Thank you. That can come down. 19 A. Although the Second Sight Report had been around for 20 a very long time and, as yet, I've still not had 21 a summary of it from the system. 22 Q. Can you recall what the system's attitude was to your 23 proposal to meet with Second Sight? 24 A. Well, basically, they always advised me not to meet with 25 Second Sight on the basis they were unreliable, they 116 1 didn't abide by confidentiality and their report that -- 2 they seemed to cling on to this key thing that they had 3 found that there was no systematic fault with the 4 system, but they then said that other things that they 5 were doing, you know, that they were not straight with, 6 which was a bit confusing, to me. And, as I said, 7 a little bit earlier, I actually really -- I found it 8 difficult to know what the key points in the Second 9 Sight Report were, particularly when I'd seen the 10 counter stuff from POL. 11 But what I would say is I think Second Sight were 12 amazing in the way that they kept going. You know, year 13 after year, they produced these reports, they thought 14 that they were on to something. They got, you know, not 15 much sympathy from the powers that be and yet they kept 16 on trying and, obviously, they did engage MPs, which was 17 the right thing to do. 18 Q. Can we move to closer to the October meeting by looking 19 at UKGI00006142. At the foot of the page or the bottom 20 half of the page, an email from Laura Thompson to Andrew 21 Smith of your private office of 9 October 2015, and she 22 says: 23 "Andrew 24 "I noted down for the team here the non-Horizon 25 points from the meeting with the Minister, which I have 117 1 attached ... 2 "On the Horizon discussion, the main points I took 3 away were [as follows]." 4 So it seemed like you had a meeting at which Horizon 5 and non-Horizon issues were discussed and this is 6 Ms Thompson noting down, in the body of the email, the 7 main Horizon points that she took away. Bullet point 1: 8 "[Post Office] wanted to flag their concerns around 9 the Minister meeting Second Sight. They felt that doing 10 so would risk undermining her independence and distance 11 from the situation, and were also concerned that if news 12 of the meeting were to leak to the media, it could risk 13 individuals withdrawing from the mediation process 14 (after considerable efforts by [Post Office] to get 15 these in the diary). Paula was also concerned that the 16 Minister's meeting might conflict with any meeting Tim 17 Parker decided to have with [Second Sight]. 18 "[You] noted Paula Vennells' views but felt it 19 important to make the offer of a meeting to Second Sight 20 and inform [James Arbuthnot] that [you] were doing so. 21 [You also] suggested that the offer should be of 22 a private meeting, and should happen quite soon, so that 23 it would take place before Tim Parker invites them to 24 meet." 25 Can you recall what you thought of Post Office's 118 1 objections to your meeting with Second Sight, on the 2 basis that meeting with Second Sight would risk 3 undermining your independence and distance from the 4 situation? 5 A. I didn't really think that that was the case. I thought 6 it was quite possible to have a meeting to hear what 7 they'd got to say and encourage them to help Tim Parker 8 with his review. So, you know, I'd said I'd see Second 9 Sight as early as July. I'd reiterated that, I think, 10 to James Arbuthnot when I saw him. They all felt Second 11 Sight was very important and I didn't think that they 12 should stop me -- that Post Office should stop me seeing 13 them and, in fact, I think even ShEx agreed, perhaps 14 warn down by my assistance, that I should see Second 15 Sight, so I had a meeting with them. 16 Q. We are going to look at ShEx's note in a moment where 17 they, to an extent, in fact, echo the position taken by 18 Post Office, at least initially. 19 Did it occur to you that Post Office's resistance 20 might be motivated by a desire to avoid scrutiny from 21 Government? 22 A. Well, certainly they were always trying to defend their 23 line. That seemed to be their approach externally, and 24 they seemed very paranoid about external matters. 25 Indeed, I remember them being very paranoid about 119 1 Panorama. Obviously, I'd worked in the private sector, 2 I worked for Tesco, which was a company that, at that 3 time, was very high profile and successful and we'd had 4 Panoramas about ourselves, and all the rest of it, about 5 you had to engage and, you know, the fact -- I mean 6 actually, I agree that it should be a private meeting, 7 probably, you know, to try and assuage Paula Vennells' 8 concerns, but I did think the right thing was for me to 9 see Second Sight, since they'd been, you know, making 10 a lot of these points over a prolonged period and 11 I couldn't really see why I shouldn't do that. 12 Q. You said there that that step might assuage Paula 13 Vennells' concerns. Do I take it that you understood 14 that Post Office's approach in this regard was being led 15 by or taken with the approval of Paula Vennells? 16 A. Yeah, I think -- didn't I have a conversation with her 17 about it? 18 Q. Yes -- 19 A. Yeah, sorry. So she felt strongly about it herself -- 20 enough about it herself, not just her PR people, to 21 actually want to talk to me about it. So she obviously 22 felt strongly, presumably on the advice of lawyers, you 23 know, that this could somehow get in the way of some 24 legal arrangements, mediation, et cetera, to talk to me 25 about it and explain her concerns. I listened to those 120 1 concerns, I was careful, obviously, when I saw them, not 2 to say anything about -- trying to think -- you know, 3 sort of something that was going to lead to a lot of 4 public rows, because they were obviously worried about 5 that, but I was absolutely determined to see Second 6 Sight, and that I did -- 7 Q. Can we look -- 8 A. -- and it was helpful. 9 Q. Can we look, please, at ShEx's position, BEIS0000013. 10 A note of 1 October 2015 from Laura Thompson to you: 11 "Advice following your meeting with James Arbuthnot 12 ... covering [his] ask that you meet Second Sight and 13 Sir Anthony Hooper." 14 "Recommendation" is: 15 "That you: 16 "Decide whether you would like to meet Second Sight 17 ..." 18 If we go down to paragraph 3: 19 "Mr Arbuthnot argued that, since you had received 20 a briefing from Post Office on this matter, it was only 21 fair that you should meet Second Sight and hear their 22 side of the story. He invited you to judge for yourself 23 as to whether Second Sight were as 'biased and 24 unprofessional' as he felt they had been depicted by the 25 Post Office. 121 1 "4. The advantages of agreeing to meet Second Sight 2 would be", and then they're set out: demonstrate the 3 Government is listening; agreeing to maintain a positive 4 relationship with James Arbuthnot; assuaging a concern 5 that Second Sight believed that their findings are being 6 misrepresented; and the position that no Government 7 action is necessary since the CCRC is considering cases, 8 mediation is ongoing and Tim Parker is considering the 9 matter with a fresh pair of eyes would be stronger if 10 you can say you have met Mr Bridgen, Mr Arbuthnot and 11 Second Sight. 12 But then there are significant risks, it was said: 13 the operational matter point in (a); more stakeholders 14 in (b) "might have a reasonable expectation that 15 Government will opine on the merits"; (c) a risk of 16 briefing it out. 17 Over the page, 6, clearly a difficult judgement: 18 "Our view is that on balance you should offer 19 a meeting to Second Sight. The risks of doing so are 20 significant, but we believe they can be handled if we 21 are careful and robust in our messaging ... 22 "8. If you do decide to meet Second Sight we 23 suggest a low-key approach with an email from your 24 office to Mr Warmington ..." 25 Did you decide, therefore, that you should meet with 122 1 Second Sight? 2 A. I did. I suspect I had already decided before this memo 3 came up. It's one of the things in Government that 4 quite often submissions sort of come along to formalise 5 a view, you know, on the one hand, on the other, and 6 they've given me a reasonable, you know, run down and 7 accepting that I should see Second Sight. So I'm seeing 8 them -- I'm not saying I saw them -- the sort of 9 implication is we're just seeing them to show it was 10 a good thing. I was actually interested in seeing them 11 to hear from them what their view of Horizon was. 12 Q. You tell us in your witness statement that when Post 13 Office's objections came in, you "did not allow Post 14 Office's objections to deflect me"? 15 A. Exactly. 16 Q. Is that how you saw the Post Office's intervention, 17 namely an occasion on which they were seeking to deflect 18 you? 19 A. I think that's fair, yes. 20 Q. Can we turn to what happened at the meeting itself and 21 the sources for that are unfortunately quite sparse. 22 Look at your witness statement, please, page 39, 23 paragraph 143. Page 39, paragraph 143. It's at the 24 foot of the page. You say: 25 "I met [Messrs Warmington and Henderson] on 123 1 19 October 2015. I understand that, regrettably, [the 2 Department] has been unable to locate any minutes or 3 other record of the meeting. I recall listening 4 sympathetically to the issues raised, but I do not 5 remember much of the substance of the meeting: the 6 meeting was certainly not a 'lightbulb moment'. I am 7 confident I would have informed them of the Parker 8 Review and that I had asked Tim Parker to meet them and 9 that I encouraged them to raise these issues with Mr Tim 10 Parker as part of that review." 11 Is that the limit of your recollection of the 12 meeting of 19 October? 13 A. Yes, the specific memory of that meeting, I can kind of 14 remember the room I was in, and so on, but unfortunately 15 there is no note of the meeting which makes it 16 difficult. But what I do remember was, you know, they 17 went through some of their points. Obviously, those 18 were becoming to become familiar to me because there was 19 a point about contracts, wasn't there, there was a point 20 of Bracknell remote being able to fiddle about without 21 a footprint, the thing that Mr McInnes had told me 22 wasn't possible. You know, there were various things 23 which they repeatedly said but their communication was 24 not of a kind -- very decent people, quite right to keep 25 going, but the communication was not of a kind that 124 1 created a lightbulb moment and that's my recollection. 2 However, by then, I felt that we were moving towards 3 a solution and I encouraged them to talk to Tim Parker 4 and to Sir Jonathan Swift about, you know, what their 5 views were. I felt that this was the right way to get 6 those concerns looked at and in play and understand 7 whether the Post Office's long defence was correct or 8 whether the Second Sight Report was correct. 9 Q. We gleaned something from what happened at that meeting 10 from paragraph 145 of the statement. 11 A. Yeah. 12 Q. Because you cross-refer to a letter that you later wrote 13 to Oliver Letwin MP? 14 A. Yes. 15 Q. You say of the meeting of 19 October: 16 "It was a helpful meeting and they raised a number 17 of important points. I suggested they contact Tim 18 Parker ... to follow [them] up. [He's] currently 19 conducting a review ... and has appointed a QC to advise 20 him. He is currently setting up meetings with the key 21 parties and [you are] expecting him to update [you] with 22 findings in the New Year." 23 I think that's all we know about the meeting of 24 19 October. Did you receive any periodic updates from 25 Mr Parker about the conduct of his review? 125 1 A. I think during the next three or four months I had 2 meetings with him. I don't recall any letters or 3 anything from him but, from time to time, when I was 4 having a meeting on the Post Office, then Laura Thompson 5 would send me a background brief as to what was 6 happening and I think I asked for a meeting in January 7 because I think somewhere -- at some stage or other 8 I was told that he was hoping to have some findings in 9 the New Year, so I had sort of pencilled that into my 10 mind as the time to take up the story again. 11 Q. We can see that from paragraph 150, if we go over the 12 page. 13 A. Yeah, there we are, 26th January. Yeah. 14 Q. You had a meeting with Mr Parker, you cross-refer to 15 your own offices or ShEx's note. There were some 16 unrelated Horizon issues discussed, or issues unrelated 17 to Horizon, and he told you on Horizon that Jonathan 18 Swift "was about to report. He had found no systemic 19 problem". 20 Was the first communication in writing that you 21 received from Mr Parker about the Swift Report, or his, 22 Mr Parker's, review, a letter of 4 March 2016? 23 A. As far as I know, that was the first that I had anything 24 of substance, other than this it's all slightly -- 25 "about to report", and he found no systemic problem. 126 1 Obviously, I'd had that from him, which I noted. 2 I mean, the meeting in January, we had quite a lot of 3 issues to discuss, is my recollection. They probably 4 crowded out any discussion of Horizon. 5 Q. If we turn then to Mr Parker's letter to you of 4 March, 6 POL00024913. We can see this is Mr Parker's letter to 7 you of 4 March 2016. He cross-refers to your meeting on 8 26 January and says he had provided you with an update 9 on the work he had undertaken with the assistance of 10 Messrs Swift and Knight, to review the Post Office's 11 handling of complaints made by subpostmasters about the 12 operation of the Horizon software system, and sets out 13 in the letter further information about the approach to 14 the review, scope of work undertaken so far, and his 15 initial findings, and outlines his plans to bring the 16 work to a conclusion? 17 This is a long letter and we haven't got the space 18 to go through it in detail, but on pages 1 and 2, under 19 the heading of "Scope of the Review", you'll see that he 20 sets out his objections to review the Post Office's 21 handling of complaints made by subpostmasters regarding 22 the alleged flaws in Horizon, and to determine whether 23 the processes designed and implemented by Post Office to 24 understand, investigate and resolve those complaints, 25 were reasonable and appropriate. Do those terms of 127 1 reference, or does that stated objective, accord with 2 your intention? 3 A. I think broadly. I mean, understand, investigate and 4 resolve -- the "resolve" is important too, and then if 5 you go down the letter, there are four areas which seem 6 quite reasonable ones to me. I mean, if you're 7 a minister you're not General Counsel for the 8 Department, you're not kind of fiddling about at the 9 margins -- what you want is to make sure that somebody 10 sensible is taking things forward. I thought the scope 11 looked all right to me, rightly or wrongly. 12 Q. Over the page, he says that he decided that the 13 particular focus should be on four matters: criminal 14 prosecutions; the Horizon system, ie the software; 15 support provided through training and helplines; and 16 investigations in the circumstances of specific cases. 17 Can you assist as to whether or not that looked 18 broadly satisfactory to you? 19 A. That looked like the right headings to me. 20 Q. He says, skipping a paragraph: 21 "... that [his] advisers requested and were given 22 unrestricted access to documentation." 23 I'll skip over whether that's accurate or not: 24 "Numerous meetings were held between them and 25 a range of Post Office staff and employees of Fujitsu", 128 1 and he sets out the meetings that he had. 2 Then he sets out, for the rest of this page and on 3 to page 3, the principal findings and recommendations. 4 Did you understand that there existed separately from 5 this document a written report. 6 A. Certainly not a final report. I mean, I think they 7 might even talk about a draft at some point. The way 8 I read this was that they were -- they'd made quite 9 a lot of progress and that they'd found these areas 10 where they needed further investigation, which actually, 11 to my mind, matched some of the things I was concerned 12 about and so were the MPs. So I thought it was work in 13 progress, and I was -- I think I asked for advice from 14 officials and they sort of said "You don't have to do 15 anything at this moment in time", so I was glad that 16 those various areas of further work were being carried 17 out. 18 Obviously, what I didn't know but you're probably 19 going to come on to ask me about, was this was 20 a slightly rosy summary of the Swift Report -- 21 Q. Yeah, I -- 22 A. -- in my view. 23 Q. Yes, I may choose words differently than "slightly 24 rosy". Can we go to page 4, please. "Next steps": 25 "I have commissioned independent persons to 129 1 undertake the necessary work ... 2 "I ... share your aim that matters should be drawn 3 to a conclusion as soon as possible ... I anticipate 4 I will be in a position to report back on the outcome of 5 the further work during May. 6 "I firmly believe that the focus and scope of my 7 review to date, together with further work which I have 8 now commissioned, will allow me to confirm that the 9 processes designing and implemented by Post Office to 10 understand, investigate and resolve those complaints 11 were reasonable and appropriate, and that there are no 12 further enquiries ... to be undertaken ..." 13 Two other matters: 14 "... as I have noted ... a number of subpostmasters 15 have made applications to the [CCRC]. That work is 16 ongoing ... Second the Justice for Subpostmasters 17 Alliance is reported to have received funding [and] no 18 claim has [yet] been issued." 19 Lastly, the last sentence: 20 "If you would like to discuss the review report with 21 me, I would be happy to do so." 22 Given the context of the letter as a whole and that 23 last sentence, did you understand there to exist some 24 freestanding review report? 25 A. No, to be honest, I didn't. I assumed that this was 130 1 kind of work in progress, that they'd got these extra 2 pieces of work to do, and that I would get a report from 3 the Chairman once that work was complete. He'd 4 mentioned May -- there was a Board meeting in May, 5 I think somebody told me, and clearly it's the sort of 6 thing that I would have expected the Post Office Board 7 to have a look at. But I was also aware that there were 8 some threads to follow up. 9 Q. We know that, by this time, Jonathan Swift had provided 10 Mr Parker with a copy of his final report. Do you know 11 why Mr Parker did not state so in his letter? 12 A. I've no idea. 13 Q. Did you discuss -- did he mention that there was a final 14 review report when you spoke with him? 15 A. I spoke to him in April, I think. I asked for advice 16 from officials, the officials said do nothing. I was 17 having a meeting with him anyway in April, one of my 18 quarterly meetings with him, and I don't recall him 19 saying that "I've got a final report", or anything of 20 the sort that I might have asked for. I recall him 21 saying that the work was ongoing in these two or three 22 important areas, some of which turned out to be actually 23 quite relevant to the court cases that eventually came 24 through. 25 Q. Do you know why he did not, without request, provide you 131 1 with a copy of the report? 2 A. I've no idea but I think he's separately said it was 3 something to do with legal privilege. 4 Q. Was that the discussion -- was that a discussion that 5 you had at the time, ie whether he could or could not 6 provide you with a report -- 7 A. No, not that -- 8 Q. -- and, if not, why not? 9 A. Not that I recall. The letter is after all -- at the 10 beginning it says "This is legal privilege", and he sent 11 to me under its legal privilege. So what's the 12 difference between a letter which is legally privileged 13 and a document that is legally privileged? I'm not 14 sure. But, obviously, the fact that the two didn't 15 match was an issue that I don't know if Tim Parker 16 himself was aware of. He may not have been but, you 17 know, you have to read the longer report to see whether 18 the summary is -- it's not that the summary is wrong 19 it's more sins of omission. 20 Q. Did you actively seek a copy of the report? 21 A. No, because I didn't have anything to do with the matter 22 after I'd had the advice from Laura Thompson not to do 23 anything until April, and then we had a meeting in 24 April. Is there a note of the meeting in April? 25 Q. Um -- 132 1 A. I don't think there is. 2 Q. I don't think there is, no. 3 A. No, sadly. But what I will have wanted, you know, I'd 4 asked him to do a review. I would have wanted the 5 conclusions of that review. I don't think it's 6 appropriate for ministers to suddenly see drafts of -- 7 I mean, I'm thinking about other things that I've done 8 as a minister since, you know, you ask for a report and 9 you get the report in due course. You don't sort of 10 have iterations. That sort of undermines the 11 independence of the report almost, if it's being sent to 12 the minister in between. 13 Q. If can we see a little of what was going on internally 14 POL00110382, and start with page 2, please. There's 15 an email of 19 February from Jane MacLeod to Tim Parker, 16 under the heading "Chairman's Enquiry": 17 "As discussed last week, we have considered the best 18 way for you to brief the Minister on the outcome of your 19 enquiry ... I expressed concerns that were we to provide 20 the Minister with a copy of the legal advice you 21 received from Jonathan Swift, there was a risk that 22 privilege could be lost and that the report could become 23 disclosable by BIS through FOI requests or similar. We 24 have also received a call from the Minister's office in 25 which they sought to understand how the reporting would 133 1 be undertaken. During that call it became apparent that 2 BIS officials are also concerned as to the legal status 3 and positioning of any report received from you." 4 Those last two sentences suggest that people in your 5 private office were seeking to understand how the report 6 or reporting of the outcome of the review would be 7 undertaken and they said that BIS officials were 8 concerned about the status and positioning of the 9 report. Was that something in which you had any 10 involvement? 11 A. Well, (a) I had no involvement and (b) having -- 12 obviously I was very concerned to read this at the time, 13 when the Inquiry sent me all these papers because it was 14 suggested that my private office were working behind my 15 back and not giving me full information. But I don't 16 think that the Minister's office reference is correct. 17 I think in the Minister's office, they mean -- 18 Q. ShEx -- 19 A. -- Ms Thompson. They were thinking she -- they're 20 getting muddled up between my private secretaries and 21 Ms Thompson, who didn't work for me; she worked for 22 ShEx, and they may -- you'd have to ask them, you know, 23 what they felt about all of that. This is just the time 24 when we got the referendum starting, isn't it so a busy 25 time for ministers. 134 1 Q. The rest of the chain deals with the drafting of the 2 letter, which eventually became the 4 March 2016 letter. 3 Were you ever made aware, prior to Mr Parker sending the 4 letter on 4 March 2016 that Post Office had discussed 5 either with ShEx or your office their intended approach 6 of sending a letter that was claimed to be a summary of 7 the review's findings? 8 A. No. 9 Q. Were you ever made aware that the full review report was 10 not to be provided, it was said, in order to preserve 11 privilege over it? 12 A. Well, certainly not at that stage. I think probably 13 never. I mean when I stopped doing it -- we'll come on 14 to this no doubt -- I thought the sort of follow-up work 15 was continuing because there was one or two quite 16 important bits of work by Deloitte and others, but then 17 it all got muddled up with the general court case by the 18 subpostmasters group but, you know, at this stage 19 I would have assumed that I would have -- would get the 20 full report in due course with recommendations as to 21 what to do, and recommendations on how we communicated 22 that to Arbuthnot and others and how we communicated it 23 to the world at large. 24 After all, you know, my concern came from the points 25 that they'd raised with me a few months earlier, which 135 1 I'd -- was -- I was -- you know, I'd obviously continued 2 to be worried about. 3 Q. In his witness statement -- I'm not going to display it 4 now and that document can come down from the screen -- 5 the cross-reference is WITN00690100, and it's 6 paragraph 93 -- Tim Parker says: 7 "Baroness Neville-Rolfe and her office was made 8 aware of the approach being taken to the distribution of 9 the Swift Review to seek to maintain legal privilege." 10 A. Do you know what date that was? 11 Q. He doesn't cross-reference it. He simply says you and 12 your office were made aware of the approach being taken 13 to the distribution of the Swift Review to seek to 14 maintain legal privilege; is that correct? 15 A. Well, as I said when I looked at this earlier, I wasn't 16 convinced it was my office and I don't recall my office 17 coming in to say to me "You can't have this document". 18 Q. So either that's a mistake in the email, which refers to 19 your office and it's meant to mean ShEx -- 20 A. Yeah. 21 Q. -- or your office had kept something from you? 22 A. Correct. Why I said when was it, it was -- obviously by 23 the time you get to sort of July, it's then unclear 24 who's going to be Minister because we'd had a big 25 change, change of Secretary of State, and I lost the 136 1 Post Office brief in that carve-up, and they seemed to 2 think, even before I lost it, that I might lose it, if 3 you read the paperwork. 4 Q. Okay. You tell us in your witness statement that the 5 first time you saw the Swift Report was earlier this 6 year as a result of the -- 7 A. Yes, it was during the Inquiry when the documents came 8 through and, obviously, I was very interested to see it. 9 Obviously the letter I'd seen but not the Swift Report. 10 Q. Did you compare the report with the letter? 11 A. In preparing for this Inquiry I did. 12 Q. What view did you take in comparing -- 13 A. Well, I took the view that it was a bit, you know, it 14 put a positive gloss -- 15 Q. I think it's paragraph 166? 16 A. I think I've dealt with it in my inquiry -- so there was 17 two -- there was a generality that it seemed to be 18 saying there wasn't too much of a problem in spite of 19 the fact that there was all these extra areas to be 20 explored, and then there was stuff that particularly 21 concerned me about how prosecutors had tried to do deals 22 with people who were being prosecuted by getting them to 23 accept false accounting, you know, as a quid pro quo for 24 dropping theft charges, and that came out -- I think 25 that's 100 to 109 of the Swift Review. 137 1 Q. If you look at -- if we display it on the screen, 2 because there's a quite neat summary -- your witness 3 statement at page 45, paragraph 166. 4 A. Yeah. 5 Q. Page 45, paragraph 166. You say: 6 "Even more importantly I now see having had access 7 to the Swift Report, that Mr Parker's reassuring summary 8 of the report was materially misleading. Specifically, 9 it failed to make any reference to the important points 10 made [by Mr Swift (sic)] in paragraphs 145-147 ... which 11 concern remote access and directly undermine the 12 information provided to ministers and, in turn, 13 Parliament, and indicate serious historic and ongoing 14 concerns as to [Post Office's] compliance with its 15 disclosure obligations in relation to criminal 16 prosecutions and convictions. This contradicts the 17 assurances given in the second paragraph of the Criminal 18 Prosecutions section of Mr Parker's letter, 'I am 19 satisfied that Post Office has adopted a proper approach 20 to disclosure such that it satisfies its duty of 21 disclosure as [a] prosecutor'. All this touches on my 22 key concern which was that postmasters should be able to 23 secure justice through the CCRC process. 24 "Similarly, whilst it refers to further work 25 commissioned in relation to [Post Office's] tactic of 138 1 charging theft and false accounting, it did not refer to 2 the important and strongly critical findings in 3 paragraphs 100-109 ... 4 "These specific findings should have been brought to 5 my attention. 6 "I was surprised and disappointed to discover, years 7 later, that Mr Swift's findings were not disclosed as 8 part of any criminal or civil proceedings. I do think 9 this is nothing short of scandalous." 10 What action would you have taken if you had been 11 provided with the raw material, ie the Swift Report 12 itself? 13 A. Well, I would have read the report, I would have seen 14 those paragraphs and other paragraphs, and I would have 15 wanted to take steps to make sure that this duty of 16 disclosure was implemented. I mean, when I came in, 17 I asked about documents. I was told by the MPs that 18 people were destroying files. I tried to make sure that 19 that didn't happen, and yet here we've got an instance 20 where things are not being disclosed. And I think 21 you've found, Mr Beer, as part of your other hearings 22 with Fujitsu and others, that there was material. In 23 fact, the -- some of the Deloitte stuff was referred to 24 in Mr Swift's report, but not in the covering letter, as 25 far as I can recall. 139 1 So what you've got is some really quite explosive 2 material in that detailed report which should have been 3 referred to in the letter to me, in my opinion. 4 Q. Well, in particular, would you agree, since the relevant 5 Deloitte report was then two years old in the tooth, and 6 that report had itself been provided to a number of 7 senior executives and a summary of it had been provided 8 to the Board? 9 A. Absolutely, and there was almost a suggestion that that 10 was new material, I think, that Swift had got hold of. 11 Sorry, we hadn't got up the Swift Report but, for those 12 involved in the Inquiry, I think it makes extremely good 13 reading because it summarises a lot of the background 14 very well and, frankly, it would have been good, you 15 know, for everybody to have had that summary made 16 available much more broadly, including, I would suggest, 17 to the Board of the Post Office. 18 Q. To what extent did you have any dealings with Jane 19 MacLeod? 20 A. Well, I think she came to the meeting on 6 August with 21 Paula Vennells. I think that's my only dealing with her 22 that I'm aware of. 23 Q. Therefore, would that be an insufficient basis to form 24 a view or impression of her? 25 A. It would and I know she hasn't given you evidence, which 140 1 is a pity because obviously a lot of the work she did 2 touched on these issues that are so important to the 3 subpostmasters -- 4 Q. Exactly -- 5 A. -- who are in the firing line on all of this. 6 Q. -- and Mr Parker said it was Jane MacLeod who told him 7 that he couldn't disclose the Swift Report to you. 8 A. Well, there you are. 9 Q. Can we move forwards, please, to a draft letter, as 10 I think it rightly is called, of 21 June 2016, and turn 11 up paragraphs 180 to 181 of your witness statement, 12 which are on page 48. You tell us that you have had 13 sight of an unsigned draft letter of 21 June from Tim 14 Parker to you. In it, Mr Parker says that Post Office: 15 "... 'has received very strong advice from Leading 16 Counsel that the work being undertaken under the aegis 17 of my review should come to an immediate end, and 18 instead address the issues through equivalent work taken 19 forward in the litigation ... I have therefore 20 instructed that the work being undertaken pursuant to my 21 review should now be stopped'." 22 You say the first time you saw this draft letter was 23 in preparation for the Inquiry. A FOIA request said 24 that they couldn't locate any information that the 25 letter was in fact sent to the Department. You are told 141 1 by the Department that it has no record of receiving it 2 and you're confident you didn't see it at the time; is 3 that right? 4 A. That's right. I was amazed when I saw it, to be honest. 5 Q. How, therefore, in the absence of that letter, was the 6 work that was outstanding from the Swift Review, that 7 was summarised in the 4 March letter, rounded off for 8 you? 9 A. Well, it wasn't really rounded off. There was, in the 10 briefing that I got in July, they said well, they were 11 looking at how the Swift Review stuff fitted in with the 12 civil litigation, which I think was perfectly reasonable 13 to look at the two alongside each other. But obviously, 14 I never had any advice on what then happened as a result 15 of that. What I discovered, you know, a couple of years 16 ago or whenever -- partly when looking, I think, for the 17 Inquiry, and partly I discovered that, you know, the 18 Swift Review had basically been buried, which I was 19 quite surprised by, because when you have legal cases, 20 there's huge processes of discovery -- I mean, I know 21 this from my background at Tesco -- there are huge 22 processes of discovery for documents, and you have to, 23 as a -- your lawyers have to make sure that things are 24 made available that may help, you know, the people 25 bringing the case. 142 1 So I was -- I mean, I thought -- I described it as 2 scandalous but I also think it's very surprising and 3 I don't know -- obviously you'd have to ask the counsel 4 that was involved in that litigation, you know, why it 5 wasn't made available to anybody. 6 Q. Thank you. That can come down. 7 You make a number of observations in your statement 8 by way of reflections. You say that Government cannot 9 function if ministers are unable to trust the 10 information that they are provided with by officials. 11 You say that you were, by mid-August, fighting ShEx, 12 that you had lost confidence in the quality of ShEx 13 advice, that they were trying to obstruct or shut down 14 your efforts to get to grips with the issues, that you 15 had lost the confidence in your civil servants on 16 matters relating to Post Office and Horizon. 17 Did you ever escalate any of those matters to the 18 Secretary of State? 19 A. I think I told the Secretary of State in August that 20 I was unhappy and that, therefore, I was calling for 21 a review by Tim Parker, and that my recollection is that 22 he supported that, that it could get to the bottom of 23 things, you know, in a reasonable way. You know, so -- 24 sorry, so -- and then -- I mean, I think, at updates, 25 which are unrecorded because of the problem of lack of 143 1 records, I might well have mentioned my concerns and, 2 you know, getting stuff done on this issue. And I think 3 I had an update with Mr Russell at some point, who was 4 the CEO, and I think you showed me a piece of paper just 5 before I came in this afternoon which actually is quite 6 helpful because, for the first time, I can see I did 7 raise it with the Permanent Secretary, as an issue. 8 Perhaps you're going to show me that. 9 Q. In fact, somebody else is going to show you that and 10 they ask that you be shown the piece of paper, so -- 11 A. Oh, thank you. Let them ask me. 12 Q. -- I'll let them do it. 13 Were they the alternative possibilities, of raising 14 your concerns with the Permanent Secretary, Martin 15 Donnelly; the Chief Executive of ShEx, Mark Russell; or 16 the Chair of the ShEx Advisory Board, Robert Swannell? 17 A. Well, if you look at a lot of the papers, they're copied 18 to the Permanent Secretary, they're copied to the 19 Minister's office, they're copied to Mr Russell. And in 20 the Civil Service, that's, you know, I was -- used to be 21 a civil servant -- that's the way senior civil servants 22 like Permanent Secretaries get an eye on things. They 23 get a lot of paper that they sift through and, as it 24 happens, I did recall having a bit of a moan to Martin 25 Donnelly and, actually, he did something about it, as 144 1 this document we're going to come on to discuss shows. 2 Obviously I felt happier once Tim Parker had taken 3 on the mantle of bringing in an independent adviser to 4 look at the complications, and, you know, although we've 5 focused on the negative from ShEx, you have to bear in 6 mind that, in my Post Office brief, I was looking at 7 lots of different things, transformation, the accounts, 8 visiting post offices, you know, how -- what was their 9 strategy going to be go forwards? So they didn't have 10 to have so much of the taxpayers' money but kept the 11 network which was so vital to local communities going. 12 So, you know, it wasn't all negative but, clearly, 13 on this Horizon thing, they seemed to be particularly 14 narrow and, as I've said several times when I asked for 15 detailed advice on the Second Sight Report towards the 16 end of August, I didn't get a submission as I should 17 have done outlining the various accusations and what we 18 as the Department thought about those. I got a defence 19 document from the Post Office. 20 MR BEER: Baroness Neville-Rolfe, thank you very much for 21 answering my questions. That's all of the questions 22 that I propose to ask. 23 There are, I think, a number of Core Participants 24 that wish to ask questions. I know that Mr Henry has 25 15 minutes or so, maybe if we start with those, that 145 1 will take us to the break at 3.00. 2 Questioned by MR HENRY 3 MR HENRY: Good afternoon, Baroness Neville-Rolfe. 4 It is often said that openness is the first casualty 5 of a project that is in serious trouble, and you 6 wouldn't disagree with that observation, would you, 7 given your experience with the Post Office? 8 A. No, and generally -- obviously, I come from a background 9 in business where your working assumption has to be 10 that, you know, that things do become public and it's 11 better to -- 12 Q. Exactly. One paragraph among many, but early on in your 13 statement, was striking, and it was your paragraph 5, 14 which reads: 15 "I would like to emphasise that a large number of 16 documents which would have been helpful in preparing 17 this statement, such as the minutes of several meetings 18 in my Ministerial Diary, have not been made available to 19 me. This is perhaps because, in 2016, the Shareholder 20 Executive and its staff and records were transferred out 21 of BIS to become part of the newly formed UKGI and, in 22 the same year, BIS was merged into a new department." 23 This is a refrain at paragraphs 31, 42, 101, 143 and 24 177 of your witness statement. Given your experience in 25 Government, how disturbing is this loss of data which 146 1 appears to be endemic within the UKGI on this subject? 2 Do you regard this as something which has hampered you? 3 A. I certainly do. I think it's very unfortunate and, if 4 you look at one or two of the documents, it says at the 5 bottom: "It isn't the private office's responsibility to 6 keep documents; it's your responsibility as the advising 7 division", which I found quite surprising. 8 I mean, latterly, I've been a Cabinet Office 9 Minister and I asked my staff what they did about 10 records and they explained that, every three months, 11 they send off a pile of papers to the archives. 12 Q. Right. So this appears to be unusual? 13 A. So it may be that it's unusual. I mean, it's not 14 something that I can really comment on. It's more for 15 the civil servants in charge of records. But it has 16 certainly been very unhelpful for me and, I think, for 17 other Ministers, that they haven't been able to see the 18 contemporaneous notes. You know, has one forgotten 19 important things? We've all tried our hardest, I'm 20 sure, but it's quite difficult. 21 Q. Right. I now want to go to a document which is 22 UKGI00019859. While it's being put up on the screens, 23 one of the themes that has dominated the Inquiry has 24 been the constant refrain, "We had every reason to 25 believe Horizon was robust. We were told this by the 147 1 Post Office. We were told this by ShEx". 2 You, however, did not believe that, did you, 3 Baroness Neville-Rolfe, because in this document you 4 expressed the view that it was probably one of HM 5 Government's IT debacles, and we can scroll down. We 6 have Richard Callard at the top, but then it's from Tim 7 McInnes. Do you see the second bullet point: 8 "As she's [that's you, Baroness Neville-Rolfe] 9 mentioned before, she thought Horizon was another 10 example of a Government IT debacle and that innocent 11 subpostmasters were the victims." 12 Then Mr McInnes says, and this is 12 June 2015: 13 "Clearly this is wholly untrue in two respects, 14 probably untrue in a third." 15 The general tone of this -- I don't want to distract 16 you -- is slightly derisory or slightly mocking but 17 I don't want to distract you with that. But what I want 18 to explore with you is why you thought that; why you 19 harboured the suspicion that Horizon was another 20 Government IT debacle. Would I be right in suspecting 21 that part of your scepticism no doubt came from your 22 personal experience in business? 23 A. I think so but also my experience of Government IT 24 systems. You know, there'd been police computers, 25 various different IT things, and Government do seem to 148 1 find -- or did -- perhaps did seem to find -- you know, 2 getting IT systems right very difficult. 3 Q. Very difficult. 4 A. And, you know, a key to having good systems -- it's been 5 my experience, partly as a non-exec in other companies, 6 but also a little bit when I was at Tesco -- is you've 7 got to have really good induction, training, helplines 8 and learn from mistakes as you go along, because it is 9 inherently difficult, bringing in IT systems and I have 10 to say that the Horizon system, if you look at the 11 Second Sight Report, had to do an awful lot of stuff. 12 Q. Yes. 13 A. And I'm sure that the IT providers will have known that. 14 They were obviously experienced IT providers in lots of 15 areas. But, you know, I came -- I suppose it's fair to 16 say this was very early on and it probably irritated 17 officials -- but I came in with a certain questioning -- 18 questioning of IT and I would have wanted to hear why 19 there weren't the sort of problems that we'd seen in 20 some of these other areas, from my recollection of when 21 I worked in Government and -- 22 Q. Yes, and, of course, you'd served in Government in the 23 1990s and you'd served in Government -- 24 A. Exactly. 25 Q. -- from, I think it's right, 2015 onwards? 149 1 A. Well, until I went to Tesco in '97, I worked in 2 Government latterly in the Cabinet Office, and in the 3 Business Department, and in Number 10. Then I had 4 15 and a half years in business. Then I joined the 5 Lords and I became a Minister in 2014. And then I was 6 a Minister for about three years and then, after the 7 referendum, I went on the backbenches, and then I've 8 been back being a minister. 9 So I'm quite unique in having had such a lot of 10 different experience: business, Civil Service and 11 several ministerial departments. So I suppose I thought 12 it was a fair comment to talk about IT debacles, even if 13 the Shareholder Executive obviously found that 14 exceptional. 15 Q. So, therefore, it's within your direct knowledge that 16 Government had suffered notorious problems with IT 17 systems for decades? 18 A. Yeah. 19 Q. You mentioned the police. There was also, I think it's 20 right, the Inland Revenue had difficulties with IT 21 problems? 22 A. They did, and especially moving to self-assessment, 23 although, actually, in time, they sorted them out. So 24 it was very bad to start with and then gradually it got 25 better. I think that's the problem. You get a lot of 150 1 bugs and things to start with, and so you've got to have 2 really good support and training and helplines, and help 3 people. 4 Q. And an openness and a commitment -- 5 A. Exactly. 6 Q. -- to get it right, as opposed to covering it up? 7 A. Absolutely. 8 Q. I mean this, of course -- notoriously, Horizon grew out 9 of the problems that the DSS had had with it, had it 10 not? 11 A. I don't think I know the background to the -- the early 12 background to Horizon but that sounds quite likely 13 because, after all, they were -- you know, there was 14 this question of making payments to individual benefit 15 claimants, yes. 16 Q. So to this refrain, where we were being told that it was 17 robust, you certainly weren't gulled by that, and the 18 wool wasn't pulled over your eyes by that, hence your 19 scepticism and the fact you were probing? 20 A. I tried to probe but I also tried to take advice because 21 the Civil Service has to work on the basis that 22 officials set things out in a cool and sensible way for 23 the attention of Ministers, offering them options, you 24 know, considering what needs to be done in the public 25 interest. I know that because obviously, to some 151 1 extent, I had residual Civil Service values in my DNA. 2 Q. Could I now move to the role of the Civil Service, 3 because you once said in the House of Lords: 4 "My Lords, having had previous responsibility for 5 the Post Office, I am very well aware that ministers are 6 advised to stand firm on seemingly solid grounds, only 7 for it to become clear in the long term that that is not 8 defensible." 9 Now, you may have heard the Right Honourable Pat 10 McFadden's suggestion regarding a new body to 11 investigate potentially rogue arm's-length businesses. 12 What would you suggest, however, be done about 13 potentially reckless advisers and officials who seemed 14 to have lost their objectivity and upon whom you relied? 15 A. Right, well, that's quite a big question. I mean, off 16 the cuff, a couple of points. One, I think it's 17 incredibly important to have the right people in jobs. 18 So you need good performance culture. You need to hire 19 the right people. You need to give them feedback when 20 they're not there. I think, as an ex-civil servant, 21 I mean, the role of the Permanent Secretary is also 22 important. So, if you think about financial matters, if 23 ministers ask civil servants to spend money that they 24 think is poor value for money, then the Perm Sec can 25 object and they send a memo that -- you know there has 152 1 to be an instruction from the Permanent Secretary to 2 the -- from the Minister to the Permanent Secretary 3 saying, "I, the Minister, think it's right to do this, 4 even though you've expressed some reservations". 5 I mean, rather than setting up a whole new 6 department to do this sort of thing on the off-chance 7 that there might be -- I hope never -- repeats of this 8 sort of thing, my only thought is: is there some way 9 that you could, you know, bring that kind of thing into 10 play and people would then know that, if their work was 11 a problem -- I mean, obviously, you can always go to the 12 Secretary of State. That is the sum role of the 13 Permanent Secretary. I don't know exactly what Pat 14 McFadden said. I'm sure he was trying to be helpful. 15 Q. So is there anyone you could have depended upon 16 independently, at the time, to validate the truth and 17 honesty of important ministerial statements before you 18 made them, to prevent the mischief that you were 19 speaking of in the House of Lords, that ultimately those 20 statements had become untenable? 21 A. I mean, the truth is that, as a politician, you are 22 extraordinarily aware that anything you say on the 23 public record in the House, whether it's the Lords or 24 the Commons, has to be accurate. And there are 25 well-established processes for correcting the record, if 153 1 you have to do that. I mean, that arose during Covid, 2 of course, didn't it? 3 So, I mean, the answer is you have to try and find 4 a way of getting at the truth and, if you find out that 5 the truth hasn't been communicated, then you have to 6 correct the record. I think, if Sir Wyn is thinking 7 about what might be done for the future -- and I think 8 you've got a further sort of whole module on this -- you 9 need to just have a think about how this would work in 10 practice and whether there would be perverse effects to 11 bringing in a whole new sort of tier. 12 I mean, the key thing, in organisations where you've 13 got people who aren't very good, what happens is you 14 move them. You move them on. In the Civil Service, the 15 Civil Service -- the appointments are rightly for the 16 Civil Service, rather than for the Ministers, to avoid, 17 you know, inappropriate -- or, you know, people having 18 their friends in the wrong places, and I think that is 19 valuable, that independence of the Civil Service. 20 So I think you need to look at this particularly in 21 the light of ShEx, where you were bringing in a lot of 22 people from outside the Civil Service, and it might be 23 that you could do more to help them, to induct them, to 24 make sure that their sort of -- their reports are 25 looking properly at what might go wrong. 154 1 Q. Can I come to that because, of course, one such recruit 2 was Mr Callard, and the final document for you, 3 Baroness, is UKGI00017443. This is an email that 4 Mr Callard sent on 18 November 2015. Could we go to 5 Mr Callard's email, which is, I think, on page 2. It's 6 18 November 2015 at 18.25. Yes, thank you very much. 7 This is in response to you expressing some dismay 8 with the way you had been informed of matters, and this 9 is Mr Callard stating that he believed that you'd been 10 a bit harsh: 11 "The problem is we cannot deliver what she [that's 12 you, Baroness] wants (a green-locked GIB, and a Post 13 Office without a perceived but non-existent IT problem). 14 Bit harsh from my perspective, we've kept a lid on the 15 latter", he says. 16 So in other words, "We've kept a lid on the Post 17 Office". 18 Baroness, given everything that you instituted, did 19 you want Richard Callard to keep a lid on the 20 subpostmasters' dispute with the Post Office? 21 A. No, I wanted to get to the bottom of the matter and the 22 truth of the matter. 23 Q. Exactly. So what he's done there is precisely the 24 opposite of what you wanted, isn't it? 25 A. It does seem to be. Obviously I hadn't seen this at the 155 1 time, and I had taken steps to say that I would like 2 more political handling, as you can see from the 3 subsequent memo in this area and in the Green Investment 4 Bank -- which also, as I said earlier, involves, you 5 know, people from outside who come in, and that's great 6 that they come in and bring their expertise, but it's 7 also important that you follow the values of -- 8 Q. Government? 9 A. -- of transparency, truth, and Government. 10 MR HENRY: Yes. 11 Thank you very much, Baroness. 12 SIR WYN WILLIAMS: Thank you, Mr Henry. 13 So we'll have our break now, Mr Beer? 14 MR BEER: Sir, can I just check with the Core Participants 15 how long they will be? 16 SIR WYN WILLIAMS: Yes, of course. 17 MR BEER: If it's a short period of time, then it might be 18 that we can survive without a break. 19 SIR WYN WILLIAMS: Yes, sure. 20 MR BEER: One Core Participant, five minutes. 21 SIR WYN WILLIAMS: Then we will have our five minutes. 22 MR BEER: Thank you. 23 Questioned by MR JACOBS 24 MR JACOBS: Good afternoon. 25 A. Good afternoon. 156 1 Q. I don't know if you can hear me. I represent a large 2 number of Core Participants, subpostmasters and 3 subpostmistresses, who were affected by this scandal. 4 Mr Beer asked you about your reflections. Mr Henry took 5 you to some correspondence involving Mr Callard. I have 6 a couple of very brief further questions. 7 You've said in your evidence that you believed that 8 you were being misled. You've also said that you 9 believe that ShEx and Post Office were working together 10 to try to deflect you. We have that email where 11 Mr Callard was trying to arrange a meeting with Post 12 Office officials to talk about a forthcoming meeting 13 with you and the Chief Executive, and to gauge your mood 14 and what it is that you wanted to do. So they were 15 colluding and talking about you behind your back, 16 effectively. 17 It's right, isn't it, that your experience is that 18 ShEx were far too close to the Post Office? 19 A. I think they weren't taking in alternative sources of 20 information. I mean, clearly, they were going to have 21 to be close to the Post Office because the Post Office 22 had all the facts on individual cases. 23 Q. But they lost their objectivity? 24 A. My worry was that they'd lost their objectivity in all 25 of that. That was at the heart of the problem, I think. 157 1 Q. I just want to clarify a point, it may have already been 2 made, but it just seems to be quite an important point. 3 You made a distinction, at 12.20 this afternoon, that 4 ShEx was made up of commercial people and not classic 5 civil servants/Civil Service Officials. Do you think 6 things would have been different, from what you 7 experienced, had the body charged with oversight of the 8 Post Office been composed of classic Civil Service 9 Officials? 10 A. I'm not sure that they would have had the expertise to 11 hold shareholdings in things like the banks and the Post 12 Office, and things, without commercial expertise. I'm 13 not against commercial expertise. I think what I was 14 saying is that that's not necessarily sufficient. 15 I mean, having said that, there were some -- I mean, 16 Susannah Storey, who I think you're seeing later, whom 17 I know from DCMS, I mean she was a civil servant of the 18 classic kind. So there was a mixture. But they -- 19 I think that -- I think -- I'm not sure the Civil 20 Service is as good -- I remember when I went to work in 21 the private sector, the whole of my first month was 22 induction, and I had three-hour meetings with all of the 23 key directors -- three-hour meetings, which I couldn't 24 understand. The difference, when you go to work in 25 Civil Service, is you're lucky to get a 15-minute 158 1 meeting just to say hello to people. 2 Because it's very different, and what you have to do 3 in the public sector is a bit different, I think it's 4 very, very important that they should understand that, 5 and that, obviously, was an understanding by Mr Callard. 6 He felt that it was important to keep the lid on but, 7 obviously, as a civil servant, it's not only keeping the 8 lid on; it's also making sure that you're doing the 9 right thing. 10 Q. In terms of public duties and serving the public, did 11 you perceive there to be any ethical difference between 12 ShEx officials and the rest of the civil servants who 13 you worked with? 14 A. I don't think we discussed ethics but they obviously 15 took a very narrow, focused view, linked to their duties 16 in terms of the commercial and strategic vision for the 17 POL, and didn't seem to focus so much on classic 18 governance issues like, you know, the risk from these 19 prosecutions, which would be something that, as a civil 20 servant, you're always looking at the downside, as well 21 as the commercial opportunity. 22 I mean, having said that, they were trying to move 23 forward. Paula Vennells, to give her credit, reduced 24 the deficits in the Post Office. So the Post Office 25 must have been doing something right at that time. 159 1 Q. Finally, Baroness, this narrow view, this lack of focus 2 on more public interest-type problems, such as 3 prosecution, is that, on your evidence, the fault in the 4 system which prevented you from being able to carry out 5 your ministerial duties in terms of receiving the right 6 information? 7 A. I think it was also to do with the particular 8 individuals because I gave them lots of openings, 9 saying, you know, "What's in the Second Sight Report?" 10 If I had been, my previous self, sitting in that seat, 11 I would have gone away and I would have read the whole 12 of the Second Sight Report and I would have gone through 13 all of the negative findings and I would have then 14 wanted to do my own job, understanding what was right 15 and what was wrong. That wasn't done. 16 What they did was take advice from the Post Office 17 because they felt the Post Office could give the answers 18 and that isn't what you do. As a good civil servant, 19 you bring -- you look at different -- you know, you look 20 at different sources. 21 MR JACOBS: I think that's answered my question. I haven't 22 other questions for you. Thank you. 23 THE WITNESS: Thank you. 24 Questioned by SIR WYN WILLIAMS 25 SIR WYN WILLIAMS: Baroness, are you a supporter of 160 1 arm's-length bodies? 2 A. As I think I said in my statement, I think they do have 3 value. If you think about Government owning things like 4 banks, the Post Office, it's not really possible for 5 ministers to be responsible on a day-to-day basis. 6 Therefore, the arm's-length system was set up. However, 7 as I said, I think, in my statement, it's extremely 8 important -- it's almost even more important that you 9 have really good people engaged, and I think people need 10 to understand that, when you are the board member on 11 an ALB representing the Government, you have a very 12 important duty and, actually, it's quite similar, 13 private equity, where they own a big stake in a company, 14 which I've had experience of, they put a director on the 15 board, and that director, I can tell you, is always 16 asking questions and thinking about, as it were, the 17 owners' needs, both financial and non-financial. So 18 does that answer my question, Sir Wyn? 19 SIR WYN WILLIAMS: Well, it does. I'm just wondering how 20 easy it is, actually, to find this super-charged person 21 who is able to always distinguish between his or her 22 duties as a member of the Board, ie his or her duties to 23 the company, and, at the same time, represent 24 a shareholder who is not necessarily aligned with all 25 the objects of the company because the shareholder will 161 1 have things like, for example, the social value of 2 keeping post offices open in their head. 3 So I'm just wondering how easy or not, as the case 4 may be, it is to find this person who is able to perform 5 these, as I would see it, extremely difficult tasks? 6 A. I think it is difficult but I think if you have clear 7 objectives that all understand and those are kind of 8 trained in at the beginning through induction, and my 9 experience, which is quite limited of private equity, is 10 that the people they put on boards to represent them, 11 you know, have sort of central -- if you like, central 12 training, they're selected to be able both to sit on 13 boards and to take an independent view, and it may be 14 that the cadre of people that we have in ShEx, which is 15 now UKGI, you know, have to have that kind of support. 16 I have to say, you know, I'm obviously not up to 17 date on what they do do, but it is a very interesting, 18 important area because you've got to get the mixture of 19 these operations moving forward commercially, but 20 reflecting the public sector value, sometimes the social 21 value, sometimes obviously value for money, which 22 matters as well, and which the external people can 23 really help with. It's difficult. I don't envy them 24 their task, Sir Wyn. 25 SIR WYN WILLIAMS: All right. Thank you very much. Well, 162 1 I'm very grateful to you for making a very detailed 2 witness statement and for answering a good many 3 questions during the course of most of today. So, 4 again, thank you very much for your witness statement, 5 and for appearing to give oral evidence. 6 THE WITNESS: Thank you. 7 SIR WYN WILLIAMS: Right, Mr Beer. Is that it for the day? 8 MR BEER: It is, sir. We return tomorrow with Margot James. 9 SIR WYN WILLIAMS: Yes. 10 MR BEER: Tomorrow being a Wednesday, might I suggest that 11 we start at 10.05, so that we don't have the 12 interruption of the fire alarm? 13 SIR WYN WILLIAMS: I don't think I need much of a temptation 14 to start a little later, Mr Beer. 15 MR BEER: 10.05 it is. Thank you very much, sir. 16 SIR WYN WILLIAMS: Fine. 17 (3.12 pm) 18 (The hearing adjourned until 10.05 am the following day) 19 20 21 22 23 24 25 163 I N D E X BARONESS LUCY NEVILLE-ROLFE (sworn) ...........1 Questioned by MR BEER .........................1 Questioned by MR HENRY ......................146 Questioned by MR JACOBS .....................157 Questioned by SIR WYN WILLIAMS ..............161 164