1 Thursday, 10 October 2024 2 (9.59 am) 3 NICHOLAS JAMES READ (continued) 4 Questioned by MR BEER (continued) 5 SIR WYN WILLIAMS: Mr Beer. 6 MR BEER: Yes. Thank you, sir. 7 Good morning, Mr Read. 8 A. Good morning. 9 Q. Can I ask, to begin, one set of questions arising from 10 something that you said in the course of your evidence 11 yesterday. 12 I think you'll recall that the Inquiry, the Chairman 13 held compensation hearings, ie hearings into the 14 schemes -- 15 A. Yes. 16 Q. -- that were set up to provide redress to postmasters, 17 and he held four such hearings: one on 6 July, one on 18 13 July 2022, one on 8 December 2022, and then one on 19 27 April 2023, which I suspect you'll remember 20 particularly because you attended it, you sat alongside, 21 I think, Ms Gallafent KC -- 22 A. Yes. 23 Q. -- with Mr Staunton, the then Chairman of the Post 24 Office sitting behind you. 25 So in none of those four hearings was it said by the 1 1 Post Office that it was the Post Office's belief that 2 it, the Post Office, should not be administering the 3 schemes of redress or any of them; do you agree? 4 A. I can't recall the specifics of that. It may be the 5 case. 6 Q. Nor was it said that the Inquiry should make 7 recommendations accordingly, whether in its progress 8 updates in its interim reports, saying that the Post 9 Office should not be administering any of these schemes. 10 Instead, the Post Office's position, and I summarise 11 greatly, was that it was properly administering the 12 schemes for which it had responsibility and that 13 sufficient elements of independence were either already 14 built into the schemes or could be built into them; do 15 you agree? 16 A. That's what I said yesterday, yes, indeed. 17 Q. You said yesterday that you looked at some 18 contemporaneous notes of a conversation that you had 19 with the Government, Post Office's shareholder, and you 20 say: 21 "The way it was portrayed to me was that the 22 Treasury were of the opinion that the chaos -- I think 23 was the word that was used -- that had been was caused 24 by the Post Office, there was a desire for the Post 25 Office to experience some of the discomfort that had 2 1 been caused", ie it should have involvement in and be 2 involved in the administration of the schemes. 3 You went on to say that, by contrast, it was your 4 firmly held view that, for a range of reasons, the Post 5 Office should have nothing to do with the provision of 6 redress to wronged subpostmasters, certainly in terms of 7 financial compensation. 8 Was that a personal view that you held? 9 A. It is a personal view that I hold but I think it's also 10 a view that is held by others within the Post Office. 11 Certainly, just to confirm your earlier comments, we 12 have done everything that we can to build independence 13 into the schemes, but I think the start point of this, 14 and it's -- it will be Simon Recaldin's view, I'm sure, 15 when you speak to him next week, as well, that there was 16 always going to be difficulty with the Post Office 17 administering compensation because of the level of trust 18 and confidence that many of the victims will have in the 19 Post Office. So I don't think it's a particularly 20 controversial position. 21 Q. Was it the corporate view, essentially, of the Post 22 Office? 23 A. Yes, it was and has been for some time. 24 Q. If that was the corporate view of the Post Office, why 25 was it not communicated to the Inquiry in any of those 3 1 four hearings, ie "We do not want anything to do with 2 redress schemes. We think it is difficult for us to be 3 involved," for the reasons that you give, "Please make 4 recommendations to take this business away from us"? 5 A. It's a good question. I'm not sure specifically why we 6 didn't say that. It is a conversation that has been 7 ongoing with Government for some time. That's our 8 failure to do so. 9 Q. The Inquiry was considering those very things, there 10 were subpostmaster groups who were saying, "Take the 11 function away from, or do not give the function to, the 12 Post Office", and the Chairman was considering making 13 recommendations about those very things. Again, I ask, 14 if that was the corporate view of the Post Office, why 15 did it not communicate it? 16 A. It's a good question. I'm unsure why we didn't make 17 that very explicit. Clearly, we should have done. 18 Q. Or is it a view that you've now come to in the light of 19 the events which have happened? 20 A. No, it's a view that I've held for some time and it's 21 a view within the organisation that has been held for 22 some time. 23 SIR WYN WILLIAMS: I think I'd like a straight answer to the 24 question: was it a view held by the organisation at the 25 dates of each of those compensation hearings? 4 1 A. It's been a view held by the organisation since the very 2 start of the schemes. 3 SIR WYN WILLIAMS: Right so it was, then? 4 A. Yes. 5 MR BEER: Can I continue, then, Mr Read, with the topic we 6 were addressing yesterday afternoon: the investigation 7 of postmasters and the engagement of the Post Office 8 with law enforcement agencies. 9 A. Yes. 10 Q. Can we look, please, at POL00448310. These are the 11 minutes of the SEG, the Strategic Executive Group, which 12 you mentioned and explained to us yesterday, held 13 relatively recently, 26 June 2024. You're shown, 14 amongst others, as present, along with Mr Brocklesby, 15 Mr Woodley, Nicola Marriott, Karen McEwan and Sarah 16 Gray. Do you recall that in this meeting, the SEG had 17 to consider, because it was tabled before it, a paper 18 concerning the passage of material to law enforcement 19 agencies? 20 A. I don't specifically -- do you have it in -- 21 Q. Yes, let's look at the paper that was tabled before this 22 SEG and it might help you. 23 A. Yes. 24 Q. POL00448345. You can see that it's a SEG report, the 25 meeting date is 26 June 2024. The author was 5 1 Mr Bartlett, director of A&CI, the sponsor was Ms Gray, 2 Interim Group General Counsel. If we look at the 3 Executive -- sorry, we should look at the "Input 4 Sought": 5 "SEG approval is sought regarding the proposed 6 change in process in governing the passing of 7 information to law enforcement to assist them in 8 criminal investigations and any subsequent prosecutions 9 prior to this matter being discussed at Board in July 10 2024." 11 So it's seeking, is this right, the SEG, that 12 group's approval, to pass a policy for approval to the 13 full Post Office Board. 14 A. That's what it's suggesting, yes. 15 Q. Yes. "Executive Summary": 16 "The current Group Investigations Policy, 17 Cooperation with Law Enforcement Policy ('the CLEP'), 18 and Legal Play Book (collectively 'the old Policies') 19 are considered too unwieldy and unnecessarily complex as 20 well as being drafted before the existence of [A&CI]. 21 The CLEP has resulted in slower than needed provision of 22 information to law enforcement and the unnecessary 23 involvement of the Board in the authorisation process. 24 "The old Policies have been consolidated into a new 25 draft single Investigation and Cooperation with Law 6 1 Enforcement Policy ('new Policy'). The draft new 2 Policy, amongst other investigative operational policy 3 changes, proposes a streamlining of the governance of 4 providing law enforcement with information: the Director 5 of A&CI and the in-house criminal counsel would have to 6 agree to providing the information and, depending on the 7 age of the information, a caveat would also be 8 provided." 9 Then "Report", paragraph 2: 10 "How the Investigations Policy was implemented in 11 respect of possible criminal matters relied upon its 12 interaction with the CLEP and Legal Play Book. These 13 were focused on limiting in a high-risk perception 14 environment how [Post Office] reported matters to, and 15 shared data with, law enforcement. Uniquely, sharing 16 data in a witness statement or as an exhibit required 17 the extraordinary permission of the Board." 18 So that's talking about the past, isn't it? 19 A. Yes. 20 Q. Is that right, that in order for Horizon data in 21 a witness statement or Horizon data in an exhibit to be 22 passed to a law enforcement agency, that required the 23 permission of the full Post Office Board? 24 A. That's correct. 25 Q. That was the position, okay: 7 1 "3. The old Policies are not enabling [Post Office] 2 to act in an agile way in monitoring forward with 3 reporting instances to law enforcement where [the Post 4 Office] suspects that they may have been a victim of 5 crime or promptly servicing lawful requests for 6 information to aid a police investigation. A&CI 7 recently took responsibility for being the only conduit 8 for witness statements to be provided to the police, 9 including relieving the Security team of this activity." 10 Then over the page. 11 "This has given us the first [pan-Post Office] 12 picture of the scale of these requests and what is 13 required to service them objectively and in 14 an evidence-based way. There are currently 22 police 15 forces requesting or awaiting Horizon-based evidence 16 across 33 police investigations. To provide this 17 information, A&CI will need to draw upon Horizon data 18 and often provide transaction analysis. The current 19 approach is that the Board will need to be approached in 20 the majority of these cases as and when the data is able 21 to be shared. 22 "A draft policy is attached with the proposed 23 replacement for the old Policies to reflect the enhanced 24 capabilities of the A&CI and the improved governance 25 approach to investigations generally. In particular, 8 1 the draft proposes a change in the governance of passing 2 material to law enforcement which we believe is risk 3 balanced." 4 Then an extract from the draft is set out, 5 paragraph 1, within paragraph 9: 6 "Proactively and reactively supplied information 7 will have differing profiles due to historic technology 8 issues. The version of Horizon that was considered at 9 fault in the Horizon IT scandal was replaced in October 10 2019. In 2020, known errors and bugs identified in the 11 Horizon Issues Judgment formed part of review by KPMG of 12 the system and found not to be prevalent in the system. 13 From 2021, a new collaborative approach was taken to 14 resolving reported Horizon issues in a dispute 15 resolution process. Due to the effect of these 16 developments, the following approach to data sharing 17 with [law enforcement agencies] is: 18 Then skipping: 19 "Any information originating from Horizon after 20 1 January may be passed as either intelligence or 21 evidence only after DA&CI ..." 22 I think that's the Director of A&CI; is that right? 23 A. That's correct. 24 Q. "... (or their nominated deputy) and an in-house 25 [counsel] both give approval. A record of [the 9 1 decision] must be recorded ... 2 "Where information is requested by LEAs that is 3 Horizon data originating from pre-1 January 2022, the 4 same process must be followed. In addition, the wording 5 included in the relevant section of the Investigator's 6 Manual covering the passing of information to LEAs must 7 be included in any witness statement for evidence or in 8 an accompanying email or letter to the LEA requesting 9 the information in a non-evidential format." 10 Q. If we carry on, if we scroll down, please, and then back 11 to the paper itself, paragraph 6: 12 "The accompanying lines referenced above which 13 caveat the material passed to law enforcement is also in 14 draft and is ..." 15 So this seems to be some wording that that it was 16 proposed would caveat certain disclosures: 17 "From 31 December 2019, all post offices have worked 18 on a version of Horizon that the High Court case of 19 Bates & Others has been considered by the High Court to 20 be 'relatively robust'." 21 I think there are some extra words or words missing 22 from that sentence, but anyway: 23 "In 2020, Horizon was tested for the known errors 24 and bugs identified in the Horizon Issues Judgment and 25 found not to be prevalent. During 2021, a process was 10 1 developed to work collegiately with Postmasters to 2 understand the causes [of] any shortfalls. Any Horizon 3 data that pre-dates January 2022 cannot be shown to have 4 benefited from all three of these checks and balances." 5 Then the SEG paper continues: 6 "There are significant differences between the 7 environment that existed at the time the old Policies 8 were formed and the current and future environment. The 9 current approach to dispute resolution and the 10 underlying technology could be seen as supporting a more 11 [business as usual] approach to passing information to 12 law enforcement. However, the most significant 13 difference between 2019 when the old Policies were 14 drafted and now is that A&CI exists and brings 15 significant criminal investigation experience to bear, 16 but more importantly, also considerably more objective 17 rigour to assessing evidence. Project Panther within 18 A&CI is solely focused on testing the reliability of 19 data that [Post Office] investigators and law 20 enforcement will rely upon." 21 Then paragraph 9: 22 "SEG is asked to discuss the proposed change of 23 approach in advance of a proposal being presented at the 24 Board in July." 25 Just stepping back, so the context is made clear by 11 1 this paper, isn't it, that there were a large number of 2 forces, some 22 -- 3 A. Yes. 4 Q. -- requesting evidence or requesting data in quite 5 a large number of cases, 33 cases? 6 A. Mm-hm. 7 Q. To summarise what we've just read there, would you 8 agree, the proposed new approach had two elements to it: 9 firstly, there would be no more need for Board approval 10 for sharing a witness statement about Horizon or sharing 11 Horizon data, instead, approval would come from the 12 Director of A&CI plus an in-house counsel; secondly, 13 when a witness statement or data was shared, if it 14 related to pre-January '22 data, it would be caveated in 15 the way that we saw. 16 A. Yes. 17 Q. That form of words would be applied to it? 18 A. (The witness nodded) 19 Q. Can we go back to the SEG minutes, please. POL00448310. 20 So this is the meeting at which this paper was 21 presented. If we go forwards to page 7, please, and 22 scroll down to paragraph 4.6 under the heading 23 "Disclosure to support police investigations", presented 24 by Ms Gray and Mr Bartlett: 25 "TABLED and NOTED was the paper on Disclosure to 12 1 support police investigations/Passing of material to law 2 enforcement. 3 "SEG DECLINED to APPROVE the submission of the paper 4 on disclosure support for police investigations to the 5 Board, noting further work and assurance was required in 6 relation to Horizon data assurance." 7 So questions arising from these two documents: 8 looking at the position as it stood before the SEG 9 paper, why was the Board's permission required to share 10 Horizon data with law enforcement agencies in a witness 11 statement or as an exhibit? 12 A. I think we touched on this yesterday, and the view of 13 the Board was that they wanted to have visibility for 14 any kind of data that was being provided to law 15 enforcement agencies, and that they wanted sight of the 16 sort of scale of the requests and, indeed, how that was 17 being operated. And I think we described yesterday that 18 there was that effective trade-off between requests from 19 LEAs and the requirement to conform to those requests, 20 whilst at the same time visibility, quite rightly from 21 the Board, that they wanted to understand where we were 22 engaging with law enforcement agencies, what type of 23 issue was being displayed, and to continue with that. 24 And I think that is why the SEG declined to approve 25 the submission of the paper. I think there was some 13 1 surprise -- my recollection from the meeting, there was 2 some surprise at the scale of requests in terms of the 3 22 law enforcement agencies and the 33 requests. 4 I think that came as a surprise to colleagues. I think 5 we were of the opinion that it was in the ones and twos, 6 in terms of requests for information on the sort of 7 scale, and I think that was -- the primary discomfort 8 was the size and the number of requests that were coming 9 forward. And, therefore, a better understanding of -- 10 and a bigger understanding of the picture, was 11 requested. 12 Q. Well, in fact -- and we'll come to this in a moment -- 13 what the minutes note is that "further work and 14 assurance was required in relation to Horizon data 15 assurance", not to know more about the number or nature 16 of requests. It's about assuring, presumably, the 17 quality, accuracy and integrity of Horizon data that 18 this I referring to? 19 A. That too, certainly, but I think it was more a case of 20 understanding the bigger picture. I think there wasn't 21 that level of understanding at the SEG and I think we 22 needed to understand more broadly, you know, what was 23 being requested, in what form, and how we were going to 24 supply that information, and what reassurance that we 25 had that we were doing this in an appropriate way. 14 1 So yes, I think there were certainly questions over 2 data assurance but I think it was a broader assurance 3 that the SEG were also looking for. 4 Q. You said, and one can understand why, the Board might 5 want to understand the scale of Horizon disclosure for 6 law enforcement purposes, and to have visibility? 7 A. Mm. 8 Q. That is satisfied by the provision of information to the 9 Board. 10 A. (The witness nodded) 11 Q. What this describes is that the Board had to give its 12 permission in order for a disclosure to occur. How did 13 the Board, in fact, go about determining whether to give 14 permission for disclosure or not? 15 A. Don't recall having specific cases come to the Board for 16 that particular -- to respond to that particular issue. 17 I think this is still fairly uncharted territory for the 18 organisation in its sort of modern guise, in terms of 19 how we supply information to LEAs. So I don't think 20 we'd had a breakdown, certainly at the Board not in my 21 time, of a specific case and then got under the skin of 22 how and what we are supplying and in what context. 23 So I think this is the start of that -- of that 24 journey, for want of a better word, in the sense that 25 this is the A&CI coming forward with a proposal. 15 1 SIR WYN WILLIAMS: I'm sorry, Mr Read, I don't want to make 2 it sound as if Mr Beer and I are Starsky and Hutch, but 3 I just don't follow that because all those requests for 4 information from the police, the 33 of them, the vast 5 majority of them presumably couldn't have occurred 6 without the Board already having sanctioned a report to 7 the police. 8 A. Well, yes, the way that I understand it is that the 9 police have obviously requested information, there will 10 be a reason why the -- 11 SIR WYN WILLIAMS: Yes, but what I mean is that, once the 12 Board are asked to sanction a report to the police, they 13 obviously know that there is a case which is now being 14 investigated by the police? 15 A. Yes. 16 MR BEER: The way that the paper put it was that: 17 "There are currently 22 police forces requesting or 18 awaiting Horizon-based evidence across 33 police 19 investigations, the current approach is that the Board 20 will need to be approached in the majority of these 21 matters as and when the data is able to be shared." 22 A. Yes. 23 Q. Was the organisation simply not processing these 24 requests -- 25 A. Yes, I think that's -- 16 1 Q. -- essentially you're paralysed? 2 A. I think that's the point that's being made. 3 Q. Do you know whether the Post Office had disclosed what 4 Mr Cameron had summarised at that meeting that we looked 5 at yesterday -- do you remember the January 2023 6 meeting, the quarterly meeting with UKGI -- 7 A. Mm. 8 Q. -- and DBT, where he said that the Horizon data is not 9 sufficient to do an investigation in many cases; do you 10 know whether that kind of disclosure had been made to 11 the police service? 12 A. I'm not sure. 13 Q. Do you know whether A&CI had in fact provided, before 14 June 2024, Horizon data and transaction analysis to the 15 police? 16 A. I don't recall a specific case of that coming to the SEG 17 or to the Board, no. 18 Q. How was, in the 33 cases, the Post Office ensuring that 19 the Horizon data that it proposed to provide to the 20 police service was sufficient and that the transaction 21 analysis that went with it was sound? 22 A. I don't have -- as I say, this is work that's in train. 23 I don't have the specific detail of that. 24 Q. The proposal that Mr Bartlett and Ms Gray made, by way 25 of their SEG report, was to essentially devolve 17 1 responsibility for permission to in-house counsel and to 2 Mr Bartlett, and one of the reasons given was that the 3 A&CI bring "considerably more objective rigour to 4 assessing evidence". How do A&CI bring considerably 5 more objective rigour to assessing evidence? 6 A. I think the majority of the individuals who work within 7 the A&CI, which I think, as we discussed yesterday, is 8 a relatively new organisation. Within that team, there 9 are primarily individuals who have worked in law 10 enforcement outside of the Post Office and I think the 11 assumption is therefore being made that these are 12 individuals who have the right training and the right 13 experience of law enforcement, more specifically than 14 perhaps was the case in the past. 15 And I think what is being demonstrated here is 16 a transition from the old Security Teams that operated 17 within the Post Office historically, which were made up 18 of a variety of different individuals, and the more 19 professional approach that's now being adopted by A&CI, 20 with better training, better skills and better 21 experience associated with law enforcement. 22 Q. More specifically, you mention better training, 23 procedures and personnel. More specifically, do you 24 know how A&CI was testing the reliability of Horizon 25 data that the Post Office and then subsequently law 18 1 enforcement agencies would rely on in a prosecution? 2 A. No, I haven't seen how the testing process works. 3 Q. Do you know what data, which data A&CI was testing? 4 A. No, I don't have access to that. 5 Q. Did you agree with the SEG's decision to decline to 6 approve the submission of the Bartlett paper to the 7 Board? 8 A. I believe so, yes. It's -- I think we've found the 9 step, the step and the move, pretty significant, as 10 group, and we discussed it obviously as group. 11 Q. Why did you find the step significant? 12 A. I think, as I mentioned a little earlier, I was 13 surprised at the number of law enforcement agencies that 14 were engaging with us, and the scale of the interest, 15 the 22 and the 33. 16 Q. So it was the number of cases in which disclosure would 17 or could occur that caused pause for thought? 18 A. It caused pause for thought, primarily because the team 19 in A&CI is stretched, massively stretched, as we 20 mentioned yesterday, both in terms of its response to 21 the variety of work, both internal investigations of 22 senior colleagues, the assurance work they're providing 23 on loss recovery and discrepancies, as well as the 24 engagement with law enforcement agencies and, in 25 addition to that, the work they're doing on Speak Up. 19 1 So I think the team was very stretched. This felt 2 like considerably large amounts of work and I think we 3 wanted to make sure that it was being thoroughly 4 administered. 5 Q. Did anyone within the SEG disagree with the SEG 6 decision, ie they wanted to approve the submission of 7 the paper to the Board? 8 A. I don't recall the specifics but I don't think so. 9 Q. I mean, presumably, Mr Bartlett -- 10 A. Yes, clearly. 11 Q. -- and Ms Gray -- 12 A. Will have -- 13 Q. -- will have sponsored and written it and proposed it? 14 A. Correct, but they're not obviously members of the SEG. 15 Q. The minutes of the SEG recorded that "Further work and 16 assurance was required in relation to Horizon data 17 assurance"; can you help, firstly, with what that means? 18 A. I think the methodology -- and I'm slightly speculating 19 but I think it's the methodology associated with how we 20 are testing Horizon data and how we are assuring 21 ourselves, both from an IT -- with the IT function but 22 also with colleagues at Fujitsu that we have 23 a methodology that is robust. 24 Q. One reading of the note of the minutes is that "We've 25 got to satisfy ourselves in-house as to the quality and 20 1 reliability of our Horizon data before we think about 2 passing it to law enforcement agencies and before we 3 downgrade from the Board to two other individuals the 4 permission to do so". 5 A. Yes. 6 Q. Would that be a fair summary? 7 A. Yes, that would be a fair summary. 8 Q. Okay. Has the further work and assurance in relation to 9 Horizon data assurance been undertaken, to your 10 knowledge? 11 A. Not to my knowledge. I'm unaware as to what progress 12 has been made over July, August and September. 13 Q. Do you know who it was proposed should undertake that 14 Horizon data assurance? 15 A. No, I haven't got that detail. 16 Q. I mean, we've seen, for example in Mr Patterson's 17 letters some things said by Fujitsu that would be 18 disclosable, or at least potentially disclosable, in 19 criminal proceedings. Certainly, as a defence lawyer, 20 I would want to see them. 21 A. Right. 22 Q. Was that brought into account in any of this process, 23 ie what was going on at the higher level between Post 24 Office and Fujitsu and, in the course of such 25 correspondence, what Fujitsu felt unable to say in its 21 1 correspondence as to Horizon reliability? 2 A. I think that was part of the debate that was had in June 3 certainly and I think we're all acutely aware of the 4 interactions that we've had with Fujitsu and clearly 5 that's something we discussed as part of this is 6 process. 7 Q. Thank you. Can we turn to what subpostmasters are told 8 about who investigates them, and go to the subpostmaster 9 contract, please. POL00000254. Just so that you know, 10 this is the post-Horizon Issues Judgment contract. 11 We'll come back to it later today, or perhaps tomorrow, 12 for some other features of the contract? 13 A. Right. 14 Q. Can we look at it in relation to what postmasters are 15 told about investigations of them, now, however, by 16 looking at pages 71 and 72. This is section 19 of the 17 new subpostmaster contract and it concerns, in broad 18 terms offences committed by subpostmasters, their 19 suspension, and "Enquiries by officers of the 20 Investigation Division". You can see that that's the 21 heading, underneath section 19. 22 A. Yes. 23 Q. We can just can, if we go down slowly, so you can see 24 the context of what is going to be said on page 72: 25 arrests and convictions; immorality; suspension; if we 22 1 scroll on, please, "Criminal Conduct: Reporting"; 2 "Inducement to Act Contrary to the Rules"; then over the 3 page, "Theft by Strangers"; "Failures to Report 4 Dishonesty"; then the cross-heading, "Enquiries by 5 Officers of the Post Office Investigation Division", 6 POID, as it used to be known for many, many years. It 7 says, as subpostmasters are told: 8 "The main job of the Investigation Division is to 9 investigate, or help the police investigate, criminal 10 offences against the Post Office [and others]. The 11 Investigation Division does NOT enquire into matters 12 where crime is not suspected. 13 "Most of the crimes dealt with by the Investigation 14 Division are committed by outsiders. It follows 15 a common reason for Investigation Division officers 16 seeking interviews with persons employed is to get help 17 in clearing up such offences." 18 Then this, paragraph 14: 19 "Although they comprise the minority of all 20 Investigation Division crime investigations, there are 21 many cases where the possibility (or even direct 22 suspicion) arises that persons employed by Post Office 23 business may be involved. Officers of the Investigation 24 Division conduct interviews about these suspected 25 offences and they are requiring to observe the same code 23 1 of conduct when obtaining evidence as that laid down for 2 police officers. This provides for an officer 3 investigating a criminal procedure offence to question 4 any person, whether suspected or not, from whom he 5 thinks that useful information may be obtained. As soon 6 as the Investigation Division officer has evidence which 7 would afford reasonable ground for suspecting that 8 a person has committed an offence, he must caution him 9 before asking any questions about that offence. The 10 caution must be in terms which make it clear that the 11 suspected person is not obliged to say anything unless 12 he misses to do so", et cetera. 13 Then 15: 14 "If a subpostmaster or Post Office branch assistant 15 is questioned as a suspected person by an officer of the 16 Investigation Division, on statements made by a third 17 person, and expresses a desire to be confronted by that 18 person, such confrontation will, if practicable, be 19 arranged. At the confrontation, the suspect will be at 20 liberty to question the third person on his evidence and 21 the questions and replies will be recorded by the 22 Investigation Division officer." 23 So this describes those conducting the investigation 24 as the Post Office Investigation Division, and officers 25 of the Investigation Division. 24 1 Given the history of the scandal dealt with in the 2 judgments of Mr Justice Fraser and the Court of Appeal 3 Criminal Division, and indeed perhaps the Inquiry, is it 4 appropriate that Post Office maintains within the 5 contract the existence of the Post Office Investigation 6 Division? 7 A. I must say, I think the wording is heavy-handed in terms 8 of the way it's described and I don't think it reflects 9 the way that we conduct investigations. So I think 10 there is a misalignment and expression "Investigation 11 Division" is not consistent with A&CI. So I would agree 12 with you on that. 13 Q. Again, given the history, is it appropriate that the 14 subpostmasters are told that the Investigation Division 15 retains investigative powers that include an evidential 16 interview process under caution? 17 A. No, I don't think it is. 18 Q. So at least this section of the contract requires some 19 quite radical revision, properly to describe the system 20 for reporting and investigation of possible offences by 21 Post Office to the police, doesn't it? 22 A. I would agree. 23 Q. Do you know why subpostmasters are told this -- 24 admittedly on the basis of the Inquiry survey only 25 15 per cent have got the new contract -- 25 1 A. Yes. 2 Q. -- but why subpostmasters are told this sort of five 3 years on after the judgments of the High Court? 4 A. I would agree with you that it's not consistent with the 5 way that the A&CI team operate. It's not consistent 6 with the way that we conduct investigations in practice, 7 and it's not consistent with the way we support 8 postmasters when they have issues. So I think there is 9 a misalignment, I would agree with you, Mr Beer. 10 Q. For a postmaster reading the contract, nothing has 11 changed, has it? 12 A. This would not -- as you say the language and the way 13 that it's constructed is not helpful and not reflective 14 of the way the Post Office is operating today. 15 Q. So that raises the "why" question -- 16 A. Yes, it does. 17 Q. -- why is it still like this? 18 A. And I think that is an entirely reasonable question. 19 We've obviously done some work on contract restatement. 20 We've obviously done some work on addressing the issues 21 that have emerged from the CIJ and the HIJ and made sure 22 that the core tenets of that particular judgment, 23 particularly the duty of good faith and particularly the 24 presumption of innocence and particularly the addressing 25 issues around secrecy and lack of transparency, I think 26 1 it would be entirely reasonable to conclude that this 2 section of the contract needs rewording, and it needs 3 addressing -- not just rewording but needs addressing. 4 We're clear that we have work to do on contracts in 5 terms of the specifics and I would say that, back in 6 2019, once we had the judgments handed down, the most 7 important element for me at that stage was to make sure 8 we changed the behaviours within the organisation and 9 then we changed the contract. So -- which is why we did 10 a restatement, rather than a recontracting completely 11 across the organisation. That is still outstanding and 12 that is work that needs to be done. 13 Q. Can I turn back, in part, to Project Phoenix and the 14 Past Roles Project, for something that has been said in 15 the course of the undertaking of those two pieces of 16 work and, just by way of some fuller context than was 17 given yesterday, can we look, please, at your third 18 witness statement from paragraph 230 onwards. 19 I'm just going to read in some of the paragraphs of 20 your witness statement by way of context for Project 21 Phoenix and the Past Roles Project. You say in 230: 22 "The background to both Project Phoenix and Past 23 Roles is that in 2022 I raised the issue with Simon 24 Recaldin stating that it was a concern to me and 25 potentially very problematic that there may still be 27 1 colleagues in post who either needed to be investigated 2 themselves or be moved into different roles to ensure 3 confidence is maintained amongst both victims of the 4 scandal and serving postmasters. Some colleagues may 5 have been aware of wrongdoing, or indeed without there 6 being immediate proof of it, have contributed to the 7 wrongdoing. I initiated a piece of work in the 8 organisation to try to get a grip on what the scale of 9 this challenge was and the number of colleagues still 10 working in Post Office and to whom this might apply. We 11 would then need to determine what action to take. 12 "The process was and slow painstaking and to be 13 fair, this was not an easy task. We needed to be clear 14 who was doing what roles and when in the past. We had 15 incomplete HR records which, given this was a desktop 16 exercise to review [1,700] colleagues with over 10 years 17 history in the organisation was a significant challenge. 18 We needed to be clear whether, not only should they be 19 being investigated themselves but also whether even if 20 no evidence of wrongdoing, there were colleagues now 21 involved in activities, like disclosure or administering 22 the compensation schemes, where it would be more 23 sensitive for them to be moved -- anything where it 24 would be better that there was no Postmaster interface. 25 I did not want to cut across rebuilding confidence." 28 1 Then 233: 2 "In terms of Project Phoenix, my own view, one which 3 I believe I share with others, is that for individuals 4 who were actually close to the investigations unit prior 5 to 2015 it is hard to conceive that they were unaware of 6 wrongdoing at that time. I am aware that there were 7 approximately 40 cases that were looked into further 8 following evidence which emerged at the restorative 9 justice meetings, the Human Impact Hearings, and from 10 evidence before the Inquiry. These are case studies not 11 numbers of individuals (ie the same individual could 12 have been involved in a number of cases). As far as 13 I am aware there are now only a handful of individuals 14 who worked in the Investigations Unit which was 15 disbanded in 2015 who are still employed by Post 16 Office -- they do remain in the organisation, but in 17 different roles. Mr Bartlett has provided further 18 information ... I am confident therefore that no one 19 from that era remains in the investigations or audit 20 sections of the business." 21 Then 234: 22 "I recognise, understand and on a personal level, 23 share the frustration that Post Office has not been able 24 to move quicker and go further in respect of Project 25 Phoenix and on Past Roles ... I would have preferred 29 1 Post Office to take more decisive action and said as 2 much at Board discussions. That is not where the 3 organised however and the collective decision was made 4 at Board not simply to dismiss anyone who was for 5 instance an investigator at the time, but against whom 6 there was no direct evidence of wrongdoing, rather to 7 transfer them to other departments, offer voluntary 8 redundancy where possible, but, where appropriate to 9 thoroughly investigate. The Board was and is 10 collectively concerned about a myriad of other 11 considerations including, importantly I should say, Post 12 Office not acting in a disrespectful way that might 13 resonate with behaviours [in] the past." 14 Lastly, 235: 15 "Post Office understands that unless wrongdoing can 16 be formally and fairly established, it cannot simply 17 remove existing staff because they were in post when 18 miscarriages of justice were taking place. Those 19 individuals of course have employment and indeed human 20 rights themselves. This however is a deeply difficult 21 area and one which I am aware that the Postmaster NEDs 22 feel very strongly about. This is also relevant to 23 [something you say below]." 24 Can we look, please, with that background, to the 25 terms of reference for the Past Roles Project. 30 1 POL00448308. This records, by way of context, that: 2 "After [this Inquiry] Compensation Hearing in 3 December 2022, it became apparent that [Post Office] had 4 recruited into its Remediation Unit (RU Team) employees 5 who had previously worked for Post Office in the 6 auditing, investigation, suspension or termination of 7 Postmasters connected to historic Horizon shortfall 8 cases. This risked undermining the integrity of, or the 9 public or postmaster confidence in, the work being done 10 by the [Remediation Unit]. It also put employees 'at 11 risk'." 12 Then: 13 "The aim of the project [and I'm only going to read 14 one] is to: 15 "Review the past roles conducted by colleagues 16 currently employed within the [Unit] and Inquiry teams, 17 to identify any that could be (for want of a better 18 word) potentially problematic. Examples of such roles 19 might include roles in the auditing, investigation, 20 suspension or termination of postmasters connected to 21 historic Horizon shortfall cases. They might be 22 'problematic' because they pose a risk to the integrity 23 or independence of work being done now, public or 24 postmaster confidence in that work, they create 25 conflict, or they place our employees at risk." 31 1 So is essentially this the result or product of the 2 idea which you were the genesis of? 3 A. That's correct. 4 Q. And what was your principal concern? What was it at the 5 December 2022 compensation hearing? 6 A. Well, I think -- 7 Q. That lit the fire? 8 A. Well, I think there were a couple of triggers. I think 9 the first trigger was the reemployment of individuals 10 who had been in the business prior to 2015. I can't 11 specifically recall if that was something that was 12 raised at the compensation hearing, but it was about 13 that time, which was the first trigger for me of 14 concern, is that we were rehiring individuals who had 15 been in the business prior to 2015 in that work, and 16 I think the second element was that, on exploring that 17 with Simon Recaldin and then subsequently with Jane 18 Davies, it became an issue for me, as -- and I think it 19 was crystallised during the compensation hearings, that 20 this might be something that is problematic, and Simon 21 advised that there were individuals within the 22 Remediation Unit who may well have been involved 23 historically in auditing, investigation or activities 24 that were of relevance to this Inquiry. 25 That was a surprise to me, in terms of how we had 32 1 determined and decided to staff the RU, and that was 2 something that, you know, for a myriad of reasons, most 3 of which are contained in the terms of reference here 4 and in the aims of the project, felt problematic for me. 5 Q. So can we wind forwards, then, to see what had occurred 6 and the approach that was being taken once the project 7 was up and running, by looking at a Group Executive 8 report which you, I think, sponsored, of 17 January 9 2024. POL00448615. 10 I don't think you wrote this yourself. 11 A. No, and the sponsorship, this would have been -- Patrick 12 Quinn works for Karen McEwan, so I think there is some 13 confusion as to why this sponsorship would be me, 14 particularly, but as it's not a -- it's not a function 15 that works for me. 16 Q. Right. So you didn't sponsor this report? 17 A. No. This report will have come to the Group Executive 18 but it won't have been something specifically sponsored 19 by me. 20 Q. So did you have any role in its creation? 21 A. No, not in its creation. This report will have come to 22 the Group Executive and I will have been appraised of 23 it, and had an opportunity to pre-read it before the 24 meeting. 25 Q. So you would have been a recipient -- 33 1 A. A recipient. 2 Q. -- rather than the sender? 3 A. That's correct. 4 Q. So that's just wrong? 5 A. Yes. 6 Q. Okay. Might it because you have told us that you led on 7 the idea, you thought of the problem and you created the 8 work -- 9 A. Possibly -- 10 Q. -- that led to the creation of the terms of reference? 11 A. Possibly. There is a broader question around the 12 concept of sponsor and line manager that I think is 13 still to be addressed as part of the way that we create 14 reports within the Post Office. The notion of 15 sponsorship and line management gets confused and 16 blurred and I think -- candidly, I think it's obviously 17 having my name in the sponsor's box. 18 Q. I just want to ask you about something that's written as 19 the communications theme for the project and it's on 20 page 11 of this document, which is an appendix to it. 21 You can see that it says, "Key themes for comms", and if 22 you just go to the foot of the page you can see what 23 that means by way of footnote, a little bit further. 24 "These are themes for internal communications." 25 Okay? These are themes for internal communications. 34 1 So if we just go up, please. It speaks in paragraph 1 2 as a key theme being that the documentary or the 3 docudrama had generated a lot of focus, including that 4 Post Office continues to employ individuals who were, to 5 some extent, involved in historic suspension 6 investigation and prosecution. 7 Then in paragraph 3, having described in 2 the work 8 that was ongoing, the key theme is said to be: 9 "In carrying out this work we are acutely aware of 10 the duties we owe to our colleagues, and the views of 11 our trade unions." 12 That seems fair enough. 13 A. Yes. 14 Q. "We also recognise that, in the vast majority of cases, 15 employees who have performed such roles in the past will 16 have carried out their duties according to instructions 17 given to them by the business at the time, and in the 18 belief that Horizon was robust." 19 Do you know the basis for that key theme for 20 communication? 21 A. What do you mean by the basis for it? 22 Q. An assessment that, in the vast majority of cases, 23 employees within this cohort carried out their duties 24 according to instructions given to them by the business 25 and that they did so in the belief that Horizon was 35 1 robust? 2 A. As in: is the author of this document in a position to 3 make that statement; is that what you're inferring? 4 Q. Yes, or -- 5 A. Yes, I -- it doesn't look precise, from my perspective. 6 I don't know where the author would be able to make 7 that -- or make that assumption, perhaps. 8 Q. Is this a reflection of a belief within the General 9 Executive at the time that, although we're undertaking 10 this Past Roles Project, in fact, the majority of the 11 people caught by it will have been doing their job 12 according to instructions, and in a belief that Horizon 13 was robust -- 14 A. Yeah. 15 Q. -- ie we can tell our people, "Although we've got to do 16 this, we know, in fact, that they were just doing their 17 jobs"? 18 A. I don't think there was any particular determination of 19 that view. I think one of the sort of themes that has 20 emerged amongst colleagues still working within the 21 organisation is that many of the leaders of the 22 organisation historically who have appeared before this 23 Inquiry, appear not to have been held to account if 24 indeed they were aware of and understood other issues 25 associated with Horizon in the past. 36 1 I think there is -- there was very definitely a view 2 amongst the people community and the authors of this 3 note that people were going about doing their job and we 4 needed to be sensitive to the fact that people were 5 going about doing their job to the best of their ability 6 and with what they knew, as opposed to a specific belief 7 that the statement as has been written here around 8 Horizon being robust, as it's written. 9 Q. At all events, was it your understanding that before the 10 Past Roles Project, there had been no internal 11 reflection within the Post Office as to potential 12 employee misconduct? 13 A. Reflections by the organisation on this? 14 Q. Yes. 15 A. There hadn't been, as far as I was aware, certainly when 16 I -- before I joined in 2019, any specific piece of work 17 that had looked into what I think you're suggesting in 18 terms of whether people were aware and what was -- of 19 what happened in the past, no. 20 Q. I mean responsive to, for example, the findings of the 21 judge in the Horizon Issues Judgment? 22 A. Not in terms of a specific piece of work about who was 23 left within the organisation. I think this is the 24 genesis of that work, and -- of those thoughts, should 25 I say. 37 1 Q. Well, the genesis, you've explained, or the paper has 2 explained, that it was the compensation hearing in 3 December 2022. I'm talking about things that might have 4 been done following the Horizon Issues Judgment of 5 December '19. 6 A. Yes, we did -- there was no specific piece of work 7 looking into either individuals who left the 8 organisation or indeed specifically people who were in 9 the organisation at that stage. 10 Q. Was that part of a culture that you maybe hinted at when 11 you were being appointed, or describing your 12 appointment, that the organisation should not look too 13 deeply into the past? 14 A. Possibly. I think it's more likely that the 15 organisation was conscious that this Inquiry would look 16 very, very explicitly into activities of the past and 17 very explicitly into issues that had occurred 18 historically, in a forensic and thorough manner, and 19 that we would be -- obviously allegations and evidence 20 would be presented that we, as I say and said yesterday, 21 would commit to investigate as a consequence of what 22 emerged. 23 So rather than running two pieces of work in 24 parallel I think the view was very much that explicitly, 25 we would see evidence emerging from the Inquiry, and 38 1 clearly that would be the trigger to take action if 2 necessary, in terms of further investigation; which is 3 indeed what we do. 4 Q. Can I turn to a separate thread of correspondence 5 concerning the work on past roles involving the Horizon 6 Advisory Board, by looking at BEIS0000846. This is 7 a separate thread of correspondence concerning the Past 8 Roles Project, disclosed to us by BEIS, involving the 9 Horizon Advisory Board members and Mr Recaldin. 10 Can we look at the top of page 5 and the bottom of 11 page 4, please. Thank you. You can see there an email 12 from Professor Christopher Hodges to Mr Recaldin and 13 others of 18 June this year. You're not on the copy 14 list. He, Professor Hodges, says: 15 "Morning Simon 16 "Hope you are well. 17 "We held a [Horizon Compensation Advisory Board] 18 meeting yesterday, at least semi-informally, and no 19 minutes will be published until a new Government is in 20 place. It is interesting that there are so many issues 21 continuing to require attention. 22 "We noted your letter [I'm not going to go to the 23 letter that triggered this]. Thank you for your kind 24 offer to brief us further ..." 25 This is essentially a letter about the Past Roles 39 1 Project. 2 A. Yes. 3 Q. "... we didn't feel it necessary yesterday, not least in 4 the light of the electoral purdah. But we would be 5 grateful for a further update. We note your ongoing 6 review. The view was expressed that one might expect 7 the answer in relation to individuals (about previous 8 involvement and hence ongoing involvement on 9 subpostmasters and mistress matters) to be either yes or 10 no, so we're intrigued to know more about the substance 11 of the review, and its timing." 12 Then if we scroll up to page 3, please, Professor 13 Hodges continues: 14 "We have two concerns: one is about supporting trust 15 of the victims in the compensation arrangements (and 16 anything else relevant) but the other is about timing, 17 given the extensive ongoing bad publicity emanating from 18 the Inquiry at the same time as the ongoing and imminent 19 new compensation arrangements. Anything you can deliver 20 on the reassurance issue around the involvement of 21 individuals, but also swiftly, would be useful." 22 Were these concerns of the Horizon Compensation 23 Advisory Board raised with you? 24 A. I will have spoken to Simon about these issues, yes. 25 Q. Were they discussed with the Board in the context of, at 40 1 about the same time, concerns being raised by the 2 Subpostmaster NEDs about the involvement of some 3 individuals in the provision of redress and similar 4 activities? 5 A. As we discussed yesterday, this has been a topic of 6 conversation at the SEG and at the Board for some time. 7 This was -- certainly over the summer, this was, and 8 continues to be, a topic of the Board and of the SEG. 9 Q. So the Advisory Board's interest in and comments on the 10 Past Roles Project were fed back to the Board; is that 11 right? 12 A. I believe they will have been, yes. I mean, this 13 information, I think this is June, so I'm sure at the 14 July board meeting this will have been fed back. 15 Q. Similarly, is it right that Government was taking 16 an interest in the Past Roles Project? 17 A. Yes. 18 Q. Can we look, please, at BEIS0000848. Go to page 3, 19 please, and scroll down. You'll see the Professor 20 Hodges email to Mr Recaldin. Then, if we scroll up, you 21 can see that Mr Cresswell shares that with a group of 22 people within DBT, yes? 23 A. Yes. 24 Q. Then scroll up, please, to page 2. In answer to the 25 question "Do we have a line on this?", answer in the 41 1 department, "Not that I can remember!" Suggestion: 2 "The Department has made it clear to the Post Office 3 in the past that it needs to take steps to remove those 4 with involvement in the scandal in any work dealing with 5 redress or appeals. It would be wrong to pre-judge any 6 individuals before the Inquiry has completed its work 7 but we would expect the Post Office to take action 8 against anyone found to have played any ... role in the 9 scandal." 10 Then scroll up, please, some tweaks are made. 11 I have read the tweaks in already. The question raised: 12 "... as this is an HR-type process [would it be] 13 appropriate for Government to comment until [Post 14 Office] has done the work?" 15 Then keep scrolling please, some more discussion 16 about lines for Government and then, if we keep 17 scrolling to the top of the page, please, 18 Ms Brooks-White says in her second sentence: 19 "I assume it came up in monthly discussions between 20 NR [which I think is you] and [Mr] Hollinrake? Is that 21 right?" 22 Did this issue come up in discussions between you 23 and Mr Hollinrake? 24 A. Yes, my recollection is it did come up in discussions 25 with Mr Hollinrake. 42 1 Q. Were the concerns raised by the Subpostmaster NEDs 2 passed on by you to Kevin Hollinrake? 3 A. I don't recall specifically. The conversations that 4 Minister Hollinrake wanted was reassurance that we were 5 doing work to ensure that there was no danger of 6 confidence from victims of the scandal, or indeed 7 postmasters, engaged in compensation. That was the 8 focus of the conversation. 9 Q. Does it give you concern or lingering doubts about the 10 effectiveness of the Past Roles Project and Project 11 Phoenix that neither of them are completed? 12 A. It's certainly been very frustrating for me that this 13 process has taken as long as it has. I've not hidden 14 from that frustration for the teams. I do recognise it 15 is an extremely complex area but, notwithstanding that, 16 finding suitable solutions has taken too long. 17 SIR WYN WILLIAMS: This is just so that I can be clear I've 18 got the timescale right: the genesis for the work was 19 the December 2022 -- 20 A. You're correct, sir. 21 SIR WYN WILLIAMS: -- compensation hearing, and the evidence 22 over the last few days is that it will be resolved 23 imminently, so we're talking about nearly two years? 24 A. Yes, that's correct. 25 MR BEER: Did you get a steer from Government as to how to 43 1 approach this issue? 2 A. I think my reflection on this is that Simon Recaldin had 3 conversations with the Government team on the ability to 4 offer voluntary redundancy and redundancy payments to 5 try and move people from the Remediation Unit. Those 6 are still ongoing, as I understand it. 7 Q. Can we look, please, at a record of one of the meetings 8 held between you and the Minister Kevin Hollinrake MP. 9 BEIS0000739. If we just go to the foot of the page, 10 I think it's the second page, actually, we can see this 11 is an email, I think sent to self, essentially, by 12 Mr Hollinrake's Deputy Head of Office and Private 13 Secretary, Mr Lucas. This is a record, if we go up, 14 please, to the top, of a meeting with you on 23 January 15 2024 and a record was made on 23 January 2024. 16 Now, presumably you won't have seen this? 17 A. Yes. 18 Q. This is a departmental record made in the way that we've 19 seen by somebody sending an email to themselves, or 20 a corporate account being used to do so. 21 If we just look down the left-hand side we can see 22 some initials: "NR", obviously you; is that right? 23 A. That's correct. 24 Q. "KH", Kevin Hollinrake? 25 A. Yes. 44 1 Q. "CFO"; can you see that? 2 A. Yes. 3 Q. Is that a person or the person's initials, or it's the 4 Chief Finance Officer? 5 A. I think it will be Kathryn Sherratt, the Interim Chief 6 Financial Officer. 7 Q. Okay. So they've been referred to by their job title -- 8 A. Job title. 9 Q. -- rather than their initials? 10 A. It would seem so. 11 Q. "LG", if we just scroll down a bit, you can see some LGs 12 towards the bottom of the page; is that Lorna Gratton? 13 A. Yes, that would be Lorna. 14 Q. So she, I think, was at this time a senior civil servant 15 in UKGI and on the Post Office Board as the Shareholder 16 NED? 17 A. That's correct, and she still is, yes. 18 Q. "SR", we see a bit of him coming into the discussion. 19 Can you see there, Simon Recaldin, presumably? 20 A. That's correct. 21 Q. Some "CCs" there as well, Carl Creswell? 22 A. That's correct. 23 Q. We know the function that he performed. 24 If we just go up, please, to the top, there's some 25 discussion about the Select Committee appearance and 45 1 what Post Office will respond to the Committee. 2 Mr Hollinrake said: 3 "Get it is your job to look forward." 4 You: "Clear it is simply not my position to opine 5 and pass judgement on predecessors." 6 He says: "... there are things you could have 7 pointed out but I take your point." 8 You say: "Don't want to go out there celebrating 9 what we've done in the past 4 years, doesn't feel right. 10 Don't want to pontificate from the pulpit on what we've 11 done." 12 Mr Hollinrake: "Key thing we've got to do is 13 legislate for the convictions, not straightforward for 14 various different reasons. One commitment I've made to 15 various colleagues, is where the money went." 16 In context, is that a reference to the issue of 17 where money paid by subpostmasters -- 18 A. That's correct. 19 Q. -- in purported satisfaction of a shortfall ended up -- 20 A. I think that's correct. 21 Q. -- in Post Office accounts? 22 A. Indeed. 23 Q. Ms Sheratt replies: 24 "KPMG had a look and that info has been passed to 25 the Inquiry. Some other analysis has been done as well. 46 1 Need to work through how the differences arose in the 2 first place. Do we wish to refine our review 3 internally, or do we want external support to pick up 4 where the prior review left off? Irrespective, we need 5 to be comfortable with the current process with this 6 type of difference with the current system. I get the 7 urgency." 8 Then she continued: 9 "PwC are our current auditors. KPMG were brought in 10 for that particular review." 11 Mr Hollinrake wants to get something in the public 12 domain within a month. 13 You are recorded, and Ms Sheratt, to say: "We've got 14 to." 15 You say: "We've got 8 days before the end ... of the 16 Inquiry." 17 I'm just reading this incidentally by way of context 18 for the meeting, rather than just going into a bit of 19 it. 20 A. Right, sure. 21 Q. "... 8 days before end of ... the Inquiry. We will have 22 to have a position before Phase 5." 23 Is that you saying that, "We, the Post Office, will 24 have to have a position on where the money went before 25 the beginning of Phase 5"? 47 1 A. I think it certainly reads that way, yes. 2 Q. Was that your view? 3 A. I think I was frustrated, as many people are and have 4 been, at the inability to answer this question in a way 5 that was -- in a way that was accurate. This particular 6 challenge had been out there for some time, the sort of 7 "Where did the money go?", question, as it was described 8 in many of the media outlets, and I think we had 9 employed, I think, two or three external forensic 10 accountants over the years, certainly prior to my time, 11 to try and get under the skin of this, and it seemed 12 peculiar to me that we were unable to get a fix, even 13 with caveats around its level of accuracy, so that we 14 could at least in part give people some confidence that 15 we understood the size and scale of this issue, or got 16 to the bottom of it. 17 Q. Lorna Gratton says: "Probably need to understand the 18 order of magnitude." 19 You are recorded as saying: 20 "Clearly the business employed Wilmington ..." 21 I think that's Ron Warmington: 22 "... and Second Sight to do some work on this 23 previous, may be some merit in speaking to them." 24 Then Mr Hollinrake recorded as saying: 25 "Real opportunity to draw a line under this more 48 1 quickly. We've been asking for things from other parts 2 of Government for some time. Anything we can do to 3 accelerate payments we would like to do. Do still here 4 from AB ..." 5 Maybe -- 6 A. Advisory Board? 7 Q. Advisory Board, yes: 8 "... that lawyers are arguing about a few hundred 9 [that's probably 'quid'] here and there. I do not want 10 lawyers on either side slowing it down. We are under 11 pressure to bring it back into DBT, we want you to 12 deliver on them. Give the benefit of the doubt to 13 postmasters." 14 There's more discussion on the HSS and the 15 introduction of service level agreements, the use of 16 without prejudice in correspondence. Mr Hollinrake says 17 that he thinks it was a big mistake to keep Herbert 18 Smith Freehills involved in the scheme. 19 Mr Recaldin says: "We are proactively phasing them 20 out." 21 Then, if we go over the page, please, you are 22 recorded in the third line as saying: 23 "Robert Daily today ..." 24 Indeed, he was a witness on that day. 25 "... Post Office Investigator. Biggest question for 49 1 me is we need some autonomy in dealing with people, 2 rather than us coming back to you or [the Treasury], we 3 need a warchest, effectively." 4 Can you help us as to what you were describing 5 there? 6 A. Yes, we needed some financial support and guidance in 7 terms of the ability to move individuals on from the 8 organisation who were involved in the scandal, and we 9 wanted to do that as quickly and efficiently as 10 possible. That might be through redundancy, that might 11 be through a settlement, that might be through some 12 other substantive reason to move people on, rather than 13 going into, potentially, issues where we might sort of 14 fall foul of the unions, or the like, and so I think the 15 point I was trying to make was that we wanted to move 16 more quickly without having to refer back to the 17 Government for funding to do such a thing. 18 Q. Lorna Gratton is recorded as saying: 19 "For those who appear publicly you might have 20 bringing the business into disrepute defence, but not 21 those that don't appear publicly." 22 You're recorded as saying: 23 "There's reputational damage that could be done here 24 and we want to be able to signpost this to stakeholders 25 that we won't sit on the fence on these issues." 50 1 Mr Hollinrake says: "I'm not a big fan of paying 2 people off. Ideally we go through a process." 3 CFO: "What we are grappling with is create a bit of 4 distance from the people who are implicated somehow and 5 those that are still in the business and that is 6 tainting it." 7 Then Mr Hollinrake says: 8 "I don't mind if we end up in an Employment 9 Tribunal." 10 Was that him signalling the approach to be taken 11 here: that the Post Office should take robust action, 12 even if it meant ending up on the wrong end of 13 an Employment Tribunal claim, brought by a dismissed 14 employee? 15 A. It does sound like it. 16 Q. Was that the approach taken? 17 A. No, I don't think we've been as robust as that. 18 Q. Was this not the Government giving you the green light 19 to be robust? 20 A. Yes, I think it is and, as I mentioned before, I think 21 we've dragged our feet in terms of being very, very 22 specific about this. 23 Q. I mean the issue is the potential for individuals who 24 still may be operating at the heart of Post Office who 25 were implicated in events in the past, isn't it? 51 1 A. That is the case and, as I have been very clear, where 2 we get formal allegations, we will act. Pre-emptively, 3 we have struggled to move people on from the 4 organisation. 5 MR BEER: Thank you. Sir, I'm about to move to a separate 6 subtopic, could we break for 15 minutes until 11.40, 7 please. 8 (11.22 am) 9 (A short break) 10 (11.40 am) 11 MR BEER: Thank you, sir. 12 Mr Read, I suspect, with your familiarity with the 13 issues in the Inquiry and the time that you've spent 14 preparing to give evidence in this phase, you will know 15 that one of the issues explored by the Inquiry is the 16 facility for the Post Office and/or Fujitsu to have 17 remote access to branch accounts -- 18 A. Correct. 19 Q. -- and a sub-issue, an exploration of what the Post 20 Office has said across time about its and Fujitsu's 21 facility to have access to branch accounts, yes? 22 A. Yes. 23 Q. A third area of exploration is, or has been, who knew 24 what about remote access and when? 25 A. Yes. 52 1 Q. No doubt you either heard, read or were briefed about 2 the evidence of Ms van den Bogerd, Angela van den 3 Bogerd, concerning her knowledge of remote access and 4 what she has said across time about the facility for 5 remote access to branch accounts? 6 A. Yes. 7 Q. Can we look, please, at POL00294728. This is an email 8 from a long time ago, before you were in post, pre-dated 9 your appointment by more than eight years, and it's 10 an email from Tracy Marshall -- can you see -- 11 A. I can, yes. 12 Q. -- to Kevin Gilliland and Angela van den Bogerd about 13 Horizon system issues. It's 5 January 2011 and, if you 14 just look at the foot of the page, in fact, I think it's 15 on the second page, you'll see that it's signed off by 16 Tracy Marshall, Agents Development Manager within 17 Network & Sales. 18 If we just go to the top, please, she says that she 19 has made some pages on the outstanding questions. Then 20 the second of those is, "[Post Office] or Fujitsu having 21 remote access to individual Horizon systems", and she 22 says: 23 "[Post Office] cannot remotely access systems and 24 make changes to specific stock units etc. Fujitsu can 25 remotely access systems and they do this on numerous 53 1 occasions on a network wide basis in order to remedy 2 glitches in the system create as a result of new 3 software upgrades. 4 "Technically, Fujitsu could access an individual 5 branch remotely and move money around however this has 6 never happened yet. The authority process required 7 audit process are robust enough to prevent this activity 8 from being undertaken fraudulently." 9 Concluding: 10 "So although changes can be made remotely, they 11 would be spotted and the person making the change would 12 be identified." 13 If we look, please, at POL00088956, we can see 14 an even earlier email, which email has secured some 15 significance in the Inquiry, an email from Mr Breeden to 16 Ms van den Bogerd, dated December 2010, and you can see 17 that Ms Marshall was a copyee, yes? 18 A. Yes, that's correct. 19 Q. If we just scroll down, and a bit more please, we see 20 cut into this email chain an email sent previously by 21 Lynn Hobbs, in which it was said that: 22 "I found out this week that Fujitsu can actually put 23 an entry into a branch account remotely. It came up 24 when we were exploring solutions around a problem 25 generated by the system following migration ... This 54 1 issue was quickly identified and a fix put in place but 2 it impacted around 60 branches and meant a loss/gain 3 incurred in a particular week in effect disappeared from 4 the system. One solution, quickly discounted because of 5 the implications around integrity, was for Fujitsu to 6 remotely enter a value into a branch account to 7 reintroduce the missing loss/gain. So [Post Office] 8 can't do this but Fujitsu can." 9 One of the issues that we've been exploring is the 10 consistency of the accounts, or accuracy or reliability 11 or truthfulness of the accounts that Ms van den Bogerd 12 has given, in light of the fact that she was provided 13 with this information, as, it seems, was Tracy Marshall. 14 We've seen what she said in the first email that 15 I have shown you, which, on one view, doesn't really 16 reflect what is set out here. 17 A. Mm. 18 Q. You tell us in your witness statement -- this is 19 paragraph 238 of your third witness statement -- that 20 a person called Tracy Marshall, as the Postmaster 21 Engagement Director, was the person who briefed you 22 about the investigation of Elliot Jacobs? 23 A. Yes, I did, yes. 24 Q. The email can come down. Thank you. 25 Is that the same Tracy Marshall that is engaged in 55 1 these investigations and discussions about remote 2 access? 3 A. Yes, it is. 4 Q. What position does she hold; is it Network Development 5 Director? 6 A. That's correct. 7 Q. Can we look, please, at WITN11610100. 8 This is Ms Marshall's witness statement of 22 August 9 and it's a corporate witness statement, it's on behalf 10 of the Post Office. If we scroll down, she says that 11 she is, in fact, the Retail Engagement Director. 12 A. Yes. 13 Q. Her areas of responsibility cover postmaster onboarding, 14 training, contract teams. If we scroll on, please, she 15 says that she is responding to two Rule 9 Requests 16 addressed to the Post Office. If we scroll down, and 17 keep going, we can just scan this. Then "Definitions", 18 then keep going. 19 So just going up, you can see the first question 20 that she addresses "current [subpostmaster] contract ... 21 set out in detail" changes made. 22 Then, if we scroll on, please. Keep going. It's 23 quite a long witness statement. I just want you to see 24 the coverage of it. 25 A. Right. 56 1 Q. If we keep going, please. We asked to identify relevant 2 changes made in the light of Mr Justice Fraser's Common 3 Issues Judgment, essentially. 4 Then if we keep going: 5 "... the process by which [subpostmasters] were 6 notified of relevant changes", section 2. 7 Then if we scroll on, please: 8 "... process by which new [subpostmasters] are 9 notified of the terms and conditions ..." 10 Scroll on, please, terms of the contract, and their 11 negotiation, whether that's permissible and what's the 12 process. 13 Scroll on, please. If we just scroll to get the 14 full heading of this section of the witness statement, 15 "Induction and Ongoing Support for Postmasters and 16 Assistants", ie "Please provide details of the training 17 now given to [subpostmasters]", et cetera. 18 If we scroll on, please. I think this is quite 19 a long section, so we can scroll on quite fast: 20 "... details of any key guidance, policies, training 21 or instructions given to those responsible for 22 delivering training." 23 Then carry on scrolling, please: 24 "which department(s) hold responsibility for [such] 25 policies and guidelines ..." 57 1 Then 8: 2 "... details of the experience, expertise and 3 qualifications of those currently responsible for 4 delivering training ..." 5 I'm not showing you or asking you to look at the 6 responses to these, just showing you the coverage. 7 10: 8 "... any key reports, reviews or investigations ... 9 which address quality of training provided ..." 10 Then scroll on, please: 11 "... details of any feedback sought or engagement 12 undertaken ... in relation to their training on the use 13 and operation of Horizon ..." 14 Scroll on, please: 15 "To what extent are [subpostmasters] expected to 16 train their own managers and assistants ..." 17 13: 18 "[Any] provision within [Post Office] for 19 [postmasters], managers and/or assistants to raise 20 issues about the provision or efficacy of training ..." 21 Then scroll on, "Contractual liability for 22 Shortfalls": 23 "Key policies and [guidance] relating to the 24 liability of [postmasters under the contract] and other 25 end users for shortfalls ..." 58 1 Scroll on, please: 2 "Which department(s) hold responsibility for [such] 3 policies ..." 4 Then a new section: 5 "... all the avenues available to [subpostmasters] 6 to raise queries or questions about Horizon", and about 7 the Business Support Centre. 8 Then scroll on, please: 9 "... current process [a subpostmaster] goes through 10 when they raise a balancing issue and seek assistance to 11 resolve it ... 12 "... policies, guidance, training or introduction 13 for those operating the [centre] since the findings of 14 Mr Justice Fraser." 15 If we continue: 16 "Which department(s) hold responsibility for [those] 17 policies ..." 18 Then 18: 19 "... details of the experience [et cetera] of those 20 responsible for operating the helpline ... 21 "... how ... the advice provided by the helpline is 22 monitored, reviewed or checked ..." 23 Then carry on, please: 24 "... how ... calls raised with the helpline are 25 monitored, reviewed and/or checked to identify any 59 1 potential issues in branches", in relation to 2 particularly shortfalls, bugs, errors and defects. 3 Then carry on: 4 "To what extent ... are branches proactively 5 notified of [bugs, errors and defects]?" 6 Then carry on, please: 7 "... sources of advice or assistance made available 8 to [subpostmasters], managers and assistants ... 9 "... any ... reports, reviews or investigations ... 10 which address the quality of the advice and assistance 11 provided via the helpline ... 12 "... the means by which [a subpostmaster, 13 et cetera], can provide feedback on their experiences 14 [of] using the helpline ... 15 "... measures ... in place to ensure that 16 [postmasters, et cetera] who contact [Post Office] for 17 assistance ... receive useful, tailored advice." 18 A section on "Suspension, Reinstatement and 19 Termination", and then continue; and continue; and 20 continue; and continue. 21 That's it, keep going, thank you. 22 Thank you. Stopping there. 23 Ms Marshall is providing the Inquiry with 24 information, the retention of subpostmasters, retention 25 of Post Office employees, including in relation to their 60 1 potential association of past wrongdoing. She's 2 essentially the Post Office witness that's speaking to 3 that issue. 4 She is a person who, on one view, is involved or 5 implicated in the remote access issue, and yet she's 6 a corporate witness for the Post Office; do you see 7 a problem? 8 A. The issue emerged in the summer, which was the first 9 time, I think. The last time we -- the last time the 10 Inquiry was sitting and these emails emerged, we invited 11 Tracy to step back from her day-to-day role while we 12 tried to understand the significance of and the extent 13 of any involvement that she had. She was very clear 14 that she was unaware of remote access being actioned. 15 She said she was aware that remote access was possible 16 but not whether or not it was enacted in any way. 17 There were, I think, a couple of emails that we've 18 just been through and a line manager suggested to her 19 that she take a step back from postmaster-facing 20 activity so that confidence could be retained, and 21 indeed provide the opportunity for us to examine any 22 further whether or not there was something substantive 23 with which she had to -- to respond to. 24 Q. She hasn't really taking a step back though, she's taken 25 a step forwards, hasn't she, because she's provided 61 1 a corporate witness statement to us and is giving 2 evidence, I think, next week? 3 A. Well, my point at this stage was that there is no 4 concrete evidence of any wrongdoing and, as 5 a consequence of that, we want to obviously treat her in 6 exactly the same way as we would anybody else, which is 7 explore any allegations that are being made but, in 8 reality, she is the individual who is best placed to 9 write that corporate witness statement and that is 10 exactly what she's done. But, at the same time, we're 11 clear that, for the confidence of postmasters, both past 12 at present, it's inappropriate for her to be involved in 13 activity that is postmaster facing while the Inquiry is 14 still ongoing, and while we can and will explore whether 15 there is anything that she needs to answer to. 16 Q. Is there anything more postmaster facing than giving 17 evidence in the Inquiry on behalf of the Post Office as 18 a corporate witness? 19 A. I'm not quite sure I understand what you're getting at. 20 Q. You said you invited her to take a step back from 21 postmaster-facing activity? 22 A. Yes, correct. 23 Q. Is it not postmaster-facing activity to come along and 24 sit in the seat that you're sitting in, give evidence on 25 behalf of the Post Office in relation to a whole range 62 1 of issues that I've just quite slowly taken you through? 2 A. Yes, I can see the point you're trying to make. I think 3 the point I'm trying to make is that my desire was that 4 she wasn't involved in activity that was specifically 5 postmaster facing, so running of forums, listening 6 groups, engagement with postmasters, as opposed to, and 7 by definition therefore, the day-to-day running of her 8 role. However, she had spent the previous four years in 9 that role and had created a lot of the change that has 10 been initiated by the Post Office and, therefore, she is 11 best placed to speak to it, and clearly the Inquiry will 12 speak to her, given that that is her role. 13 I don't think it is inconsistent to remove her from 14 coming to the Inquiry to give evidence on the work that 15 she's done and, you know, if you have questions about 16 other elements of her role going back over time, I'm 17 sure the Inquiry will explore that. As I said earlier, 18 we have been very clear that, where allegations are 19 made, we will investigate those and we will do that. 20 But it is a presumption of innocence in the same way as 21 it would be now for a postmaster as well, and I think 22 it's important that we continue to maintain that. 23 I certainly have a responsibility to all my 24 colleagues, as well as to postmasters, and I think it's 25 appropriate that the balance -- and it's a fine 63 1 balance -- that we have adopted in terms of asking her 2 to step back from day-to-day activity, maintaining the 3 fact that she has done and has spent the last four years 4 involved in activity which will be explored by this 5 Inquiry, and then giving her the chance to come and 6 speak to that well, which I think is a sensible way to 7 progress. And we've been very clear that where people 8 have been invited to step back at the conclusion of the 9 Inquiry, and whenever allegations, if they are made, are 10 made, we will continue to act. 11 Q. Thank you. Can I turn to, again, a sub-issue we 12 addressed previously yesterday: namely, having 13 subpostmasters as NEDs on the Board? 14 A. Yes. 15 Q. You address this with a sort of qualitative assessment 16 in paragraph 83 of your third witness statement -- 17 A. Right. 18 Q. -- if we can turn that up and have a look at it. So 19 WITN00760300, thank you, page 46. It's paragraph 83. 20 You say: 21 "In respect of the Board, Postmaster Non-Executive 22 Directors have been an important part of trying to 23 invert this dynamic. They bring a detailed and relevant 24 understanding of current day matters to Board meetings 25 in a uniquely creditable way. This ensures 64 1 a transparency of issues and an agreed and collective 2 understanding across the organisation of the most 3 important priorities." 4 Then you go on to consider something slightly 5 separate. 6 A. Yes. 7 Q. You give the impression, would you agree, that having 8 the Postmaster NEDs on the Board has been a positive 9 thing? 10 A. I think it's been very positive and I've been very 11 consistent with that. I think it's an important part of 12 the change that we've been trying to bring about at the 13 Post Office. I was the champion of bringing Postmaster 14 NEDs onto the Board. It is and was a feature of the 15 role that I had at Nisa where I had a combination of 16 independent Non-Executive Directors and Member 17 Directors -- Non-Executive Directors, and that makes -- 18 worked well. 19 Q. Can we look, please, at BEIS0000753. This is a readout 20 of a meeting between you and other members of the Post 21 Office Executive. So Ms Sheratt, Mr McInnes and, on the 22 other side, Lorna Gratton, Carl Creswell, Jamie Lucas -- 23 and I should say Mr Hollinrake too. 24 A. Yes. 25 Q. We can see his private secretary is also recorded as 65 1 being present. I just want to, again, read a little bit 2 of context. You say: 3 "Pleased with our session ..." 4 Is that referring to the session before the Select 5 Committee? Just look at the date at the top. 6 A. Yes, I think there were two Select Committee meetings, 7 one in January and one in February, and I think this one 8 is referring to the -- 9 Q. To the second? 10 A. -- to the February one, yes. 11 Q. You say you were pleased with your session: 12 "... and felt a bit like the rug got pulled from 13 beneath us." 14 Mr Hollinrake is reported as saying: 15 "It's fair to say, at a certain point in time, have 16 to take the gloves off and try to manage the 17 [information]. I think the Select Committee were weak 18 with him, apart from Antony Higginbotham. Sorry it was 19 so messy. Keen to support in any way we can to make 20 sure we get passed [sic] this. Hope he's discredited." 21 Is that a reference to Henry Staunton? 22 A. That's correct, yes. 23 Q. So the Minister was saying that he supposed Henry 24 Staunton was discredited? 25 A. That's correct, yes. 66 1 Q. "Anything else you think we need to make it easier?" 2 You say you're looking to Lorna Gratton: 3 "Need as much support as you can get from Ben 4 Tidswell to try to get the Board functioning properly. 5 We need to try and find a way through the Project 6 Pineapple memo." 7 That's the inadvertently disclosed email? 8 A. Yes, that's correct, yes. 9 Q. You're recorded as saying: 10 "We'll have a Board meeting tomorrow and see where 11 we can get to. Postmaster NEDs may use tomorrow as 12 an [opportunity] to criticise on funding and 13 anti-postmaster sentiment. Need to avoid tomorrow 14 morning being a proper road crash." 15 Ms Sheratt: "Had a bit of a flavour of it on Monday, 16 they think it did not do enough for postmasters. Elliot 17 mentions where the investment for the future of the 18 business and postmaster rem is front and centre, costs 19 are rising, and this has been a theme of theirs for 20 a while." 21 Then you're record as saying: 22 "This goes back to whether the postmaster directors 23 are playing a role of a director, or of a trade union 24 rep. I don't know where that is going to go. They are 25 extremely exposed as a result of Project Pineapple. Not 67 1 sure to patch this up. In a slight stand off." 2 Then Ms Gratton: "They are not in a good place and 3 aren't operating in a way appropriate for the business." 4 You ask: "How can they ensure their own 5 self-interest doesn't cut across their role in 6 supporting [Post Office] as a business?" 7 This doesn't seem to record such a rosy picture of 8 yours of the Subpostmaster NEDs. 9 A. I think it's a moment in time and I think we've heard 10 a lot about Project Pineapple in this environment. What 11 I would say is the point of the postmaster directors on 12 the Board is to be challenging, is to bring a tactical 13 view of what is going on the ground, and I went into 14 this with my eyes open, fully knowledgeable that this 15 would be uncomfortable. The big challenge for the 16 Postmaster NEDs, of course, is that they are elected to 17 the Board, unlike anybody else, who is appointed to the 18 Board. So as an elected representative on the Board, 19 voted for by other postmasters, they've got a very dual 20 challenge of, on the one hand feeling that they are 21 representing postmasters, whilst, at the same time, 22 recognising they have duties as Directors of Post 23 Office, and that provides conflict. 24 Not unsurprisingly -- and you heard from both Saf 25 Ismail a couple of weeks ago, I think Saf suggested he 68 1 was working anything up to ten days a month on this -- 2 not unsurprisingly, many postmasters were looking to 3 them and constantly looking to them to say, "What have 4 you done? What have you done? What are you doing?" 5 And I think that is the challenge we have had, and Saf 6 and Elliot have faced considerable pressure from their 7 peer group, whilst at the same time having to recognise 8 that they have got to -- and they have duties directors 9 of the Post Office. And so it is a tricky play. 10 There is no question that this time -- and you'll be 11 very familiar with this -- that this time was a very 12 difficult pod for the Post Office, the departure of 13 Henry, the exposure of the Project Pineapple email, the 14 challenges that the Postmaster Non-Executive Directors 15 felt, but also they were coming to the end of their term 16 at this stage. This is the three years, and I think 17 they felt very keenly that they wanted to be able to 18 demonstrate they'd made a real difference and I do 19 believe that to be the case but I think it was something 20 that was playing on their minds as well. 21 Q. When did you start becoming concerned that they may not 22 be acting as directors but instead as trade union reps? 23 A. I mean, I don't think we should make too much of this. 24 I don't think that is a major issue. I think one of the 25 challenges that this role has, it's exactly what 69 1 I experienced, that Nisa was trying to get that balance 2 between representing postmasters, as I've mentioned, and 3 actually fulfilling a role as a director. It's 4 an ongoing issue, an ongoing challenge and very 5 difficult, in fact virtually impossible, to draw a line 6 between the two, and I think it requires very sensitive 7 navigation from them, very sensitive navigation from 8 other Board members and, indeed, obviously, from me, in 9 terms of making sure that we get the best from the 10 Postmaster Non-Executive Directors. 11 Q. What did you understand to mean by "trying to find a way 12 through the Project Pineapple memo"? 13 A. My understanding of that, and what was on my mind at the 14 time, was we'd just lost our Chairman in very difficult 15 circumstances. I think the -- I think everybody was 16 acutely conscious of the manner of Henry's departure, 17 and the publicity that was associated with that. We had 18 two Non-Executive Directors who were concerned about the 19 exposure of the Project Pineapple email. 20 Q. I think before that, they were concerned about the 21 conduct of three member of the General Executive? 22 A. They were. 23 Q. That was the substance of their concern? 24 A. That was the substance. 25 Q. The inadvertent disclosure of the email, as you 70 1 described it, is an additional matter? 2 A. It is an additional matter, but I think the primary 3 matter that is being discussed in this email is, and was 4 from my perspective, how do we bring some stability and 5 cohesion to the Board, given we'd lost the Chairman and 6 we had two main Board Directors who were 7 disenfranchised? Less about what they were 8 disenfranchised with and more about the personal 9 circumstances they were in. 10 It was my interpretation of what was going on and 11 what I wanted to try to create was an environment where 12 we had got a sense of collegiality and a sense of 13 stability at a Board level. It was quite apparent that 14 this was causing a disquiet, amongst the organisation, 15 it was being played out in public, and it was, as 16 I think I mentioned before, pretty unedifying and 17 unhelpful for the direction of business. 18 Q. At this time the Post Office was putting at a public 19 message that it was putting subpostmasters at the heart 20 of its business, including by having Subpostmaster NEDs 21 on the Board, wasn't it? 22 A. I don't think it was necessarily at this particular 23 moment doing that. I think postmasters had been on the 24 Board for almost three years before to this -- prior to 25 this particular situation. So I'm not sure that's 71 1 necessarily a fair characterisation. 2 Q. To what extent were the Board, including the 3 Non-Executive Directors, updated on the contact that you 4 and other members of the Executive were having with the 5 shareholder? 6 A. I report back on the detail of the shareholder meeting, 7 and when there are specific issues that emerge, 8 I invariably take my Corporate Affairs Director with me 9 to these meetings on a monthly basis and notes of those 10 meetings are then shared with either the Chairman or 11 indeed with the entire Board, depending on the content 12 that is required. 13 So that would happen after each of the ministerial 14 meetings and, of course, I would refer to the 15 ministerial meetings in my CEO reports to the Board, of 16 which many have been displayed. 17 Q. You'll remember that one of Grant Thornton's criticisms 18 was the extent to which the shareholder's input was 19 diving decision making and performance of Post Office? 20 A. Yes. 21 Q. So to what extent were the Board, including the 22 Non-Executive Directors, sighted on exchanges such as 23 this? 24 A. On the sort of mechanics of what is going on in here, 25 probably less about the mechanics. If there are things 72 1 that are matters of substance then, of course, those are 2 issues that we would share with the Board. 3 Q. Did you share the view that Ms Gratton expressed that 4 the Subpostmaster NEDs were not operating in a way 5 appropriate for the business? 6 A. Did I share that with? 7 Q. Did you share that view? 8 A. Oh, sorry, did I share that view? 9 Q. Yes, did you hold that view? 10 A. No, I think my experience of the Postmaster NEDs is 11 that, you know, they are naturally challenging, 12 challenging of me and I'm open to that challenge. 13 Q. Mr Ismail has given evidence to us that he believed, 14 after the departure of Mr Staunton, that responsibility 15 to heal the rifts in the Board after Project Pineapple 16 was placed upon the two Subpostmaster Executives; Is 17 that correct? 18 A. I don't think explicitly that was necessarily the case. 19 I think clearly, as main Board Directors, they have 20 an opportunity to engage with members of the Group 21 Executive and, by definition, you know, I think they 22 share some responsibility to try to move that agenda 23 forward. I don't think it's necessary that the Chairman 24 has to do it, or that the SID has to do it. I think 25 everybody has a responsibility to try to ensure that we 73 1 get a sense of stability and cohesion back on to the 2 Board. So I don't think it was any one person's 3 responsibility. 4 Q. Did you leave it to them, the two Subpostmaster NEDs, to 5 build bridges with Mr Foat and Mr Richards? 6 A. On reflection, I probably did give them too much of 7 the -- too much of the onus was placed upon them. 8 I think that's probably a fair reflection. I think at 9 this time, not unsurprisingly, we were under enormous 10 amounts of pressure as an organisation, and my 11 reflection is that I probably could have done more. 12 Q. It was your actions that, in particular, had left them 13 exposed to a response or reprisals from those against 14 whom they made allegations, wasn't it? 15 A. Well, as we discussed yesterday, it was an inadvertent 16 mistake, and we've been through the mechanics of how 17 that mistake occurred. I also expressed my apology to 18 them within 12 hours of the event occurred. So I don't 19 think it's fair to characterise it in that way. I think 20 it was -- as I say, an inadvertent mistake. It was 21 disappointing that it had occurred, I was keen to make 22 sure that we moved on and it obviously didn't -- we 23 obviously didn't move on as quickly as that would 24 have -- as would have been helpful. But, 25 notwithstanding that, I think that the scenarios 74 1 surrounding Henry's departure clearly didn't help. 2 Q. Thank you. Can we move to a new topic -- 3 SIR WYN WILLIAMS: Before we do, Mr Beer, just to clear my 4 mind. 5 I think you were present when Ms Scarrabelotti gave 6 evidence, yes? 7 A. I was, sir. 8 SIR WYN WILLIAMS: In relation to Postmaster Non-Executive 9 Directors, she was asked some questions about that. 10 A. Yes. 11 SIR WYN WILLIAMS: I'm not pretending that these were her 12 words, all right, but she seemed to be suggesting, 13 I think, that the current serving postmasters had a very 14 important role to play but perhaps not as members of the 15 Board? Do you remember her giving that -- 16 A. Yes. 17 SIR WYN WILLIAMS: I just wondered what your view of that 18 was, if you have one? 19 A. Yes, I do, Sir Wyn. I do believe that they have a role 20 to play on the Board. I think we were in a situation 21 with no other operators/retailers on the Board, other 22 than effectively myself and the two Non-Executive 23 Directors, and I think it gave reassurance to other 24 Board members that they had a tactical understanding of 25 what is going on, on the ground, in that forum, and that 75 1 they would challenge me in particular on issues that we 2 were implementing. 3 So I think it was a really important part of the 4 development that we've had over the last three years to 5 have the Postmaster Non-Executive Directors being in 6 a position where they could challenge the change that 7 was being implemented into our business. 8 SIR WYN WILLIAMS: All right, thank you. 9 Sorry, Mr Beer. 10 MR BEER: In fact, on that topic, we could go back and look 11 at BEIS0000753. 12 This was the note of the meeting you held with 13 Mr Hollinrake and others on 29 February and, if we just 14 scroll down -- and a bit more, please, stop there -- 15 I left off examining the memo with Lorna Gratton saying: 16 "They are not in a good place and aren't operating 17 in a way appropriate for the business". 18 You said: "How can they ensure their own 19 self-interest doesn't cut across their role in 20 supporting [Post Office] as a business." 21 Then if we scroll on, please, six paragraphs from 22 the bottom, eight paragraphs from the bottom, Lorna 23 Gratton says: 24 "I don't think postmaster oversight of the Board is 25 worth it, I think there's good mileage for more 76 1 postmaster input in the retail [side] of the business." 2 Did you understand it to be her view that having 3 postmasters on the Board was not worth it but there was 4 more value in having them have some other input, as it's 5 called, in retail? 6 A. Not quite. I think what we were -- or what was being 7 described here is the Voice of the Postmaster and the 8 NFSP, as I recall, were progressive a concept of an 9 oversight Board that sat above the main Board of the 10 Post Office, and played a strategic role in shaping the 11 direction of travel. So I think that is what the 12 oversight of the Board, which would be populated by 13 people from the CWU, ministerial colleagues, potentially 14 postmasters as well. So I think that is what is being 15 described here by way of postmaster oversight of the 16 Board. 17 From a retail perspective, I think what Lorna is 18 referring to here is, is there a more, I wouldn't say 19 executive role, but I think is there a role of oversight 20 within the retail business of the Post Office that the 21 Postmaster Non-Execs can play, which I think is quite 22 a complicated concept. You heard Mr Ismail say he did 23 ten days a month anyway. I was trying to wrestle in my 24 own mind what a Postmaster Non-Executive Director, with 25 more role in retail, that then starts to blur, I think, 77 1 the boundaries of what an executive does and what 2 a non-executive does. So it is a difficult concept. 3 I think what Lorna is quite rightly pointing out is, 4 certainly where the Post Office is now, there is 5 an opportunity for more input from the broader 6 postmaster community and I buy that completely and I do 7 believe that, which is certainly why we have a serving 8 postmaster as part of the Senior Leadership Team. 9 I think trying to fashion the role, as described 10 here, could be complicated, in terms of 11 accountabilities. 12 Q. So we shouldn't read this to mean that Ms Gratton's view 13 as expressed here was that having postmasters on the 14 board was not worth it? 15 A. That's certainly not how I read it, no. 16 Q. Thank you. I only raise that because it is linked to 17 the question that the Chairman asked. 18 A. Right. 19 Q. Can we move to the new topic, then, which is the 20 post-Group Litigation postmaster contract. 21 A. Yes. 22 Q. We have looked at the front page and a bit of it, 23 section 19, already. The crossreference, no need to 24 turn it up, is POL00000254, and I think the Post Office 25 produced a guide, do you remember -- 78 1 A. Yes. 2 Q. -- for postmasters, a summary of the effect of the 3 Common Issues Judgment on the postmaster contract. I'm 4 not going to engage in an exercise of comparing what it 5 said versus the judgment, but instead go straight to the 6 contract itself, POL00000254. 7 Can we look please at page 32. This is, would you 8 agree, one of the key clauses, section 12. 9 A. Yes. 10 Q. "Responsibility for Post Office Limited Stock and Cash", 11 if we scroll down, please, to 12, "Losses", so 12 section 12.12: 13 "The subpostmaster is responsible for all losses 14 caused through his own negligence, carelessness or 15 error, and also for all losses caused by the negligence, 16 carelessness or error of his or her assistants. 17 Deficiencies due to such losses must be made good 18 without delay." 19 I think you'll recognise that there's a change 20 there -- 21 A. Yes. 22 Q. -- from the past contract, in that it introduces the 23 qualifier negligence, carelessness or error in relation 24 to assistants -- 25 A. Yes, that's correct. 79 1 Q. -- rather than an absolute liability -- 2 A. Correct. 3 Q. -- for losses caused by assistants. 4 Then clause 13: 5 "Subject to clauses 12 and 13A ... the financial 6 responsibility of the subpostmaster does not cease when 7 he relinquishes his appointment and he will be required 8 to make good any losses incurred during his term of 9 office which may subsequently come to light." 10 Then some new clauses, 13A: 11 "Post Office shall not seek recovery from the 12 subpostmaster unless and until: 13 "[1] it has complied with its duties under clause 20 14 ... (or some of them) ..." 15 We'll look at them in a moment: 16 "[2] it is established that the shortfall represents 17 a genuine loss to it; and 18 "[3] it has carried out a reasonable and fair 19 investigation as to the cause and reason for the alleged 20 shortfall and whether it is properly attributed to the 21 subpostmaster under the terms of this contract. 22 "Gains 23 "Surpluses may be withdrawn provided that any 24 subsequent charge up to the amount withdrawn is made 25 good immediately." 80 1 Then if we go to 20, "Post Office Duties": 2 "Post Office shall: 3 "[1] provide the Horizon system [which is defined] 4 which shall be reasonably fit for purpose, including any 5 or adequate error repellency. 6 "[2] provide adequate training and support, through 7 the provision of training materials, to the 8 subpostmaster, particularly if and when Post Office 9 imposes new working practices or systems or requires the 10 provision of new services." 11 Then 3, I'm going to ask some questions about this 12 in a moment: 13 "Properly and accurately effect, record, maintain 14 and keep records of all transactions effected using 15 Horizon. 16 "[4] Properly and accurately produce all relevant 17 records and/or explain all relevant transactions and/or 18 any alleged or apparent shortfalls attributed to the 19 Subpostmaster; 20 "[5] Cooperate in seeking to identify the possible 21 or likely causes of any apparent or alleged shortfalls 22 and/or whether or not there was indeed any shortfall at 23 all; 24 "[6] ... identify the causes of any apparent or 25 alleged shortfalls, in any event; 81 1 "[7] disclose possible causes of apparent or alleged 2 shortfalls (and the cause thereof) to the Subpostmaster 3 candidly, fully and frankly; 4 "[8] make reasonable enquiry, undertake reasonable 5 analysis and even handed investigation, and give fair 6 consideration to the facts and information available as 7 to the possible causes of the appearance of alleged or 8 apparent shortfalls ... 9 9, I'm going to ask some questions about this too: 10 "communicate, alternatively, not conceal known 11 problems, bugs or errors in or generated by Horizon that 12 might have financial (and other resulting) implications 13 for the Subpostmaster; 14 "[10] communicate, alternatively, not conceal the 15 extent to which other subpostmasters of branches are 16 experiencing problems relating to Horizon and the 17 generation of discrepancies and alleged shortfalls; 18 "[11] not conceal from the Subpostmaster Post 19 Office's ability to alter remotely data or transactions 20 upon which the calculation of the branch accounts ... 21 depend; and 22 "[12] properly, fully and fairly investigate any 23 alleged or apparent shortfalls." 24 So with these additional obligations imposed on Post 25 Office, how is the question of the negligence, 82 1 carelessness or error by a subpostmaster or their staff 2 approached, in practice? 3 A. In practice? In practice, we do a number of things. 4 Certainly from an investigative point of view or from 5 a -- trying to work out whether a discrepancy or a loss 6 has occurred, we have a completely different approach to 7 that that we adopted prior to 2019. We have -- as 8 I mentioned yesterday, we have created a number of 9 different teams with different responsibilities. That 10 starts with the network monitoring team, who identify 11 and look for, and monitor the network on a day-to-day 12 basis, to identify where there are different issues and 13 different problems emerging and, indeed, if they are 14 doing so. 15 Clearly, we have the Branch Support Team in terms of 16 the Assurance Team who do the stock and reconciliation 17 issues, and we have a Support and Reconciliation Team as 18 well, that is also ring-fenced to help support 19 postmasters. But I think the most important principle 20 is that we start from a position of innocence and it is 21 our objective to help postmasters to understand how, if 22 and when discrepancies have occurred, how do we work 23 with them? 24 And we have a tiered process for doing this. The 25 Branch Support Centre is clearly the first port of call 83 1 for any postmaster who may or may not have an issue that 2 might emerge. We have a second line team, which is the 3 Branch Support and Reconciliation Team, which are there 4 to aid and support postmasters with more complex issues 5 and, clearly, we have an IT Team who is and who do go 6 out to branches very specifically to help postmasters 7 identify and resolve issues that may or may not be well 8 understood by those particular postmasters. 9 So it's a very different approach to the one that we 10 adopted pre-2019. 11 Q. In terms of negligence, carelessness or error, for 12 instance, if a subpostmaster says that the loss arose 13 because of a lack of training in undertaking this 14 process, "I admit I pressed these buttons and I admit 15 that it caused a loss of £500 but that was because the 16 process I was undertaking, I wasn't properly trained 17 upon it, and that's what's caused the loss". 18 A. Where we -- 19 Q. Is that negligence, carelessness or error? 20 A. I haven't personally been in to do investigations of 21 that nature but I think that the principle that is 22 important at this stage is where there is a disagreement 23 between a branch and the Post Office over a discrepancy 24 or over an issue, we are not -- other than going into 25 a dispute resolution process, and a further level of 84 1 investigation, and a degree of assurance process -- we 2 are not enforcing that loss on a postmaster. 3 And I think that is an important principle at this 4 stage: we don't think it is appropriate and we are not 5 enforcing it. 6 So it's possibly not answering the specifics of your 7 question but I think the principle that I'm trying to 8 describe is that we start with a presumption of 9 innocence and we also start with the fact that, if we 10 cannot resolve an issue, we are not imposing a solution 11 on a particular branch. 12 Q. The evidence from one of the Subpostmaster NEDs was to 13 the effect that the button on the Horizon keyboard, on 14 the branch terminal, for paying in was proximate to the 15 button for paying out -- 16 A. Yes. 17 Q. -- and it was therefore easy to press the wrong button. 18 Is that something that would be classified as postmaster 19 error and, therefore, something for which they were 20 responsible, ie pressing the wrong button? 21 A. Again, I am not sure I'm able to describe that 22 specifically but on the principal point you make, we've 23 obviously spent quite a lot of time looking at the 24 keyboard itself so that where there are specific issues, 25 as that you've just described, that are manual issues, 85 1 we have tried to move buttons and change buttons to make 2 sure that it is more intuitive and easier and less 3 manual, in terms of some of the mistakes that are being 4 made. 5 Q. Does the Post Office provide some sort of guidance, 6 either to its investigators or to its subpostmasters, as 7 to what negligence, carelessness or error means, and 8 what it looks like, in practice? 9 A. I don't know whether that is specifically the case. We 10 do have, online and e-learning tools around the 11 investigative process, around what we do and why we do 12 it, and examples of where, you know, issues could or may 13 emerge. 14 Q. So sort of case studies of -- 15 A. Yes. That's -- 16 Q. -- what would and would not fit within this type of 17 subpostmaster liability? 18 A. That's my understanding, yes. 19 Q. The purpose of asking you those questions, those two 20 examples that I gave, wasn't to get definitive answers 21 for use in the future. Would you agree that it's 22 necessary to have some sort of guidance so that 23 subpostmasters are clear, beyond the three bare words 24 themselves, as to in what circumstances they will be 25 liable for shortfalls and which they may not? 86 1 A. Yes, I think that's fair. 2 Q. At paragraph 20.3 provides that the Post Office will: 3 "properly and accurately effect, record, maintain, 4 and keep records of all transactions effected using 5 Horizon." 6 Does this mean that a mechanism exists for 7 monitoring the identification and payment of any 8 shortfalls by subpostmasters? 9 A. Yes, it does. 10 Q. So is there a mechanism for recording the payment of 11 shortfalls by subpostmasters? 12 A. There is now, yes. 13 Q. When was that introduced? 14 A. Certainly post-2019. I have had discussions with 15 Melanie Park, who I think you're speaking to next week 16 and, indeed, around this very topic, which is: is there 17 a record of all payments that are made by postmasters, 18 and a reason code and a payment vehicle that it 19 describes what it is that they are paying for, whilst at 20 the same time, is there a problem impact database that 21 describes all the bugs, errors and defects that have 22 emerged, what we've done about them, whether they've 23 been fixed, what potential detriment they may or may not 24 have thrown up and that will be -- that is obviously 25 a database with which the Branch Support Teams and the 87 1 Stock and Reconciliation Teams, who do -- Support and 2 Reconciliation Teams who do engage with postmasters 3 obviously have access to, so that when postmasters 4 describe issues that they may be experiencing, we now 5 have a database of all the issues that have emerged, and 6 that is certainly -- I think it is since 2019, I could 7 be wrong, and all the payments and more importantly the 8 way that reconciliation has occurred in terms of 9 resolving those issues. 10 Q. Is that function run and maintained by Fujitsu? 11 A. No, that's run and maintained by Melanie Park's 12 Operation Team in Chesterfield. 13 Q. Paragraphs 4, 5 and 6, would you agree, taken together, 14 require the Post Office to identify the reason for 15 shortfalls, in particular, 6? 16 A. Yes, the onus -- as I have stated, the onus is very much 17 on the Post Office to identify where these problems have 18 occurred, and the onus is very much on the Post Office 19 to ensure that if there are any fixes that need to be 20 made that they make them so, yes, I would agree with 21 that. 22 Q. That duty, to identify the cause of a shortfall, exists 23 irrespective of whether the shortfall is settled by the 24 subpostmaster? 25 A. That's correct. 88 1 MR BEER: Thank you. 2 Sir, it's 12.45 now; could I invite you to break 3 until 1.45? 4 SIR WYN WILLIAMS: Yes. Certainly. 5 MR BEER: Thank you very much. 6 (12.44 pm) 7 (The Short Adjournment) 8 (1.45 pm) 9 MR BEER: Thank you, sir. 10 Good afternoon, Mr Read. 11 A. Good afternoon. 12 Q. Can we turn to the topic of shareholder priorities, 13 please. There is no need to turn it up but, in 14 paragraph 246 of your first witness statement, you say: 15 "The postmaster sentiment survey showed that 16 remuneration is the top priority for postmasters. 17 Despite some increases, it remained a top priority for 18 many postmasters and the area with the lowest perceived 19 improvement." 20 Can we look at a letter that you reference in the 21 same witness statement, in your paragraph 169, from 22 Kevin Hollinrake to Mr Staunton, outlining the 23 shareholder priorities that the Department would like 24 you to focus on. UKGI00044317. You will see this is 25 from Mr Hollinrake to Mr Staunton. It's dated 29 June 89 1 2023 and contains the strategic priorities for 2023 to 2 2024. 3 I suspect you're familiar with this letter, are you? 4 A. Yes, I am. 5 Q. I don't want to spend time scrolling through it, but 6 would you agree that postmaster remuneration, 7 ie ensuring that today's postmasters are able to make 8 a living, and the viability of the network as 9 a consequence, are not included in the list of 10 properties set out by the Government? 11 A. Yes. 12 Q. Do you know why? 13 A. I assume it's because they take that as given, as that 14 being the core element of the job. 15 Q. You've said that remuneration is, according to the 16 postmaster sentiment survey, the top priority for 17 postmasters. It's not listed as any priority by the 18 Government. 19 A. That's correct. 20 Q. Aside from what is formally written down by the 21 Government, in your interactions with the Department, 22 with UKGI and with ministers, would you say it is 23 a priority for the Government to ensure that 24 subpostmasters are remunerated fairly and are able to 25 make a living through their partnership with the Post 90 1 Office, a state-owned business? 2 A. I think it's one of a number of priorities. I think the 3 major priority, as you'll probably see from the 23/24 4 letter to Henry is very much around compensation and 5 support to the Inquiry. They are clearly priorities, 6 but your point is correct in that the last four 7 postmaster surveys we have conducted, remuneration has 8 been, on each occasion, been the number 1 concern for 9 current serving postmasters. 10 Q. If we go to page 2 of the letter and look at the first 11 priority: 12 "Effective financial management and performance, 13 including management of legal costs, to ensure medium 14 term viability." 15 If you see at the fourth bullet point, this includes 16 maintaining "stringent cost control" and maintaining 17 a "clear focus on value for money and efficient 18 delivery, across the cost base, including", and then 19 some subpoints. 20 Would you agree that effective financial management 21 and performance, including stringent cost control, is in 22 conflict with the fair remuneration of postmasters? 23 A. Potentially. 24 Q. So not only is the fair remuneration of subpostmasters 25 not listed as a priority, a priority that is listed is 91 1 potentially in conflict with it? 2 A. Yes, I think that's fair to say. 3 Q. You tell us in your witness statement, paragraph 273 -- 4 no need to turn it up -- that you have: 5 "... committed that Post Office will work towards 6 sharing 50 per cent of branch generated revenue with 7 postmasters which represents a significant change to 8 their remuneration and, in the last financial year, the 9 Post Office achieved 45.6 per cent, and would continue 10 to drive the fixed upwards." 11 Would you agree that if branch generated income is 12 low, then the amount available to be shared with 13 subpostmasters is low? 14 A. That's one part of the equation. The other part of the 15 equation is the central costs associated with running 16 the Post Office which, obviously, if we reduced those 17 central costs then the proportion of revenue that's 18 available to be distributed increases. 19 Q. Would you agree that the Government and Post Office is 20 not doing enough to ensure that branches can offer 21 sufficient services to ensure sufficient 22 branch-generated income? 23 A. I think we're trying hard to do that but that comes to 24 the core of the purpose of the Post Office, which, you 25 know, ultimately -- and we've discussed this over the 92 1 last couple of weeks in this forum -- is getting clear 2 on what the purpose, the vision and the strategy of the 3 Post Office is: is it about generating new sources of 4 income and, indeed, what are those new sources of 5 income; is it about market failure and, from 6 a Government perspective, being clear what market 7 failure the Post Office is there to address; or is it 8 about looking for new avenues? 9 And that's very much what we have tried to do, which 10 I said in my personal statement quite extensively, about 11 the plans that we've had to drive the four key 12 activities that the Post Office is engaged in, mails and 13 parcels, cash and banking, what we're doing with our 14 travel business and how we're driving our platform 15 products as well, which is where we're looking for new 16 commercial opportunities for postmasters to -- 17 ultimately to drive their revenue. 18 Q. A member survey by the National Federation found that 19 70 per cent of postmasters who responded to the survey 20 were taking home personal drawings of less than the 21 national minimum wage, at that time £8.91 an hour. 22 Would you agree that it is shocking that the Post Office 23 and their sole shareholder, the Government, would allow 24 the remuneration of postmasters to fall to such a low 25 level and then not make it a priority to rectify it? 93 1 A. It hasn't appeared, as you say, in the shareholder's 2 letter to the Chairman. However, it's a clear priority 3 for the organisation. I think we spend a great deal of 4 time focused on how do we generate more revenue for the 5 existing postmaster population. By way of example, 6 I think in the first year, in 1920 (sic), we increased 7 postmaster remuneration by 10 per cent. The following 8 year by 7 per cent, and the subsequent two years, we've 9 obviously not been as successful as we were in those 10 first two years, it's tended to be inflation led. 11 What we've done, particularly with the mails and 12 parcels element of the revenue that is generated by 13 postmasters, is to link that to CPI, so that at least it 14 increases every single year by the same -- well, by CPI 15 so some 65 per cent of all the mails and parcels 16 products that we sell. 17 But your point is well made, which is there is more 18 to do to take cost out of the business and there is more 19 to do to address the underlying operating model that 20 allows postmasters to simplify their relationship with 21 Post Office and obviously simplify what it is they are 22 doing. 23 Q. Can we look at the entrustment requirements set by 24 Government. POL00027887. You'll see that these are 25 contained in a letter addressed to your predecessor, 94 1 dated 16 April 2018. Have they been updated since then? 2 A. Not as far as I'm aware. 3 Q. Can you tell us what the entrustment requirements are, 4 please -- I mean, not a list of what they are but, 5 generically, what do you understand the entrustment 6 requirements to be? 7 A. This is the services of general economic interest in 8 terms of what it is that we are expected to provide by 9 way of running the Post Office. 10 Q. If we scroll down, please, and keep going. The last 11 sentence on the top of the previous page: 12 "That network must meet the following minimum access 13 requirements ..." 14 A. That's correct, yes, the SGEIs, yes. 15 Q. The first: 16 "Nationally, 99% of the UK population to be within 17 3 miles and 90% of the population to be within 1 mile of 18 their nearest post office outlet. 19 "[Secondly] 99% of the total population in deprived 20 urban area across the UK to be within 1 mile of their 21 nearest post office outlet. 22 "95% of the total urban population across the UK to 23 be within 1 mile of their nearest post office outlet. 24 "[Fourthly] 95% of the total rural population across 25 the UK to be within 3 miles of their nearest post office 95 1 outlet." 2 Then: 3 "In addition, the following criterion will apply at 4 the level of each and every individual postcode district 5 ... 6 "95% of the population of the postcode district to 7 be within 6 miles of their nearest post office outlet." 8 Then: 9 "Post Office is required to provide this network of 10 post office branches to make available the services of 11 general economic interest detailed in annex A ..." 12 Do you agree that these are requirements are those 13 that currently exist in relation to the post office? 14 A. Yes, they do. 15 Q. Do you agree they impose upon the Post Office 16 an obligation to public service? 17 A. Yes, they do. 18 Q. But do you agree they impose an obligation on Post 19 Office to public service that impacts upon the 20 profitability of Post Office as a business? 21 A. Undoubtedly. 22 Q. Would you agree that the public service requirements, as 23 I'm going to call them, tend to fall more heavily on 24 smaller branches with a lower footfall in areas of lower 25 population density -- 96 1 A. Largely, yes, that's fair. 2 Q. -- or lower income areas, which mean that branches in 3 such areas are less profitable than branches typically 4 are in wealthy urban districts? 5 A. I think that's fair. 6 Q. Can you also confirm the branches that bear the greater 7 weight of these public service obligations tend not to 8 be those run by what I think are called strategic 9 partners, ie Co-op, WHSmiths and similar? 10 A. That's correct. 11 Q. Does the Post Office have an enduring commitment from 12 Government to maintain public service duties of the Post 13 Office into perpetuity? 14 A. I don't think we've had a long commitment to do that. 15 The expectation is that we will fulfil the SGEIs and, on 16 a yearly basis, that's exactly what these are. The 17 policy, or the entrustment, as set out hasn't changed 18 since 2010 and we are, and have been, in discussion 19 since 2021 with the Government around a policy review 20 for the Post Office, and that is not something that has 21 yet come to fruition but it is something that we have 22 been very keen to encourage the shareholder to take part 23 in or, in fact, to lead. 24 The point being is that the market has changed 25 dramatically since 2010. I mean, not least we've had 97 1 separation of Royal Mail from the Post Office, we've had 2 the right of digitisation, we've had the growth in 3 e-commerce and we've had a massive change in consumer 4 behaviours and habits and there is a reason why the high 5 street is closing at the speed with which it is closing, 6 there is a reason why 5,000 banks have closed since 7 2015. The face-to-face delivery of services has 8 changed, which therefore makes the question around -- 9 the question that needs to be answered -- very, very 10 clear as to the long-term purpose and vision of the Post 11 Office and, by that, I mean long-term. 12 We describe here in the -- or in the letter that 13 you've just shown us the strategic priorities for the 14 Post Office. My personal view is strategic priorities 15 aren't for a year; strategic priorities imply five to 16 ten years, at least in terms of vision. So they're 17 tactical priorities, as opposed to strategic priorities. 18 What the Post Office is in need of, and certainly 19 the work that the incoming Chair has initiated with 20 Teneo from its strategic -- in its strategic review, is 21 a joined-up vision between the Post Office and the 22 shareholder for the long-term future of the Post Office, 23 and by that I mean five to ten years minimum, such that 24 we can start to plan more strategically, as opposed to 25 tactically, which is very much the nature of the letters 98 1 that -- this particular letter that we've just read 2 implies. 3 Q. Can you assist us: in practice, how do branches in low 4 population density or deprived areas, as compared to 5 branches in higher population density or wealthier 6 areas, receive, if they do, appropriately weighted 7 compensation for delivery of the public service 8 requirements? 9 A. Yes, I can. So we receive a subsidy from the Government 10 for the provision of services in areas where, to your 11 point, it may not be economically possible to run 12 a branch. We have some 1,300 SPSO branches, which are 13 traditional legacy branches, which tend to operate, as 14 you quite rightly point out, in rural, or isolated, or 15 inner urban areas, that may not have the level of 16 economic activity that -- or footfall indeed, that you 17 would expect. 18 That subsidy, to the tune of £50 million, has been 19 static since 2018, in terms of its funding. I think it 20 was 210 million a year, back in 2012/2013, at the time 21 of separation. It is, as I say, and has been, static 22 for the last six years at 50 million but, to my earlier 23 observation, the changing shape of the landscape and the 24 changing shape of footfall on the high street has meant 25 that, in essence, costs have increased while the subsidy 99 1 has remained static but, in real terms, lost value. So 2 there is a mismatch between those two. 3 Q. Is the subsidy distributed to post offices by reference 4 to the extent to which the public service requirements 5 are disproportionately borne by then, ie -- 6 A. Yes, I understand. Yes. It tends to be footfall/ 7 transaction driven, in terms of how we support -- with 8 fixed payments to specific branches. 9 Q. I think it's right that in the summer of this year, 10 Grant Thornton delivered an important report for the 11 Post Office? 12 A. One of many, yes. 13 Q. Yes. Let's look at the report to make sure we're -- 14 A. I was going to say -- 15 Q. -- looking at the same one. POL00446476. This one 16 concerned the effectiveness of the Board. 17 A. Yes. 18 Q. It's dated 19 June 2024. Can you explain, please, 19 firstly, the circumstances in which Grant Thornton came 20 to be commissioned to undertake this review and write 21 this report? 22 A. Yes, I can. I think Rachel Scarrabelotti mentioned this 23 last week. In effect, the sort of business code 24 suggests that you should have a Board Effectiveness 25 Review on a yearly basis and I think every three years 100 1 the effectiveness review should be done and conducted by 2 an external party, and Grant Thornton were commissioned 3 to do the external review. 4 Q. Thank you. If we go over the page, you'll see the 5 partner at Grant Thornton delivering the report. If we 6 scroll forwards, please, an idea of the length of the 7 thing. Then forwards, please. If we can perhaps skip 8 to page 8, I think this is the first part of substance 9 to the report that we will find. It's an executive 10 summary or key findings section. Under "Overview", the 11 first key finding was: 12 "Lack of clarity on the purpose of the Board, with 13 the Shareholder relationship inhibiting the Board's 14 effectiveness due to perceived interference in [Post 15 Office's] work and limited visibility around the 16 longer-term funding and objectives of the organisation." 17 Was that a finding with which you agreed? 18 A. Yes, it was, and I would say that the findings did get 19 Board endorsement. 20 Q. There's three parts to it. Firstly, a lack of clarity 21 on the purpose of the Board; what does that mean? 22 A. I think perhaps the way I would describe it is that, 23 given that there is ambiguity over the strategy, purpose 24 and vision of the Post Office, it is quite difficult to 25 ensure that the level of governance that is supporting 101 1 that misaligned strategy, if that's the right word, is 2 quite difficult to articulate. And I think what the 3 Board have struggled with in terms of governance 4 challenges is, without real clarity about the purpose 5 and direction of the Post Office long term it's quite 6 difficult to establish the right levels of governance, 7 and I think that's the clarity issue that's being 8 described here, and the reference being made to what the 9 Board has wrestled with. 10 Q. The shareholder relationship inhibiting the Board's 11 effectiveness due to perceived interference; in what way 12 did the Government inhibit your Board's effectiveness by 13 interfering in your work? 14 A. I think it's more the lack of clarity over matters that 15 are for the Board and matters that are for the 16 shareholder. There are certain areas in which the 17 shareholder has and takes a particular standpoint and 18 view. I think it would be obvious to point out that we 19 have a single source of funding, which is the 20 Government, and we are therefore completely and utterly 21 reliant on our funding from the Government, and this, by 22 definition, causes challenges, certainly from 23 a strategic point of view. 24 You will have seen in the verbatims associated with 25 this particular report that there are many observations 102 1 made around the control of the shareholder without 2 consequence or without accountability and the general 3 influence that the shareholder has over the direction of 4 the business. 5 You'll also notice, certainly in my first witness 6 statement, I made reference to some of the Non-Executive 7 Directors who'd left after a single term, feeling that 8 independence has and was eroded, if that's the right 9 word, by the -- well, by the obligations and by the 10 constraints that are part of being a publicly-owned 11 organisation. 12 Q. The third element is limited visibility around the 13 longer term funding and objectives of the organisation; 14 was this essentially recording that the Post Office 15 needed to know whether it had the backing of its owner 16 long term? 17 A. Yes. 18 Q. Why did it take the expense of an outside organisation 19 to report to be able to state the fairly obvious truth 20 that the Post Office needs to know whether it has the 21 backing of its owner long term? 22 A. I think, as Alisdair Cameron said a couple of weeks ago, 23 this has been a constant struggle for members of the 24 Board. This isn't something that has sort of emerged 25 relatively in the near term. When it comes to funding, 103 1 in particular, that is a challenge for the business. 2 I think we are subject to spending reviews, Government 3 spending reviews, which could be one, two or even three 4 years in duration. There are many issues associated 5 with determining how funding is derived. I will use 6 a similar analogy or similar example to the one that Al 7 used, which was the 21/22 funding round, where the Post 8 Office identified a need for £450 million, which was 9 a combination of subsidy and investment, and we were 10 offered 202 million and, eventually, after five months 11 of toing and froing, the Government gave us 335 million, 12 which was still obviously 80 million less than had been 13 asked for. 14 That has happened at each of the funding rounds that 15 the business have had and that obviously makes the idea 16 of long-term planning very difficult. Funding is 17 obviously driven by budget, rather than by need, and 18 I think, again, a long-term strategy, with an underlying 19 funding model to support that, is what I think is 20 required and, clearly, that's one of the outputs, I'm 21 sure, that Teneo will be discussing with the Government 22 over the next two or three weeks when the final Teneo 23 review is put forward. 24 Q. I'm going to come to Teneo in a moment. 25 A. Right. 104 1 Q. Would you agree that the confirmation of the 2 Government's commitment to Post Office's public service 3 and the number and spread of branches must be a basic 4 requirement for the continuation of the Post Office as 5 an institution? 6 A. My sense is that the policy review that is required by 7 the Government, 15 years since its last policy review, 8 should look at all elements of the public sector service 9 that is provided by the Post Office, and be very clear 10 on what it is that it is expecting the Post Office to 11 deliver. 12 Clearly, at present, we have a fairly uncodified 13 social contract. Yes, you described the service of 14 general economic interest and the entrustment elements 15 of it, but I think it's broader than that and it's wider 16 than that. When you look at the role that postmasters 17 play in communities up and down the country, when you 18 look at the trust at a local level between consumers and 19 customers, the communities and their postmasters, it is 20 quite extraordinary. 21 And when you look at the social value associated 22 with that commitment from postmasters, it is that that 23 I think needs to be more heavily examined in terms of 24 the contribution that is being made by postmasters and 25 how the Government sees, over the next 5, 10, 15 years, 105 1 that continuing to evolve but, more importantly, that 2 postmasters are recognised for that contribution, which 3 they currently aren't. 4 Q. How is it possible that these questions -- the long-term 5 backing of the owner, the continuation of the social 6 purpose commitment -- have not been answered for the 7 future? 8 A. I think that's a question you'll need to discuss with 9 the Government. As I say, we've been keen to have 10 a policy review for some time. We make this desire very 11 clear to Government: that this is what we are expecting 12 and what we need because there is, as I said, 13 a determination to have a unified purpose, a unified 14 vision and a long-term strategy from the Post Office, 15 from which everything else should flow. 16 Q. Do you agree that, in the meantime, the continuation of 17 the Post Office, coupled with the support of Government, 18 goes hand in hand with the projected life of Post Office 19 branches and, consequentially, the individual 20 investment, mortgages and family financial decision 21 making that has to be undertaken by postmasters on 22 a daily basis? 23 A. Yes, I do. 24 Q. You tell us in your third witness statement -- it's 25 paragraphs 31 to 46, but there's no need to turn them 106 1 up -- that the issues that you identified with the 2 culture within the Post Office included, from the 3 outset, a perception that "the organisation had lost 4 sight of the postmasters". 5 Is the failure by the Government to ensure the 6 future of the Post Office and a commitment to its social 7 purpose and consequential funding another example of 8 such a cultural behaviour? 9 A. Yes, I think that's fair. 10 Q. Would you accept that the very same issues of obtaining 11 decisions and support from Government have also affected 12 and afflicted the compensation, redress and financial 13 restitution? 14 A. No, I don't think that's fair to say that. My sense is, 15 and I think from a DBT perspective, not unsurprisingly, 16 a great deal of focus has been on redress, certainly in 17 the five years that I've been in the organisation, and 18 perhaps less time has been spent on developing the Post 19 Office of today for tomorrow. And I think that the 20 Government would -- and officials in DBT, would 21 recognise that that is the case. It is complicated to 22 manage both but I think it is important, certainly for 23 today's Post Office, that there is more clarity. 24 Q. You tell us in your first witness statement -- no need 25 to turn it up, it's page 22, paragraph 38 -- that: 107 1 "The external strategic review that the Post Office 2 is undertaking led by Teneo will be complementary to the 3 work being undertaken by the Department, as it intends 4 to set out a future model for the Post Office to deliver 5 sustainably against the stakeholder requirements." 6 You add that that review was expected to conclude in 7 September 2024, the month just gone. What's the current 8 position? 9 A. The current position: two years ago, the Department 10 invited, as it happens, Grant Thornton, again, to do 11 an initial strategic review of the Post Office, and 12 I think that that was primarily associated with the sort 13 of commercial long-term future of the Post Office. 14 The output of that piece of work was a second 15 review, which I understand is what is ongoing at the 16 moment, again, commissioned by DBT. I've not had sight 17 or visibility of the scope or of the content of that 18 review, or indeed of its findings, and, clearly, from my 19 perspective, it's quite important that we are included 20 in that piece of work. 21 I hope that, and am reassured, certainly by the 22 current Chair, that he has had those conversations with 23 the incoming administration, whereby we can dovetail the 24 Teneo Strategic Review and the independent work 25 conducted by the Department to ensure that the output is 108 1 something consistent and something that everybody can 2 buy into. 3 Q. Can we look at the scope of the review, POL00448624. 4 Can we look at page 109, please. This was a Board paper 5 and an update for the Board on the Strategic Review. 6 It's dated 4 June 2024. If we can go to the next page, 7 110, please, we see the scope of the review but, by way 8 of background first: 9 "Post Office has invited Teneo to carry out 10 a comprehensive Strategic Review of the business and 11 develop a clear plan for the future." 12 Then the equivalent passage on the right-hand side: 13 "Teneo will undertake a through review of the Post 14 Office to understand its current position, clarify its 15 core objectives, identify opportunities and risks, 16 prioritise initiatives and develop a clear [path] to 17 realise the chosen strategy." 18 Then a plan. Then if we go over the page: 19 "We aim to address a range of key questions for the 20 Post Office to develop a clear plan for the business 21 over the next five years." 22 One of them on the far right is "Stakeholder 23 Management": 24 "How do we ensure stakeholder support for the 25 strategy? 109 1 "How do we ensure that subpostmasters' interests are 2 properly reflected? 3 "Is the current ownership structure appropriate? 4 "What is the most appropriate funding model?" 5 Left-hand side, "Reputation, Trust & Brand": 6 "How is the Post Office viewed in the wake of the 7 Horizon scandal? 8 "What actions must be taken to restore public 9 confidence? 10 "What do stakeholders want to see from the Post 11 Office (eg make money vs serve the community)? 12 "Does the Post Office's purpose and vision need to 13 evolve to balance societal vs economic benefits?" 14 Some of these questions are, would you agree, rather 15 fundamental but also rather basic, ie "What do 16 stakeholders want to see from the Post Office (ie make 17 money vs serve the community?" How is it that question 18 needs to be asked and answered now? 19 A. Well, I think the long-term purpose of the Post Office 20 is pretty critical. I think we've got to understand and 21 ask ourselves what is the purpose of the Post Office, 22 what is it for, and, alongside that, will go questions 23 of ownership, in terms of where does it sit? So is it 24 designed as a commercial entity that is competing in 25 markets with the banks, with financial services 110 1 businesses, with large logistics players, with other 2 retailers, or is it there to fulfil a particular social 3 purpose for the isolated, for the elderly, for 4 Government services, in terms of providing some form of 5 Government service around benefits and the like? 6 I think it's a pretty fundamental question that the 7 Government needs to ask and, with that and from that, 8 flow many of the issues that are on this single slide. 9 My recollection was that this is Teneo's first 10 engagement with the Board and this was their sort of 11 first initial starter for ten. Things have evolved 12 since then from a scope perspective, in terms of how 13 they go about doing that piece of work and ... 14 Q. Why has it taken five years since the judgments of the 15 High Court for the Post Office to consider these most 16 basic of propositions, given the scrutiny given over to 17 the Post Office in those judgments? 18 A. I don't think that's necessarily how I would 19 characterise it. We conducted, when I first started at 20 the Post Office -- which I say from my evidence -- a not 21 dissimilar review to this particular one with McKinsey 22 which looked at the purpose and looked at the strategy 23 and looked at the vision of the Post Office. 24 Clearly, in the following five years an enormous 25 amount has changed, not just consumer behaviour as 111 1 a consequence of Covid, not just some of the issues 2 associated with the cost of living crisis, but also the 3 revelations of some of the practices that we have been 4 uncovering in the Inquiry, and so I think strategy is 5 always dynamic, there are always things occurring. 6 I think, probably, the last five years in the Post 7 Office's history have been more dynamic than any other 8 time in recent memory, and I think that's something that 9 needs to be build into the particular strategic review 10 that has been triggered by the arrival of the new Chair. 11 I think it also needs to be brought -- there is 12 a natural time frame for this exercise. First and 13 foremost, the Inquiry will come up with its set of 14 recommendations, following the four years that it's been 15 engaged looking at what is gong on in Post Office; there 16 is a new administration, in terms of the Labour 17 Government, and therefore there will be a shift and 18 change in its perspective on what the future of the Post 19 Office may look like; and, at the same time, we are 20 producing our own internal strategic review. 21 And I think, bringing together all of these 22 elements, it's a very natural time for the organisation 23 to take stock and to, I hope, find real clarity about 24 the purpose, the vision and the long-term strategy for 25 the Post Office. 112 1 Q. In the meantime, how can subpostmasters and their small 2 to medium businesses possibly make plans when the Post 3 Office itself and the Government are asking such 4 fundamental questions as these, looking around for ideas 5 and answers? 6 A. I think it's a very reasonable question in the sense 7 that this will have been an extremely difficult time for 8 postmasters and -- and for post offices more broadly, 9 not just because of the changing shape of the macro 10 conditions in which they operate, which you've just 11 described, but also as a consequence of the fact that we 12 need to get much, much clearer on what the long-term 13 future looks like. 14 When I go into branches, and have done over the last 15 six to eight months, the questions that postmasters put 16 to me most explicitly are around: what are we doing for 17 remuneration; what are we doing by way of innovation, in 18 terms of what other products and services can we sell 19 and can we deliver from our post offices; but then the 20 sort of third and fourth questions are what is happening 21 to the brand as a consequence of this scandal; and, more 22 importantly, what is happening to my long-term 23 investment in a post office? 24 I'd say they were the four top questions that are 25 asked of me when I go into post offices today. 113 1 I hope that we can answer those in the next few 2 weeks, as we go through the Strategic Review. I think 3 that is going to be a really very important part of 4 providing confidence to postmasters about the long-term 5 direction of the business. Will we answer all the 6 questions? I doubt it. But I think we will be able to 7 give people much greater clarity on what the next five 8 to ten years look like and I hope that, from 9 a governmental point of view, we can look at the funding 10 model to make sure that it is reflective of a five to 11 ten-year strategy rather than a one to two-year tactical 12 engagement. 13 Q. Put bluntly, who would buy a post office under these 14 conditions? 15 A. Strangely, now you say it, we don't see the level of 16 churn that you would expect. Had you asked that 17 question to both Saf and Elliot two weeks ago, you would 18 have found that they are both looking for additional 19 post offices. There is and there are a number of 20 individuals who are keen to buy post offices. So 21 I think -- you know, I don't think it's quite as stark 22 as you are perhaps suggesting. As I say, there are 23 entrepreneurial postmasters who are still keen to run 24 a post office and, you know, I think people should take 25 confidence in that. 114 1 Q. Only 35 per cent of them reported that they had 2 confidence in their senior leadership in the 2024 Post 3 Office Colleague Engagement Survey, and you tell us that 4 that has fallen 5 per cent since the 2023 survey and 5 4 per cent since the 2022 survey. That's in 6 paragraph 252 of your first witness statement. 7 Are postmasters included in the Colleague Engagement 8 Survey? 9 A. We do a dedicated survey for postmasters, which is 10 a postmaster survey, and we do an internal survey for 11 those people who are -- 12 Q. So the survey that I'm talking about, the Colleague 13 Engagement Survey, that's for Post Office employees? 14 A. That's for the employees, correct. 15 Q. Given the initiatives that you've told us about 16 throughout your four witness statements, why is it that 17 the confidence in senior leadership within the Post 18 Office is falling? 19 A. I think there are a number of reasons for that. I don't 20 think it'll come as a great surprise that the survey 21 itself was conducted, I think, in February and March, at 22 the time of Henry's departure from the business, and the 23 enormous focus that was provided by that, in terms of 24 the perceived dysfunctional nature, I guess, of the 25 Board and, to a degree, of the Group Executive, and 115 1 I think that has had a profound impact on colleagues and 2 senior team members. 3 It obviously occurred after the four-part 4 dramatisation, literally a few weeks after that and, of 5 course, the subsequent and quite rightly media outrage 6 and consumer outrage at what had happened historically 7 within the Post Office. And I think these are important 8 elements to factor into the sentiment of colleagues, 9 whose pride, clearly, has been, not unsurprisingly, 10 hugely damaged and whose confidence, having seen a level 11 of dysfunction as perceived in the media, rather than it 12 being conveyed to colleagues through normal internal 13 channels, was obviously being seen in the media. And 14 I think that put a big dent in the confidence that 15 colleagues had in senior leadership. 16 Q. Would you agree that the fall in confidence in the 17 Senior Leadership Team could, in part, be due to the 18 high turnover of senior leadership, perhaps giving the 19 impression of a rudderless ship? 20 A. In part, I think high turnover has been a feature of the 21 Post Office for many, many years. It's a difficult 22 place to work, it's a difficult place to achieve success 23 and I think, at the moment, it's probably at its most 24 difficult, given the overarching implication of the 25 scandal, as well. So, yes, I think that's certainly 116 1 something that is a major factor, is -- and, as 2 I mentioned before the lunch break, the importance of 3 stability at a Board and Group Executive level and the 4 importance of stability and confidence in the 5 individuals who are occupying those roles, is paramount 6 to the long-term success of the business, and that's 7 something that I think is needed and needed urgently. 8 Q. Do you think it could, in part, be due to the revelation 9 of a scandal, upon a scandal, being the awarding of 10 bonuses to senior Post Office leadership in relation, in 11 particular, to an Inquiry-based metric? 12 A. I think the challenges in the business certainly stem 13 back to that particular period. There's no question 14 that the Transformation Incentive Scheme and the bonus 15 metric associated with it, and the perception that the 16 organisation was blind or deaf to what was occurring 17 within the scandal, certainly will have dented people's 18 confidence for sure. 19 Q. Would you agree that the dent or diminution in senior 20 leadership's confidence could, in part, be due to the 21 allegations of bullying and sexism made against 22 individuals in senior leadership positions, including, 23 in fact, yourself and Mr Staunton? 24 A. Yes, I guess that's probably fair, that that image that 25 will have been conveyed by those allegations will, of 117 1 course, have had an impact on colleagues. However, in 2 defence of that, I would say that a degree of confidence 3 will have been taken by colleagues that no one is above 4 the law in the Post Office, and those whistleblowing 5 allegations that were made against me, as an example, 6 were followed through with a fairly comprehensive 7 investigation. None of the allegations, I may hasten to 8 at, were upheld but, by definition, colleagues will have 9 taken confidence that it was possible to investigate the 10 Chief Executive and the Chairman, irrespective of what 11 else was going on in the organisation and, more 12 importantly, that those investigations went through to 13 their natural conclusions. 14 Q. Would you agree that the diminution in the confidence in 15 the senior leadership of the organisation could, in 16 part, be due to postmasters, including Elliot Jacobs, 17 a Board member, facing a harsh and non-transparent 18 investigation, suggesting to subpostmasters that perhaps 19 nothing has changed since the GLO? 20 A. I don't think that particular isolated incident of 21 Elliot, disappointing though it was -- and as I said 22 yesterday, I don't think it was conducted in the way 23 that I certainly would have wanted, I think. But I also 24 do believe that when you look in the round at the way 25 that we have changed to support postmasters over the 118 1 last four years, that is materially different from where 2 the Post Office has been historically, notwithstanding 3 the perhaps heavy-handed way in which Elliot had been 4 treated. 5 Q. In the light of these issues, and each of them, what 6 confidence should the Inquiry have that the Post Office 7 has or will put in place a Senior Leadership Team that 8 deserves the confidence of Post Office employees, 9 postmasters and the public? 10 A. I think the energy and enthusiasm and drive of the new 11 Chair should give the Inquiry great confidence that 12 Nigel will ensure that: (a) the Strategic Review is 13 conducted in the right way; (b) that the Board and its 14 colleagues will be aligned behind that Strategic Review 15 and that subsequently we will have a Strategic Executive 16 Group and Senior Leadership Team that will support what 17 we're trying to do. 18 So I feel confident that that will happen. I think 19 we have a number of capable -- and very capable 20 executives who have joined the business reasonably 21 recently, and I think the Board, as well, is -- and 22 I mentioned it before sort of six months ago -- the need 23 for sort of stabilisation. I think Nigel has brought 24 that to the organisation and to the Board. So, yes, 25 I do have confidence that the wheels are in motion to 119 1 ensure that the business can come through this very, 2 very difficult period and, you know, emerge stronger. 3 Q. In your first witness statement at paragraph 214 -- 4 perhaps we'd better have it up on the screen, 5 WITN00760100, page 105, please. Paragraph 214, you tell 6 us that: 7 "In April 2021, Post Office launched a behavioural 8 framework called 'Ways of Working' ('WOW') to replace 9 the Post Office's previous values and strategic pillars 10 of: Care, Challenge and Commit. [Ways of Working] was 11 intended to describe 'how' an individual should act in 12 Post Office, to define behaviours that were expected of 13 all Post Office personnel when interacting internally 14 and externally with both Post Office colleagues and with 15 postmasters." 16 You tell us in paragraph 220 on page 107: 17 "The Colleague Engagement Survey ... asks colleagues 18 'whether they see the Ways of Working demonstrated 19 across the business'. In 2021 this was 41%, in 2022, 20 50%, in 2023, 58%, in 2024, 53%. Colleagues were also 21 asked to indicate their agreement to the following 22 statement: 'Where I work people are held accountable for 23 their performance and behaviours'." 24 In 2022, 38 per cent agreed; '23, 59 per cent; and 25 in '24, 63 per cent. 120 1 Are postmasters included in this survey? 2 A. No, not in this survey. 3 Q. As they're not included, how can the Post Office measure 4 whether the Ways of Working are being demonstrated in 5 interactions with subpostmasters? 6 A. We have a separate postmaster survey, which gives the 7 opportunity for all postmasters to take part. That 8 happens at a very similar time, and we also then do 9 a pulse survey every six months with postmasters, just 10 to check on whether or not we are making progress on the 11 commitments that we made following that survey. 12 I think it's quite important just to touch on the 13 postmaster survey. It is conducted usually in February 14 and March with results in April, and that tends to 15 provide me with the opportunity to speak to the 16 postmasters at our annual postmaster conference, where 17 we will share the results of the survey itself. We will 18 post those results on to Branch Hub and by email to all 19 postmasters, and we'll then have a series of workshops 20 which postmasters are invited to, and they can take part 21 in if they want to, which allows us to work through the 22 results themselves, so that postmasters can bring to 23 life for the team what it is that is being said, and 24 interpret the surveys themselves, so that we can then 25 build an action plan. 121 1 And then, towards the middle of the autumn, and 2 it'll be sometime this month, I think -- yes, it'll be 3 sometime this month or maybe early in November -- we 4 will have a pre-Christmas conference where we will 5 present the results of the pulse survey but also the 6 action plans associated with the survey that was 7 conducting in March, and people can hold us to account 8 for whether or not they've seen any improvement or any 9 change in, or indeed whether or not the commitments that 10 we've made and the action plans that we've promised, 11 we've actually made any progress at all. 12 So there is a difference between the two surveys, 13 clearly there are different things to measure, and 14 different things to gain and get feedback on. 15 MR BEER: Thank you, Mr Read. 16 Sir, can we take the afternoon break now. 17 SIR WYN WILLIAMS: Yes, we can but can I just clarify one 18 thing that I want to be sure I've got the right end of 19 the stick. My understanding of Mr Railton's evidence 20 was that, as a consequence, at least in part of the 21 Teneo work, a strategic plan had now been formulated at 22 Post Office; is that correct? 23 A. The final version of the strategic plan has been 24 completed by Teneo and the main Board have signed it 25 off, in the sense that they agree with the findings of 122 1 that. 2 SIR WYN WILLIAMS: Right, so I've got that right. 3 A. Yeah. 4 SIR WYN WILLIAMS: That has either gone, or is imminently 5 going to, Government for their, in inverted commas, 6 "approval". 7 A. That's correct. 8 SIR WYN WILLIAMS: But am I also right in thinking that at 9 the same time, the Government has been working on their 10 own strategic -- 11 A. That is correct. 12 SIR WYN WILLIAMS: Has there been any crossover between 13 those two keys of work? 14 A. There has been interaction between the Teneo team and 15 DBT, as I understand it. 16 SIR WYN WILLIAMS: Right. I did get it right at least. 17 MR BEER: Can you tell us what "interaction" means? 18 A. That's a good question. The -- as I understand it, 19 Teneo have obviously got a number and a range-off 20 stakeholders that they've engaged with and clearly DBT 21 is one of those, and my understanding is that Teneo and 22 DBT have discussed the specific piece of work, the 23 specific policy work that DBT Phase 2 have initiated, 24 and we obviously want to make sure that these pieces of 25 work come together. 123 1 There's absolutely no point in doing a Strategic 2 Review of the Post Office internally, if the shareholder 3 is off doing its own piece of work and never the two 4 should meet. That would be a very unfortunate outcome. 5 SIR WYN WILLIAMS: I love the way we use the word "The 6 Inquiry" but I'm thinking a bit more personally because 7 I'm the one who is supposed to make these 8 recommendations and, if we have a state of affairs where 9 the Post Office has got Plan A, shall we say, and the 10 Government has got Plan B, I think it's a bit optimistic 11 to think that Wyn Williams can produce the all-embracing 12 Plan C. 13 But, anyway, there we are. Let's have a break. 14 MR BEER: Sir, the plan is to break until 3.00 and then 15 we'll switch to Core Participant questions. I haven't 16 finished by questions yet. 17 SIR WYN WILLIAMS: No, no, I understand that. 18 MR BEER: Because I think you know, and some of the Core 19 Participants know, that Mr Henry can't be here tomorrow. 20 SIR WYN WILLIAMS: No, no, that's fine by me. 21 MR BEER: He is going to ask questions between 3.00 and 22 4.00. 23 (2.45 pm) 24 (A short break) 25 (3.03 pm) 124 1 Questioned by MR HENRY 2 SIR WYN WILLIAMS: Mr Henry. 3 MR HENRY: Thank you, sir. 4 Good afternoon, Mr Read. 5 A. Good afternoon. 6 Q. Together with Ms Page, I represent a small cohort of 7 broken people who are yearning for justice, hoping 8 against bitter disappointment that they can move on and 9 find some resolution, and I'm sure you understand that. 10 A. I do. 11 Q. You would accept, would you not, that the wrongful 12 prosecution of the subpostmasters is an atrocious 13 chapter in the Post Office's history? 14 A. Unquestionably. 15 Q. Convictions were procured, it seems, on a fraudulent 16 basis -- 17 A. Yes. 18 Q. -- material non-disclosure? 19 A. That's correct. 20 Q. Of course, even if subpostmasters weren't prosecuted, 21 there was a culture of prejudice that then existed, 22 a rush to judgement or a default setting that Horizon 23 was never at fault, that the shortfalls were always in 24 some way connected to the stupidity or incompetence of 25 the subpostmaster? 125 1 A. Yes, that's absolutely what we've learnt. 2 Q. Of course, this protracted episode, now well over two 3 decades in length, represents, as I'm sure you will 4 agree, the most shameful, brutal and sustained breach of 5 trust in the company's history? 6 A. Yes, that's fair. 7 Q. You would agree that it's a nadir that the Post Office 8 will not even begin to recover from until full and fair 9 compensation is paid to its victims? 10 A. That's absolutely correct. 11 Q. Now, wrongful accusation leading to conviction brings 12 a person's life to a shuddering halt. I'm sure we can 13 all agree on that. 14 A. Yes, we can. 15 Q. The trajectory of their lives thereafter is either 16 flattened or crushed by that injustice but you would 17 accept that, even when that wrongful accusation is 18 removed, some wounds never heal and some injuries can 19 never properly be compensated for? 20 A. That's certainly my experience from the restorative 21 justice meetings that I have attended. 22 The long-term impact is profound. 23 Q. And it spreads across the family? 24 A. I agree. 25 Q. Yes. Compensation, insofar as possible, you would 126 1 agree, is an attempt to restore a person's human dignity 2 and to put them in a position which they might have 3 reached, a level they might have attained, had they not 4 had their lives stolen from them? 5 A. That is the objective of redress, yes. 6 Q. So it should not be a box ticking exercise but should 7 fairly assess and properly reflect the many varieties of 8 loss that these appalling injustices have inflicted on 9 the subpostmasters? 10 A. Yes, I would agree. 11 Q. Now, that is a very important factor, would you not 12 agree: the life that they might have led without 13 dishonour or disgrace, that can't be brushed under the 14 carpet by the Post Office, can it? 15 A. No, it can't. 16 Q. You would agree that, if the subpostmasters and their 17 dependents are treated unfairly during this compensation 18 process, then the Post Office's own reputation, perhaps 19 even its future, is doomed? 20 A. Yes, I think that's fair. 21 Q. Yes, because it would be the most appalling irony or the 22 most dreadful repetition of past history if the Post 23 Office in the past, having exploited the law to its 24 wrongful advantage, did so again, to find some way of 25 evading its proper responsibility to the people it 127 1 wronged? 2 A. Yes, I would agree. 3 Q. Of course, if the Post Office drags its heels, the same 4 applies? 5 A. Yes, that's correct. 6 Q. So it follows that the most important thing that the 7 Post Office under your stewardship should be doing, is 8 to facilitate the speeding up of meaningful 9 compensation, to avoid the postmasters living in penury 10 or, as we heard at the very beginning of your evidence, 11 in fact before you gave evidence, Mr Read, dying before 12 receiving proper redress? 13 A. Yes, that's correct. 14 Q. Now, I think we can still rely on The Times Newspaper. 15 Data obtained by The Times under Freedom of Information 16 laws revealed that 263 subpostmasters and 17 subpostmistresses had died since being wrongly accused 18 of stealing money because of the computer accounting 19 errors and, of that 263, 251 died before receiving 20 compensation. That's a terrible statistic, isn't it, 21 Mr Read? 22 A. It is a terrible statistic. Yes, it is. 23 Q. 251 never receiving an apology or recompense, and I am 24 sure you would struggle to find words to convey the 25 injustice of that? 128 1 A. No, it's a terrible situation. 2 Q. Each death, during this process, before compensation has 3 been made, is an obviously serious matter, you would 4 accept that? 5 A. Yes. 6 Q. It could show that the process isn't fit for purpose or 7 it isn't working properly if the claims take so long 8 that, unfortunately, people die before they receive 9 compensation? 10 A. I think that's a fair conclusion. 11 Q. Now, I want to now concentrate on something slightly 12 more specific than the vagaries of fate because, 13 obviously, people can die for a variety of reasons at 14 any time. But do you know how many of those dead 15 subpostmasters' claims were delayed or denied on 16 technical legal grounds? 17 A. No, I don't know that. 18 Q. Has the Post Office made any study of why the process is 19 so slow and whether its lawyers are to some extent 20 responsible for the delays? 21 A. I don't think I would call it a study but we are acutely 22 conscious, as you'll have seen over the last two days, 23 and particularly the compensation meetings that I've had 24 with the Government and with the Minister, we spend 25 a lot of time trying to work out how do we improve and 129 1 speed up the process. That is a constant point of 2 conversation with myself and the Minister and others. 3 Q. But returning to the issue I was raising: it would be 4 a terrible thing if claims were being derailed by clever 5 legal points, which right-thinking people might even 6 regard as chicanery. 7 A. Yes, it would be. 8 Q. Would it ever be right, in your view, to reject a claim 9 on a technicality? 10 A. To reject an entire claim on a technicality? That would 11 seem the wrong thing to do. My understanding is that we 12 have learnt lessons in that particular respect and we 13 now, where there are disputes or where there are issues 14 associated with technical reasons, we have got ourselves 15 to a position where we pay interim payments and we try 16 and work out how we resolve those particular disputes. 17 That's my understanding of how we've evolved. 18 Q. So to reject an entire claim on a technicality would be, 19 in your view, would it be fair to say, unconscionable? 20 A. It would seem -- it would certainly seem a strange 21 approach and I don't believe that we are doing that now. 22 It may well have been the case and we've learnt, and 23 we've listened and we've moved on but I didn't believe 24 that was the case now. As I said before, I think we've 25 got ourselves to a position where we have -- and if we 130 1 are in a dispute, whether that's in the HSS scheme or 2 the OC scheme, we do pay interim payments up to that 3 particular level, and then we have a debate about, and 4 a discussion about, how we can come to a conclusion. 5 That is my understanding. 6 Q. I see. Now, I wonder, and there are so many cases, but 7 I'm going to take you to the case of Mr Sivasubramaniam 8 Jayakanthan, and you may not have heard of him but he 9 was a subpostmaster in Putney. He was audited, 10 interviewed and suspended on 4 March 2005. His Post 11 Office was peremptorily shut down that very same day 12 before a full investigation had taken place -- 4 March 13 2005 -- and later that night, he hanged himself, and his 14 wife Gowri found his lifeless body in the loft. His 15 fate earlier that day was probably the same as described 16 my Mr Justice Fraser in the Common Issues Judgment at 17 paragraph 886, and I quote: 18 "Suspended subpostmasters are not only entirely 19 excluded from the Post Office part of their premises, 20 they appear to be excluded, in some cases, from the 21 entire premises and also are completely denied access to 22 any information or records." 23 Now, no wrongdoing was ever established against that 24 man, and although the shortfall was on the automatic 25 telling machine or cashpoint, it was reported through 131 1 Horizon. In November 2023, three years after she made 2 her application to the Horizon Shortfall Scheme, Gowri 3 Jayakanthan's application was rejected, and I'm just 4 going to tell you what the two stated reasons for that 5 rejection was, Mr Read. 6 The first was that the company that her husband had 7 used so many years before to contract with the Post 8 Office, had been dissolved; and the second reason was 9 that the loss was not a Horizon shortfall, because it 10 had arisen through use of the ATM, even though the data 11 in question was, and had been, processed via Horizon. 12 That can't be right, can it, Mr Read, to do that to 13 that woman? 14 A. That doesn't sound right, Mr Henry, I would agree with 15 you. I am not familiar with this case, as you rightly 16 point out. I don't specifically get into individual 17 cases. However, as you quite rightly say, the principle 18 seems peculiar, given that Horizon was clearly involved 19 in the ATM processing. 20 Q. The people representing you, and I don't mean you 21 personally, I'm talking about the institution, but they 22 would have known that, at the time of the tragedy, she 23 was the mother of two young children, infants under the 24 age of five, whom she had to raise thereafter on her 25 own, having suffered years of financial hardship and 132 1 insecurity because she lost her livelihood, as well as 2 her husband. 3 So you outright reject, it could never be acceptable 4 for the Post Office's lawyers to take a technical point 5 like that, blocking her path to closure and 6 compensation? 7 A. I think, in the context of where we have gone over the 8 last three or four years, it does seem, in the way that 9 you describe, to be a -- a desperate situation, I agree. 10 Q. Now, leaving aside the issue of the three-year delay, 11 I want to now deal -- very, very briefly because we're 12 going to touch on it a little bit later -- with the 13 inception of the schemes. I accept, of course, that you 14 were very, very recently in post and so, therefore, you 15 were very much dependent upon people to advise you. 16 But there isn't any question, is there, of extremely 17 tight restrictive eligibility criteria being used to 18 deter claims: narrow, legalistic criteria to reject 19 claims and claimants; you would reject that? 20 A. Sorry, as an accusation against the organisation? 21 Q. The HSS scheme, for example. Take that as the focus. 22 Whether there were narrow legalistic criteria to reject 23 claims and claimants, I mean, you would be shocked if 24 that were the case, would you not? 25 A. Well, my understanding is that the bar for entry into 133 1 the HSS scheme was as low as it could be, it was 2 certainly lower than any legal metric, so we were trying 3 to encourage people to come forward. So, yes, I would 4 suggest that wasn't how it was set up or designed to be. 5 Now, the implications of the scheme and the errors 6 that we have made subsequently, I would -- and I'm sure 7 we'll discuss them a little later -- but certainly the 8 principle of establishing the scheme was to ensure that 9 we gave fair redress. 10 Q. Now, there's another dimension that I want to address, 11 and that's whether the compensation sums being offered 12 are adequate. That, of course, would depend on many 13 variables, which you would not be necessarily familiar 14 with in each individual case ask but, as a general 15 principle, would you agree that the misconduct of the 16 Post Office causing and prolonging the suffering of the 17 subpostmasters over many years, that would be a relevant 18 factor? 19 A. Yes, I would. 20 Q. So if the Post Office deliberately delayed, denied or 21 obstructed appellate rights, it should pay more, 22 shouldn't it? 23 A. Yes, that would make sense. 24 Q. Because, of course, it would thereby be wrongly 25 prolonging the suffering of its victims and so therefore 134 1 the damages should go up, or the compensation award 2 should go up; do you agree? 3 A. Yes, if suffering is being extended unnecessarily, 4 I think that's a fair assumption. 5 Q. Yes. Now, given your research and the evidence that has 6 been given to this Inquiry, I am sure you're driven to 7 accept that the Post Office over many years strove to 8 delay the revelation of exculpatory material that would 9 have enabled criminal appeals to have been brought 10 swiftly? 11 A. I think we've certainly heard that, and we can agree 12 that that has been the case. 13 Q. Yes. I mean, no need to go over old ground but it is 14 important to note: the non-disclosure of the Clarke 15 Advice from 2013 to 2020, concerning Mr Gareth Jenkins, 16 I mean, Mrs Misra could have brought an appeal in 2013 17 or 2014, had that not been suppressed; do you agree? 18 A. Yes. 19 Q. Yes. Mr Butoy, Mr Moloney's client that I have 20 permission to mention, a Legacy Horizon case from 2007, 21 he went to prison in 2008 for 39 months. His appeal was 22 rejected in 2018 and the Court of Appeal Criminal 23 Division had the Horizon mantra put before it, and the 24 Horizon mantra -- I mean no disrespect, Mr Read, but 25 it's: no evidence that the Horizon system was shown to 135 1 be unreliable or open to errors; whilst as with any 2 computer system errors from time to time may crop up; 3 Horizon is largely reliable; the proportion of alleged 4 and detected defects related to the Post Office branch 5 accounting is minuscule, in comparison with the overall 6 operation of the system; used in 11,600 Post Office and 7 multiple in-branch users daily to provide financial 8 services and counter operations on a national scale. 9 So his appeal was rejected in 2018 but he was 10 cleared in April 2021 as part of the Hamilton judgment. 11 Now, I think, with a degree of understatement, that it's 12 fair to say, is it not, Mr Read, that the Court of 13 Appeal in 2018 didn't get the full picture, did they? 14 A. It sounds like that was the case. 15 Q. I mean, without pulling any punches, they were misled 16 because the truth about Legacy Horizon, as was held by 17 Mr Justice Fraser, was very different from that which 18 was put before the Court of Appeal? 19 A. Yes. 20 Q. Yes. So that mantra was a slogan to finesse what very 21 senior management by then in 2018 ought well to have 22 known: that Horizon, leaving aside its commercial 23 application, was wholly unreliable and unfit for 24 forensic purpose, in other words to bring a case in 25 court to deprive a person of their liberty; you would 136 1 agree with that? 2 A. Yes, I would. 3 Q. Right. So given this history of obviously meritorious 4 appeals being delayed and the appeal procedure being 5 unnecessarily prolonged, you would accept, and in fact 6 you were very candid about this in your witness 7 statements, that the Board, the Senior Executive Team, 8 historically the institution, prioritised its commercial 9 and reputational interests as opposed to doing justice 10 to the subpostmasters? 11 A. I said there was very definitely a focus on 12 profitability and commercial sustainability, rather than 13 on the wellbeing and the development of the postmaster 14 contract. Absolutely I did, yes. 15 Q. Now, again, just dealing with the mindset and accepting 16 the fact that you were only just in post, the Post 17 Office was even being advised in 2019 that the Criminal 18 Cases Review Commission might never make a referral. To 19 use a colloquialism -- and these aren't the words used 20 by the learned counsel who was advising the Post 21 Office -- but the CCRC might blink. Would you accept 22 that, given what this Inquiry has established, the Post 23 Office ought to have been banging on the door of the 24 CCRC, the DPP and the CPS, saying, "You've got to refer 25 these cases, they're unsafe"? 137 1 A. When are we describing? Do you mean in 2018 or do you 2 mean subsequently? 3 Q. I'm talking about as soon as it came to pass that there 4 were serious problems with Horizon and certainly by 5 2019, after the receipt of the Horizon Issues Judgment, 6 the Post Office ought to have been banging on the door 7 of the CCRC saying, "You've got to refer these cases". 8 A. Yes, I can see where you're coming from. 9 Q. You agree? 10 A. Yes, I can see that. 11 Q. But you were being advised by your General Counsel, and 12 it's paragraph 23, page 12 of your third witness 13 statement, words to the effect "Don't dig into the 14 past". 15 A. Yes, the guidance that I received at that stage was that 16 my focus was very much on today's Post Office for 17 tomorrow and moving the business forward. So I think 18 that's fair. 19 Q. You know Santayana's famous dictum: those who do not 20 learn the errors of the past are condemned to repeat 21 them? 22 A. Yes, I didn't specifically learn that but I understand 23 where you're getting at. 24 Q. But, anyway, you have very candidly and properly 25 accepted that, if the Post Office prolonged and delayed 138 1 criminal appeals, they should pay more, and you may have 2 been advised on this already, and I don't seek to know 3 your advice because that's privileged, but when 4 a wrongdoer causes harm intentionally, or recklessly, or 5 with gross negligence, then a court can award punitive 6 or exemplary damages and, on any fair consideration, you 7 would agree that this scandal qualifies as an obvious 8 case, in which such punitive or exemplary damages might 9 be eligible? 10 A. Agreed. 11 Q. Can you help me: does the Post Office advise claimants 12 of this potential claim in the schemes you administer? 13 A. I can't help you with that. I don't know the specific 14 details of that. 15 Q. I suggest that the Post Office does not. 16 A. Okay. 17 Q. The forms are silent on exemplary damages and, 18 specifically in relation to the HSS form, there is no 19 box for an applicant to claim exemplary damages. 20 Now, I'm going to come to that form in a little bit 21 more detail later but there is an appendix to the form 22 which gives some guidance to potential claimants and 23 there is no mention of exemplary damages anywhere in the 24 appendix. Now, you're not aware about that? 25 A. I'm aware of the appendix and I'm aware of the fact that 139 1 it's effectively a review and a guidance about how 2 a decision is made and what has been considered, but 3 I am -- 4 Q. You weren't aware of the omission about exemplary 5 damages? 6 A. Sorry, yes, I wasn't aware of the omission, yes. 7 Q. Yes. Now, given the array of legal advice you 8 receive -- and I emphasise I'm not criticising you 9 because you are dependent obviously on legal advice -- 10 but shouldn't exemplary damages have been mentioned in 11 the form? 12 A. You would have thought so, in the way that you 13 described: that the potential heads of loss, which 14 I know there is no cap on any of those potential heads 15 of loss, or indeed on the specifics, they are considered 16 irrespective, but guidance would have been sensible and 17 I think that was the objective of the appendix. 18 Q. Yes. Now, it follows, your not being aware of it, but 19 something is being done in the name of the Senior 20 Executive Team, the General Executive, the Board, 21 something is being done on your behalf which is not 22 candid and which is not forthcoming because exemplary 23 damages ought to have been itemised as a potential head 24 of claim; do you accept that? 25 A. I -- 140 1 SIR WYN WILLIAMS: Well, I'm not sure that it's fair to ask 2 a non-lawyer about when exemplary damages may be 3 payable, Mr Henry. 4 MR HENRY: But the possibility -- 5 SIR WYN WILLIAMS: No, let me finish. 6 MR HENRY: Sorry, sir. 7 SIR WYN WILLIAMS: The exemplary or aggravated damages in 8 strict legal terms -- and I don't mean that in terms of 9 a technicality but when they would be awarded by a court 10 in England and Wales -- are clearly defined, are they 11 not, and they're not the sort of damages that are 12 necessarily payable for all tortious conduct, let alone 13 breach of contract. So I think one has to be careful in 14 what one is putting to Mr Read about this. I'm 15 perfectly prepared to accept substantial submissions 16 about this where there's a proper legal framework, so to 17 speak. 18 MR HENRY: So be it, sir. 19 SIR WYN WILLIAMS: But I think getting Mr Read to agree or 20 disagree about things about which he's really competent 21 to answer -- I'm not sure it's helping me, put it like 22 that. 23 MR HENRY: I'll try to be more helpful. 24 A lot of the people filling in these forms don't 25 have legal representation; you would accept that? 141 1 A. I would accept that. 2 Q. You don't pay for legal representation for people to 3 fill in the forms, do you? 4 A. Correct. 5 Q. Yes. Now, I want to just ask you to consider this: 6 candour and transparency from now on -- or not from now 7 on but it ought to have been the touchstone about what 8 people could claim and certainly in the advice document, 9 particularly given the fact that you're dealing with 10 people who don't have legal representation. Right. 11 Can you see history repeating itself because, 12 admittedly, a lot of this occurred before you came on 13 board, Mr Read, but there were years of delay subverting 14 the appeal process, which you've accepted, and fighting 15 the GLO tooth and claw, weren't there, before you came 16 on board. 17 A. That's correct. 18 Q. Now, echoing the past, we've got five years of delay 19 and, I suggest, attrition in the compensation process, 20 and that history is repeating itself; what do you say to 21 that? 22 A. I think the visibility that has been shone on the 23 compensation schemes by Parliament, through the Select 24 Committee, by the Inquiry itself, and by the general 25 media would suggest to me that that is not going to 142 1 happen. I think it would be very fair to say that we 2 set out on the journey of the HSS, and I can remember 3 quite explicitly speaking with Alan Bates about the need 4 to get a very simple application form -- so you're quite 5 right -- and the guidance that we discussed at that time 6 was that a lot of individuals had suffered enormous 7 trauma, a lot of individuals were deeply concerned about 8 the relationship with the Post Office and, as 9 I discovered on my restorative journey -- justice 10 journey, people didn't even want to open letters from 11 the Post Office, people didn't want to engage with the 12 Post Office, they were so traumatised. 13 So the guidance was very much let's find a way to 14 make sure that people don't need to engage in a legal 15 process but they can submit a claim, and I think what 16 I've learnt and I think what you're describing now, is 17 the principle of doing that was probably right, in the 18 sense that I think people were deeply troubled by the 19 notion of engaging with the legal system, they wanted 20 a way to submit a claim and receive redress. 21 And we didn't get there, for a multitude of reasons. 22 Perhaps we may discuss this later but we didn't get 23 there and I think that is of some regret from my 24 perspective. That's for sure. 25 Q. No doubt it would be a matter of regret to you if that 143 1 supposedly simple and non-legalistic process -- and, in 2 fact, the Chairman of the Inquiry, on 8 December 2022, 3 actually was concentrating on that, that it should be 4 a non-legalistic process -- you would be deeply 5 concerned, wouldn't you, if it was mutating into 6 a legalistic or adversarial process? 7 A. I would. 8 Q. You have already touched upon the potential, as it were, 9 conflict or impossibility or unwisdom, to use that word, 10 of the Post Office being involved in these schemes 11 because, as you've rightly pointed out, the former 12 subpostmasters want to have no interaction with the Post 13 Office at all, some of them, because of the deep trauma 14 they have suffered. But also, does it not place you in 15 a state of conflict because, if you were candid and 16 transparent and saying, "You've got to claim this, 17 you've got to claim that, you've got to claim the 18 other", then of course you would be racking up the 19 amount of money you would have to pay in compensation, 20 wouldn't you? 21 A. That's an inevitable conflict, yes, you're right. 22 Q. Yes. You've already said, not in so many words, that 23 the Post Office's role in administering two out of the 24 three schemes is both wrong and untenable? 25 A. Mm-hm. I probably didn't use those words but I think it 144 1 was inappropriate and I've said that many, many times. 2 Q. Yes. The delay and discreditable disputes concerning 3 compensation would exacerbate that lack of trust, would 4 it not? 5 A. Yes, it would. 6 Q. It would continue to poison the relationship that exists 7 with the victims and further besmirch the character of 8 the Post Office? 9 A. I've been very clear that speedy and fair redress is 10 essential to protect the long-term interests of the Post 11 Office and, obviously, the relationship between the Post 12 Office and the victims of the scandal. We haven't lived 13 up to that and that, as I say, is of deep regret. 14 Q. Yesterday you said this: 15 "I've looked at my contemporaneous notes ..." 16 That would be of conversations with the shareholder 17 and the Government: 18 "... and I think I may well have disclosed something 19 to this effect, that the way it was portrayed to me was 20 that the Treasury were of the opinion that the chaos -- 21 I think was the word they used -- had been caused by the 22 Post Office, there was a desire for the Post Office to 23 experience some of the discomfort that had been caused." 24 A. That's what I said, yes. 25 Q. Now, I don't dispute that that was said to you but 145 1 somewhat odd for a shareholder to want that, isn't it? 2 A. Well, I think you're raising an interesting question 3 about the shareholder. The shareholder has many guises, 4 and I think it would be fair to say that is the 5 ministers, that is the Department, that is UKGI, that is 6 the Treasury. I think this idea that this notion of 7 "the shareholder" is quite confused, in the sense that 8 there are competing and different objectives from 9 different elements of "the shareholder", as you put it, 10 and I say that in my witness statement: that one of our 11 challenges is to define very clearly who is the 12 shareholder and are their objectives aligned because 13 ministers, departments, UKGI, Treasury, have different 14 objectives, and that is a challenge for us all. 15 Q. So was the Treasury calling the shot when you gave that 16 evidence yesterday? 17 A. That -- well, ultimately, we have a single source of 18 funding, whether that's for the long-term future of the 19 Post Office or whether that indeed is for compensation 20 and that is from the Treasury, and I don't understand or 21 know about the inner workings of how departments 22 interact with the Treasury. What I do know is that 23 an arm's-length body isn't allowed to interact with the 24 Treasury. One goes through either the shareholder 25 representative, in this sense UKGI, or indeed 146 1 occasionally we can speak to the Department who, in 2 turn, will speak with the Treasury. 3 So there is an obfuscation, I think, by definition 4 of me as the personification, I guess, for want of 5 a better word, of the Post Office and the funder. 6 Q. Yes. Whoever was calling the shots, however, the 7 decision that you should be involved -- the Post Office, 8 that is -- in two out of the three schemes was thereby 9 exposing a teetering institution, which is virtually 10 insolvent, to further reputational damage and criticism. 11 A. I do hold that view, yes. 12 Q. Yes. The Government is using the Post Office as 13 a shield or fire curtain, isn't it? 14 A. That could be a description, yes. 15 Q. The fact that you're administering two out of the three 16 schemes gives the Government a degree of protection, 17 being at one remove gives it room for plausible 18 deniability, where they can detach themselves from 19 criticisms levelled at the Post Office, can't they? 20 A. That's true. 21 Q. They might even be instructing you to minimise or 22 suppress compensation claims whilst avoiding public 23 scrutiny? 24 A. No, I don't think they've asked us to do that, but 25 I think they are one step removed but, at the same time, 147 1 hold the levers of funding. 2 Q. Have they expressed concerns about the bill? 3 A. No, I think it would be fair to say that there is 4 an inevitability about it. I don't believe the 5 Department has expressed a concern. I think they 6 recognise that freeing up the funds from Treasury is 7 never easy and, therefore, determining what that 8 business case could look like and how it works, again, 9 is a question for the Department and for UKGI. But, no, 10 I would say that there is recognition that the bill is 11 significant and they must get on and deal with it. 12 Q. So that there's no quibbling about the bill, this could 13 all be wrapped up quickly if the money were put on the 14 table? 15 A. Well, my sense is that, with the intervention of the 16 previous Secretary of State, back in September '23, and, 17 again, with the mass exoneration and the availability of 18 the £600,000 fixed fee for the overturned convictions 19 and the £75,000 for the HSS, they have put their mouth 20 where their money is, would be my suggestion. 21 Q. I'm going to suggest that the 600,000 is woefully 22 inadequate for some cases, as is the 75,000. So can 23 I just ask you, then, what is the cause of the delay: if 24 the Government says, or you have been told, that there's 25 no quibbling about the bill, there's a realisation that 148 1 the money has to be paid, what are the reasons for the 2 delay? 3 A. Well, I think agreement has now been reached, certainly 4 in HSS, for the 75,000 fixed back and the 75,000 fixed 5 forward. We will be writing out to 25,000 additional 6 postmasters to make them available -- to make the scheme 7 available. So I think that process, I think, is 8 happening and will happen this month. So I think one 9 should be confident that we will get on and execute as 10 a consequence of that. I think that there is definitely 11 progress now in the overturned convictions. I think 12 principles have been established. I think the process 13 has been firmly agreed. I think the 600,000 is starting 14 to work. So that is happening. 15 And my sense -- and you'll be able to speak, I know, 16 to Simon Recaldin when he comes next week on the 17 specifics of some of these issues -- that having taken 18 an inordinate length of time, particularly in OC, to 19 establish some of the principles, that is now done and 20 I think I would like to think that we will see 21 compensation flowing -- I use that word advisedly -- in 22 a way that it hasn't been to date. 23 SIR WYN WILLIAMS: Do you mind if I ask a question a moment, 24 Mr Henry? 25 MR HENRY: Of course, sir. 149 1 SIR WYN WILLIAMS: Take the HSS -- 2 A. Yes. 3 SIR WYN WILLIAMS: -- and truncating it, so we can give 4 Mr Henry his full time allowance, it gets to a point -- 5 and I'm talking about the high-value cases in HSS, all 6 right? 7 A. Yes, yes. 8 SIR WYN WILLIAMS: There gets to a point in time where 9 an independent panel has said, "We think the value of 10 this is X". Right? 11 A. Correct. 12 SIR WYN WILLIAMS: Let's assume there's a happy state of 13 affairs and the postmaster is likely to agree that sum, 14 all right, because you're not really far apart. 15 A. Okay. 16 SIR WYN WILLIAMS: At any point in this process, does 17 Government authority have to be obtained for individual 18 settlements? 19 A. Yes, it does. 20 SIR WYN WILLIAMS: Right. Thank you. 21 A. Every time -- would you like me to explain that a bit 22 more? 23 SIR WYN WILLIAMS: Yes, please. 24 A. So every time that the guidelines associated with 25 individual heads of loss are either breached, if that's 150 1 the right word, then the Government needs to sign off. 2 So the principles that have been established in terms of 3 the early neutral -- the ENE process, they have been 4 established with some guidelines for heads of loss, and 5 ranges. If those ranges are -- and the agreement is 6 from the panel that actually it should be outside of 7 those ranges, then that has to be signed off by the 8 Government. 9 SIR WYN WILLIAMS: Right. So even though there is 10 an independent panel, which has agreed what the sums 11 should be -- 12 A. Correct, sir. 13 SIR WYN WILLIAMS: -- it is at least, in theory, possible 14 that the Government could say no. 15 A. In theory, that is possible, yes. 16 SIR WYN WILLIAMS: So the next question is: has that ever 17 happened? 18 A. I'm not aware but others may have a view. I don't -- 19 SIR WYN WILLIAMS: You don't know? 20 A. I don't know. 21 SIR WYN WILLIAMS: All right. Thank you. 22 Sorry, Mr Henry. 23 MR HENRY: No, no. Thank you, sir. 24 So just dealing with the £600,000, that could never 25 be appropriate for a high-value case, could it? 151 1 A. No, I think you're right. We both know that in the 2 600,000 for the overturned convictions but also the 75 3 for the HSS, there will be plenty of individuals for 4 whom this will not be appropriate. But it will be 5 a good medium for many and I think that the point -- 6 that is the point. 7 Q. What do you say to Mrs Blakey's widower, who stated that 8 he had to accept the £600,000 because he was worn out 9 and that he didn't have the energy to fight on because 10 it had been so drawn out and so painful that he just 11 decided, "I just have to accept the £600,000"? 12 A. I think that's desperately sad and my understanding was 13 that the -- is that the interim payment would cover that 14 specific cost and, if there was a need to go above and 15 beyond 600, then that would be possible. So I'm sad 16 that he felt unable to continue with that process. 17 That's not what the process was designed to do. We were 18 keen to ensure that people got closure, which, by 19 definition, means there will be many who will want to go 20 above and beyond 600,000, and we would want them to be 21 in a position where they can come to a point of closure 22 with the Post Office and with the Government. 23 Q. So you reject any suggestion that the Government has 24 been tight with the purse strings? 25 A. No, I don't believe it has been tight with the purse 152 1 strings. I think the process is overly bureaucratic. 2 I would fully acknowledge that. I think the 3 establishment of principles in -- as an example, the 4 establishment of principles in HSS, when it was first 5 set up, took an inordinate length of time. There are 6 many examples, I think, where bureaucracy got in the 7 way, things have gone wrong. I don't think that is 8 necessarily borne out by people, you know, being 9 malicious in any way. I just think that is a poor 10 process, rather than it being anything more than that. 11 You know, certainly I know there will be people in 12 this room who have had dealings with the Post Office and 13 I'm sure they've been deeply frustrated by it but 14 I wouldn't -- it's not because the purse strings are 15 being closed tight. 16 Q. You've talked about bureaucracy and you've said, 17 "I don't think it's about anybody being malicious", 18 "malicious" is a very strong word but what about 19 old-fashioned attitudes? Has the delay been caused 20 because of the Post Office's historic, dyed in the wool 21 prejudice against subpostmasters? 22 A. No, I don't believe that. I don't believe that. 23 I think that would be an unfair conclusion to come to. 24 I think it genuinely is a case of old-fashioned 25 bureaucracy, if that's a different way to put it. 153 1 Q. You say it's unfair, but you can understand the concern 2 surely -- 3 A. Of course. 4 Q. -- typified, I regret to say, by your letter to the Lord 5 Chancellor, which might have caused people enormous 6 concern, that letter to the Lord Chancellor, which was 7 reflective of an old-fashioned view, I suggest, Mr Read? 8 A. No, I don't believe that. I can see why people will 9 have been frustrated by it. We had an obligation, 10 I believe, to alert the Lord Chancellor to the work that 11 we'd done and I think we worked quite extensively with 12 the Advisory Board trying to work out and trying to 13 understand how do we get more people to come forward, 14 which is exactly what we tried to do. And, you know, 15 you can see, I think, that there are minutes from the 16 Advisory Board meeting that articulate that challenge. 17 Q. How do you get people to come forward, Mr Read, when 18 your letter to the Lord Chancellor was in the terms it 19 was, and also Mr Vamos' unsolicited letter -- I'm going 20 to call it the "They must be guilty" letter -- which was 21 inexplicably posted on the Post Office's website earlier 22 this year. How can you get people to come forward if 23 that is happening on your watch? 24 A. Well, we tried it many, many times, to engage with the 25 700 convicted postmasters, both writing to them, trying 154 1 to engage with them, getting the CCRC to help us, and it 2 was a source of great concern, certainly to me, back in 3 the summer of 2023, when we were discussing this with 4 the Advisory Board, that we couldn't find a way to get 5 people to come forward. And we sought the CCRC's help, 6 we sought other's support, we even enquired of the CCRC 7 if we could bring cases forward to the CCRC without 8 postmasters necessarily being aware of it, as in to try 9 and get those convictions overturned, which is something 10 that we did, but was rejected by the CCRC and the Court 11 of Appeal, obviously, because postmasters need to be 12 involved in that process. 13 So it was, a -- and remains a -- clear frustration 14 and a clear recognition, I think, that the Post Office 15 role in this particular process of remediation and of 16 redress, you know, first and foremost is the wrong one, 17 and we shouldn't be involved in that process. 18 Q. Yes. Earlier on you've denied that there is or was 19 a deliberate policy of delay and deterrence based on the 20 design of the forms. But I want to deal with this 21 perplexing question of trying to get people to come 22 forward. Have you heard of complaints about the 23 complexities of the compensation process and the forms 24 itself from subpostmasters? 25 A. Yes, we have. 155 1 Q. Have you heard, apart from what I've just mentioned 2 about Mrs Blakey's husband, of subpostmasters settling 3 for less because they didn't have the energy or the 4 means to pursue their just entitlements? 5 A. No, I haven't, until you've mentioned that example. 6 Q. So you haven't heard about subpostmasters who sell 7 themselves cheap, deterred by red tape or intimidated by 8 the process? 9 A. I didn't get that sense and, certainly, if I look at the 10 HSS scheme in particular, that wasn't my takeaway from 11 that process. 12 Q. If the application forms have misinformed people as to 13 their rights, or deterred them from applying -- but 14 let's concentrate on if they have misinformed people as 15 to their rights, that would be appalling, would it not? 16 A. I agree. 17 Q. Again, I have to be careful in light of the Chair's 18 earlier observations but let's just concentrate on the 19 Historic Shortfall Scheme very, very quickly. It's 20 supposed to compensate subpostmasters who are not 21 actually convicted of theft but were accused of theft. 22 A. That's correct. 23 Q. They lost their jobs, many were threatened with 24 prosecution and forced to repay cash shortfalls, which 25 were entirely fictitious and all of that, the stress, 156 1 the suffering, the damage to their reputation, that 2 should be compensated for, should it not? 3 A. That's correct. 4 Q. You know, from the evidence that we have heard, about 5 subpostmasters being called thieves, spat at or shunned 6 in their community, even in one case being attacked. 7 All because of that false accusation. 8 A. Yes, I am aware of that. 9 Q. You know also, of course, about the fact that some of 10 them had to move house because they had become pariahs 11 in their locality? 12 A. Yes, I sadly met many. 13 Q. Now, as at June 2023, there have been about 2,500 HSS 14 claims settled and the average settlement payment was 15 only £32,000. Does that strike you as being rather low? 16 A. I think there's a very long -- I was going to say -- 17 tale is the wrong word. I think there's a long -- let 18 me put it another way: I think where fatalities or 19 bankruptcies or others, obviously there are a smaller 20 number of those, but there are a lot of very low claims, 21 which I suspect is why the overall average is what 22 you're suggesting. My point, I guess, is that, where 23 they are more complex and where they are involving 24 bankruptcy or fatality or anything of that nature, or 25 indeed bigger claims, they're larger. 157 1 So I'm not sure the average necessarily paints the 2 picture that -- 3 Q. Well, anyway, let's return to the form. Would you agree 4 that the form is lengthy, complex and legalistic? 5 A. Yes, I would. 6 Q. I don't know if you're familiar, but you may have been 7 aware of the criticism by Mr Dan Neidle of Tax Policy 8 Associates in respect of it? 9 A. I'm aware of his criticism, yes. 10 Q. Taking it quickly: the form and appendix, 14 pages in 11 length but with other supplementary documents it's over 12 20 pages of material, and, as you've already said, no 13 legal advice, no payment of legal costs for completing 14 the form. You would realise, as an institution, that 15 you're dealing with a number of unrepresented 16 applicants, correct? 17 A. Correct. 18 Q. Right. So, therefore, you must be assiduously careful 19 to ensure that they're not misled? 20 A. Yes. 21 Q. Right. You've accepted the importance of a person's 22 reputation and the stigma of false accusation, haven't 23 you? 24 A. I have. 25 Q. Right. Mr Neidle, and you're familiar with what he 158 1 said, he has stated and suggested that the HSS form is 2 designed to deter claims for damages to reputation; what 3 do you say to that? 4 A. I mean, he's clearly entitled to his view. I think what 5 we have done as a consequence is that we have 6 reconstructed the application form, so now that if you 7 want to apply in the HSS scheme for 75,000 forward, 8 I think it's now reduced to a mere 20 questions, and 9 we've also recut the application form for those who 10 don't want to apply for 75,000 but may have a more 11 complex claim. 12 So I think we've learnt and listened quite 13 extensively to the Select Committee, to this committee, 14 to the commentary that has been run by postmasters and 15 by others, and I would argue that -- not argue, I would 16 state that we have made changes to the tax position, 17 we've made changes to the complexity, we've reduced the 18 scheme application form, and we've also spoken at length 19 with DBT about an appeals process because we are very 20 concerned, for exactly the reason you've just described, 21 that we may find ourselves in a position where people 22 were disadvantaged, we would say, you know, 23 inadvertently, but if they have been, we clearly need to 24 address that, and that is something that I'm alive to. 25 Q. I won't go into the argument about how the form is 159 1 misleading because I believe that would be better for 2 submissions. So I will move on and ask you to just help 3 me with a document which is POL00155397. I think you've 4 been shown this document, have you not, Mr Read? 5 A. I'm not sure. If you could scroll down, I could see. 6 Q. By all means. It was provided to you earlier this week. 7 A. Can we scroll down, just so I can see it? Thank you. 8 Q. We'll take it -- 9 A. Sorry, which piece are you taking me to? 10 Q. Yes, of course. Well, if we go to page 1, it's entitled 11 "GLO Post Settlement GE" -- that's General Executive? 12 A. Group Executive. 13 Q. "Group Executive" -- forgive me -- "Paper", and 14 presumably, therefore, you would have seen the paper 15 itself? 16 A. Yes, I was in the organisation at this time, yes. 17 Q. Yes. This is what Mr Underwood says at page 1: 18 "... I am not sure Nick wants me to lead the 19 Historical Claims workstream owing to my prior 20 involvement in the Complaint & Mediation Scheme, 21 Chairman's Inquiry and the GLO." 22 It goes to: 23 "I am not sure the workstream leads set out in 24 Appendix 1 are set in stone yet", and then the words 25 that I have just taken you to that have been 160 1 highlighted. 2 Can you help me: weren't entry fees mooted at one 3 point before access to the HSS was allowed? 4 A. Entry fees, sorry? 5 Q. Yes, fees for applicants. 6 A. Sorry, I'm not sure what that means, actually, to be 7 honest. 8 Q. Well, in other words -- 9 SIR WYN WILLIAMS: Mr Henry is suggesting that, before you 10 could enter the scheme, you had to pay a fee. 11 A. Oh, really? Okay. 12 SIR WYN WILLIAMS: As you do in court, in some instances, 13 for example. That's what he's asking you about. 14 Yes, Mr Henry? 15 A. I don't recall that being the case. It may well be but 16 I don't recall that. 17 MR HENRY: Could we go to page 2 of 5, and could we scroll 18 up, please -- maybe down, in fact. I'm sorry, when 19 I say up, I mean down. 20 If we keep going, yes, "Fees", exactly. Thank you. 21 So we've got Mr Underwood there saying: 22 "My strong view is that you cannot seek payment from 23 applicants -- however small and regardless of the 24 rationale behind it. Optically this would be extremely 25 challenging and would be a position that I believe the 161 1 business would struggle to maintain under political and 2 media pressure. I think you can achieve the same 3 desired outcome [through] having [it says 'though'] 4 a very tight and clearly communicated set of eligibility 5 criteria and requirements in terms of the documentation 6 applicants have to provide in order to be accepted into 7 the Scheme." 8 Now, that's an atrocious line of thinking, is it 9 not, that, at one point, the Post Office would seem to 10 have been discussing charging fees to be paid by the 11 wronged victims of the Post Office before they would be 12 allowed to enter into the scheme? 13 A. It does seem a bizarre -- 14 Q. Yes. I suggest, as is clear from what Mr Underwood was 15 saying, was that the same desired effect, the same 16 outcome, would be strict -- very tight, in other 17 words -- eligibility criteria, very tight and clearly 18 communicated set of eligibility criteria and, of course, 19 the documentation subpostmasters would have to provide 20 before being accepted into the scheme. He suggested 21 this would have the same desired outcome, didn't he? 22 It's clear -- 23 A. It does look as though that's what is implied. 24 Q. I suggest that was to restrict access to the scheme and 25 to deter applicants, isn't it? 162 1 A. Possibly. 2 Q. Yes. It's a more subtle and insidious method of doing 3 it but it makes it difficult for subpostmasters to 4 apply, to reduce the Post Office's disclosure. I mean, 5 for example, in the forms, they talk about the provision 6 of contemporaneous documents. How are you going to get 7 contemporaneous documents when many years have passed 8 and where the Post Office had seized them and, as in 9 Mr Lee Castleton's case, never returned them? It's 10 a hurdle, isn't it? Not a low hurdle, but it's actually 11 a high bar. That was the design, wasn't it? 12 A. It's certainly -- you could certainly draw that 13 conclusion from this paragraph. 14 Q. I remind you, we've dealt with it very briefly already, 15 paragraph 886 of the Common Issues Judgment: 16 "Suspended SPMs are not only entirely excluded from 17 the Post Office, part of their premises, they appear to 18 be excluded in some cases from entire premises and also 19 are completely denied access to any information or 20 records." 21 Then Mr Justice Fraser said this: 22 "Given the severe effect upon a subpostmaster of 23 having their appointment terminated, it is not only 24 important, but I would go so far to say crucial, that 25 they're given a reasonable opportunity to meet a case 163 1 being brought against them by the Post Office. It is 2 difficult to see how they can have such an opportunity 3 if they are denied access even to copies of information 4 or records." 5 That judgment came out on 15 March 2019. This email 6 is January 2020. By that time, the people in this 7 email, one of whom, of course, was Mr Williams, Rodric 8 Williams, would all have known the difficulties for 9 subpostmasters of obtaining contemporaneous documents, 10 when these were historic events that had occurred many, 11 many years before and where they had been subjected to 12 such unfairness; do you agree? 13 A. That's a concerning conclusion, yes. 14 Q. You all knew -- and I don't mean that pejoratively to 15 you, Mr Read -- but those advising you all knew, when 16 this demand for contemporaneous document was hatched, 17 that subpostmasters would have great difficulty in 18 complying with it; that must be right? 19 A. That's a disturbing conclusion, yes. 20 Q. Yes. Now, Mr Read, I realise you were, to some extent, 21 put in this job to a degree under false pretences 22 because you had no idea -- no idea -- what you were 23 letting yourself in for, but you would agree that you 24 were not the solution you promised to be, despite 25 everything you did? 164 1 A. Not the solution I promised to be; what do you mean? 2 Q. Well, the compensation process is not being dealt with 3 fully, fairly and quickly. That must be right? 4 A. I think, to a degree, that's fair. 5 Q. Yes. It's the same, I suggest, dyed in the wool 6 inability of the Post Office to treat those it 7 destroyed, or very nearly destroyed, with dignity, 8 respect and justice? 9 A. I would like to think we've learned the lessons of this. 10 I think it has been slow and painful for the Post Office 11 to do so. I think, culturally, we've had to come a long 12 way to do that but I would it argue that those lessons 13 have been learned. I think the changes that we have 14 made, certainly over the last few months, particularly 15 to the schemes, to the approach that we've adopted, to 16 the way that we've engaged with victims, has changed. 17 I would hope that people in the room had identified 18 that but we're obviously open to feedback accordingly. 19 But I think, certainly since the compensation hearings 20 and since the drama at the start of this year and since 21 the Select Committee, I think we've learnt those 22 lessons, I think the shareholder has too and I think 23 there is a great deal more understanding. 24 This process has hugely helped in shining a light on 25 some of the practices of the past. I think we are 165 1 genuinely open and moving towards a better system. 2 There are proper appeals processes, proper 3 independent panels now working, there is a commitment, 4 certainly from the Shareholder, from a funding 5 perspective, and there is a commitment from the Post 6 Office to get this right. 7 I do believe some of the principles are now in 8 place. I do believe that the process is such that 9 things will start to flow but I would also acknowledge, 10 and I think you've been very generous in pointing it out 11 today, that mistakes have certainly been made, and 12 I would agree with that. 13 SIR WYN WILLIAMS: Thank you, Mr Henry. 14 MR HENRY: Thank you, sir. 15 SIR WYN WILLIAMS: You will know, Mr Read, that in each of 16 my progress updates and in my interim report, I drew 17 attention to the oft-repeated phrase, both by Post 18 Office and Government, that "compensation would be full, 19 fair and prompt". Forget "prompt" for the moment. Can 20 you assure me that it is still the aim of Post Office to 21 provide compensation which is full and fair? 22 A. I can assure you. 23 SIR WYN WILLIAMS: Fine. Thank you. 24 Then we'll adjourn now until tomorrow morning when 25 you'll resume your questioning, Mr Beer. 166 1 MR BEER: I will, sir. 2 SIR WYN WILLIAMS: Yes, thank you. 3 (4.08 pm) 4 (The hearing adjourned until 10.00 am the following day) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 167 I N D E X NICHOLAS JAMES READ (continued) ...............1 Questioned by MR BEER (continued) .............1 Questioned by MR HENRY ......................125 168