McFadden says he wishes he had challenged Post Office more, but it gave ’emphatic defence’ of Horizon system
Jasper Jolly
A lot of the pre-lunch questioning of Pat McFadden, a former postal affairs minister who ran Labour’s election campaign and is now a member of Keir Starmer’s government, focused on what warnings he received about possible problems with the Horizon system.
That included the letter from former home secretary Jacqui Smith on behalf of a constituent, and another from Brian Binley, an MP at the time, forwarding a letter from Computer Weekly journalist Rebecca Thomson. In that 2009 letter, Thomson wrote:
“The Post Office refuses even to entertain the possibility that their system could be going wrong.”
McFadden said that he wished that he had challenged the Post Office more on its insistence that the Horizon system was robust. However, he said he was reliant on the Post Office, which gave an “emphatic defence” of the system.
Asked about a particular letter, he said:
The Post Office kept insisting that the system was robust and fit for purpose.
The terrible thing is that those court judgments were found to be unsafe and unsound. I did not know that at the time.
With this particular letter, I’m not sure, because it was so emphatic, but if you ask me over the whole story here, of course I wish I had done more to question these responses. I believe if I had I would have got the same response from the Post Office.
Key events
Ed Davey: I would have ‘acted differently’ if ‘Post Office had told the truth’
Former postal affairs minister Ed Davey has said he would have “acted differently” if the “Post Office had told the truth”.
In his witness statement to the Horizon IT inquiry, he said:
With all issues in such a busy portfolio, you had to be able to rely on the advice of civil servants, and you were not in a position to dig into the detail of every question that came across your desk.
As I have stated publicly, I believe I was seriously misled by the Post Office. I do not know if one or more civil servants misled me during my time as a minister, or if they were themselves misled by the Post Office. I hope the inquiry can shed light on this.
However, if I had known then what we all know now – if the Post Office had told the truth – of course I would have acted differently.
Asked about this by Jason Beers KC, counsel to the inquiry, Davey said:
Yes, I now know I was being lied to. I follow this inquiry, and it’s pretty clear what they told my officials was not true.
Asked which executives had lied to him and his officials, Davey said:
The senior executives I dealt with were David Smith and then Paula Vennells. There may have been one or two others…. And they were the ones giving the information to my officials and to me. So they were the people passing information which was untrue.
Smith was the Post Office’s managing director between April and December 2010, and Vennells was chief executive of the Post Office from 2012 to 2019.
Ed Davey apologises to Bates for declining meeting
Back to the Horizon inquiry.
Ed Davey said he was “deeply sorry for the individuals and families who have had their lives ruined” by the scandal, and that it took him five months to meet Sir Alan Bates, the subpostmaster who spearheaded a campaign for justice. The Liberal Democrats leader was postal affairs minister between 2010 and 2012.
He apologised to Bates for declining a meeting with him in May 2010 and saying “I do not believe a meeting would serve any useful purpose”.
He said in his written submission to the inquiry:
The Post Office Horizon scandal is the greatest miscarriage of justice of our time, and I am deeply sorry for the individuals and families who have had their lives ruined by it.
As one of the ministers over the 20 years of this scandal who had postal affairs as part of my ministerial responsibilities, I am sorry that it took me five months to meet Sir Alan Bates, the man who has done so much to uncover all this, and that I did not see through the Post Office’s lies when I and my officials raised his concerns with them.
Davey also said that he was not aware that the Post Office and Royal Mail Group themselves investigated, prosecuted and obtained convictions against sub postmasters. Some people in the room shook their heads when this was read out by Jason Beers KC.
Davey told the inquiry:
If I had known about it [the private prosecutions] I would have been surprised… It seems quite an old fashioned thing to do.
Now we know that it was wrong and it seems that power should be taken away. I wasn’t aware and it seems odd that they were.
ECB keeps interest rates unchanged
In other news, the European Central Bank has held interest rates unchanged, as expected. President Christine Lagarde will explain the bank’s thinking behind the decision in a press conference in half an hour, and markets will be hoping for clues on when the next rate cut might come – possibly in September?
The ECB became one of the first major central banks to reduce interest rates, cutting its three key rates by a quarter point in June.
The former postal affairs minister Pat McFadden also told the Horizon IT inquiry he does not believe making ministers “shadow chief executives” to prevent the bosses of state-owned companies going “rogue” would work in practice.
I’m not sure in practice, given the number of arm’s length bodies there are, that ministers really can act as shadow chief executives of them.
Which begs the question ‘what do you do when one goes rogue? – if it’s not a minister sitting on a chief executive’s shoulder, what is it?
I wonder if it’s worth considering some sort of body that’s established to do precisely this, that can be called in to launch an inquiry or take action when the level of allegations reaches such a point that it looks like that is the right thing to do.
This is a live and real policy question which has been exposed by this scandal and I’m glad you’re considering it going forward but I’m not sure making ministers shadow chief executives is going to be the practical way to do this.
Pat McFadden has also said that he is unsure when “blind faith” from the Post Office in its IT system turned into something “more sinister where people are just not telling the truth.”
He told the Horizon IT inquiry:
My reflection on this after all these years is clearly those responses were wrong.
The evidence being used in the court to prosecute the subpostmasters has turned out to be wrong and was proven to be wrong in the cases that overturned these judgments many years later.
What I’m not clear about is in what point in this story does blind faith from the Post Office in their IT system turn into something more sinister where people are just not telling the truth.
Now I don’t know at what point that happens but it’s something I’m sure the inquiry will want to get to the bottom of.
McFadden says he wishes he had challenged Post Office more, but it gave ’emphatic defence’ of Horizon system
Jasper Jolly
A lot of the pre-lunch questioning of Pat McFadden, a former postal affairs minister who ran Labour’s election campaign and is now a member of Keir Starmer’s government, focused on what warnings he received about possible problems with the Horizon system.
That included the letter from former home secretary Jacqui Smith on behalf of a constituent, and another from Brian Binley, an MP at the time, forwarding a letter from Computer Weekly journalist Rebecca Thomson. In that 2009 letter, Thomson wrote:
“The Post Office refuses even to entertain the possibility that their system could be going wrong.”
McFadden said that he wished that he had challenged the Post Office more on its insistence that the Horizon system was robust. However, he said he was reliant on the Post Office, which gave an “emphatic defence” of the system.
Asked about a particular letter, he said:
The Post Office kept insisting that the system was robust and fit for purpose.
The terrible thing is that those court judgments were found to be unsafe and unsound. I did not know that at the time.
With this particular letter, I’m not sure, because it was so emphatic, but if you ask me over the whole story here, of course I wish I had done more to question these responses. I believe if I had I would have got the same response from the Post Office.
Sir Ed Davey, the leader of the Liberal Democrats, who was postal affairs minister between May 2010 and February 2012, is now being questioned by Jason Beer KC, counsel to the Horizon inquiry.
McFadden is repeatedly asked by the lawyer Sam Stein, who represents sub-postmasters, why no-one in the government spoke to the subpostmasters directly, rather than just going back to the Post office.
He said:
The right thing to do was to ask the people running the business and… that structure had been set up some years before I was the minister, they were the people who ran the Horizon system. They were the people who had the information about it.
And when I look at the correspondence in the round, what I’m really struck by is how emphatic their defence of the system was, and continued to be for a long time after this exchange of correspondence, not only an emphatic defence, but also the use of court judgments as a proof point.
When pressed on this, McFadden added that the National Federation of Subpostmasters said that they “didn’t think there was a fundamental problem with the system either”. He later discovered that the federation had a “bad relationship” with subpostmasters, “but that wasn’t something that was clear to me at the time”.
McFadden calls ‘hands in the till’ email ‘shocking’
McFadden is shown an email from Alan Cook, the former managing director of the Post Office, who wrote to two staff members: “My instincts tell that, in a recession, subbies with their hand in the till choose to blame the technology when they are found to be short of cash”. (There are gasps in the room when the email is shown.)
Cook told the inquiry in April that he will “regret for the rest of my life” that email.
McFadden says he had not heard senior Post Office people express this view at the time, but that it was “shocking”.
Counsel to the inquiry Sam Stevens asks:
Any recollection of Mr. Cook expressing those views to you?
McFadden replies:
No, I never saw this. I think it was published by this inquiry some weeks ago, I saw it in detail for the first time on Monday. I think it’s shocking and revealing about the instincts inside the Post Pffice at the time, but I never heard senior Post Office people say that at the time.
Earlier, counsel to the inquiry Sam Stevens asked former postal affairs minister Pat McFadden:
Where does ultimate accountability for the actions of an arm’s length body such as the Post Office, that is owned by the government, lie?
He replied:
I’ve thought about this a lot because of this issue and this whole question of the arm’s length relationship and what happens when that goes wrong and what you can do about it.
If it’s state-owned, ultimately the accountability will lie with the government because it’s state-owned.
But I do want to stress that the legislation that had been passed and the postal services act had deliberately created this separation.
Hundreds of subpostmasters are still awaiting compensation despite the previous Conservative government announcing that those who have had their convictions quashed are eligible for £600,000 payouts.
McFadden is asked about the cases of individual subpostmasters, about which he was told in early 2009.
He is shown a letter from Jacqui Smith, the MP who wrote to him about Julian Wilson, a subpostmaster in her constituency who had been suspended by the Post Office for “making false cash declarations”, and others in a similar position. She wrote: “I feel that there could be a system problem here.”
At the time, he wrote back to her saying that these were operational issues that were a matter for the Post Office. He has just told the inquiry:
We would certainly, at that stage, have had no way of knowing about the detailed running of the Horizon system. What this whole story is, is that over time, there are more and more cases and more and more questions about it, but certainly in the early stages of this, this would have been regarded as a matter for the Post Office.
Jasper Jolly
Pat McFadden has said that ministers “took no part in the decision to prosecute” post office operators by the Post Office.
The Post Office was unusual in regularly pursuing private prosecutions itself against its branch operators. Many of these relied upon evidence from the Horizon IT system, which ended up being faulty.
Just before the inquiry’s morning break, McFadden was asked about the oversight by ministers – the ultimate owners of the Post Office – of those prosecutions. He said that he did not remember ever discussing prosecutions, and that ministers would have trusted that the private prosecutions brought by the Post Office would meet the same standard as public prosecutions. He said:
I don’t remember that ever being discussed in that way. Ministers are very reluctant, for understandable constitutional reasons, to intervene in prosecutions. Once court judgments are cited, all the ministerial learning you have is not to interfere with the courts.
If ministers see reference to prosecutions or convictions in correspondence they will assume that the court has reached its verdict correctly… We are told not to interfere.
McFadden: ‘Wrong’ information on Horizon had ‘terrible human consequences’
Jasper Jolly
Cabinet minister Pat McFadden has told the inquiry that “wrong” information on the Horizon system has had “terrible human consequences”.
Counsel to the inquiry, Sam Stevens, has been asking about the process by which ministers make statements and write letters on the Post Office. McFadden said ministers have to trust that the information being given to them is accurate. He said:
It’s very difficult, and it’s relevant to this issue, because at the heart of this issue is that in the process that I’ve been describing… the information turns out to have been wrong, with terrible human consequences for some of the people who were here.
Decisions were made on the basis of information passed on by officials both in the department and from the Post Office itself, McFadden said. Ministers have very little room for manoeuvre if that information is incorrect or false, he said:
The minister is very reliant on those other layers having told the truth about the information that’s put in front of them to sign.
A feature of the Horizon correspondence and probably other things to do with an individual post office… the department and me as the minister we’ve got no independent information about that other than in the Post Office. Most of the time queries like this are answered directly by the Post Office themselves.
Labour minister promises ‘fast and fair compensation’ for subpostmasters
Away from the inquiry, the new Labour government answered an urgent question about the Post Office scandal in parliament and said compensation to wrongly convicted subpostmasters would be “fast and fair,” the BBC reported.
Asked when the compensation scheme would be up and running, business and trade Minister Justin Madders said the government would make a statement on the issue by the end of this month. He told MPs:
[We] intend to work cross-party, we believe that there’s absolutely no reason why that should not continue.
We absolutely agree with him… delivering fast and fair compensation is at the heart of all we are trying to achieve here.
The former postal affairs minister told the Horizon IT inquiry he was first made aware in February 2009 that the Post Office was prosecuting subpostmasters for alleged shortfalls at their branches.
Pat McFadden said an email from a Computer Weekly journalist asking for comment on allegations made by subpostmasters was the first time he became aware of complaints about the manner in which the Post Office conducted its investigations.
In his witness statement, McFadden said:
As far as I can tell from the documents this was the first time I was made aware that the Post Office was prosecuting its subpostmasters in respect of these shortfalls.
It was also the first time I became aware that there were complaints regarding the Post Office’s investigation of the issues.
McFadden said a handover note given to him when he took on the postal affairs minister role in mid-2007 “did not mention anything” in relation to subpostmasters’ complaints about the Horizon system.
In his witness statement, the Labour MP said:
The note did not mention anything in relation to any issues subpostmasters and subpostmistresses were having with the Horizon IT system, and I did not receive any oral briefing upon appointment to the department in relation to any such issues.
Horizon was mentioned in briefings and statements when I was first appointed only as an investment in the future of the Post Office.
I did not at the time of appointment know of complaints made by subpostmasters about the system, or any Post Office Limited or Royal Mail Group investigations into such matters, or any prosecutions by Royal Mail for fraud, theft or false accounting.
My knowledge of Horizon matters did not materially change or develop until early 2009.
Also in his witness statement to the inquiry, McFadden said he does not recall officials telling him that “they thought a miscarriage of justice was under way”.
He told the probe he believed that he was not told of it because the Post Office’s responses to queries about the system were that it was robust.
I have no evidence or reason to believe that the officials in the department were receiving any information different to that set out in the replies from the Post Office.
Ministers are reliant on the information they get from officials.
At no point do I recall officials saying to me that they did not believe these replies or that they thought a miscarriage of justice was under way.
I expect this was because they were being told the same thing by the Post Office, as was set out in the replies.
