Post Office Inquiry - live: CEO Nick Read ‘surprised’ at 33 police investigations involving branches this year

Postmasters need to be recognised for the important role that they play within their communities, Nick Read has said.

The inquiry is now considering the future of the Post Office and the nature of its relationship with the government.

Mr Read told the inquiry: “When you look at the role that postmasters play in communities up and down the country, when you look at the level of trust between communities and postmasters, it is quite extraordinary.”

He added that “postmasters should be recognised for that contribution, where they currently aren’t.”

Mr Read added that the Post Office have been asking the government for a clearer strategy for their future. “There is a desire to have a long-term strategy for the Post Office from which everything else will flow,” he said.

The inquiry has returned after the lunch breach and Mr Read is being asked about the government’s priorities for the Post Office in 2023/ 24.

The inquiry has been shown a letter from minister Kevin Hollinrake to chairman Henry Staunton on 29th June 2023, titled strategic priorities for 23/24.

In the list of priorities set out by the government, the level of pay for postmasters is not included as a concern.

Mr Read was asked why this is, given that recent surveys of postmasters show their number one concern is the level of their pay.

He told the inquiry: “I assume they [the government] take it as given as that being the top priority of the job.”

Mr Hollinrake’s letter lists the government’s first priority as “effective financial management and performance, including management of legal costs, to ensure medium term viability”.

He goes on to list the requirement to “maintain stringent cost control”.

When pushed on whether this is in conflict with any desire to increase remuneration of subposters, Mr Read said: “Potentially”.

The inquiry had previously heard that Mr Read had received over £750,000 a year for his CEO role and had been pushing to increase this to over £1.1m.

The inquiry has now taken a break over lunch. It will be back at 1:45pm for the second half of Mr Read’s evidence.

Chief executive Nick Read has told the inquiry that there is a feeling within the Post Office that former leaders “appear not to have been held to account”.

In apparent reference to former Post Office CEO Paula Vennells, he told the inquiry: “I think one of the themes that has emerged amongst colleagues still working within the organisation is that many of the leaders of the organisation - historically - who have appeared before this inquiry, appear not to have been held to account.

“If indeed they were aware of and understood other issues associated with Horizon in the past, I think there was very definitely a view amongst the bigger community that people were going about doing their job and we needed to be sensitive to the fact that people were going about doing their job to the best of their ability and with what they knew.”

Former business minister Kevin Hollinrake told Post Office CEO Nick Read that he wanted former chairman Henry Staunton to “be discredited”, according to a note of a meeting shown to the Horizon IT inquiry.

A note of a meeting between Mr Hollinrake and Mr Read dated 29th February 2024 was shown to the inquiry.

Mr Hollinrake, who was at the time a minister in the Tory government, was recorded as saying about Mr Staunton: “I think the select committee were weak with him, apart from Anthony Higginbottom. Sorry it was so messy. Keen to support in anyway we can, to make sure we get passed this. Hope he’s discredited. Anything else you think we need to do to make it easier?”

Mr Read confirmed to the inquiry that this was referring to the former chairman Henry Staunton.

Mr Staunton and Mr Read have often been at odds with each other in their evidence both to the business select committee and to the Post Office inquiry.

Mr Staunton was sacked by Business secretary Kemi Badenoch in January 2024. He appeared before MPs on 27th Febuary 2024, in which he claimed he was the victim of a smear campaign.

He also claimed that a bullying inquiry was ongoing into Nick Read. Mr Read has now said that an inquiry into any misconduct has exonerated him.

Mr Read is being quizzed about why Retail Engagement Director Tracy Marshall is a corporate witness for the Post Office, when she was previously implicated in problems with remote access.

An email emerged during the inquiry showing Ms Marshall had knowledge that postmasters’ accounts could be access remotely back in 2011, at the heart of the Horizon scandal.

Despite this Ms Marshall is a corporate witness on behalf of the Post Office to the inquiry.

Mr Read was asked whether he thought there was a conflict when “she is on one view implicated in the remote access issue, and yet she is a corporate witness for the Post Office.”

Mr Read explained: “ The issue emerged in the Summer. This was the last time the inquiry was sitting, and these emails emerged.

“We invited Tracy to step back from her day to day role. She was very clear that she was unaware of remote access being actioned. She understood it was possible but not aware it was actioned in any way.”

Mr Read continued: “A line manager suggested to her that she take a step back from postmaster facing activity, so that confidence could be retained.”

Ms Marshall is due to give evidence to the Post Office inquiry in coming weeks.

Nick Read has said he was frustrated that the Post Office couldn’t get to the bottom of where money paid by wrong subpostmasters to the company had gone.

Many wrong subpostmasters dipped into their own savings to make up shortfalls that showed up on their accounts due to dodgy Horizon data.

Mr Read spoke about how the Post Office had employed a number of forensic accountants to get to the bottom of where this money had gone.

He told the inquiry: “It seemed peculiar to me that we were unable to get a fix, even with caveats as to its level of accuracy, so that we could at least in part give people some confidence that we understood the size and scale of this issue or got to the bottom of it.”

The inquiry is examining the new contract for postmasters, which details the role of the Post Office’s investigations team.

The contract explains that the Post Office’s investigations team can interview postmasters under caution if they suspect a crime has been committed.

The contract explains: “The main job of the Investigation Division is to investigate, or help the police to investigate, criminal offences against the Post Office, British Telecommunications and the Department of National Savings, the Investigation Division does NOT enquire into matters where crime is not suspected.”

It goes on: “Although they comprise the minority of all Investigation Division crime investigations, there are many cases where the possible (or even direct suspicion) arises that persons employed on Post Office business may be involved. Officers of the Investigation Division conduct interviews about these suspected offences and they are required to observe the same code of conduct when obtaining evidence as that laid down for Police Officers.

“This provides for an officer investigating a criminal offence to question any person, whether suspected or not, from whom he thinks that useful information may be obtained. As soon as the Investigation Division officer has evidence which would afford reasonable ground for suspecting that a person has committed an offence, he must caution him before asking any questions about that offence.”

Chief executive Nick Read has admitted that the contract is “heavy-handed”, telling the inquiry: “I think the wording is heavy handed in terms of the way in which it is described. I don’t think it reflects the way that we conduct investigations.

“It’s not consistent with the way that the A&CI [investigations] team operate. It’s not consistent with the way that we support postmasters when they have issues.”

He admitted that the wording of the contract should be changed, explaining: “The language and the way that it is constructed is not helpful and not reflective of the way that the Post Office is operating today.”

Nick Read has said that he was “surprised” at discovering in June that 22 police forces were carrying out investigations involving Post Offices.

Mr Read told the inquiry: “I was surprised at the number of law enforcement agencies that were engaging with us, and the scale of the 22 and the 33.

“It caused pause for thought, primarily because the team in A&CI [investigations team] is massively stretched.”

The Post Office’s internal investigations team were covering “both internal investigations of senior colleagues, assurance work on loss recovery and discrepancies, and cooperation with law enforcement.”

Mr Read said: “This felt like considerably large amounts of work and we wanted to make sure that it was being administered properly”.

Mr Read said he did not know what work had been done recently to make sure that the Horizon data that was being provided to the police was not faulty.

IT company Fujistu had previously raised concerns with Mr Read that the Horizon data might not be reliable even in 2024. The company’s CEO was raising concerns about the Post Office’s ongoing requests for Fujistu to cooperate with law enforcement investigations.

22 police forces were carrying out investigations involving Post Offices across 33 police investigations in June this year, the inquiry has heard.

Notes from a meeting on the 26th June, written by the Post Office’s director of assurance and complex investigations John Bartlett, were shown to the inquiry.

The paper was titled ‘The passing of material to law enforcement’. It explained: “There are currently 22 police forces requesting or awaiting Horizon-based evidence across 33 police investigations. To provide this information A&CI [investigations team] will need to draw on Horizon data and often provide transaction analysis. The current approach is that Board will need to be approached in the majority of these matters as and when the data is able to be shared.”

The paper was asking to speed up the process of providing information to the police by bypassing the Board’s approval. It said that there were no longer any faults with the Horizon system data at this time.

The paper read: “Proactively and reactively supplied information will have differing profiles due to historic technology issues. The version of Horizon that was considered at fault in the Horizon IT scandal was replaced in October 2019. In 2020, known errors and bugs identified in the Horizon issues Judgement formed part of a review by KPMG of the system and found to not be prevalent in the system.”

Mr Read told the inquiry: “There was some surprise at the scale of the requests. I think we were of the opinion that it was in the ones and twos in terms of requests for this information. Therefore a bigger understanding of the picture was requested.”