Business and Trade Committee
Oral evidence: Post Office and Horizon – Compensation: follow-up, HC 477
Tuesday 27 February 2024
Ordered by the House of Commons to be published on 27 February 2024.
Members present: Liam Byrne (Chair); Douglas Chapman; Jonathan Gullis; Antony Higginbotham; Ian Lavery; Julie Marson; Andy McDonald; Charlotte Nichols; Mark Pawsey.
Questions 452-604
Witnesses
IV: Nick Read, CEO, Post Office; Ben Tidswell, Chair of the Remediation Committee, Post Office; Simon Recaldin, Remediation Matters Director, Post Office; Simon Oldnall, Horizon and GLO IT Director, Post Office.
Witnesses: Nick Read, Ben Tidswell, Simon Recaldin and Simon Oldnall.
Chair: Welcome to this panel of the Business and Trade Committee inquiry into how we accelerate redress in a way that is faster and fairer for the victims of the biggest miscarriage of justice in British legal history.
As the witnesses have been informed in advance, we have a procedure in Parliament for witnesses to take the oath. We do not use it in ordinary circumstances, but given the context of this oral evidence session, we have decided that we will require the witnesses on this panel to take the oath today. I remind witnesses that they are obliged to tell the whole truth to the Committee, and that any failure to do so will be considered a contempt of Parliament and a potential perjury. Will the Clerk of the Committee please administer the oath?
Nick Read: I swear by almighty God that the evidence I shall give before this Committee shall be the truth, the whole truth and nothing but the truth, so help me God.
Simon Recaldin: I do solemnly, sincerely and truly declare and affirm that the evidence I shall give before this Committee shall be the truth, the whole truth and nothing but the truth.
Simon Oldnall: I swear by almighty God that the evidence I shall give before this Committee shall be the truth, the whole truth and nothing but the truth, so help me God.
Ben Tidswell: I swear by almighty God that the evidence I shall give before this Committee shall be the truth, the whole truth and nothing but the truth, so help me God.
Q452 Chair: Thank you very much indeed. Mr Read, have you been dragging your feet in paying redress to the victims of this injustice?
Nick Read: No, I don’t think we have. I think we have had some success in terms of the speed at which we have paid, particularly with the HSS. I have heard many comments today about the HSS, but from our perspective, certainly, we believe that we have completed the first tranche, which was the 2,417 of the original applicants to the HSS. We have made offers to them all, and I think in the region of 62% have already been settled. On the OC, I would agree that it is slower than we would want it to be—no question about that. I will ask Mr Recaldin to bring a bit more colour to that, but it is certainly slower than we would hope.
Q453 Chair: In a moment, I think. The former chairman of the Post Office has made allegations in public that he received either direct instructions or by a nod and a wink orders, in effect, to try and slow the process down so that “the Tories could limp into the next election”, minimising financial liabilities. Do you believe that your chairman did receive such a message?
Nick Read: I don’t believe that to be the case. I can categorically say that nobody in my team or I have received any instruction from the Government about slowing down compensation.
Q454 Chair: Do you believe the former chairman is lying?
Nick Read: Well, I don’t believe it’s true. I do not believe that that is the case. I think he has misinterpreted or perhaps misunderstood the conversation that he had with Ms Munby. If I look at the data that I provided to him before he had that briefing, at no stage was compensation mentioned. It was absolutely a conversation about the long-term future and funding of the Post Office. I do not believe that it had anything to do with compensation. He might have been mistaken.
Q455 Chair: Is it possible that the former chairman came away from that conversation, as you just said, having misinterpreted what was said to him?
Nick Read: I don’t believe it is. We have had no conversations at all about the mixing of funding between the compensation schemes and the overall funding of the Post Office per se. I don’t think that that in any way comes through in his notes.
Q456 Chair: I have the email from Mr Staunton to you dated 6 January 2023. He reported to you that Ms Munby had said to him there was no appetite to “rip off the band-aid… Now was not the time for dealing with long term issues”, and the Post Office needed a plan to “hobble” up to the election. Mr Staunton goes on to say, “I said the funding issues revolved around poor decisions made many years ago with Horizon and related legal issues.” So let me ask again: is it possible that the former chairman misinterpreted what the permanent secretary told him?
Nick Read: It is possible. You will have to ask Mr Staunton whether he misinterpreted. I don’t believe that to be the case. We have been very consistent that compensation, as I said, was not mentioned in the briefing that he received before he went to see Ms Munby. In the notes that he has suggested, there is no mention of compensation, so I do not believe that to be the case at all.
Q457 Chair: Did the former chairman relay anything else either verbally or in any other way to you following that conversation?
Nick Read: Not that I recall.
Q458 Chair: Not that you recall. Do you think there may be?
Nick Read: No, I don’t. I understand where you are going with this in terms of—
Chair: I am looking for the whole truth.
Nick Read: I completely understand that. I don’t believe—I have been quite categoric—that that is the case.
Q459 Chair: So you believe that this email that Mr Staunton sent to you is the only communication, the only read-out, that you have from Mr Staunton about that conversation.
Nick Read: I believe that is the case, yes.
Q460 Chair: In the Secretary of State’s letter to me late last week, she points out that she took four months to issue a priorities letter to Mr Staunton that was dated 29 June 2023. In that letter, the Secretary of State says that she told Mr Staunton to “inject pace” into delivering compensation for overturned convictions. Have you had any other instructions to “inject pace” into the delivery of the other redress schemes?
Nick Read: Instructions? I think we are all acutely conscious that the schemes are not as quick as they need to be and the balance between fairness, redress and managing public money and the level of bureaucracy is not where we want it to be.
Q461 Chair: How did this letter that was sent to the chairman with these instructions show up on your desk? How was that translated into targets for you?
Nick Read: The chairman’s letter fulfils a very specific purpose. We have a quarterly shareholder meeting, which is attended by colleagues from the Department and from UKGI, as well as the chairman and myself, and on a quarterly basis we review. The start point for that conversation is the priorities letter that the chairman receives on a yearly basis, so it is part of that process.
Q462 Chair: So there was a board-level discussion about this priorities letter.
Nick Read: As I say, the letter itself is discussed on a quarterly basis. That would have been shared, I am sure—I cannot specifically say—with his board colleagues. I am sure he would have forwarded it to his board colleagues. He certainly sent a copy to me.
Q463 Chair: So there should be four discussions about this a year.
Nick Read: Four discussions a year with the shareholder, UKGI, the management team and myself, and he and I would attend that shareholder meeting.
Q464 Chair: The striking thing about this letter is what it does not say. It does not say that the Post Office is to “inject pace” into any of the redress schemes other than the scheme for overturned convictions. I am trying to understand where the written paper trail is from the Secretary of State to a Minister to the board of the Post Office that basically says, “Speed up.”
Nick Read: I do not think it is a paper trail per se, but those are conversations that obviously I have on a quarterly basis at the shareholder meeting. They will be conversations that I have on a regular basis with the Minister. I meet him on a monthly basis, and we talk about the issues that are going on in the Post Office. The speeding up of compensation is a conversation that we would have on a monthly basis.
Q465 Chair: I cannot see in the board minutes that you have released to us any discussion about a ministerial instruction to speed up the pace in redress schemes, so I come back to the question: have you had written instructions from the Department to speed up the processing of redress schemes?
Nick Read: As I said at the very start, I do not think I have written instruction, but these are conversations that clearly we would have with the Department on a regular basis.
Q466 Chair: I think the Committee is pretty surprised that you have not had written instructions to speed up the resolution of redress in one of the biggest miscarriages of justice in British history.
Nick Read: I think it is an absolute given that that is what we are trying to do. We are all acutely conscious—I have said it here in this room to the Select Committee.
Q467 Chair: You say you are acutely conscious that it is what we are trying to do, but I am looking at the budget for overall redress of just over £1 billion, which you set out in your letter to me. Only 20% of that money has been paid out; 80% of the money has not been paid out. I am trying to understand how acutely conscious you are of the need to get the money out the door.
Nick Read: Very, is the short answer to that.
Q468 Chair: But you have no written ministerial instructions to that effect.
Nick Read: Correct.
Q469 Chair: Have you had a conversation with the Secretary of State about the need to accelerate redress schemes?
Nick Read: No, I have not.
Q470 Chair: Have you had a conversation with the Minister about the need?
Nick Read: Yes. The Minister and I meet on a monthly basis, and we discuss this as part of our agenda.
Q471 Chair: If we are looking for a paper trail of instructions from the Department to you about speeding up the process, would we be able to find that?
Nick Read: I do not think that it is going to be that easy to articulate very specifically where that is.
Chair: So it is unclear.
Nick Read: It is unlikely.
Q472 Chair: What about the UKGI rep on your board? Has the UKGI rep on your board ever underlined the importance of speeding up the redress system?
Nick Read: She is very clear that the primary objective of the organisation must be to address the underlying issues of compensation, as well as supporting the inquiry and driving cultural and operational change. I think we are all consistently clear that those are the core drivers of the business.
Q473 Chair: But that is different from an explicit instruction and explicit pressure on you to speed up what you are doing to pay out redress. We all understand that “addressing the underlying issues” is management speak. What I am talking about is an explicit instruction—
Nick Read: I have not had an explicit instruction.
Q474 Chair: Right. So the Secretary of State has not had an explicit conversation with you, nor has the UKGI rep on the board, but the Minister—thank God—has.
Nick Read: Yes.
Q475 Chair: Are you happy with the pace of the redress schemes to date?
Nick Read: No, I am not. I have said that on many occasions when I have been here, which is that we are very clear that the postmasters who have been in this appalling scandal need closure quickly. I am also very clear that to modernise and move the Post Office forward, we need to ensure that redress is completed. I have said in this forum as well that we cannot do that until such time as compensation and redress have been settled for those involved in the scandal.
Q476 Chair: Are there any management bonuses tied to the speed of redress?
Nick Read: No, there are not.
Q477 Chair: Are there any incentives on you?
Nick Read: No, there are not.
Q478 Chair: So there is no written instruction to deliver, no bonuses and no incentives—just a general urging of good will from the Minister, by the sound of it.
Nick Read: Correct.
Q479 Chair: He nodded, for the record.
We have heard today from the lawyers who have given us evidence that it may take one to two years to complete the process of providing redress. Do you share that assessment of the timetable?
Nick Read: I might ask Mr Recaldin to be specific about that. I think that he might have a view on how long it is going to take. In fact, may I ask that Mr Recaldin speaks to that?
Chair indicated assent.
Simon Recaldin: Thank you. I want to start, if I may, by saying that I am very conscious that I will probably quote a lot of numbers. This is my job; my job in Post Office is to deliver compensation as speedily as possible—
Chair: Believe me, as a former Chief Secretary to the Treasury, I like numbers.
Simon Recaldin: I am grateful. I am, however, much more conscious that behind every number I quote is a person, and that person has suffered significantly, not only from the original scandal but in terms of the journey that we have made them go through to receive their compensation, and the way that that journey has been managed. I want to apologise for that. That is my opening statement, if I may. This journey to get compensation is not good, and it is too bureaucratic. We are listening because it needs to be faster—and it will be.
Q480 Chair: Thank you. And you are going to tell us what your estimate is of how long it is going to take to complete the process of providing redress.
Simon Recaldin: I would also like to, if I may—it is part of the answer to the question—talk about Mr Creswell’s evidence around the GLO disclosure, because I think he might be doing himself a bit of a disservice, and therefore this might be better news for the Committee, because—
Q481 Chair: Why don’t you start with your estimate of how long it is going to take to provide redress, and then we’ll unpack it?
Simon Recaldin: —because I think that this will improve that evidence. But in terms of my estimate, I have two schemes. The closure date of the HSS was potentially looming until the excellent ITV series, after which we have had more than 1,000 new claims in—which I think is fantastic, by the way, because my job is to pay out fair compensation. So for you to now ask me to put a timescale on that is going to be challenging, because I had already dealt with 2,500 claims and I had made the offers for 2,500 claims, and we were going through the process of resolving any disputes in that. Therefore I had a trajectory to close all those down towards the end of March next year. Now, with another 1,000 cases in there, I have to reassess that plan—I am sure you understand that—in terms of how I deliver those.
In terms of late applications in the HSS, which were received by the end of September, I will deliver 95% of those offers by the end of March next year, but then I have the new claims coming in. I think it is very reasonable and sensible for bodies such as this to challenge me to put a timescale on those, and I believe that we will put in a target on how quickly we will turn those around. I see no reason why we cannot replicate what they have in the GLO scheme on this.
Q482 Chair: So the initial timeframe for the HSS was March next year, but now it is going to take a bit longer because you have just got a load of new claims?
Simon Recaldin: Correct.
Q483 Chair: Okay. What about the GLO scheme?
Simon Recaldin: In the GLO scheme, my only responsibility is disclosure.
Q484 Chair: Okay, but what is your guess? I mean, we have just we have just heard that—
Simon Recaldin: I’m not going to guess.
Q485 Chair: Okay, let me put the question this way: we have just heard that 45% of the disclosures have not been made. When will those disclosures be made?
Simon Recaldin: That is what I tried to start to answer, Chairman. The knock-on effect of the excellent idea of putting £75,000 as a minimum payment in the GLO scheme is that less disclosure has to be made, so I can now take some of those out of my work stack of disclosure, which makes that 55% more. What we are finding—I am happy to share this with the Select Committee when we have actually done the numbers when I get back to the office—
Q486 Chair: You haven’t brought those numbers here?
Simon Recaldin: Well, because 55% was last week and now Freeths and DBT have supplied us, “In your work stack, Mr Recaldin, we don’t need disclosure on these cases,” so I can now discount those, and I believe now that that 55% is actually nearer 64%—
Chair: 64%?
Simon Recaldin: Yes, 64%, which will hopefully help in terms of the Minister’s ambition to deliver these offers out by 7 August.
Q487 Chair: Okay. For the remaining cases, is there any view about how long it will take to issue disclosures?
Simon Recaldin: Because we have now reduced the numbers of disclosures required, my original plan that was set for July—to complete disclosure in July—will now move to the left. I do not know by how long because I am redoing that plan as we speak—it is live—because we have only just been told how many of that cohort will be taken out by the excellent idea about the £75,000.
Q488 Chair: Are we likely to have the GLO scheme concluded by early August?
Simon Recaldin: In terms of disclosure?
Chair: No, in terms of all done and dusted.
Simon Recaldin: You will have to ask the Government and Freeths.
Chair: I did, and they were unclear.
Simon Recaldin: I am responsible for disclosure. I will absolutely provide the disclosure in a timely fashion, as I have laid out.
Q489 Mark Pawsey: Mr Read, you appeared before the Committee on 20 June and were challenged by the Chairman about the overpayment of bonuses to board members. Can we take it that that matter has been entirely dealt with now?
Nick Read: It has.
Q490 Mark Pawsey: In your evidence you mentioned on many occasions that the Post Office is unable to move on “until such time as we have addressed the issues of the past”.
Nick Read: Correct.
Q491 Mark Pawsey: The Chairman has challenged you about written instructions from Ministers or from the Department, but as a management team you have your own imperative to get this business sorted, yet we hear that there are still two years to do that. Why is it taking so long?
Nick Read: It is immensely frustrating. I agree with you. It is stressful and distressing for the victims as well. Clearly, it is extraordinarily complex. Mr Recaldin has just pointed out that we have had 3,560 claimants come forward as applicants, and we have had an additional tranche that have come forward as a consequence of the drama. It is difficult; there is no question about that. There are multiple schemes, and there is no question that that is complicated. I am acutely aware that there is an issue of trust associated with the Post Office. We have to inject into the schemes some independence to give people confidence that this process is independent and independently managed, so that this level of trust can in some way be mitigated. That is the reason it is taking so long.
Q492 Mark Pawsey: Eight months have passed since you gave evidence to the Committee. As far as we can see, not a great deal has happened apart from a TV documentary.
Nick Read: I would challenge that. We have finished the HSS, and we have started the OC scheme. There was the Secretary of State’s introduction in the autumn of the £600,000 option for overturned convictions as well as today. There is movement, so I would challenge your view that nothing has happened since then.
Q493 Mark Pawsey: Addressing the issues of the past is also about the relationship between the Post Office and postmasters—
Nick Read: Existing postmasters?
Mark Pawsey: Existing and former. You were in the room when we heard evidence that there remains what I would describe as a toxic culture, institutional mistrust, and a complete lack of trust between the organisation and postmasters. What are you doing to address that?
Nick Read: I was disappointed to hear that, no question about that. I would probably point to a datapoint. We do an annual survey in the autumn with our postmasters, and the scores on support and rebuilding the relationship have improved markedly as a consequence of the work we have been doing in the organisation. I can give some examples of the type of activity we have done. We have introduced new field teams to support postmasters. We have introduced new schemes to support existing postmasters who are going through difficulties in their branches. We have new engagement and communication processes with our postmasters. We have two postmasters on the board, as you know. We have a new postmaster director. In terms of the culture in my central teams, every senior leader has an area that they go out to on a quarterly basis. We have the “A week in the life of a postmaster” training, which every employee must go through to understand. We are about to introduce more training around the inquiry and compensation. We are working hard to change perceptions internally and certainly the perceptions that have been expressed in this room today. We want to try to change those perceptions.
Q494 Mark Pawsey: Are you satisfied that the postmasters who have suffered harm are going to be appropriately compensated for that harm? We heard some pretty harrowing experiences just now. Are you confident that that will be dealt with?
Nick Read: I believe it will be. We are very clear—certainly within the administration of the schemes, which Mr Recaldin looks after and Mr Tidswell oversees—that we need to inject independence to give people the trust and belief that they are getting a fair deal. The reality is always that people are going to be frustrated, and that is something we are deeply concerned about. Therefore, we are continuing to try to lower the evidential bar so that people can and will put their claims in and ensure they get the right compensation.
Q495 Mark Pawsey: One of the things that we heard from the former postmasters is that many of them simply want closure. They want rid of this horrible period of their lives. Do you accept that many have accepted less than they are entitled to in order to make this problem go away?
Nick Read: It must be possible. I agree with you, Mr Pawsey. I have met with many of the victims. Myself and Mr Recaldin do this regularly and have done, and it is very harrowing. We understand the trauma that people are experiencing. We do understand the difficulties that many, many of our victims have gone through, and that is very challenging.
Q496 Mark Pawsey: And how might those people be more accurately compensated, Mr Read—those who have accepted less than they are entitled to?
Nick Read: We are very keen, and have had this conversation with Government, around an appeals process. We recognise that, certainly when we initiated the scheme, at the very start, there may well have been bureaucratic delays and problems with the scheme, so we do want to have an appeals process. We do think that is the right way to go forward.
Q497 Chair: I am just looking at some of the statistics. Please correct me if I have got these wrong. In your letter to me of 5 February, you said the budget for the HSS is £233 million. The public statistic is that about £98 million has been paid out. That is only just over 40% of the budget.
Nick Read: This is for the historical shortfall scheme.
Chair: Yes.
Nick Read: Yes. Just about £100 million has been out.
Q498 Chair: On the GLO scheme, I don’t think we know what the budget is. It is certainly not disclosed. About £127 million has been paid out. On the overturned convictions scheme, £35 million has been paid out. That is 4% of the £780-million budget.
If we put these numbers together and compare it with the £1.2 billion that you wrote to me about earlier in the year, the best-case scenario is that perhaps 40% of the budget for redress has been paid out.
Nick Read: Correct.
Chair: You can’t be satisfied with that level.
Nick Read: I’m not. No, I’m not satisfied with that. The core driver is the number of overturned convictions victims who have not come forward—who we anticipated would come forward but have not come forward. That is at the root of the stats that you have just described.
Q499 Chair: What is the position on the pre-Horizon cases—the Capture cases? Are you anticipating further claims to come from problems with the Capture system?
Nick Read: I will let Mr Recaldin go into the detail of this. We are very thankful for Kevan Jones coming forward with his eight particular victims of the Capture system. We have obviously spent the last five weeks working hard on it.
Mr Recaldin will give you some detail and some numbers behind what we think we have discovered that occurred between 1992 and the launch of the Horizon system, and the number of individuals who may well have been involved in Capture. It is still a work in progress, but we will give you a very clear breakdown of those numbers. It is in excess of 1,000.
Simon Recaldin: I concur with Nick Read’s comments about Kevan Jones. I put on record our thanks—my thanks—for bringing this matter to our attention.
There are eight cases that have been brought to our attention, which have alleged issues with this Capture system. More concerning is that there is evidence from the individuals that four of those eight actually included convictions. That helps us in our investigations because we can go to those courts and try to find evidence around it. This is stuff that happened 30 years ago, and the records are very, very, very thin. So we are doing that. We have mandated our criminal lawyers to go and find some evidence and some disclosure on these cases.
We know from our records that the Capture system was a floppy disk, effectively. It wasn’t networked. It wasn’t connected or anything. It was a glorified spreadsheet that helped postmasters settle every week, and it did that job. We also recognise that there were issues with it, because we have seen correspondence. Again, thank you to Kevan Jones MP, whom we are grateful to for the supply of that.
There is evidence that the Post Office wrote out to postmasters who used it, to say, “By the way, we got that coding a bit wrong, and therefore there might be an issue; please reboot” and so on. There were errors in the system. We recognise that.
Q500 Chair: So there may be further cases that emerge.
Simon Recaldin: There may be. We are in an investigatory stage. It is important that we know the facts around this. We are well into that. We will conclude. We haven’t concluded yet whether there is any detriment, but if any detriment has occurred as a result of Capture, then obviously we need to do the right thing.
Q501 Chair: And you are happy to update the Committee with your discoveries?
Simon Recaldin: Absolutely.
Q502 Chair: Okay, thank you.
When people apply to the Horizon shortfall scheme, they obviously do not know what information you know, so in a sense they are applying blindfold. Do you think that is a problem?
Simon Recaldin: Our evidential bar is deliberately very low on this. That means that if the postmaster says something happened, it happened. Do we look for evidence? Yes, we do look for evidence. But if we cannot find evidence, we take their statement as the evidence. That is pretty clear in terms of our principles.
Q503 Chair: You ask people to fill in a 14-page form, which I have read, and which is very complicated. Have you read that form?
Simon Recaldin: Yes.
Q504 Chair: Do you think it is simple enough?
Simon Recaldin: No.
Q505 Chair: What are you planning to do to simplify it?
Simon Recaldin: This is very much part of the proposal we have pulled together. If I may, there are a number of issues with this. First is the clumsiness, the bureaucracy and the legalese in that application form, in particular at the time it was issued. If you think about the age profile of the people it was issued to, there are some challenges around that. People had to print things off, sign things, re-scan them and send them back. That process can and should be challenged. Mr Hudgell already put it very well: legal representation is only offered at the point of offer, rather than to help people to fill in that form—they might think, “What does that mean, ‘in terms of fair compensation’? I don’t know what that means.” Sir Wyn—the inquiry—has picked that up as well. There is also potentially an issue around consequential loss guidance after the issuance of the scheme. So there are a number of things it is right to look at and challenge. At the end of the original 2,417 cohort, it is right to assure what you have done, and that is exactly what Post Office has done.
Q506 Chair: That is quite a self-critique. When did these revelations dawn on you?
Simon Recaldin: Because we are listening. We are listening to people like you. We are listening to the advisory board. We are listening to the Minister. We are listening to the postmasters. Therefore, based on those issues, we are recommending that there should be an appeals process around this, and the advisory board is supportive of that.
Q507 Chair: I am holding an example of an offer letter. There is quite a simple table on page 2 that sets out the different heads of loss. If somebody is presented with these numbers, I do not think there is any real explanation of how they were arrived at. Do you think that is fair?
Simon Recaldin: If they receive an offer letter, they are absolutely entitled to appropriate legal advice. By the way, it is not limited to £1,200; it is reasonable legal fees.
Q508 Chair: What is the cap on reasonable legal fees?
Simon Recaldin: There isn’t—whatever is reasonable.
Q509 Chair: Is it uncapped?
Simon Recaldin: It is not £1,200. It was £1,200, and because we are listening, that changed.
Q510 Chair: When did that change?
Simon Recaldin: Forgive me; I can’t recall. I am happy to provide that information, but it has changed.
Q511 Chair: Was it this year? Last year?
Simon Recaldin: It is certainly since I have been at the Post Office, which is since 2022.
Q512 Andy McDonald: Let’s get this right. We have had evidence that it was £1,200—that those were the fees. We need to have clarity here. So it was £1,200?
Simon Recaldin: It was £1,200, and we have made it very clear that we have changed it to reasonable fees. We have put that on the website and communicated it.
Q513 Andy McDonald: You have introduced the lower bar as a concept. We have heard evidence from witness after witness saying that it is anything other than a low bar. One of our postmasters allegedly used money to pay off a mortgage that the Post Office had invented. How is that a low bar? We heard from Dr Hudgell that there are self-evident issues. If this has happened to you, your reputation is down the toilet. You don’t need to have that bottomed out—you know that has happened. How is that consistent with you telling this Committee that there is a low bar?
Simon Recaldin: I am very sorry to hear that feedback. We are listening. This is not defensive—please do not take this as defensive; it is not meant to be—but I would say that it is a process. The process might be wrong, but all these decisions in HSS have been made by an independent panel. So on the point around causation of bankruptcy, that is not a Post Office decision. That decision has been made by an independent panel of KCs looking at what they have been presented. I encourage Mr Hudgell to bring whatever he can, including witness statements, for the panel to reconsider that decision. This is an independent panel making the call.
Q514 Chair: Would you mind, at your convenience, letting the Committee know when the cap on legal aid was taken off?
Simon Recaldin: Of course.
Q515 Chair: I have not heard any sub-postmasters who are aware of it. I have heard sub-postmasters telling me that they are fighting against Herbert Smith Freehills, one of the biggest law firms in the country, with such inequality of arms that they are unlikely to win. If we look at claims that were settled between 2020 and 2022, I think at that stage it was not clear that people could take 80% of the offer and continue to press their case.
Simon Recaldin: That is correct, Chair.
Chair: Does that mean that claims settled between 2020 and 2022 need to be re-examined?
Simon Recaldin: If they are settled, then—
Q516 Chair: They settled, often because they could not afford to fight on. Since then, they have been able to take 80% of the claim in order to put food on the table—
Simon Recaldin: I see. That is another very good reason why there should be an appeals process—correct.
Chair: Right, so we may need to re-look at these claims.
Simon Recaldin: If they have settled—some of them with legal advisers, but most of them without—and they feel they have not had a fair outcome, our recommendation, which the advisory board has made to the Minister and which the Minister recognised in the House the other day, is absolutely to have an appeals process.
Q517 Chair: At the moment there is no standard tariff for calculating things such as reputational damage or distress and inconvenience. That makes it very difficult for sub-postmasters to put a claim together. How are we going to resolve that? Are you able to publish a standard tariff, or a guide to how people can construct the right number to apply for?
Simon Recaldin: We rely on expertise, because this is principle-based; it is all built on principles. The people who make those calls are people who make those decisions all the time. They are eminent KCs on the independent panel.
Q518 Chair: But the people applying are not eminent KCs, and therefore they need a standard tariff to understand what they should be applying for.
Simon Recaldin: That is fine, and I understand that. What we do not want is a tariff to be restrictive in any way.
Q519 Chair: No, but a tariff none the less would help people to get their claim numbers in the right place, would it not?
Simon Recaldin: Yes, it would.
Chair: If it would, will you undertake to produce one?
Simon Recaldin: I can.
Q520 Chair: Thank you very much indeed. Have you been told at any stage, by anybody, to try to bear down on the value of claims?
Simon Recaldin: Never.
Q521 Jonathan Gullis: Mr Read, do you believe you have changed the culture of the Post Office since taking on the role?
Nick Read: I think we have made a lot of progress, and there is plenty still to do.
Q522 Jonathan Gullis: You will have heard from the witnesses earlier that the Post Office is still the Post Office—that was not said in a flattering tone.
Nick Read: No, it wasn’t.
Q523 Jonathan Gullis: The Chair, in the House yesterday, quoted from board minutes from March 2023 that said, “board members lamented that the board was tired and constantly distracted by historical issues and short-term crises.” That does not really sound as though the board has learned the lessons of the past, does it?
Nick Read: I think the specific point that was being referenced in that minute was that the board were keen to get the right balance between the strategic direction of the business and compensation. We had 64 board meetings in 2022, which is why perhaps the comment around tiredness might have come in—
Q524 Jonathan Gullis: With the greatest respect, Mr Read, 64 board meetings does not make up for people who spent seven months in prison, or years where—
Nick Read: Of course.
Jonathan Gullis: One of our previous witnesses—Mr Downey, I think, if I got his surname correctly—literally had to flee the country to protect his family and himself. He then came back to seek a claim, only to face some bogus, as Mr McDonald has pointed out, £100,000 mortgage payment. Someone must have got that figure from somewhere, so if the Post Office is investigating someone who is now putting in a claim, that is a question I would have. If so, where have this figure and idea come from? It seems either mythical and made-up, or as though someone is trying to dig up dirt on people who have already been victims of this process. You say you are tired. I don’t care if it is 64 board meetings—I suspect it should have been 364 board meetings in a year; maybe give yourself Christmas day off as a treat—to come up with answers for these people who have suffered more than they should have and are still waiting, as the Chair has pointed out, for some form of redress. That, by the way, is what we should all be calling it from now on, and no longer compensation, as Mr Bates rightly pointed out. Henry Staunton, the former Post Office chair, said that the management culture at the Post Office is—these are his words—a “mess”, “toxic” and “mistrustful” of sub-postmasters. Were his remarks accurate?
Nick Read: No, I don’t believe they are.
Q525 Jonathan Gullis: Why do you disagree with him on this point?
Nick Read: Because I think we have made a lot of progress, certainly since 2019, to try and change the culture of the organisation. Don’t get me wrong, this is a scandal that has gone on for 25 years. There was an enormous amount to change, and it won’t be changed overnight, but we have made progress. Postmasters have told us that we have made progress—existing postmasters, in the network today—and I think we have made progress, as can be seen from the performance of the network and our postmasters during the crisis of covid, and indeed as we have come out of that. There is no question about the Post Office and its role in the infrastructure of our country—no question at all.
Q526 Jonathan Gullis: On mistrust, you were advised by an external legal adviser, Nick Vamos, that the vast majority of convicted people are, among other things, “guilty as charged” and were “safely convicted.” Why did he write this letter to you?
Nick Read: We did a number of things 18 months ago, and it is important that I set the record straight here. Eighteen months ago, we were struggling to understand why postmasters weren’t coming forward. We had a trace system; we had involved the CCRC; we had written out to postmasters. We had expressed a real desire for people to come forward, and 18 months ago we asked Peters & Peters, two eminent KCs, to do a desktop exercise to ask whether there was any way we could proactively and pre-emptively go out to victims and say, “Do you know what? We’re not going to stand in your way. We’re going to ensure that your conviction is overturned. We do not need to stand in the way.”
Q527 Jonathan Gullis: I think you will appreciate, Mr Read, that the reason people mistrust the Post Office is because they have been privately convicted. They have had, obviously, spurious claims made against them about where money has gone. They themselves have funded the shortfalls in many cases, leading them to bankruptcy, and then the Post Office themselves admitted to losing the money, as you confessed the last time you were before us. Since 2005, we do not know where that money has gone—it could well have gone towards bonuses of board executives.
Then, on top of that, when people are having to spend years fighting to get convictions overturned and, as the Chair has pointed out, years to process the paperwork and submit some of these forms, I don’t blame people for not coming forward. Then I read letters like this, where Nick Vamos is writing to you saying, “Guilty as charged,” and then your letter to the Secretary of State for Justice, the Lord Chancellor Alex Chalk, where you draw attention to what you call a “significant” number of prosecutions, which “raises acute political, judicial, and communications challenges…against…by-passing the normal appeals process.” Reading that letter, it feels like you are lobbying the Government—I am happy for you to correct the record if I am wrong—to not go through with this legislation in order to get rid of convictions.
Nick Read: Not at all.
Jonathan Gullis: Because I can’t read that letter any other way. I am not a legal expert—I will be interested to hear from Mr McDonald, because I am sure he has an opinion on it as well—but if that is not your intention, as I am sure you are about to lay out, why on earth would you send this letter to the Lord Chancellor?
Nick Read: I have an obligation to ensure that, when decisions are being made by the Government, they are being made with the full information, and that is the full information that we have, the evidence that we have, and the work that we have done. Mr Vamos was very clear. I am not a lawyer, but I could see that this was of significant note, and it was important that the Ministry of Justice had that information.
I was very clear in that letter—and you can read the letter—that we are making no value judgments here, and I have been very clear when I’ve been here. I want people to get through this process, and if mass exoneration is the right thing, then let’s make sure that we get the right legislation in place to deliver mass exoneration.
Q528 Chair: Did you commission the letter from Peters & Peters?
Nick Read: No.
Q529 Chair: They just sent it to you off their own bat?
Nick Read: They did. It was unsolicited, it came through—
Q530 Chair: It just arrived in the post one day?
Nick Read: It did, and I know Mr Vamos is quite happy to come and explain that—to write to the Department as to why he did that—but as I say—
Q531 Chair: But in your letter, why did you say you would be “bound” to oppose an appeal?
Nick Read: Because in the Hamilton judgment, we have an obligation to the courts not to concede unless the Hamilton principles are involved. As a lawyer, Mr Tidswell is better placed to explain the detail, but it is very clear that that is an obligation that we have. When this letter arrived, I am also very clear that it is of significance, and it was important, therefore, that the Ministry of Justice were aware of that. But if I go back—
Chair: So you wrote—
Nick Read: If I may, Mr Byrne, we shared this information with the advisory board back in July and again in September, and with the Department, so this is not new information that has just emerged.
Q532 Chair: No, I think people are surprised by the way you put it.
Nick Read: I see. Okay, I understand.
Q533 Chair: But your answer to us today is that you were following a court-sanctioned judgment when you said, “We are bound to oppose an appeal.”
Nick Read: Yes.
Q534 Jonathan Gullis: Mr Tidswell, we heard from Mr Creswell earlier that you made a phone call to him about Henry Staunton as chair and that, allegedly, in that conversation—I will let you clarify the record—you said there were board members willing to go if Mr Staunton remained in place. Is that an accurate representation of the phone call you had with Mr Creswell?
Ben Tidswell: Yes, it is. I spoke with Mr Creswell and I explained to him concerns that I had heard from board members and from senior executives about Mr Staunton’s behaviour. I passed that information on to him, as the senior independent director of the company.
Q535 Jonathan Gullis: You will understand that it will be hard to understand how the Post Office culture has changed if its chairman was engaging in such behaviour that you felt the need to contact Mr Creswell to say that board members were on the verge of quitting if Mr Staunton remained in his position as chair.
Ben Tidswell: I completely disagree with that. I think it is the other way around. If somebody, no matter how senior they are, is misbehaving, or not behaving in a way that is consistent with their role, that will be dealt with, and the Post Office is big enough to be able to deal with that. It is highly unfortunate, and it causes, I am sure, an enormous amount of concern to all of you and to everybody who watches the Post Office and who wants to see it succeed or at least do what it should be doing. I am acutely conscious of that, but let us be in no doubt that, in circumstances in which a very senior individual was doing something they should not have been doing, the system worked, and that information was conveyed as it should have been.
Q536 Jonathan Gullis: Can you give details as to what the allegations were against Mr Staunton, or is there still an investigation?
Ben Tidswell: As you heard from Mr Creswell, there is an investigation under way, and I am not going to comment on it, because it is a confidential investigation. But I can tell you what I told Mr Creswell, which was what he told you: there were a number of concerns, the most significant of which were that Mr Staunton was obstructing investigations, and particularly the whistleblowing investigation into him, and had taken steps to circumvent the shareholder’s position in relation to the appointment of my replacement.
Q537 Jonathan Gullis: This is the final question from me. Mr Read, you said you have, alongside Mr Recaldin, been meeting a number of victims. Do you have a specific number for how many you have met so far?
Nick Read: I think it is 33 that I have met. I think Mr Recaldin has met more like 50.
Simon Recaldin: Forty-nine.
Q538 Jonathan Gullis: How regularly are those meetings taking place, or how often are you sending out invitations to come and meet you?
Nick Read: We have been very clear that we are open for any victim to come forward and meet us, and we have done that. We have said that consistently over the last 18 months. I have been to Scotland, to Ireland, to Wales—all over the country—to meet individuals. Even in this building, I have met victims on a one-to-one basis with Mr Recaldin. So it is something that I extend to people, and I am very keen that my leadership team and members of the board also do that, because it is important that people understand the trauma that people have gone through and what they have experienced. I think that will make us a better business culturally and a better business in terms of understanding the postmasters and the trauma.
Q539 Chair: You wrote in your letter to me earlier this year that improvements had been made in the culture, but reading the emails that we released yesterday, I saw that Mr Staunton’s email included the view expressed by one of the sub-postmasters on the board that “the views expressed by Richard Taylor, and previously by management and even members of the Board, still persisted—that those PMs who had not come forward to be exonerated were ‘guilty as charged.’ It is a view deep in the culture of the organisation...that Post Masters are not to be trusted.” It does not sound like the culture has been improved in quite the way this Committee would hope.
Nick Read: That is a very disappointing email. There is no question that the release of that documentation was deeply troubling to all of us. We met as a board last Wednesday, and the individuals involved in that email refuted the characterisation and the way that it was written, which was pleasing to hear.
Notwithstanding that, we know we have a lot more to do. We know there is a lot more that we need to do as an organisation to improve. But one of the things that I am very clear about is that there must be opportunity for members in the board to have disagreements. That is why we have invited postmaster directors on to the board to challenge us and to make sure that we make the right calls to postmasters and that, operationally, we are doing the right things, and that can be uncomfortable. I was very acutely aware that, when I suggested to the Secretary of State that we have postmasters on the board, that would inject discomfort. The reason we did that, clearly, is that we needed to get the board and the business closer to the operation and to what postmasters are thinking.
Q540 Chair: But there is prima facie evidence that the culture is not yet in the right place.
Nick Read: As I say, it is a work in progress; we have been very clear that it is a work in progress. It is deeply worrying and distressing that we are not making the speed of progress that we would like to. However, as I say, at the board we were united in our purpose last Wednesday. All the board members on the call were very clear that we have a direction of travel and that we are going in the right direction.
Q541 Chair: So the cultural problem is “work in progress”, not “job done”.
Nick Read: Correct.
Q542 Ian Lavery: Who are the untouchables, Mr Read?
Nick Read: That is not an expression that I am aware is used in the organisation—not an expression that I recall using. I think there is a misunderstanding in the way that expression has been used. It is referred to as 40 untouchables. I am very, very clear that we have done two pieces of work. One, we have been through all the past roles in the organisation for the last 30 years and we have identified that there are five individuals who have “investigator” or “investigating manager” in their job titles. None of those individuals is involved in any activity to do with investigation today.
We also—I think this is where the 40 number comes up—have 43 cases that have been opened up as a consequence of the meetings that Mr Recaldin and I have done with former postmasters, identifying where there are names that have come up in those private meetings and also from the human impact evidence that we have heard in the public inquiry. We are looking into those 43 cases—that is not 43 people, but 43 cases. So this notion of untouchables is not an expression that is used in our organisation. I don’t know where it comes from.
Q543 Ian Lavery: You recognise the term “untouchables” and recognise where it comes from. Explain that, because other people have got a different view. They are called the untouchables due to the power they wield, their aggressive nature and the fact that they act like “mafia gangsters”—those are not my words, but the words of sub-postmasters at the Sir Wyn inquiry. It has been stated that they operated under a dire culture that still considered that the wrongly convicted postmasters were guilty and on the take. To be quite honest, this reads like a badly scripted gangster movie. You have got a group of investigators turning up at post offices and basically wielding so much power, and frightening the wits—
Nick Read: Well, let me—
Ian Lavery: Hang on. They frightened the wits out of individual sub-postmasters, postmasters, employees—closing them down at will and calling them everything. Like we have heard this morning, they were causing people to actually leave the country and their place of employment—where they have lived—and not return.
Nick Read: Well, that is not happening today. We have not investigated or prosecuted anybody since 2015.
Ian Lavery: I am not saying today; I am saying it did happen.
Nick Read: This may well have happened in the past. The reason we are acting on the cases that have come up in the human impact evidence gathering in the inquiry, and the names that come to Mr Recaldin and I when we meet individually with people, is that we want to build evidence to make sure that no one—no one—is above the law at the Post Office, from the top to the bottom. We will do that. The only way we can regain any form of trust is to be totally transparent and absolutely clear that no one is above the law. That is absolutely the case.
Q544 Ian Lavery: Do you believe that, at the time, they acted in the manner described?
Nick Read: Yes, I have heard those stories. I have heard those narratives and I have heard very traumatic descriptions from individuals that Mr Recaldin and I have met—harrowing stories. So I do believe that that is the case and that, where there are individuals, we are investigating them.
However, what I also want to be really clear about is that we do not want to repeat the mistakes of the past. We do not want to just prejudge people in a way that clearly happened to postmasters historically. We will go through due process. If there are individuals who have been involved in activity that is either aggressive or has been unacceptable, then we will explore that. That is what we are doing with the 43 cases.
Q545 Ian Lavery: Are there any original investigators from that time still active in investigating current postmasters?
Nick Read: As I say, we have five individuals who were investigators or who had “investigation manager” in their job titles still in the organisation. I am not going to describe what process we are doing, but we are looking into allegations that have been made against those, so there are investigations that are ongoing as a consequence of the 43 casework that I described to you just a second ago.
Q546 Ian Lavery: Just for clarity, people who have been categorised by sub-postmasters as mafia, gangsters—
Nick Read: Are in an investigation.
Q547 Ian Lavery: Whether they are under investigation is not the point. They are still employed by the Post Office, making investigations into current postmasters.
Nick Read: No.
Q548 Ian Lavery: So that is not the case.
Nick Read: No—not the case.
Q549 Ian Lavery: So none of them is employed.
Nick Read: Not in investigative roles at all. As I say, there are five individuals—
Q550 Ian Lavery: Just tell me, instead of me trying to quiz you. Are they working for the Post Office?
Nick Read: We have five people working for the Post Office who had “investigation” and “investigation manager”—
Q551 Ian Lavery: What did you not just say that for?
Nick Read: That is what I just said.
Ian Lavery: It’s not. You’re trying to hide it, man!
Q552 Chair: Why are they still employed?
Nick Read: Because these are individuals who have come up during the human impact sessions or during meetings that Mr Recaldin and I have had with victims. To ensure that we have due process, we will investigate these individuals. People know that investigations take time. We want to assess the allegations. We have been out to individuals that Simon Recaldin and I spoke to and have asked them the question—we have followed up. That is what we are doing at the moment, and we will go through a due process. I will ensure that people have the right to reply. That is important. I want to make sure that we have a proper process.
Q553 Ian Lavery: Is the Horizon data still being used to support new prosecutions?
Nick Read: We are not prosecuting anybody. We have not prosecuted anybody in the Post Office since 2015.
Q554 Ian Lavery: On the Project Pineapple email exchange—I am sure you understand that—
Nick Read: Yes, I understand that.
Ian Lavery: One non-executive director talked about so-called “pathclearing” efforts in the Post Office to settle new financial discrepancies, which have “echoes of the past”, and the responsibility of a man who “constantly reinforces the mantra of ‘all PMs’”—postmasters—“‘are on the take’.” Do you know what that refers to?
Nick Read: Pathclearing—it is colloquially referred to as pathclearing—is an exercise that we will need to do when we move off the Horizon platform in one, two, three years’ time, whenever that moment is. We will have to go branch by branch and post office by post office to ensure that we manage to migrate from one system to the other. The pathclearing exercise is, “How are we going to go into the branches to make sure that they are fit and ready to accept the new Horizon system?”
I am not sure what he was aiming at with that comment. It hasn’t started. It hasn’t even been planned. We don’t have a delivery mechanism yet in place. But the colloquial term refers to how we will need to ensure that everybody is fit for purpose, ready to go, and the branch is ready. That is what pathclearing is: how do we help and support postmasters to be ready to accept the new system when we migrate away from Horizon?
Q555 Ian Lavery: Mr Read, Mr Recaldin, Mr Oldnall and Mr Tidswell, are you untouchable?
Ben Tidswell: Absolutely not. If people are not complying with their duties, then they are accountable. You see that most clearly with the departed chairman. I certainly expect everybody in the organisation to be accountable. At the moment, in the absence of a chairman, I suppose I lead the board, but I can absolutely tell you that every member of the board believes that as well.
Simon Oldnall: I echo that point. I expect to be held to account in my role by my leadership team—absolutely.
Simon Recaldin: I can echo that and I can tell you that I am challenged regularly. I am very touchable.
Nick Read: So am I.
Ian Lavery: You didn’t seem too convinced there, mind, Mr Read. [Laughter.]
Q556 Chair: Can I check something, Mr Read? You wrote to me on 23 February to say that you do not recognise the 40 investigators remark, but I am looking at the email from Elliot Jacobs of Wednesday 24 January that says: “The culture that PMs are ‘guilty’ and ‘on the take’ is embedded in this company and whilst we continue to employ 40+ people who ensured innocent people were found guilty and who continue to believe that mantra, this will never change.” I am trying to understand why you don’t recognise the 40—
Nick Read: It is inaccurate.
Chair: —but Elliot Jacobs, who sits on your board, or did sit on your board, does.
Nick Read: He did. It is inaccurate. It is not true.
Q557 Chair: Elliot Jacobs is wrong.
Nick Read: He is wrong.
Ben Tidswell: He is wrong. He accepts that.
Q558 Chair: You said that you don’t recognise that remark, but it is clearly common currency among board directors.
Nick Read: Between Mr Jacobs and Mr Staunton, clearly it is, but that is not common currency in our business. Common currency would mean people would be talking about it. It is not common currency.
Q559 Andy McDonald: Let me wind back a little to the Nick Vamos issue. Just for the record, Mr Read, did you take it upon yourself to write to the Lord Chancellor?
Nick Read: Yes.
Q560 Andy McDonald: Did you challenge the view that Nick Vamos expressed in his letter? Did you subject it to a challenge process?
Nick Read: No, I didn’t challenge his process.
Andy McDonald: You just accepted it.
Nick Read: I recognised that it was a letter of significance. I am not a lawyer, as I say. I spoke with my corporate affairs team, and they felt that it was something that we needed to release. That is what we did. But as I say, I am under no illusions that—
Q561 Andy McDonald: So you talked to your corporate affairs team. Did you talk to the board? Did you mention it to the board?
Nick Read: No, I didn’t mention it to the board. I don’t mention all the decisions that I make to the board.
Q562 Andy McDonald: My goodness, that is a pretty significant intervention not to mention to the board.
Nick Read: It is a matter of judgment, and clearly, as the group chief executive, I didn’t believe it was the case that I needed to do that. I wasn’t drawing any conclusions as a consequence of this. I have been very clear that we were releasing this information because we had done so to the advisory board and to the Government back in September. This is not new news.
Q563 Andy McDonald: It’s not news? It’s a bomb that has gone off, and you are not talking to your board about it.
Nick Read: We have an obligation, and that obligation, from a legal perspective, is why it was important for us to release that information. We’re making no judgments about it—no value judgments about it.
Q564 Julie Marson: Mr Tidswell, in the first session I had an exchange with Mr Creswell, and I wanted to make sure that you had an opportunity to comment on it. Mr Creswell said to me that he had “never heard…anything like the allegations that were made to me by Ben Tidswell” about the chairman. They included, as you mentioned to my colleague Mr Gullis, silencing a whistleblower and potentially bypassing a board appointment process.
Mr Creswell also mentioned something that I think might be relevant to our next session as well, in terms of interpreting the meanings of various memos and conversations that the former chairman had. Mr Creswell said that “some aspects of the chair’s performance in terms of his grip on his brief, and whether he was alert in meetings,” were also a concern that had been passed to him. Is that a concern that you raised and that you can expand on?
Ben Tidswell: That is not a concern that I raised in the conversation that I had with Mr Creswell. I think I can say that there was a distinct change in Mr Staunton’s behaviour that I perceived once he became aware of the investigation into him. I know that because, as the senior independent director, I was the person who was asked to convey to him that he was going to be investigated. That was in about November last year. I think it would be fair to say that his behaviour changed in a way that was somewhat erratic from that point, and it became more erratic as we got into January.
So, if I am answering your question correctly, I did have some concerns about Mr Staunton’s behaviour from about November. Prior to that, I don’t think—Mr Staunton has his own style, and that was the way in which he ran meetings and dealt with people. I didn’t have a problem with that. It was not necessarily the way I would have done it, but I didn’t have a problem with it. I certainly don’t recall him falling asleep in meetings or anything like that.
Julie Marson: That is useful. Thank you.
Q565 Antony Higginbotham: Mr Recaldin, when you made settlement offers to sub-postmasters, did you mark them as without prejudice and go on to say that that made them confidential?
Simon Recaldin: Yes.
Q566 Antony Higginbotham: Why?
Simon Recaldin: We did it because we got legal advice to do it, and when it was set up, that is what we agreed to do—
Antony Higginbotham: Who gave you that legal advice?
Simon Recaldin: And by the way, that is standard practice. But we have listened and we have changed. Without prejudice has now been withdrawn because we have listened and we understand the message that that sends about secrecy and not wanting to disclose, and so on.
Q567 Antony Higginbotham: Who gave you that legal advice? I have here a warning notice from the Solicitors Regulation Authority, from 28 November 2022, that makes very clear that you should not do that in those circumstances.
Simon Recaldin: The original legal advice was from our legal advisers, which was Herbert Smith at the time, to go through the process to make sure we are safe in terms of withdrawing without prejudice. We sought other legal advice and the view is that it is a call that you can make if you want to. The recommendation, by the way, is to keep it on, but we understand the optics and the message it is sending, so on that basis in the HSS we are taking without prejudice off those—and retrospectively, as well.
Q568 Antony Higginbotham: Was there a conversation when that warning notice was issued about whether it was right to keep them on the settlement letters? After 28 November 2022, was there a conversation about the fact that the notice had been issued and you needed to review them?
Simon Recaldin: The conversation has been an ongoing one for some time; I can’t remember when it first started, but it has been ongoing, because of the feedback we have been having about the optics of what that looks like—hiding behind corporate secrecy and so on.
Q569 Antony Higginbotham: It is not just optics. This is a Solicitors Regulation Authority warning notice. I assume you employ a general counsel and you did back in 2022. You would expect your general counsel to keep up to date with warning notices issued by the SRA. Is it your belief that the general counsel was negligent and just did not pay attention to documents coming from the regulatory body for solicitors?
Simon Recaldin: That is not my belief at all. I have to be careful here because, as you know, this has been referred to the SRA and we await the outcome, so I can’t comment on that. But the group legal counsel has absolutely been involved in all these decisions.
Q570 Antony Higginbotham: Mr Read, last time you were before this Committee, we had an exchange about non-disclosure agreements and I specifically asked, “does the Post Office still use non-disclosure agreements in reaching settlements with sub-postmasters?”. You said, “Not to my knowledge.” I said, “So no non-disclosures have been requested or signed since you took over as chief executive.” You said, “Not to my knowledge”, and then you said you would check. I appreciate you have now checked—
Nick Read: I have checked and written to that effect, yes.
Q571 Antony Higginbotham: Is it not the kind of thing that you would expect your general counsel to keep you updated on, given that there was a warning notice by the regulatory body?
Nick Read: Yes, that is a fair challenge.
Q572 Antony Higginbotham: Mr Tidswell, on a separate matter, in the disclosures we have had of various email exchanges, it is clear that there was some dispute about the process to follow to secure your replacement—whether that was an internal process or an external one. I think the former chairman, Mr Staunton, suggested it was external, but the majority of the board voted instead to make it internal. What is your recollection of how that process worked?
Ben Tidswell: I think that is not quite right; it was the other way round. In fact, it was not even necessarily the other way round, if I may just explain. The original position, which I think was towards the end of last year, was an agreement among the board that it would be an external appointment.
Antony Higginbotham: To get more experience.
Ben Tidswell: Yes. I think it was felt particularly that here was an opportunity to bring on the board someone with different experience, particularly Whitehall-facing experience, who could help us a little bit more with understanding how to navigate Government and policy.
To be very clear, that is not a decision the board can take; it is a decision for the shareholder. All we did at that stage was recommend it to the shareholder and the shareholder agreed with that. Of course it was not something that we said without consultation; it was a position that had been foreshadowed, and we understood that to be the Department’s view as well, so we agreed and we started the process.
What happened in January, very shortly before the decision was taken by the Secretary of State in relation to Mr Staunton, was that a series of discussions were convened by Mr Staunton in which he sought to reverse that decision—and, indeed, gave instructions to the company secretary to stop the search, in circumstances where there had not been a proper board meeting to discuss it.
Q573 Antony Higginbotham: So he made that decision without consulting the board formally?
Ben Tidswell: Yes. He discussed it with some board members, but—
Antony Higginbotham: But not at a formal board meeting.
Ben Tidswell: Not at a formal board meeting and, most importantly, he had not consulted the shareholder. I think it was always plain—it should have been plain to him, but certainly it was plain to me—that there was no prospect of the shareholder changing its view on that. I think the shareholder had a firm preference for an external appointment.
I think that was the second thing that Mr Creswell referred to this morning, and it was certainly a point that was key in my discussion with him in January, which took place two days after Mr Staunton sent an email about that. You have probably seen the email in which he says to the company secretary to please stop the search. You could probably say that that was somewhat the straw that broke the camel’s back, in that at that stage I think it became apparent that something needed to be done—some discussion needed to take place about whether he was the right person to be the chairman.
Q574 Antony Higginbotham: Would you characterise the way Mr Staunton undertook that process as pretty standard for how you would approach governance more broadly?
Ben Tidswell: The second bit of the discussion?
Antony Higginbotham: Yes.
Ben Tidswell: No, absolutely not. On the contrary, I think it was not how you would approach governance. It seemed to me, and indeed to other board members who were involved, that it was very odd. It wasn’t consistent with what you would do at all.
Q575 Antony Higginbotham: You have sat on other boards before, presumably.
Ben Tidswell: I am not on the Post Office board because I am a governance specialist. As you know, I am a lawyer, and I am there primarily to help Mr Recaldin. I joined the board in July 2021 in order to try and push forward all the things we have been talking about today in terms of oversight, and so Mr Recaldin and I work very closely together on that.
I am not a governance specialist. I have chaired a board of a professional partnership with independent directors on it and I have also had a career in which I have dealt with governance issues like the collapse of Barings and the collapse of RBS, where I acted for the non-executive directors.
Antony Higginbotham: It is fair to say you have some experience.
Ben Tidswell: I have a long history and experience of understanding how you do this. And of course, there is a lot of guidance about corporate governance, which is published.
Q576 Antony Higginbotham: Finally, to Mr Read, on an unrelated point. One of our roles in this place is to represent people across the country. I am sure we have all been contacted by postmasters and sub-postmasters, certainly since the last evidence session. I have been contacted by quite a few. They all share broadly the same perspective, which is that the culture of the Post Office has not changed; that as postmasters and sub-postmasters, they feel undervalued and under-remunerated; and that they do not feel like they have the ear of the executive team. What would your message to all those people be?
Nick Read: I am deeply worried that that is how people feel. I would want to reassure them that we have postmasters at the centre of everything we are trying to do—from a remuneration perspective, from an engagement perspective, a communication perspective and a support perspective.
We have put in places where we are making ourselves available to them. We have a series of regional meetings with postmasters starting in March and April. I am going to be available—I am always available to speak with postmasters, as we did yesterday with the Voice of The Postmaster and the CWU postmasters. I am available to do that, as is my leadership team.
Q577 Antony Higginbotham: But you heard an earlier panel, where we were talking about remuneration and the level of pay that sub-postmasters receive. We heard that it was under £20,000 or just over £20,000. You can’t be happy with that.
Nick Read: Of course I am not.
Q578 Antony Higginbotham: Surely when you look at remuneration and when you do your next review of how you compensate your postmasters and sub-postmasters, that has got to rise dramatically.
Nick Read: We have a yearly meeting, which is in April, when we discuss the remuneration rates, and that is something that we will be in discussion with the NFSP about—talking to them about how we are going to move remuneration forward.
We have done it relatively succinctly over the last 18 months or so. We had an excellent Christmas this year where remuneration was up by 11.5% over the two months of Christmas, so we are making progress.
We are migrating the business away from some of the core activities of just simple mail and parcel distribution, by bringing in new carriers, by bringing in new business and by building out the banking framework, which will be more remunerative for postmasters as well. It is all about trying to make sure that we can secure the commercial sustainability.
Q579 Antony Higginbotham: Could you make a commitment, for example, that your intention is that every postmaster and sub-postmaster gets paid X% above the real living wage, as a bare minimum, and that, if their calculations are that they are not getting that, you will make sure that there is an appropriate package?
Nick Read: As I say, we have hardship funds. We have different ways of trying to make sure that postmasters are, but we will be working this year when we go the remuneration improvements to make sure that we continue to make sure that the proportion of revenue that goes to postmasters increases year on year.
Q580 Jonathan Gullis: Mr Read, when you and I last met in January, I asked whether any public relations companies had been hired by the Post Office after the drama had aired.
Nick Read: Correct.
Q581 Jonathan Gullis: And I asked what the price of that was. An article in the Telegraph today suggests that there is a firm called TB Cardew being paid at a rate of £15,000 a month. First of all, when was that contract agreed?
Nick Read: TB Cardew started working for the business in 2019, and then again in 2022 we had the renewal of that contract.
Q582 Jonathan Gullis: Have you had any training from them for your appearance before the Select Committee today?
Nick Read: Have I had any—
Jonathan Gullis: Have you had any Select Committee training as they may call it in public affairs, to prepare for today?
Nick Read: I have obviously prepared for this extremely important meeting; of course I would prepare for it, yes.
Q583 Jonathan Gullis: And they have put a briefing pack together with biographies of Members as well as suggested questions that might be asked.
Nick Read: Yes.
Q584 Jonathan Gullis: That you are using today. Okay.
Very quickly then, TB Cardew has been the company used. You will understand that there will be concerns that, given the £15,000 a month—an extortionate amount of money—the contrition being shown by the Post Office might not be taken as seriously, if you are effectively paying to spin your way out of a crisis.
Nick Read: I do not follow the logic of that at all. We are a business generating £1 billion worth of income in a year. We have commercial arrangements with the likes of Evri, DPD and banks; we need a PR organisation to work with us to make sure that we promote today’s business from both a social and commercial perspective. So I do not, I am afraid, Mr Gullis, believe that that is a fair—
Q585 Jonathan Gullis: How much of the company’s time has been spent specifically, in percentage terms, on what has happened?
Nick Read: Very little. If the point you are trying to make is about the preparation for today, most of the colleagues on this panel will have done work themselves and we would have had a practice as well, which of course you would expect us to do because we want to take this seriously.
Q586 Jonathan Gullis: I just wanted to make sure that postmasters, sub-postmasters and sub-postmistresses feel that the contrition that you have shown on the panel today is genuine and real.
Nick Read: Absolutely.
Q587 Jonathan Gullis: And not something that has been rehearsed and prepared for, like a good actor.
Nick Read: No—no it is not.
Q588 Andy McDonald: The Post Office is generating income of £1 billion and we hear about hardship funds for postmasters. The juxtaposition of those comments is just unbelievable. Are you going to sort this out by recognising a proper trade union to represent postmasters? That has been sadly absent from this process and is needed.
Nick Read: You will be aware that we have a long-term contract with the NFSP. Clearly, we are trying to work with them to create the right environment.
Q589 Andy McDonald: The protections were clearly not afforded to these postmasters.
Nick Read: I understand.
Q590 Andy McDonald: Finally, Mr Tidswell you serve on the remuneration committee. Is the issue of the bonuses that were paid closed out—the metric that was calculated opposite the funding of information to Sir Wyn Williams, fraudulently, falsely, put into those accounts to award people bonuses? That would ordinarily lead to a prosecution under the Theft Act. Is that done?
Ben Tidswell: Yes, it was very clumsy and I do apologise to everybody for that.
Q591 Andy McDonald: Clumsy? You have postmasters prosecuted under the Theft Act for false accounting, yet that happened at the senior level at the Post Office.
Ben Tidswell: I am sure that you have seen the two reports into this from Amanda Burton and Simmons & Simmons. I absolutely accept the findings that they made, and the issue is closed out—yes, it is.
Q592 Ian Lavery: Hardship funds at the Post Office? This fantastic brand, the Post Office, has hardship funds for employees. I am not sure what that really shows with regard to your leadership, Mr Read.
I believe and understand that you received somewhere in the region of a £400,000 bonus in the last couple of years. Four hundred-odd thousand pounds! Two of the individuals sat here today were receiving wages of less than £20,000—nearly less than the national minimum wage. Your bonuses, on top of your hundreds of thousands of pounds in wages, was 20 times more than their annual salary. Does that not really show how the Post Office is rotten to the core?
Nick Read: I am not going to answer that question in that sense. Clearly, I am well paid and I am clearly in a position where I am trying to make sure that the commercial sustainability of the Post Office is going to be for the next generation as well.
Q593 Chair: Let me close off Mr Higginbotham’s questions. In your letter to me earlier this year, you said that the offer letters made to postmasters and postmistresses are marked “Without prejudice” so that they are confidential. In fact, when you mark something “Without prejudice”, it just means that the contents are not admissible in court; it is not a confidentiality agreement. The letter you sent to us was not a perfect reflection of the facts.
Nick Read: I will have to check that and come back to you.
Q594 Charlotte Nichols: Mr Read, you just referred to the Post Office’s relationship with the National Federation of SubPostmasters. This is not an independent trade union, and it has been brought up by Alan Bates in front of this Committee in previous evidence sessions as an organisation that was actually complicit in the perpetuation of the Horizon scandal.
Do you think that it is time for the Post Office to recognise an independent trade union that, as in evidence previously given before this Committee by Alan Bates, might actually have supported sub-postmasters, rather than throwing them to the wolves as the National Federation of SubPostmasters did?
Nick Read: We are open to talking to all postmasters and postmaster groups. As I said yesterday, we spoke to the CWU, which represents some 275 to 300 postmasters, and the Voice of the Postmaster group, which represents more than 1,000 people. I am not closing down any conversations with any specific groups. I am keen to speak to all groups of postmasters to understand how we can move the Post Office forward.
Q595 Charlotte Nichols: Thank you. Mr Read, in your earlier evidence today you said, “If mass exonerations are the right course”. To be crystal clear, do you believe that this is the right course?
Nick Read: To be crystal clear, we support anything that will accelerate justice for wronged postmasters. I am absolutely clear that if that is what the Government want to do, we will support it.
Q596 Charlotte Nichols: But again, do you believe that there are sub-postmasters and sub-postmistresses who are “guilty as charged”, as advised by Nick Vamos and raised as a concern by you in your letter to the Justice Secretary? For all the answers you have given about mass exonerations, your answers have been very, “If this is something the Government want to do” and, “If this is the right course”. Do you believe that there are people who are guilty who will be exonerated under this? If not, what is your opposition to its being carried out?
Nick Read: I have no opposition.
Q597 Charlotte Nichols: So you do not believe that there is anyone who is guilty who will be exonerated under the mass exonerations proposal.
Nick Read: There may well be people, but it is the least worst option. We have heard the Minister say that. These are exceptional circumstances, and if there are one or two or whatever that number is—I do not know what that number is—then fine. However, this is the best way to get the right level of justice for the people who have been wronged.
Q598 Charlotte Nichols: So you still believe that there are potentially guilty people, despite all the evidence we have heard up to this point.
Nick Read: I am not sure what you mean specifically by your question. What do you mean “guilty people”? I do not understand that, because—
Q599 Charlotte Nichols: You still believe that there are people whose convictions are not in fact wrongful among the numbers of people who will be exonerated under the mass exoneration proposals put forward by the Government and supported by this Committee and the House.
Nick Read: I think as everybody has mentioned, there may well be—I do not know.
Q600 Charlotte Nichols: Thank you. Moving on, I do not think that anyone watching today’s evidence session could fail to be moved by Tony, Tim and Alan’s testimony, the impacts that what happened has had on them and the harm it has caused to them and their families.
Nick Read: Agreed.
Q601 Charlotte Nichols: Taking up a point raised by Alan Bates in his evidence earlier today, Mr Recaldin, why did the Post Office wait to start the process of disclosure, given that it knew the names of everyone eligible to claim, instead of waiting for the claim and therefore causing even greater delay?
Simon Recaldin: Because we needed to agree, and we did agree, the disclosure process with Freeths, the legal team—that is, what they needed in disclosure. At the same time, we got a load of DSARs in as well, which take longer and, from a regulatory perspective, must take priority.
We had to ensure that those DSARs were downsized, then we agreed what Freeths wanted in terms of the disclosure. It did take time; it did take too long. However, we are on it and producing and, as I said earlier, we are at 64% of that target. We are now slightly ahead of target thanks to the Minister’s intervention and the £75,000 minimum payment in GLO, which is excellent news, because it means that I can get resource more into that space to speed up the GLO disclosure even more.
Q602 Charlotte Nichols: Finally, Mr Read, we have seen delays, lies and buck-passing from the Post Office while hundreds of victims are still left without a path to redress under flawed schemes. Why should you continue to be trusted to oversee the delivery of financial redress to victims?
Nick Read: We are very clear that whatever the Government decide and determine is the right course of action, we will follow it. If people and the Government believe that the right level of trust is not in the Post Office and there is a better mechanism, we will fully support it, whatever it looks like. I am not precious about this: I am acutely conscious that we want to get the best mechanism. Whether it is with or without us, I do not mind.
Q603 Chair: Thank you very much indeed. This evidence session draws to a close.
Mr Read, I am grateful for your evidence, but you have been in post since September 2019 and you have told the Committee today that only £1 of every five of the budget has been paid out in redress. You have said that that is not good enough, and that it is much too slow. You have said that the toxic culture at the Post Office is not sorted yet; it is still a work in progress, not job done. And there have been problems with the evidence about PR advisers, but also the use of confidentiality agreements. Tell the Committee today why we should have confidence in you continuing in your post.
Nick Read: Because we are delivering great things for the Post Office in terms of the way that we are performing. Our trading is excellent. The Post Office itself is making profit. Postmasters have improved in terms of the relationship they have with the centre and their trust in our organisation. That is something that we can measure and we have measured. We are making progress and we are listening to postmasters so that we can get right the schemes that we have discussed for the last couple of hours. We are very happy to do that and we are very flexible to do that. We will continue to work hard to ensure that justice is served for the postmasters.
Q604 Chair: Have you ever tried to resign as chief executive of the Post Office?
Nick Read: No. Why do you say that?
Chair: Because we have a redress scheme that is in the wrong place, a culture that is in the wrong place, and problems with the information given to this Committee. I would like to know whether you are planning to stay in post to deliver the redress schemes that we have just heard are not performing in the way that they should.
Nick Read: I want to make sure that we get justice for our postmasters, and that is what I will stay to do.
Chair: Thank you very much. That concludes this panel.