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Senior executives at the Post Office suggested that “lots and lots of cash lying around in unexpected places” might have meant sub-postmasters were led “into temptation”, rather than accept IT failings, an official inquiry has heard.

The inquiry into faulty Horizon IT software at the Post Office, and the associated prosecution of hundreds of sub-postmasters for theft and false accounting, heard evidence from former North East Hampshire MP Lord Arbuthnot on Wednesday.

He was a champion of victims in the late 2000s and 2010s and appeared in the ITV drama Mr Bates vs The Post Office, which reinvigorated interest in the scandal’s miscarriages of justice.

As well as those who were wrongly prosecuted many more wracked up significant debts, lost their homes, were ostracised from their communities and suffered ill health, while some left the country.

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Lord Arbuthnot was played by actor Alex Jennings in Mr Bates vs The Post Office. Pic: Little Gem / ITV Studios
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Lord Arbuthnot was played by actor Alex Jennings in Mr Bates vs The Post Office. Pic: Little Gem / ITV Studios

Rather than accept the IT system’s failings, senior officials within the Post Office told Lord Arbuthnot that sub-postmasters were led “into temptation”, he told the inquiry.

“Alice Perkins [former Post Office chair] and Paula Vennells [former chief executive] had both raised the problem of there being lots and lots of cash lying around in unexpected places,” Lord Arbuthnot said.

“I do not know whether that point – which Alice Perkins made strongly – affected her approach towards the honesty or otherwise of sub-postmasters,” the peer added in his witness statement to the inquiry.

Minutes recorded of what Ms Vennells said during a meeting with MPs in 2012 read: “It appears that some sub-postmasters have been borrowing money from the Post Office account/till in the same way they might do in a retail business, but this is not how the Post Office works.

“Post Office cash is public money and the Post Office must recover it if any goes missing.”

Lord Arbuthnot arrives to give evidence to the Post Office Horizon IT inquiry. Pic: PA
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Lord Arbuthnot arrives to give evidence to the Post Office Horizon IT inquiry. Pic: PA

Unsafe convictions

As early as March 2013 Lord Arbuthnot said he told the Post Office that its convictions of sub-postmasters could be unsafe as evidence of flaws within Horizon had been unearthed by forensic accountants Second Sight, who were hired by the organisation to investigate allegations.

Lord Arbuthnot felt this evidence undermined convictions and showed there was a risk the Post Office wasn’t doing its duty to disclose any evidence that might undermine its prosecution case or help sub-postmaster defendants.

Second Sight found Fujitsu – the company behind the Horizon system – could access Post Office accounts remotely.

Lord Arbuthnot told the inquiry: “If Fujitsu or the Post Office can manipulate a sub-postmaster’s account without the post business knowing about it, then how can you prosecute that sub-postmaster for something which could not be provably down to the postmaster?”

He added this fact alone undermined the “standard of proof required in a criminal trial”.

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‘Profoundly wrong’

Sub-postmaster victims of the faulty software were told they were the only ones having problems with Horizon – something Lord Arbuthnot found “profoundly wrong” and intimidating, as he was aware of several cases.

“There was something at the back of my mind which continued to trouble me, which was these people who were being told, ‘you are the only person this is happening to’.

“And that struck me as being profoundly wrong, because first – it was obviously disprovable. They were not the only people it was happening to.

“Second, it was isolating those sub-postmasters and sub-postmistresses so they could not get support from others in the same position.

“And third, it had an element of intimidation about it, all of which set the Post Office and its way of operating with its sub-postmasters in a bad light.”

Lord Arbuthnot arrives at the Department for Business and Trade, Old Admiralty Building, central London, ahead of a meeting of the independent Horizon Compensation Advisory Board. Picture date: Wednesday January 10, 2024.
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Lord Arbuthnot arrives at the Post Office inquiry. Pic: PA

‘Government refusing to take responsibility’

The whole nature of the government’s hands-off approach to the Post Office, which it entirely owns, came in for criticism from Lord Arbuthnot as the inquiry heard of the numerous government ministers he contacted about the injustices.

“What this arm’s length arrangement essentially means is the government is refusing to take the responsibilities that go with ownership,” he said.

“If you have an organisation that is as important to the community as the Post Office is, then the people have got to be able to have proper control over it.”

Lord Arbuthnot also accused the Post Office of “stringing MPs along” in a “behind-the-scenes deception process” to cover up issues with the Horizon system.

He said the organisation grew increasingly defensive in 2013 after the investigation by Second Sight.

The peer said: “They knew there was a large number of bugs in the system that they hadn’t told MPs about.

“That’s what I know now, but I didn’t know that then.”

The peer also told the inquiry he was not satisfied with the “brush-off” response he received from Ms Vennells after he raised concerns over sub-postmaster complaints about the Horizon system.

During her time as managing director, Ms Vennells defended the Horizon system when it was queried by the former MP, describing it as “robust”.

Paula Vennells
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Paula Vennells during her time at the Post Office in 2016. Pic: PA

In a statement this week after the inquiry resumed, Paula Vennells said: “I continue to support and focus on cooperating with the inquiry and expect to be giving evidence in the coming months.

“I am truly sorry for the devastation caused to the sub-postmasters and their families, whose lives were torn apart by being wrongly accused and wrongly prosecuted as a result of the Horizon system.

“I now intend to continue to focus on assisting the inquiry and will not make any further public comment until it has concluded.”

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M&S tells agency workers to stay at home after cyberattack

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M&S tells agency workers to stay at home after cyberattack

Marks & Spencer (M&S) has ordered hundreds of agency workers at its main distribution centre to stay at home as it grapples with the unfolding impact of a cyberattack on Britain’s best-known retailer.

Sky News has learnt that roughly 200 people who had been due to undertake shift work at M&S’s vast Castle Donington clothing and homewares logistics centre in the East Midlands have been told not to come in amid the escalating crisis.

Agency staff make up about 20% of Castle Donington’s workforce, according to a source close to M&S.

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The retailer’s own employees who work at the site have been told to come in as usual, the source added.

“There is work for them to do,” they said.

M&S disclosed last week that it was suspending online orders as a result of the cyberattack, but has provided few other details about the nature and extent of the incident.

In its latest update to investors, the company said on Friday that its product range was “available to browse online, and our stores remain open and ready to welcome and serve customers”.

“We continue to manage the incident proactively and the M&S team – supported by leading experts – is working extremely hard to restore online operations and continue to serve customers well,” it added.

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It was unclear on Monday how long the disruption to M&S’s e-commerce operations would last, although retail executives said the cyberattack was “extensive” and that it could take the company some time to fully resolve its impact.

Shares in M&S slid a further 2.4% on Monday morning, following a sharp fall last week, as investors reacted to the absence of positive news about the incident.

M&S declined to comment further.

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Deliveroo shares surge 17% as £2.7bn takeover looms

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Deliveroo shares surge 17% as £2.7bn takeover looms

Shares in meal delivery platform Deliveroo have surged by 17% as investors react to news of a £2.7bn takeover proposal.

The company revealed after the market had closed on Friday that it had been in talks since 5 April with US rival DoorDash.

Deliveroo suggested then it was likely the 180p per share offer would be recommended, though full terms were yet to be agreed.

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At that price, the company’s founder and chief executive, Will Shu, would be in line for a windfall of more than £170m.

Deliveroo further announced, before trading on Monday, that it had suspended its £100m share buyback programme.

The opening share price reaction took the value to 171p per share – still shy of the 180p on the table – and well under the 390p per share flotation price seen in 2021.

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Deliveroo’s shares have weakened nearly 50% since their market debut.

The deal is not expected to face regulatory hurdles as it provides DoorDash access to 10 new markets where it currently has no presence.

But a takeover would likely represent a blow to the City of London given the anticipated loss of a tech-focused player.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “If the deal is done at that price, the company will fail to shake off the ‘Floperoo’ tag it was saddled with after its disastrous IPO debut in 2021.

“Even though Deliveroo has finally broken through into profitable territory, the prolonged bout of indigestion around its share price has continued.

“The surge in demand for home deliveries during the pandemic waned just as competition heated up. Deliveroo’s foray into grocery deliveries has helped it turn a profit but it’s still facing fierce rivals.”

She added: “The DoorDash Deliveroo deal will be unappetising for the government which has been trying to boost the number of tech companies listed in London.

“If Deliveroo is purchased it would join a stream of companies leaving the London Stock Exchange, with too few IPOs [initial public offerings] in the pipeline to make up the numbers.”

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US trade deal ‘possible’ but not ‘certain’, says senior minister

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US trade deal 'possible' but not 'certain', says senior minister

A trade deal with the US is “possible” but not “certain”, a senior minister has said as he struck a cautious tone about negotiations with the White House.

Pat McFadden, the Chancellor of the Duchy of Lancaster, told Sunday Morning with Trevor Phillips there was “a serious level of engagement going on at high levels” to secure a UK-US trade deal.

However, Mr McFadden, a key ally of Sir Keir Starmer, struck a more cautious tone than Chancellor Rachel Reeves on the prospect of a US trade deal, saying: “I think an agreement is possible – I don’t think it’s certain, and I don’t want to say it’s certain, but I think it’s possible.”

He went on to say the government wanted an “agreement in the UK’s interests” and not a “hasty deal”, amid fears from critics that Number 10 could acquiesce a deal that lowers food standards, for example, or changes certain taxes in a bid to persuade Donald Trump to lower some of the tariffs that have been placed on British goods.

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And asked about the timing of the deal – following recent reports an agreement was imminent – Mr McFadden said: “We’ll keep working with the United States and keep trying to get to an agreement in the coming weeks.”

As well as talks with the US, the UK has also ramped up its efforts with the EU, with suggestions it could include a new EU youth mobility scheme that would allow under-30s from the bloc to live, work and study in the UK and vice versa.

Mr McFadden said he believed the government could “improve upon” the Brexit deal struck by Boris Johnson, saying it had caused “an awful lot of bureaucracy and costs here in the UK”.

He said “first and foremost” on the government’s agenda was securing a food and agriculture and a veterinary agreement, saying it was “such an important area for the UK and an area where we’ve had so much extra cost and bureaucracy because of Brexit”.

He added: “But again, as with the United States, there’s no point in calling the game before it’s done. We’ve still got work to do, and we’re doing that work with our partners in the EU.”

The Cabinet Office minister also rejected suggestions the UK would have to choose between pursuing a trade deal with the US and one with the EU – the latter of which has banned chlorinated chicken in its markets – as has the UK – but which the US has historically wanted.

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On the issue of chlorinated chicken, Mr McFadden said the government had “made clear we will not water down animal welfare standards with either party”.

“But I don’t agree that it’s some fundamental choice beyond where we have to pick one trading partner rather than another. I think that’s to misunderstand the nature of the UK economy, and I don’t think would be in our interests to put all our eggs in one basket.”

Also speaking to Trevor Phillips was Tory leader Kemi Badenoch, who said the government should be close to closing the deal with the US “because we got very close last time President Trump was in office”.

She also insisted food standards should not be watered down in order to get a deal, saying she did not reach an agreement with Canada when she was in government for that reason.

“What Labour needs to do now is show that they can get a deal that isn’t making concessions, so we can have what we had last month before the trade tariffs, and we need serious people doing this,” she said.

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