The account of the Post Office’s former chief executive about what she knew during key years of the firm’s scandal is not believed by the former CEO of Royal Mail, the inquiry into the injustice has heard.
Paula Vennells has been giving evidence as part of a three-day appearance at the inquiry into the impact of faulty Horizon accounting software, which led to the prosecution of more than 700 sub-postmasters.
In addition to the wrongful convictions for theft and false accounting, many more sub-postmaster victims generated large debts, lost homes, livelihoods and reputations and suffered ill health. Some died by suicide.
Widely not believed
The inquiry heard that Dame Moya Greene, the former Royal Mail CEO whom Ms Vennells worked alongside for many years, texted Ms Vennells in January of this year to express her disbelief at the wrongdoing denials.
Ms Vennells has long maintained – and reiterated on Wednesday – that she was unaware of the extent of flaws with Fujitsu’s Horizon software.
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Sub-postmasters listening to the inquiry in the Fenny Compton village hall in Warwickshire, where dozens of sub-postmasters met for the first time in 2009 as they began their fight for justice, also said they did not believe Ms Vennells.
“She is blatantly, utterly lying, and it’s got to stop,” former sub-postmaster Sally Stringer told Sky News.
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Dame Moya texted Ms Vennells after the airing of the ITV drama Mr Bates Vs The Post Office, which reinvigorated interest in the scandal, saying: “When it was clear the system was at fault, the Post Office should have raised a red flag. Stopped all proceedings. Given people back their money, and then tried to compensate them from the ruin this caused in their lives.”
When Ms Vennells replied that she agreed, Ms Greene said: “I don’t know what to say. I think you knew”.
“I want to believe you. I asked you twice. I suggested you get an independent review reporting to you. I was afraid you were being lied to. You said the system had already been reviewed multiple times. How could you not have known?” her text said.
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The question of how it was that she couldn’t have known was taken up the the inquiry’s lead barrister Jason Beer KC.
Ms Vennells core argument emerged early in questioning: she said she wasn’t informed of bugs because of the way information flowed within the organisation. She accepted that as CEO she was in charge of how information was communicated.
“I was too trusting,” she said.
Emotional testimony
Ms Vennells broke down in tears numerous times during her evidence, the first of which was when Mr Beer read out details of sub-postmasters who were not convicted, as juries accepted there were flaws with Horizon.
The inquiry had just been presented with evidence of Ms Vennells telling MPs in 2012, “Every case taken to prosecution has found in favour of the post office. There hasn’t been a case investigated where the horizon system has been found to be at fault”.
This belief, Ms Vennells said, was “a representation of the information that I was given” rather than proof of an unwavering belief that nothing had gone wrong.
‘Wait and see’ accusation
Criticism came from Mr Beer over the fulsomemess of Ms Vennells cumulative 798-page witness statement.
He asked if she was adopting a “wait and see” approach: “Let’s see what comes out in evidence. See what I’ve got to admit and then I’ll admit that?”
“Given you provided a 775-page witness statement that took seven months to write, could you not have reflected on what you should have done fully and differently within the witness statement?” he added.
Image: Post Office Horizon IT scandal inquiry lead counsel Jason Beer KC.
Ms Vennells’ statement said that with the benefit of hindsight, there were “many things” she should have “done differently”, but she would wait for the inquiry to conclude to expand on that detail.
But she denied adopting a “wait and see” approach.
Rather, “It was simply a matter of time,” she said. “The inquiry asked me, I think, over 600 questions to 200 or 300 with subquestions in each. I went through probably hundreds of thousands of documents.”
Evidence to Parliament in 2015
A major question going into the inquiry was how Ms Vennells was able to tell Parliament in 2015 there was “no evidence” of “miscarriages of justice”.
On Wednesday morning, Ms Vennells said that was what she had been told “multiple times” by Fujitsu – that nothing had been found in Horizon.
Comic relief
Back in the village hall in Fenny Compton there were moments of laughter when Mr Beer asked Ms Vennells if she was “the unluckiest CEO in the United Kingdom?”
His question was asked “In the light of the information that you tell us in your witness statement you weren’t given… the documents that you tell us in your witness statement that you didn’t see. And in the light of the assurances that you tell us about in your witness statement that you were given by Post Office staff”.
‘Exculpatory’ remembering
Another line of questioning from Mr Beer was that Ms Vennells had a better memory of events and records that made her and the Post Office look good and a worse recollection of things that made her and her organisation look bad.
“Why is it that in your witness statement, when you refer to a recollection of a conversation that’s unminuted, undocumented, not referred to in any email there are always things that exculpate you that reduce your blameworthiness?” he asked.
That wasn’t her approach, Ms Vennells said.
Signing off a £300,000 legal bill to go after a £25,000 loss?
Sub-postmasters and those following the scandal likely will be listening out to see if Ms Vennells approved the legal bill to prosecute Lee Castleton, who was featured as a victim in the ITV drama.
Earlier this month former managing director Alan Cook told the inquiry Ms Vennells approved legal costs of £300,000 to prosecute Mr Castleton for a supposed £25,000 shortfall when she was a network director at the Post Office.
The UK’s biggest housebuilders are set to pay a record sum to fund affordable housing after the competition regulator investigated sensitive information sharing among the firms.
A total of £100m, paid for by seven companies, will go to affordable housing programmes across England, Scotland, Wales and Northern Ireland, following a Competition and Markets Authority (CMA) investigation.
The inquiry was launched last year due to concerns that the companies were sharing commercially sensitive information, which could influence the prices of new homes.
There was concern that the housebuilders – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – exchanged details about property sales, including pricing, viewing numbers and buyer incentives such as upgraded kitchens or stamp duty contributions.
It’s resulted in an agreement to make the combined £100m payment – the largest secured via a commitment from companies under CMA investigation. Hundreds of new homes could be funded with the money, the CMA said, helping low-income households, first-time buyers and vulnerable people.
The businesses have voluntarily agreed to pay the sum and have not acknowledged wrongdoing. No finding of rule-breaking or illegality has been made.
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What next?
They have also offered to sign up to legally binding commitments to prevent anticompetitive behaviour.
Among the proposals advanced by the companies was an agreement not to share some information, like prices houses were sold for, with other housebuilders, except in limited circumstances, and to work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing.
If accepted, the commitments will become legally binding, and the CMA will not need to decide whether the housebuilders broke competition law.
Initially, eight companies were under investigation, but following a merger of Barratt Homes and Redrow, the number became seven.
“Housing is a critical sector for the UK economy and housing costs are a substantial part of people’s monthly spend, so it’s essential that competition works well. This keeps prices as low as possible and increases choice,” the CMA chief executive, Sarah Cardell, said.
At least 13 people may have taken their own lives after being accused of wrongdoing based on evidence from the Horizon IT system that the Post Office and developers Fujitsu knew could be false, the public inquiry has found.
A further 59 people told the inquiry they considered ending their lives, 10 of whom tried on at least one occasion, while other postmasters and family members recount suffering from alcoholism and mental health disorders including anorexia and depression, family breakup, divorce, bankruptcy and personal abuse.
Writing in the first volume of the Post Office Horizon IT Inquiry report, chairman Sir Wyn Williams concludes that this enormous personal toll came despite senior employees at the Post Office knowing the Horizon IT system could produce accounts “which were illusory rather than real” even before it was rolled out to branches.
Sir Wyn said: “I am satisfied from the evidence that I have heard that a number of senior, and not so senior, employees of the Post Office knew or, at the very least, should have known that Legacy Horizon was capable of error… Yet, for all practical purposes, throughout the lifetime of Legacy Horizon, the Post Office maintained the fiction that its data was always accurate.”
Referring to the updated version of Horizon, known as Horizon Online, which also had “bugs errors and defects” that could create illusory accounts, he said: “I am satisfied that a number of employees of Fujitsu and the Post Office knew that this was so.”
The first volume of the report focuses on what Sir Wyn calls the “disastrous” impact of false accusations made against at least 1,000 postmasters, and the various redress schemes the Post Office and government has established since miscarriages of justice were identified and proven.
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‘It stole a lot from me’
Recommendations regarding the conduct of senior management of the Post Office, Fujitsu and ministers will come in a subsequent report, but Sir Wyn is clear that unjust and flawed prosecutions were knowingly pursued.
“All of these people are properly to be regarded as victims of wholly unacceptable behaviour perpetrated by a number of individuals employed by and/or associated with the Post Office and Fujitsu from time to time and by the Post Office and Fujitsu as institutions,” he says.
What are the inquiry’s recommendations?
Calling for urgent action from government and the Post Office to ensure “full and fair compensation”, he makes 19 recommendations including:
• Government and the Post Office to agree a definition of “full and fair” compensation to be used when agreeing payouts • Ending “unnecessarily adversarial attitude” to initial offers that have depressed the value of payouts, and ensuring consistency across all four compensation schemes • The creation of a standing body to administer financial redress to people wronged by public bodies • Compensation to be extended to close family members of those affected who have suffered “serious negative consequences” • The Post Office, Fujitsu and government agreeing a programme for “restorative justice”, a process that brings together those that have suffered harm with those that have caused it
Regarding the human impact of the Post Office’s pursuit of postmasters, including its use of unique powers of prosecution, Sir Wyn writes: “I do not think it is easy to exaggerate the trauma which persons are likely to suffer when they are the subject of criminal investigation, prosecution, conviction and sentence.”
He says that even the process of being interviewed under caution by Post Office investigators “will have been troubling at best and harrowing at worst”.
The report finds that those wrongfully convicted were “subject to hostile and abusive behaviour” in their local communities, felt shame and embarrassment, with some feeling forced to move.
Detailing the impact on close family members of those prosecuted, Sir Wyn writes: “Wives, husbands, children and parents endured very significant suffering in the form of distress, worry and disruption to home life, in employment and education.
“In a number of cases, relationships with spouses broke down and ended in divorce or separation.
“In the most egregious cases, family members themselves suffered psychiatric illnesses or psychological problems and very significant financial losses… their suffering has been acute.”
The report includes 17 case studies of those affected by the scandal including some who have never spoken publicly before. They include Millie Castleton, daughter of Lee Castleton, one of the first postmasters prosecuted.
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Three things you need to know about Post Office report
She told the inquiry how her family being “branded thieves and liars” affected her mental health, and contributed to a diagnosis of anorexia that forced her to drop out of university.
Her account concludes: “Even now as I go into my career, I still find it so incredibly hard to trust anyone, even subconsciously. I sabotage myself by not asking for help with anything.
“I’m trying hard to break this cycle but I’m 26 and am very conscious that I may never be able to fully commit to natural trust. But my family is still fighting. I’m still fighting, as are many hundreds involved in the Post Office trial.”
Business Secretary Jonathan Reynolds said the inquiry’s report “marks an important milestone for sub-postmasters and their families”.
He added that he was “committed to ensuring wronged sub-postmasters are given full, fair, and prompt redress”.
“The recommendations contained in Sir Wyn’s report require careful reflection, including on further action to complete the redress schemes,” Mr Reynolds said.
“Government will promptly respond to the recommendations in full in parliament.”
The UK’s public finances are in a “relatively vulnerable position”, the government’s official forecaster has warned.
The Office for Budget Responsibility (OBR) cited a drag from successive economic shocks, recent U-turns on spending cuts and higher-than-expected policy commitments.
It sounded alarm over the projected path for debt as a result, in its annual fiscal risks and sustainability report.
It saw total debt above 270% of gross domestic product (GDP) by the early 2070s – up from a current level of 96.5% – declaring that rising debts have led to “a substantial erosion of the UK’s capacity to respond to future shocks”.
The OBR’s report highlighted damage from the COVID pandemic and cost of living crisis that followed Russia’s invasion of Ukraine.
But it raised fears that past and current government policies were further harming the sustainability of the public finances.
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The report said that the pension triple lock, for example, was now estimated to cost £15.5bn annually by 2029-30.
That was “around three times higher than initial expectations”, it said.
The lock, which rises each year in line with inflation, wage growth or 2.5% – whichever is higher – had risen by more than the 2.5% base in eight of the 13 years of operation to date, the report stated.
The watchdog said it reflected more volatile inflation than expected.
It also picked up on the latest government U-turns over planned welfare and winter fuel payment cuts in the face of rebellions by Labour MPs.
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Welfare U-turn ‘has come at cost’
The decisions are expected to leave Chancellor Rachel Reeves facing a black hole of £6.75bn while weaker-than-expected economic growth could add a further £9bn to that sum in the run-up to the autumn budget, according to Sky News projections that see a void of around £20bn.
The OBR highlighted future risks from rising defence spending and the impact of climate change.
Public sector pay demands could also prove a drag, with resident doctors voting in favour of strikes over pay.
While ministers acknowledge damage to the public purse from the U-turns, Ms Reeves has repeatedly ruled out a new wave of borrowing to fund a spending spree.
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Could the rich be taxed to fill black hole?
As such, the government has not ruled out the prospect of some form of wealth tax to help meet its commitments despite the top 1% of earners contributing almost a third of all income tax already – on top of other targeted taxes such as capital gains.
The report said: “Efforts to put the UK’s public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances.
“Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.”
Shadow chancellor Mel Stride said of the report: “The OBR’s report lays bare the damage: Britain now has the third-highest deficit and the fourth-highest debt burden in Europe, with borrowing costs among the highest in the developed world.
“Under Rachel Reeves’ economic mismanagement and Keir Starmer’s weak leadership, our public finances have become dangerously exposed – vulnerable to future shocks, welfare spending rising unsustainably, taxes rising to record highs and crippling levels of debt interest.
“Labour’s recklessness risks it all – your pension, your job, your home, your savings.”
A Number 10 spokesman said: “We recognise the realities set out in the OBR’s report and we’re taking the decisions needed to provide stability to the public finances.”