The Post Office’s outgoing CEO today agreed the government is using the company as a “shield” over compensation schemes, while giving evidence at the inquiry.

Nick Read, who resigned last month, was giving evidence at the Post Office Horizon IT Inquiry for the second day, with a focus on delays to victims’ financial redress.

Edward Henry KC, representing wronged sub-postmasters caught up in the Horizon scandal, asked Mr Read if the government “is using the Post Office as a shield or a fire curtain”.

He replied: “That could be a description, yes.”

Mr Henry continued: “The fact you’re [the Post Office] administering two out of the three schemes gives the government a degree of protection… one step removed gives it room for plausible deniability?”

Mr Read responded: “That’s true.”

Hundreds of sub postmasters were wrongfully convicted due to faulty Horizon computer software used by the Post Office between 1999 and 2015.

The outgoing Post Office boss denied the company has been instructed “to minimise or supress compensation claims whilst avoiding public scrutiny”.

Mr Read admitted, however, that the compensation process has been “overly bureaucratic” and expressed “deep regret” that the Post Office had not lived up to delivering “speedy and fair redress”.

However, he insisted the “approach” and way of “engaging” with victims has changed in the last few months, with “lessons learned” since the start of the year.

“I think we are genuinely open and moving towards a better system,” Mr Read told the inquiry. “There are proper appeals processes, proper independent panels now working.”

He added there is a “commitment… to get this right,” and said he believes “things will start to flow” despite “mistakes hav[ing] certainly been made”.

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Mr Read also addressed the “terrible” fact that hundreds of sub-postmasters have died before receiving compensation.

A total of 251 people have died without getting full financial redress, according to data cited at the inquiry.

Nick Read insisted “a lot of time” has been spent “trying to work out how do we improve and speed up the process”, adding it was a “constant point of conversation” with the government.

Read more:
Post Office faces another software scandal
Alan Bates threatens legal action
CEO says ‘I don’t need to clear my name’

Mr Read said it was “astonishing” the Post Office was involved in the administration of compensation schemes and said the “corporate view” was that the Post Office should not have anything to do with them.

When asked why that view was not communicated to the inquiry in meetings, Mr Read responded: “It’s a good question. I’m unsure why we didn’t make that very explicit…clearly we should have done.”

He said the lack of communication on this was a “failure”.

Mr Read also today told the inquiry how Post Office employees “implicated” in the Horizon scandal may “still be operating at the heart” of the business.

The inquiry continues.

More than 140 London-listed companies including Fevertree Drinks, Jet2, Mothercare and YouGov have warned the chancellor that uncertainty over the continuation of a vital tax incentive is damaging investor confidence ahead of this month’s Budget.

Sky News can exclusively reveal that AIM-quoted businesses generating combined profits of £1.5bn and employing more than 120,000 people have written to Rachel Reeves to urge the government to provide “clear support” for business relief (BR) in order to restore investors’ faith in the City’s junior exchange.

The letter represents a comprehensive warning to Ms Reeves from dozens of prominent companies about the impact of recent speculation about the abolition of BR for inheritance tax.

It is understood to have been organised at the behest of Octopus Investments, which is invested in a large portfolio of AIM stocks through its AIM Inheritance Tax Service.

Cavendish, the investment bank which acts for roughly a quarter of all AIM-listed companies, is said to have corralled many of the signatories to the letter.

Among the other backers of the plea to the chancellor, which was sent last month but has not been reported, were Arbuthnot Banking Group, Cake Box Holdings, FRP Advisory, Gateley, H&T Group, Marlowe, M&C Saatchi, Mortgage Advice Bureau, Nichols, Revolution Bars, Revolution Beauty, Science in Sport, Staffline, Tasty, Virgin Wines and Warpaint.

In it, they say that AIM “has given innovative businesses like ours the ability to access patient capital as we grow” since it was established 30 years ago.

“Underpinned by important tax reliefs like Business Relief on Inheritance Tax, AIM has become one of the most successful growth markets in the world.

“While there are a small number of specialist funds investing in companies listed on AIM, a significant percentage of our shareholder base is made up of individual investors.

“BR compensates those investors for some of the additional risks associated with investing in growing companies.

“This investment forms the foundation of AIM as a critical growth platform for smaller companies.”

The letter is the latest warning to Ms Reeves to emerge in recent weeks, with the bosses of leading brokers such as Peel Hunt and Dame Julia Hoggett, chief executive of the London Stock Exchange, signalling that the viability of the junior London market would be threatened by the abolition of BR.

The Treasury has refused to comment on the intensifying speculation ahead of the Budge.

City sources said the companies’ collective letter had also been sent to other Treasury ministers as well as to Jonathan Reynolds, the business secretary.

It was sent amid estimates that the chancellor could need to raise as much as an additional £25bn from tax rises in order to avoid a return to austerity.

“The nature of BR legislation means that qualifying investors, who are advised to make these investment decisions as part of estate planning, take a long-term approach because they have little incentive to sell in fear of a market downturn,” the letter added.

“Recent uncertainty around the future of BR, created by media speculation, has significantly impacted the ability of AIM businesses to raise capital.

“A lack of clarity on the future of this relief has damaged investor confidence, showing clearly the close link between the relief and the future success of the market.

It added that the chancellor should use her inaugural Budget to restate Treasury support for BR for qualifying AIM-listed shares.

“High-growth businesses are critical to our economy, in terms of job creation, innovation and, increasingly, the ability to reinvigorate parts of the UK that have suffered from a lack of investment.

“Clear government support for BR will restore confidence in the AIM market and help it to play a key role in driving economic growth, ensuring the UK remains competitive for high-potential businesses.”

Other signatories included Brave Bison Group, Brickability, Brooks Macdonald, Comptoir Group, Crimson Tide, Hargreaves Services, Intelligent Ultrasound, Music Magpie, Ramsdens, Safestay and Union Jack Oil.

Octopus Investments and Cavendish both declined to comment.

Hundreds of employees of the digital bank Monzo are being given the opportunity to sell part of their stakes in the company as its valuation soars to £4.5bn.

Sky News has learnt that Monzo notified staff on Thursday that it was launching a secondary share sale backed by a number of the world’s leading technology investors.

Sources close to the deal said employees were likely to sell tens of millions of pounds-worth of stock as part of the deal, which is being launched less than three weeks before Rachel Reeves, the chancellor, is expected to increase the rate of capital gains tax in her inaugural budget.

Monzo, which has more than 10 million customers, has become one of Britain’s most successful, and valuable, fintech companies.

It employs more than 3,700 people.

Earlier this year, it raised more than £500m by selling newly issued shares to a group of investors led by Capital G, a division of Alphabet-owned Google.

That primary share sale valued the business at £4.1bn.

The latest share sale is understood to involve existing Monzo investors StepStone Group and GIC, the Singaporean sovereign wealth fund, buying stock from employees.

One insider said it would set a new floor for Monzo’s valuation as it progresses towards an initial public offering at some stage in the next couple of years.

Founded in 2015, it is now profitable and has diversified into investments and instant access savings accounts.

In recent months it has also launched pensions products and accounts aimed at under-16s.

Monzo now ranks as the seventh-biggest bank in Britain by number of customers, with one in five adults and one in 16 businesses now banking with it.

The company is among a new generation of banks which have emerged since the last financial crisis and begun to accumulate a significant share of the UK retail banking market.

Read more business news:
Chancellor warned taxes may ‘need to be raised by £25bn’
Post Office CEO says he doesn’t need to clear his name
Human trafficking charges against Stagecoach tycoon dropped

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Rivals include Starling Bank and Revolut, which was recently valued at $45bn and has just been awarded a banking licence by British regulators.

Monzo has recovered spectacularly from a difficult period when it emerged that the City watchdog was investigating it for potential breaches of anti-money laundering and financial crime rules.

It has revamped its corporate structure as it pursues an international expansion strategy that will serve as the prelude to a stock market listing.

Monzo Bank Holding Group was established to avoid the company facing punitive capital treatment by British regulators as it launches in new overseas markets.

Other Monzo investors include the Chinese group Tencent, Passion Capital, Accel, General Catalyst and Hedosophia.

Monzo is run by TS Anil, its chief executive, and chaired by Gary Hoffman, one of Britain’s most prominent bank executives.

A Monzo spokesperson declined to comment.