1 Friday, 4 November 2022 2 (10.00 am) 3 MR BLAKE: Good morning, sir, can I call Jonathan Evans 4 please. 5 MR JONATHAN EVANS (sworn) 6 Questioned by MR BLAKE 7 MR BLAKE: Thank you, can you give your full name, please? 8 A. Jonathan Evans. 9 Q. Mr Evans, you should have in front of you your witness 10 statement? 11 A. I have. 12 Q. That statement is dated 16 September of this year; is 13 that right? 14 A. It is. 15 Q. Could I ask you to look at page 22, that is the final 16 page of the witness statement? 17 A. Yes. 18 Q. Is that your signature there? 19 A. It is. 20 Q. Is that statement true to the best of your knowledge and 21 belief? 22 A. It is. 23 Q. For the purpose of the transcript that statement is 24 WITN03460100. 25 Thank you very much for attending today, Mr Evans, 1 1 and for giving that statement. That statement will now 2 go into evidence and the exhibits as well and the 3 questions that I will ask you today will really build on 4 what you have already said within that statement. 5 A. Okay. 6 Q. I'm going to start, just by way of background, with the 7 various roles you have held over the years. You started 8 in 1974 as a management trainee at the Post Office; is 9 that right? 10 A. It is. 11 Q. Among other things, you were in 1984 an assistant head 12 subpostmaster in Leicester; is that right? 13 A. Assistant head postmaster, not a subpostmaster. 14 Q. You became subpostmaster manager at Post Office Counters 15 headquarters? 16 A. Yes. 17 Q. You became, after that, the general manager in the 18 Midlands region; is that right? 19 A. Yes. 20 Q. You were network director between 1995 and 1999 -- 21 A. Yes. 22 Q. -- director of shaping competitive success programme in 23 1999, secretary to the Post Office between 1999 and 2001 24 and then company secretary of Consignia and then Royal 25 Mail Group between 2001 and 2010; is that right? 2 1 A. That is correct. 2 Q. It is those later roles that we will principally be 3 focusing on today. I'm going to take you broadly 4 chronologically. I'm going to start in the late 5 1980s/early 1990s and your role, including that of 6 general manager. Those roles that you held at that 7 period, presumably, were ones that involved quite a lot 8 of contact with subpostmasters; is that right? 9 A. Yes, it is right. In fact, going back further to the 10 time that I was at Leicester, that also had quite 11 a close involvement with subpostmasters because I was in 12 charge then of I think around 150 post offices in 13 Leicestershire. So I was the -- that was part of my 14 remit to look after those. I had pretty close dealings 15 with the subpostmasters and the Federation 16 representatives. 17 Q. So over those decades, you got to know subpostmasters 18 pretty well and the way that -- 19 A. I did. 20 Q. -- they worked? 21 A. I did. Particularly in the role of subpostmasters 22 manager, where the whole job was around dealing with the 23 contractual issues and remuneration issues and a whole 24 host of other things to do with subpostmasters. So that 25 involved a lot of contact with the Federation and 3 1 subpostmasters themselves. 2 Q. On the subject of contractual issues, presumably you 3 were familiar with the requirement of subpostmasters 4 which made them contractually responsible for certain 5 losses? 6 A. Yes. 7 Q. You would also, presumably, have been aware of 8 prosecutions in those early 1990s? 9 A. Yes, and indeed before and, really, this was a point 10 I was wanting to establish with you, that -- I mean, one 11 of my earliest recollections when I was at Leicester, 12 not actually in connection with a subpostmaster but with 13 a young postman who had tampered with a giro cheque and 14 it was a clear case of fraud. And I recall vividly that 15 the investigations people came to me and said "Look, 16 we've got this chap", as they would say, "bang to 17 rights, we ought to prosecute him". 18 I had already seen him in terms of his dismissal 19 from the company but I took the view that, here was 20 a 17/18 year old lad and it would be inappropriate to 21 prosecute him. Now, the reason I raise that -- and 22 I had a similar experience, actually, when I was coming 23 on a bit when I was in the Midland region, where we had 24 the choice as to whether to prosecute somebody, this was 25 a subpostmaster who had been guilty of or accused with 4 1 benefits -- sort of an inside job with benefit 2 encashment fraud. But six months previously we had 3 given him the bravery award because he had had an armed 4 attack on his Post Office. So there was the question 5 "Do we prosecute somebody -- how would that look?" I 6 can't remember how that ended up. 7 But the point I wanted to make is that, throughout 8 my time in line management, it was line managers who had 9 the ultimate responsibility to decide whether to 10 prosecute or not, not the investigation people, not the 11 lawyers. It would come to line management to decide. 12 Q. Do you know what period that ended? 13 A. I can vouch for that being up until the end of my time 14 as network director. What happened subsequently is, to 15 me, an interesting question. 16 Q. So up until 1999, it was the line management that took 17 the ultimate decision? 18 A. Yes. Clearly, they would be influenced, to an extent, 19 by what the security people, the investigators, the 20 lawyers were saying. But they exercised judgement in 21 terms of what the overall picture looked like for 22 a particular individual and what he or she was being 23 accused of, to decide how to progress it. 24 Q. Was that part of the consideration of the public 25 interest more broadly? 5 1 A. I think it was more what is -- what seems a reasonable 2 thing to do, based on managerial judgement, really. 3 I will put it that way. 4 Q. Your experience of that, was that on the paper-based 5 system, rather than on an electronic system? 6 A. Yes, absolutely. 7 Q. Did those roles -- so we are talking about pre-1995 8 roles -- give you a good overview of how the company 9 worked? 10 A. I would say so. I mean, one of the great advantages of 11 when I joined the Post Office when I did, it was 12 a two-year training programme, which got you to 13 experience all aspects at ground level of how the 14 business worked. So I spent time as a postman, went out 15 on a delivery round. I spent time on the counter, 16 I served customers on the counter. I was present when 17 people did a balance. It gave me that sort of 18 understanding of how the business operated. 19 Now, there was an awful lot, of course, that 20 I didn't know. In those days, a counter clerk would 21 have gone on a six-week training programme before they 22 were let loose on the customers. But I think I had 23 a pretty good understanding of how the business worked, 24 yes, and particularly having experienced the business -- 25 as you can see, I went from being the personal assistant 6 1 to the Post Office chairman to assistant head postmaster 2 in Leicester, from working with the board right on the 3 shop floor, as it were. I was very fortunate to have 4 a pretty broad experience of what the Post Office did. 5 Q. When you became regional manager, did you expect 6 management to take your concerns as regional manager 7 seriously? 8 A. Yes, I think so. 9 Q. Was the role of a regional manager quite significant 10 because they were the link to the subpostmasters? 11 A. Yes. There were seven regional managers when the Post 12 Office Counters reorganised itself in 1993. I had led 13 that reorganisation and ended up as one of the seven 14 regional general managers. So in the Midland region, we 15 had 1500 subpostmasters and we made a point, as a team, 16 of -- the team in the Midland region -- of having our 17 meetings not just always in Birmingham but we went out 18 to different parts of the region, held meetings there 19 and invited subpostmasters and staff to come and meet 20 us, so that we tried to establish that link with the 21 people that -- 22 I mean, after all, we saw it pretty clearly that, if 23 we wanted to give good service to our customers, which 24 is what the business was about, we needed to make sure 25 that the people who gave that service understood exactly 7 1 what we were trying to do and we wanted to get close to. 2 Q. You spent some time on both sides, so as regional 3 manager and then up the chain in senior management? 4 A. Yes. 5 Q. Do you think senior management took the concerns of the 6 regional managers seriously? 7 A. I am sure they did. I mean I became network director 8 and then had the seven regional general managers 9 reporting to me. So I can tell you that I did take -- 10 they were not shy in coming forward with what they 11 thought was coming on. 12 Q. I'm going to move onto your role as network director. 13 So you became network director in 1995. Can you just 14 tell us briefly what that role encompassed? 15 A. I suppose the best way to describe it, in terms of how 16 other organisations would have called it, would have 17 been operations director. So I was really there in 18 charge of the day to day operation of Post Office 19 Counters so that, as I say, the seven regional managers 20 were reporting to me. So ultimately 19,000 post 21 offices, however many there were at the time, I was in 22 charge of in terms of their day to day operation. So we 23 were looking at the quality of service they gave, their 24 staffing arrangements, we were into different forms of 25 contracts that we were experimenting with as well as 8 1 just making sure the day-to-day operation of the 2 business ran well. 3 Q. In that role, were you part of the leadership team 4 within the Post Office? 5 A. I was a director of Post Office Counters yes. 6 Q. Was that a role, as network director, a role that was 7 more involved in the day-to-day lives of subpostmasters 8 than perhaps other people at that level within the 9 company? 10 A. I think it would be, yes. 11 Q. I'm going to look at our first document. That is 12 POL00031271. This is an August 1996 document that was 13 written by Bob Peaple, addressing the automation change 14 programme. Very briefly, can you tell us what the 15 automation change programme was? 16 A. What I think it was, was a -- managing a number of 17 automation projects that were going on in the business 18 and putting some collective weight behind them to make 19 sure they integrated well, and so on. I think it was 20 that. So this was 1996. It was the early days of 21 Horizon. And there would have been some other 22 automation issues around. I can't describe it much 23 better than that, than I think is in the document 24 itself, which describes the purpose of it. 25 Q. Thank you. Can we look at page 6 of this document, 9 1 please. Page 6 sets out the purpose of the Automation 2 Transformation Steering Group. I will just read that 3 purpose. That says: 4 "To provide leadership and direction to the 5 transformational programme and shared ownership of the 6 business vision which it supports. The steering group 7 is responsible for monitoring and reviewing overall 8 progress towards the successful completion of the 9 automation programme and achievement of the strategic 10 targets which have been set." 11 You refer in your witness statement to the terms of 12 reference of the Automation Transformation Steering 13 Group. Is the terms of reference that paragraph or is 14 it -- perhaps we could scroll onto the next page and 15 after, there is reference of outputs and inputs. What 16 did you understand to be the terms of reference of that 17 group? 18 A. I would say all of this, actually. We served a purpose. 19 Inputs and outputs would have described what the 20 programme was about. 21 Q. Can we look at page 9 which sets out the membership. 22 Looking at the names there, it seems to be quite 23 a significant role in that you have Bob Peaple there and 24 you are mentioned there, Roger Tabor is there. Did you 25 see it as a significant role at the time? 10 1 A. To be perfectly honest I can't think now what I thought 2 at the time. It clearly was an important collection -- 3 an important grouping of people and the role they were 4 doing was important because automation and the 5 automation transformation was significant for the 6 business. So I think it was right that I was connected 7 with it. But there you have got the personnel director, 8 the strategy director, the finance director, myself, 9 Paul Rich, who I think you have seen is the development 10 director, and some IT people, I believe. So, yes, it 11 was a significant -- 12 Q. Would it be fair to say that you were involved at quite 13 a high level in the automation project at that early 14 stage? 15 A. Yes. 16 Q. Presumably as network director you could feed into how 17 that might impact on the ground? 18 A. Yes, I suppose I would. Again I have zero recollection 19 now of actually how that worked or examples of it but 20 I would guess that was what I was there for, yes. 21 Q. Bob Peaple, we have seen, is on that membership. He was 22 also on the evaluation board in 1996. Were you aware 23 either in broad terms or in specifics of what was 24 happening at that procurement stage? 25 A. I was aware from the point of view of -- Bob was 11 1 a colleague and colleagues talk but I wasn't involved, 2 myself, in the actual selection process. 3 Q. We have heard, for example, that Pathway wasn't the most 4 technically attractive option, was that something that 5 you would have been aware of in 1996? 6 A. Well, this is where it is -- where the memory can play 7 tricks. I'm certainly aware of that now. Whether I was 8 aware of it at the time I'm less sure. 9 Q. Would you have been aware, for example, that one of the 10 reasons Pathway succeeded was they were carrying 11 a greater risk, in particular, relating to fraud. Was 12 that something you remember? 13 A. I remember it said a different way, that because the -- 14 there was the need for whoever the supplier was going to 15 be to be compliant with the PFI arrangements, which 16 therefore involved a significant transfer of risk, that 17 ICL tick that box more than the other applicants did: 18 I was aware of that. 19 Q. We have seen in a document, I don't need to bring the 20 document up, but discussion of a need for a proactive 21 management stance towards Pathway because of certain 22 concerns at that procurement stage. Were you aware of 23 that need? 24 A. I can't say that I was. I mean again it is one of those 25 points that I now am aware of, but what I was aware of 12 1 20 years ago, I can't be certain of. 2 Q. I think perhaps in broad terms would you have been aware 3 that they weren't necessarily the best provider on some 4 aspects and needed to be carefully managed? 5 A. I don't think I would even go that far actually in terms 6 of what I was aware of at the time. I don't think -- 7 I can't recollect thinking that, if you see what I mean. 8 Q. We have heard from witnesses -- some witnesses who say 9 that Pathway underestimated difficulties with rollout. 10 We have heard the counter view from Mr Todd and a paper 11 that was produced that said that Post Office Counters 12 Limited couldn't have reasonably believed that the Post 13 Offices were fit for automation. 14 What was your view, at that time, of the physical 15 condition of branches and whether they had been 16 sufficiently taken account of at the procurement stage? 17 A. Well, knowing the range of premises that sub post 18 offices were in, ranging from bright, shining, Crown 19 post offices to small, rural offices that were in 20 somebody's front room or in a church hall or, in one 21 case in the Midlands, would you believe, a converted 22 pigsty. It was no surprise that there would be 23 difficulties with installing the equipment in all of 24 those. 25 Now whether the estimate as to what would be 13 1 required to do that was miscalculated, I don't know. 2 I don't know who was assuming what in terms of what that 3 commitment would be. 4 Q. Because you were not party to that part of the business? 5 A. I was not party to that. 6 Q. Are you aware of Pathway having been given 7 an opportunity to investigate individual branches or, 8 perhaps, not being given an opportunity to investigate 9 branches? 10 A. I have no recollection of that. I feel it would be 11 unlikely that we would have prevented them from 12 investigating. All sub post offices are open to anybody 13 to get a good look, okay you can't get behind the scenes 14 but you can get a good impression of what sub post 15 offices and all post offices are like by visiting them 16 and there is no bar to that. 17 Q. How clear would it have been during your period, for 18 example, as network director, that many branches would 19 have been, for example, without a computer or relying on 20 a telephone line? 21 A. Sorry sir, you mean pre-Horizon how many -- 22 Q. How obvious would it have been to either an IT 23 professional or a member of the public? 24 A. That there was no computer in the office? 25 Q. That there were many branches, for example, without 14 1 computers or who relied on telephone lines? 2 A. All would have been without computers, unless the 3 subpostmaster, him or herself, had one for their own 4 purposes. I would be very surprised if there were no 5 telephone lines because we needed to access them and 6 they needed to call us. Does that answer the question? 7 I'm not too sure. 8 Q. I suppose you spent every day as network director, 9 getting information about the network, but how obvious 10 would it have been to somebody outside of your role as 11 to the state of post offices and their technological 12 state. 13 A. I think the general view would have been that it was 14 fairly minimal, actually. I can think of some 15 subpostmasters who did have their own minor EPOSS 16 system -- I forget the name of it -- Michael Jackson 17 system, or something like that, that some subpostmasters 18 were getting -- 19 Q. Maybe Edward Jackson or something? 20 A. Whoever it was. 21 Q. Unlikely to be Michael Jackson, perhaps! 22 A. Yes, sorry. But other than that, pre-Horizon, computers 23 were not much in evidence at post offices, if that 24 answers the question. 25 Q. What was your view, as network director, of how 15 1 realistic the project was at that stage? 2 A. I think I saw it as daunting, just on the sheer scale of 3 it and I knew that there were a number of 4 subpostmasters, particularly those -- although not 5 necessarily -- those who were older, that were looking 6 at it with a bit of trepidation. The thought of having 7 to deal with computers, I mean -- but bear in mind this 8 is, what, 20-odd years ago, when computers and use of 9 technology was far less prevalent than it is now. There 10 were some people who were concerned about it. 11 So I think I saw, yes, there were the physical 12 problems and, as we got into the live trial, the 13 Federation certainly represented those to us, there were 14 problems with subpostmasters not being able to put the 15 kit in and what are we going to do about moving the 16 furniture around, and all that sort of thing. But 17 I think I was equally concerned that some subpostmasters 18 would just not buy into -- or just feel unable to cope 19 with what they were being asked to cope with. 20 And I know some did leave, some decided "Okay, this 21 is the point at which I'm going to leave the -- I'm 22 going to sell my business". We tried to encourage them 23 not to do that but there was a bit of that about. 24 Q. At that stage, did you think the project was achievable? 25 A. I am of an optimistic tendency, so I feel sure that 16 1 I would have felt that, even though I recognised that it 2 was not going to be a walk in the park. 3 Q. Do you remember the views of others at that stage in 4 senior management? 5 A. I think senior management were in a very positive frame 6 of mind. I mean, the thing to remember here is gaining 7 the government's commitment to automating the Post 8 Office network, and even more so to gaining the future 9 business from the Benefits Agency, which was a third of 10 the income, was a colossal prize, not just for the 11 business but for subpostmasters themselves, who had 12 invested -- I think it was at 1 billion collectively 13 into their offices. 14 So to get the assurance that here was the government 15 wanting to make sure that the Post Office was 16 computerised and locking in Benefits Agency business for 17 a number of years, was a colossal prize. So, of course, 18 we were wanting to maximise the positive on that and, 19 therefore, doubts at the time as to whether this was 20 achievable were, I think, subsumed, if you like, in the 21 euphoria of actually getting this agreement in. 22 Q. I'm going to move on to the summer of 1997, a period 23 when you were still network director. Can we look at 24 NFSP00000279, please. This is an NFSP meeting of 25 28 May 1997, addressing automation. Is this something 17 1 that you remember at all? 2 A. Well, it is interesting this, I think I put in my 3 witness statement that I don't remember it. In fact, 4 I would even go so far as to say I do not think I was 5 there but I do stand to be corrected on that. Because 6 it is not clear who was there because, if you look to 7 the end of the document, you will see a list of people 8 mentioned and it couldn't conceivably have been all of 9 those who were at the meeting. 10 Q. Absolutely. Perhaps we can turn to page 5 of the 11 document. There is an ID key there and you are 12 certainly on the ID key. 13 A. Yes. 14 Q. So you are named, even if you are not present. 15 A. I mean, all of the Counters executive committee and 16 regional managers, I fell pretty sure that they were not 17 all present at this meeting, but they were given -- 18 I mean, I'm willing to be corrected and say that I was 19 there, I don't know, but I have no recollection of it. 20 But I think the really important thing is this was 21 typical of meetings that were taking place between 22 ourselves and the Federation and, in this case, with 23 Pathway, and this gives you the flavour of the issues 24 that were around that needed addressing. 25 Q. Can we look at page 2, please. It may be that you are 18 1 not able to help but I want to try and understand those 2 first three bullet points, if we can. It says there: 3 "Expert support -- outlet focused 'case notes'. 4 "Collating information generated by all parties 5 involved. 6 "Keeping outlets informed and up to date. 7 "Who owns this Communication process?" 8 Are you able to assist us with what that might mean? 9 A. I don't think I can say much more than the words say 10 themselves, really. It seems to be centred on 11 harnessing the information that was coming from 12 individual trial offices. I think this was the point at 13 which this meeting would have taken place and what it 14 refers to. Perhaps it is saying "How can we share 15 information that is coming from them all and who is 16 owning the communication to make sure that that 17 happens?" I suspect that's what it is about. 18 Q. Second bullet point: 19 "Robustness of communication network for systems." 20 Third: 21 "Subpostmasters not reporting all system errors -- 22 distorting error rate figures." 23 That seems to speak for itself. 24 A. Yes. 25 Q. Were you aware of that, at that stage? 19 1 A. No. I have no memory of being aware of it. 2 Q. It says "Action By", that's the PDA, the Programme 3 Delivery Authority. 4 A. Yes. 5 Q. Do you recall any steps taken at that stage to address 6 those kinds of problems such as underreporting? 7 A. I'm afraid I don't remember any specific actions in that 8 respect, no. 9 Q. Can we turn over the page to page 3, please. Now, it is 10 halfway down the page: 11 "Urgent need for guidance of kit specifications, 12 counter layouts to enable new Subpostmasters/those who 13 want to modernise outlet prior to automation ..." 14 In the action column, it's got "PR/JE". Now, we 15 know from the key that is Paul Rich and yourself. Is 16 that something you remember at all? 17 A. I think I do have a vague recollection of this. Not in 18 connection with this meeting. But this was effectively 19 subpostmasters saying, proactively, that "If my office 20 needs a bit of adjustment in order to get the Horizon 21 kit in, let me take the opportunity to modernise it more 22 widely than that. So let me know the specification of 23 what's going to come into it, so I can build that into 24 a refurbishment to my office". I think that's what that 25 was about. 20 1 Q. At that period, so 1997, were there concerns being 2 raised about the fitness of the infrastructure that 3 existed in branches? 4 A. I think the concerns were coming from individual 5 subpostmasters. How widespread that was, I don't know. 6 But I can certainly -- as I think I have said before, 7 I can recall instances where people were unsure about 8 how the kit would actually fit in their perhaps cramped 9 premises. 10 Q. You described some quite basic post offices. You gave 11 one particular example. 12 A. Yes. 13 Q. Were you receiving concerns in 1997 that post offices 14 might not be ready for automation? 15 A. I'm not sure whether they wouldn't be ready, but that 16 they would require some modification. I was certainly 17 aware of that. 18 Q. Given the size of the network, would that be quite 19 a large number required modification? 20 A. I couldn't say that. My impression now, I think, would 21 have been that it would not have been a significantly 22 large number. 23 Q. Still in the summer of 1997 can we look at POL00039675, 24 please. This is a note or a letter of 2 July 1997. 25 Now, it says from Don Grey. Is that regional manager of 21 1 the North East? 2 A. Yes. 3 Q. So that's the equivalent to what you were in the 4 Midlands, at one stage? 5 A. Yes. 6 Q. You already said that the views of the regional manager 7 is taken seriously by management. 8 A. Yes. 9 Q. The date is on the second page. We don't need to turn 10 to that yet. Can we look at that first substantive 11 paragraph. If we could scroll down slightly, point 1, 12 entitled "Live Trial Review". It seems as though what 13 is being emphasised there is the importance of a live 14 trial of the system; is that a fair summary? 15 A. Yes. 16 Q. It says there: 17 "Some of this review will be embedded in the work 18 commissioned by Jonathan after the CEC Awayday in May." 19 Are you the "Jonathan" there? 20 A. Yes. 21 Q. Do you remember that? 22 A. No, unfortunately. I remember when you sent me -- this 23 document to me fairly recently, it was as if I was 24 reading it for the first time. 25 Q. It says: 22 1 "I understand you have recently asked trial region 2 [managers] to provide comment on experience to date. 3 How does that fit with other activities and how are we 4 ensuring a coordinated and comprehensive review of all 5 elements of the live trial?" 6 That's number 1 on the list there. I know you don't 7 remember reading this but do you think it would be fair 8 to say that was seen as the most important issue at that 9 time? 10 A. It was an important thing to be do doing, yes, 11 absolutely. The RLMs, incidentally, were regional 12 liaison managers. I think they were set up -- I may be 13 wrong on this but they were set up to be in the trial 14 regions, of which I think there were two, you know, to 15 be the main conduits for information coming from the 16 live trial. I think that was their role. 17 Q. So that paragraph is really talking about the importance 18 of the live trial and obtaining subpostmaster feedback 19 through regional liaison managers? 20 A. Yes. 21 Q. If we could keep on scrolling over the page, it seems as 22 though Mr Grey is also concerned about ensuring 23 a fitness for purpose specification. Do you remember 24 that? 25 A. Let me have a read of this. 23 1 Q. I can read it out for the record: 2 "Pathway Work Quality 3 "What measurement systems are we putting in place to 4 verify the standard and sufficiency implementation? 5 This is particularly pertinent in the context of the WTL 6 and sub contractors where we stand to incur additional 7 costs if we do not exercise proper control. Have we any 8 plans to establish a clear defined fitness for purpose 9 specification nationally, which satisfies not only 10 Horizon implementation but also supports our business 11 requirements in the longer term?" 12 Is that something you remember at all? 13 A. I'm afraid I don't. I think what he is getting at is to 14 do with the hardware installation in the branches and 15 whether we were -- had established a minimum level of, 16 well as it is saying here, a standard and sufficient 17 implementation. How would we know to judge what Pathway 18 had done, met a requirement? And I think this is Don 19 asking the question, "What is the answer to that"? 20 Q. So is a fair summary of that letter, that the regional 21 manager there is emphasising the importance of live 22 trials and also the importance of ensuring sufficient 23 specification, essentially, so that the system works? 24 A. Well, be careful. I'm not sure whether it is about 25 whether the system worked or whether the hardware could 24 1 be satisfactorily installed. I think that was mainly 2 the focus on this. 3 Q. I'm going to move to 1998. You were still network 4 director. Can we look at POL00089931 please. This is 5 a document that we have recently provided you with. It 6 is a very long document. I don't need to take you to 7 any real specific page of that document. Can you just 8 tell us what it is? 9 A. What it seems to be -- because it says "Foreword" -- 10 a sort of call to arms to people to understand what 11 Horizon is going to mean in terms of operating 12 instructions and please comply with what this document 13 sets out. 14 Q. Perhaps we could scroll down the page because it's got 15 your name at the bottom of the foreword? 16 A. Yes. 17 Q. Then if we keep on scrolling, it is some sort of 18 instruction manual or manual for subpostmasters? 19 A. I think it is more for managers of subpostmasters. It 20 may include subpostmasters as well. 21 Q. Was it part of your job as well at that stage to get the 22 network ready for Horizon? 23 A. I think that was more the Horizon team's role. Clearly 24 we were working together on it but that was -- I think 25 this document was produced by then. Incidentally I have 25 1 again -- I'm sorry about this -- but even though this 2 looks like a significant document I do not have 3 a recollection of it. 4 Q. Do you know why you might have been writing the 5 foreword, was that because you had responsibility for 6 the overall network? 7 A. Yes, I think it would have been that and what the 8 contents were really -- who was this -- who were the 9 recipients of this were people who would have been 10 ultimately in regions, therefore under the network 11 director's control. 12 Q. At this stage, were you having conversations directly 13 with ICL about how ready they were? 14 A. Me personally? No. 15 Q. Was there a reason for that? 16 A. The reason was that others were doing that. It was not 17 my role to engage with them on those issues. 18 Q. Do you think it would have been helpful for them to have 19 discussed, for example, the fitness of the individual 20 branches with the network manager -- network director? 21 A. I can't think it would have been unhelpful but I would 22 like to think that they were getting as much information 23 as they could from their main contacts without needing 24 to do that and I am sure if they felt under-provided 25 with information, I think they could have asked for it. 26 1 Q. Were you providing that information up the chain? Who, 2 in Post Office, would you have been providing updates 3 about the state of individual branches? 4 A. Oh gosh, I don't think it quite worked like that. There 5 was no -- I do not think there was any sort of database 6 of the state of post offices if you like and how that 7 was changing. 8 Q. But in broad terms, who would you have been updating 9 about the state of readiness of the network? 10 A. I do not think I would have been updating anybody 11 actually, whether that was going on within PDA, with 12 their dealings of ICL, I don't know. 13 Q. So where would management have been getting their 14 information about how ready post offices were for this 15 automation project? 16 A. I don't recall and, you know, there may have been 17 a process in place to, in some way, consolidate that 18 information as to what needed to be doing in group's 19 offices and aggregating all that up. I can't remember 20 it if there was. There could have been. 21 Q. You can see how it is quite important that you were one 22 of the people who had a close liaison with 23 subpostmasters, that management find out about what's 24 going on in individual branches, was that somebody 25 else's role to inform management of that kind of 27 1 information? 2 A. I'm not sure I'm quite on the same wave-length as you on 3 this. I think the -- whether a particular branch was 4 capable of easily receiving the Horizon kit was 5 an almost individual, case by case basis. 6 So the thought of aggregating -- you know, what is 7 the overall status of the network to receive Horizon? 8 Would have meant adding a lot of apples and pears 9 together to come up with an answer and I'm not sure that 10 that was either done or necessary to be done. I think 11 the key thing was, on the ground, office by office, how 12 difficult would it have been or how easy would it have 13 been to install the equipment? I don't recall any -- 14 again I stand to be corrected -- but I don't recall any 15 system for recording or whatever. 16 Q. Do you think it is unlikely that the message would have 17 been received by senior management about the state of 18 readiness overall of the Post Office network? 19 A. Unlikely that it wouldn't have been received? I think 20 it is unlikely that it would have been received. All 21 the directors had their ears pretty close to the ground 22 and, if this had been seen to be a major issue, "Boy, 23 we've got this Horizon system in but we can't fit it in 24 anywhere", that would have registered, of course it 25 would. But I do not think it was on that scale. 28 1 Q. You sat on the Treasury Working Group. Why, as network 2 director, were you on the Treasury Working Group? 3 A. It is an interesting question. The answer might be best 4 given in one of the documents you have. It is the 5 minutes from the Treasury Working Group. Do you want me 6 to give you the number? 7 Q. Certainly, if you have it. 8 A. It is POL00028090. 9 Q. We will be coming to that document shortly. 10 A. Okay. 11 Q. Perhaps you can just say, in very broad terms, why you 12 thought, as network director, you were the 13 representative? 14 A. Well, you will see from those minutes that, in the 15 meeting before I attended, there was a discussion at 16 that meeting as to would it be a good idea to have 17 somebody from Post Office Counters as part of the group. 18 Again, you will see from those minutes that it was 19 commented it would be very helpful for presentational 20 purposes, I think it was put, and also that it should be 21 somebody who did not have a connection with the 22 negotiations then underway with ICL and also because 23 there would be some analysis that needed doing in terms 24 of the impact of Horizon ceasing or being altered on the 25 size of the network. 29 1 So I think, from a combination of all those things, 2 the fickle finger of fate pointed in my direction. 3 Q. So, on the one hand, it is because, although you were 4 from the Post Office, you were independent of the 5 discussions with ICL? 6 A. Yes. 7 Q. But, on the other hand, it is also because, as network 8 director, you knew about the potential impact on the 9 network of cancellation? 10 A. Yes. People in my team, in head office, got some 11 modeling ability just to work out what those 12 consequences might be. 13 Q. We have heard about issues with the Benefits Agency in 14 1998. I'm going to look at the minutes that you have 15 just been talking about. First, we will look at 16 POL00028642. This is a discussion paper that you wrote 17 for the Treasury. Now, in your statement at 18 paragraph 18, you refer to three options in play at that 19 time. The three options were: continue as planned; 20 continue without the benefits card; or cancel Horizon. 21 This document that you -- over the page is about 22 Option 3, ie cancellation of Horizon. Can we look at 23 paragraph 2 and below, please: 24 "Option 3 envisages the immediate cancellation of 25 the entire Horizon project ..." 30 1 You set out there some of the implications, the 2 first one being: 3 "confidence will be lost in [Post Office Counters 4 Limited] -- from the moment of announcement of Horizon's 5 cancellation, the commercial sub-office market would 6 discount the asset value of post offices, thereby 7 triggering the initial stages of a spiral of network 8 decline." 9 Can we move on to page 5 and can we look at 10 paragraph 14, please. Paragraph 14 is "POCL response -- 11 cost reduction whilst maintaining network stability": 12 "The cancellation of Horizon, the impact of ACT and 13 the subsequent income/footfall loss all have the 14 potential to damage POCL's finances and network. These 15 effects would be offset in part by the pace and manner 16 in which ACT is introduced, the speed at which 17 alternative technology could be brought in, and the 18 consequent capacity of POCL to offer banking and other 19 products. Unmanaged network change itself would 20 undermine the capability to develop new income streams 21 and, if it is to be avoided, action would need to be 22 taken to protect the network from collapsing between the 23 timing it of the Horizon announcement and the period at 24 which replacement technology and new business income 25 streams could kick in." 31 1 Can we go over the page, please, to the 2 "Conclusion"? That's paragraph 19. That says: 3 "In its basic format option 3 [so that's the 4 cancellation] leads to a smaller business, with a much 5 reduced and still unstable network, and POCL still 6 making a considerable loss. If POCL responded as 7 outlined in this paper, it could potentially hold onto 8 the network but would result in being a heavily 9 subsidised business. This is because ACT eats into 10 POCL's income and footfall before alternative technology 11 can deliver sufficient replacement customers and income. 12 Offices would need to be subsidised to keep them viable 13 but too many customers would have been lost for the POCL 14 fight back to do more than level off and start 15 marginally to reduce the subsidy. There also remains 16 the very real risk that the subsidy would not achieve 17 network stability -- particularly if any announced 18 package is not seen as credible." 19 Consistent with other evidence we have heard, this 20 paints a pretty bleak picture of cancellation; do you 21 agree with that? 22 A. It does. 23 Q. Was it your intention, at that time, to make clear to 24 government the bleak picture? 25 A. It was undoubtedly that was the intention. It might 32 1 have been called at the time -- well, if it was done 2 now, "Project Fear", I suppose. But it was painting 3 a -- this is not fanciful, this is what easily could 4 happen. 5 Q. And the message that's being communicated is that there 6 is a need for speedy automation? 7 A. Yes, and I think the important thing is managing the 8 confidence levels of subpostmasters. That's what really 9 this was getting at, particularly the risk of what we 10 called there "unmanaged closures". This is 11 subpostmasters of their own will deciding "I have had 12 enough, I'm pulling out before the value of my business 13 sinks even further", and that would have been a real 14 risk because then we would have had -- we obviously like 15 to keep post offices well spaced out between each other, 16 that would have potentially resulted in a -- not a very 17 good network, and that's what we were aiming to avoid. 18 Q. The message that's communicated isn't about individual 19 post offices closing though, it is about the impact on 20 the network and then the impact, no doubt, for Post 21 Office Counters Limited as a viable company? 22 A. Yes, but the impact on the network is the impact on 23 subpostmasters. "Network" means the number of sub post 24 offices and if individual subpostmasters are going to 25 decide we no longer wanted to be part of this, that 33 1 would have been the result. 2 Q. Would you agree that the message that's being 3 communicated there, it is not focusing on the impact for 4 the individual subpostmasters, it is focusing on the 5 impact for the company? 6 A. Well, I would suggest it is actually focusing on both 7 because this does talk about the confidence in the 8 subpostmaster's market, higher up in the document. It's 9 doing both. Yes, it would mean that POCL would get into 10 a heavy loss-making position and that the impact on the 11 network, ie subpostmasters, would be considerable. 12 Q. When we look at the conclusion and it talks about the 13 heavily subsidised business, would the subsidy be going 14 to the company or to the individual subpostmasters? 15 A. I think the implication here was that, to keep 16 subpostmasters in business, we would need to 17 artificially maintain their remuneration levels, which 18 would require the company to have a subsidy. So, 19 effectively, the company would be being subsidised by 20 government, in order to subsidise subpostmasters. 21 Q. Can we look over the page to page 8, please, to annex 1. 22 Annex 1 sets out the products and services that Post 23 Office Counters Limited would develop on Horizon. 24 I don't need to read the whole page. Perhaps we can do 25 a slow scroll through that page as well. It talks 34 1 about, for example, the Government Gateway. That 2 itself, presumably, would have been very financially 3 significant to the company? 4 A. Yes. These are ideas that we are working up with the 5 help from McKinseys. I think there was a McKinseys 6 person with us at this meeting with Harry Bush (?), 7 thinking through what is the future strategy for Post 8 Office Counters to be? We focused on these three 9 critical markets: financial services, banking 10 transactions -- this big idea of post offices being, as 11 we called it, a Government Gateway where people would be 12 able to do a lot of government business within -- in 13 a sort of synchronised way. So, instead of having to, 14 if you moved house, to tell DVLA and other government 15 organisations what your new address was, you could go 16 into a Post Office and do it once and it would spread 17 out. 18 That was the sort of big idea. It proved more 19 difficult to do than the idea sounds, in the end. But 20 we were certainly focusing, and with a lot of government 21 support, on making the Post Office Network be that 22 Government Gateway. And, obviously, also the third 23 part: remembering that we are still part of Royal Mail 24 and Royal Mail and Parcelforce were major sources of 25 business. 35 1 Q. Can we look at the paragraph that's just at the bottom 2 of the screen now, beginning "It is important". It 3 says: 4 "It is important to note that the time frame for 5 POCL to achieve the full potential identified in these 6 markets is c10-15 years and much has to be done to 7 reposition POCL to face up to these markets 8 successfully." 9 Is the message that's being communicated in annex 1 10 that there is a long-term project that will benefit both 11 Post Office and government? 12 A. Yes. That is what we were trying to say. 13 Q. And all of that would rely on Horizon? 14 A. It would rely on Horizon and it would rely on no shocks 15 to the network that would throw it into instability. So 16 what we were basically saying is, in a nutshell, "We are 17 still reliant on Benefits Agency business, don't switch 18 that source off too quickly, it will need time to get 19 these other revenue streams in and, if we are able to do 20 it that way then that is a practical solution to the 21 position we are in". 22 Q. It is certainly saying "Let's keep the Benefits Agency 23 part", but also quite a significant part of this is "We 24 need Horizon, come what may"; would you agree with that? 25 A. It is certainly saying "We need automation, come what 36 1 may". 2 Q. Can we go to POL00028090, please. This is 3 September 1998. These are the beginning of the minutes 4 that we just talked about. 5 A. Yes. 6 Q. Page 1 shows that it is from the Treasury. This is 7 papers for the second meeting of 25 September. So 8 25 September, we will come to it, but that's I think 9 when you attended for the first time, and these papers 10 include the minutes from the first meeting? 11 A. Yes. 12 Q. Perhaps we can look at page 3. Included in the papers 13 for the second meeting is a list of who attended the 14 Horizon Working Group and you are there listed as the 15 sole representative of the Post Office, for reasons that 16 you have explained. 17 Can we go over the page, please, to page 4 and this 18 is the minutes of the first meeting. So that's 19 a meeting that you weren't at. 20 Can we go over the page to page 5, please, to 21 paragraph 2. So this is "The purpose of the Working 22 Group and membership". I'm just going to read, for the 23 record, part of the second paragraph: 24 "Membership of the group was discussed. Sarah 25 Graham ..." 37 1 Who was Sarah Graham? 2 A. Sarah Graham was a senior official in the Department of 3 Social Security. 4 Q. "... suggested that both the [Benefits Agency] and [Post 5 Office Counters Limited] should be represented on the 6 group. On the one hand it was important to keep the 7 negotiation separate from the work of the group, and 8 this might be difficult if they were included. On the 9 other hand there was presentational value, not to 10 mention advantages in terms of speed (since they would 11 need to be closely involved in the work on fallback 12 options), with having them represented. It was 13 important to overcome POCL's view that they were 14 separate from government." 15 Was that how the government saw it at the time? 16 A. Depends who you mean by "the government". I think there 17 was a view, I suspect, amongst officials that, because 18 of the stance that Post Office Counters had been taking 19 on some legal issues connected with how the Horizon 20 contract could be terminated, that they -- and I think 21 the next meeting came onto this as well -- that POCL at 22 one stage could be blocking ministers' wishes because 23 they had an implicit veto in terms of whether the 24 Horizon contract could be cancelled or not. I think 25 that's what this was getting at. 38 1 Q. Was it, in any way, an attempt to rein you in as 2 an independent company? 3 A. That might have been in Sarah Graham's mind, in saying 4 all this. 5 Q. What was your feeling at the time? 6 A. My feeling at the time was, actually, that I was 7 there -- if you go on to read the next bit -- the BA and 8 POCL would be included in the working group but on the 9 understanding that there may need to be some meetings 10 without them present. 11 So I think I was feeling -- I was part of the B team 12 on this. There was the A team, who were the government 13 officials, who could have their -- as I think it says 14 later on, do their brokering between individual 15 government parties. I think I was there -- perhaps I'm 16 looking at this now a bit more cynically than I did at 17 the time -- but for presentational value, so they could 18 say "We have involved Post Office Counters in this", and 19 also that the bit about separate from government could 20 be explored with a representative who was there. 21 Q. Did you feel political pressure at that time? 22 A. I didn't feel political pressure, no. I think the 23 debates we had, having said everything I have just said, 24 were pretty good. There was a lot of open discussion 25 around what could happen but it was pretty clear, 39 1 nonetheless, where individual members of the group were 2 coming from. 3 Q. Did you feel, as somebody who wasn't, say, the chief 4 executive or the chairman at this meeting, that you were 5 chosen, in any way, because you were less senior? 6 A. I do not think I felt that, apart from seeing how the 7 POCL representative was being positioned in this 8 paragraph 2, which itself was effectively saying, "We 9 really only want somebody to join this group who isn't 10 connected with the negotiations and who" -- well, all 11 the rest of it -- "who is there, in a way, only when we 12 want that person to be there", because the big 13 negotiations will go on between government officials and 14 ministers without both Benefits Agency and Post Office 15 Counters people there. 16 Q. Did you feel comfortable being part of that group at the 17 time? 18 A. It was pretty challenging, whether it was comfortable? 19 As I say, my recollection is that the tenor of the 20 meetings was very business like and constructive. So, 21 I think I played a part. 22 Q. Let's look at the minutes from the second meeting, that 23 is POL00028091, please. This is the 25 September 24 meeting. You can see there at the bottom "Minutes of 25 2nd meeting follow". Can we turn over the page to 40 1 page 3, please, which is where the minutes appear. If 2 we can scroll down we can see, on that occasion, you 3 were attending. So that, I think, was your first 4 meeting. 5 A. Yes. 6 Q. Would you agree with that? 7 A. Yes, I think that is right. 8 Q. Can we turn to page 5, please. Can we look at 9 paragraphs 10 and 11. Paragraph 10 is talking about the 10 "Viability of Option 2, using Horizon without a Benefit 11 Card": 12 "This concerns the technical and commercial 13 viability of Option 2, asking the question 'If there is 14 no BPC, would Horizon be a sensible solution for POCL in 15 technical and commercial terms?' This issue is being 16 addressed by KPMG. George McCorkell noted that this 17 work should take account of where the Post Office itself 18 wanted to go." 19 It moves on to what you have said: 20 "Jonathan Evans explained that if the BPC was 21 cancelled, POCL would wish to review its options and 22 requirements and retender. AS ..." 23 Who is "AS"? 24 A. Adam Sharples, the Treasury chair. 25 Q. "[He] suggested that if the Horizon system was worth 41 1 pursuing, it would be surprising if taking out one 2 component would require starting again from scratch. 3 Restarting would delay by several years, so to continue 4 without the BPC must be a serious contender for 5 a fallback option." 6 You are saying there that you might look again and 7 even carry out a re-tendering exercise. You have 8 already described today what you called "Project Fear". 9 Was the approach at that meeting to effectively provide 10 a negotiation tactic and to scare them into POCL 11 potentially pulling out? Was that a serious -- 12 A. Yeah. I think in an ideal world that is what we would 13 have wanted to do. Because bear in mind, here we are, 14 this is in 1998, probably three years on after the 15 initial tenders were sought for the system, by which 16 time technology had moved on a lot and we had the 17 Horizon system was built with the BPC in mind. If we 18 were just going a simple EPOSS system we might have 19 wanted to have done something different, simpler, 20 perhaps less expensive. 21 I think that is the point I was making. Whether it 22 was -- I mean, Adam Sharples was immediately, if you 23 like, "Close it down" and there was a clear view that 24 I do remember getting from these series of meetings 25 that, if you like, ICL needed to be kept in the ring. 42 1 Q. Was it a seriously held option by Post Office Counters 2 Limited though or was it more of a negotiation tactic? 3 A. I wouldn't like to in any way demean it by saying it is 4 a negotiation tactic. I think it was a genuine view at 5 the time but I think we realised as time went on that 6 the cost of cancelling Horizon completely, which this is 7 what would have entailed, even though we could have 8 invited ICL to re-tender, were really insuperable and as 9 I say, the sort of prevailing wind that we were seeing 10 was that ICL needed to be, perhaps for cost reasons and 11 perhaps for other reasons, needed to be kept in the 12 ring. 13 MR BLAKE: Thank you. 14 Sir, that brings me to an end of one particular 15 topic. It might be a good opportunity to take a short 16 break. 17 SIR WYN WILLIAMS: 15 minutes? 18 MR BLAKE: Thank you. 19 (11.08 am) 20 (A short break) 21 (11.23 am) 22 MR BLAKE: Thank you very much, sir. 23 We were in 1998. I'm going to go towards the end of 24 1998 now. There were contractual discussions taking 25 place and we are going to look at some of that 43 1 paperwork. Can we look at POL00031119, please. 2 This is a letter from Hamish Sandison at Bird & Bird 3 to yourself and others. Is that part of the Treasury 4 Review group, those recipients? 5 A. Some of them are. I don't recognise Marilynne Morgan 6 and -- I mean Jeff Triggs, a solicitor from Slaughters, 7 was not a member of the working group and neither was 8 Paul Rich actually. I do not think this is necessarily 9 connected with the Treasury working group, I may be 10 wrong. It depends what's beneath it. 11 Q. Can we look at the next page? 12 A. Yes. 13 Q. Do you remember receiving this kind of correspondence? 14 A. I remember receiving this kind of correspondence yes. 15 Q. Do you remember this one in particular? 16 A. Not explicitly, no. 17 Q. You certainly received it -- 18 A. Yeah, I'm not doubting that but it is not one that's 19 stuck in my memory. 20 Q. Can we look at page 12, please. The document is all 21 about ICL proposals from the 9 November and it is 22 renegotiation discussions. On page 12 it is Mr Sandison 23 and Hazel Grant from Bird & Bird and they are assessing 24 the potential change in contract. 25 Paragraph 29 addresses fraud risk. It appears there 44 1 that ICL wanted to carry less fraud risk; is that 2 something you remember? 3 A. Again, I'm aware of that but, whether I was aware of it 4 at the time or whether it's gone into my mind since, 5 I couldn't say. But I am aware of that issue, yes. 6 Q. You said this morning that you were aware that one of 7 the reasons why ICL was awarded the contract in the 8 first place was because they took on a greater fraud 9 risk? 10 A. Yes. 11 Q. Do you remember discussions during this period about 12 taking on less fraud risk? 13 A. Again I don't remember the discussions but 14 I certainly -- it is certainly in my mind that they -- 15 that that was an issue and therefore discussion must 16 have taken place but I don't ever remember being party 17 to discussions on that. I may have been but it is not 18 within my knowledge now. 19 Q. Perhaps if we can scroll down to acceptance. It says 20 there: 21 "Pathway propose wide changes to the acceptance 22 procedures. Broadly, this would result in final 23 acceptance occurring before live trial." 24 Perhaps if we could scroll down to 32 and 33. 32, 25 the second half of that paragraph says: 45 1 "As a result of certain changes, the public sector 2 parties would find it almost impossible to terminate due 3 to failure to achieve acceptance once the live trial had 4 been completed. This is because it would be almost 5 impossible to prove that failure to achieve acceptance 6 was due to the exclusive default of Pathway." 7 There were certain contractual discussions taking 8 place there about acceptance. Do you remember emphasis 9 being taken off live trial prior to acceptance? 10 A. I must put that in the same category as before. I'm 11 certainly now aware that that was an issue but whether 12 I was aware of it at the time, I don't know. 13 Q. We looked this morning at documents from 1997 such as 14 Don Grey's memo which placed importance on live trials. 15 Do you remember that at some period in late 1998, for 16 example, ICL were trying to decrease the emphasis on 17 live trials? 18 A. Again I don't recall that and back to what we were 19 saying before about my involvement in the Treasury 20 working group was because I was not involved in 21 negotiations with ICL. Even though this document was 22 copied to me, and I accept that, the negotiations with 23 ICL and the implications of what's in here, I was not 24 involved in. 25 I willingly accept that I may have been, at the 46 1 time, aware of what was going on, but it was not in my 2 ambit to deal with it. 3 Q. This particular memo was only sent to you and Paul Rich 4 in terms of the Post Office Counters recipients? 5 A. Yes. 6 Q. Do you remember why you and Paul Rich may have been the 7 only Post Office recipients of that kind of information? 8 A. Certainly Paul would have been in the forefront of this. 9 Perhaps I was sent it because of my -- alongside my 10 involvement in the Treasury Working Group, I had become 11 a sort of conduit between Post Office Counters and the 12 DTI. 13 I had a pretty close -- a semi-formal, informal 14 relationship with David Sibbick at the DTI and was 15 therefore able to gauge what was going on. So it may 16 well have been because I was perceived in that role that 17 I was copied into it. 18 Q. Do you remember Bird & Bird acting as programme lawyers? 19 It was the BA POCL automation programme? 20 A. Yes, I do. 21 Q. Do you remember being part of that core group? 22 A. No. 23 Q. Can we look at POL00039895, please. Again, this is 24 another document. This is 13 November 1998. Again, 25 similar contractual discussions taking place. Could we 47 1 scroll down on that page. Again, ICL discussing an ICL 2 proposal. Can we look at page 3 please which is a memo, 3 again from Hamish Sandison and Hazel Grant at Bird & 4 Bird. This document at page -- can we go to page 13, 5 please, and scroll down to paragraph 29 and below. 6 Thank you. 7 Again, very similar to the earlier one, it addresses 8 fraud risk and says Pathway proposes significant changes 9 to the provisions for fraud risk, effectively departing 10 from the tendering position. 11 Then it goes on to talk about acceptance and again 12 it talks about acceptance before live trial. It says: 13 "Broadly they envisage final acceptance (and loss of 14 termination rights) occurring before live trial." 15 Is this a document that you recall at all? 16 A. It is the same as the previous one. I acknowledge that 17 I was sent it but as I was not directly involved with 18 the negotiations with ICL, it was not something that 19 I picked up and ran with at all. That was for, 20 certainly Jeff Triggs, the lawyer, Paul Rich, I think, 21 and others in the commercial arena in POCL who were 22 dealing with that issue. 23 Q. Looking at this document, it looks as though there is 24 a movement away from what was envisaged at the 25 procurement stage, those kind of discussions that you 48 1 said you had with Bob Peaple, early in the procurement 2 stage. Was that something that you recall at all? 3 A. I again put that in the category, I'm certainly aware of 4 it, it is in my mind except, what I knew at the time -- 5 another question. I think I probably did because this 6 was in a way the move away from PFI basis and therefore 7 I was conscious that that was happening I'm pretty sure. 8 You know, in essence that's what was going on and 9 I think I would be aware of that, yes. 10 Q. Do you think that the mindset changed at the Post Office 11 to effectively try and accept what was on offer in order 12 to salvage the situation even if it was not what was 13 originally procured? 14 A. I think it was a bit of that, yes. But, conditioned by 15 the financial consequences of not following that route 16 and also, as I think I alluded to earlier, there was 17 a certain sense coming from government that, as I say, 18 ICL needed to be kept in the ring. 19 Q. Yes. I want to stay with 1998 and look at one discreet 20 issue and it relates to Bird & Bird. Can we look at 21 POL00028686, please. This is a letter of 22 11 November 1998. Can we go straight to page 5. 23 It is a letter from Slaughter and May, from Jeff 24 Triggs at Slaughter and May. You are one of the 25 recipients at the top of the copy list. Do you see your 49 1 name there? 2 A. Yes. 3 Q. Do you remember this kind of correspondence from 4 Slaughter and May? 5 A. In fact, I can say that I remember this letter. 6 Q. So this letter is talking about Hamish, who we have seen 7 was the Bird & Bird lawyer. Can we scroll down 8 slightly. It says: 9 "The conflict issue seems to me entirely clear and 10 simple. The fact is that in certain areas we would like 11 Hamish to do one thing and DSS would like him to do 12 another." 13 Can you tell us about this issue, please? 14 A. Well, what was going on here, Hamish -- who I don't 15 think I ever met, actually -- but he was the lawyer for 16 the programme, ie the joint BA/Post Office programme. 17 Therefore, he wasn't a Post Office lawyer and he wasn't 18 a BA lawyer. I think what was going on here was -- 19 I mean, Jeff Triggs had a wonderful way of getting to 20 the grips of it and feeling like the little boy staring 21 at the Emperor's new clothes -- makes you sit up and 22 think -- and what he was getting at here was, 23 effectively, the DSS appeared to have commissioned Bird 24 & Bird, ie Hamish, to conduct some work for them, which 25 was not really programme commissioned. So he was, in 50 1 Jeff's view here -- he was actually in conflict and, 2 therefore, shouldn't have done that. 3 Q. Can we look at another document, POL00039880, and can we 4 go over the page, please. Thank you very much. Sorry, 5 the page before that, page 2. 6 This is actually from you to Robert Ricks at HMT and 7 it is the second paragraph there I wanted to take you 8 to: 9 "We understand that a submission is being prepared 10 by Hamish Sandison on behalf of DSS. We should point 11 out he has not been instructed to do this in his 12 capacity as a programme lawyer." 13 Is it fair to say that, in late 1998, there were 14 tensions with Hamish Sandison and Bird & Bird and the 15 direction that they were going? 16 A. I think that's fair, yes. 17 Q. Can we look at POL00039933, please. This is a letter to 18 you from the DSS. It is from Sarah Graham, who was 19 a civil servant at the DSS. Can we look at paragraph 2, 20 please, it is 30 November 1998. She says there: 21 "I am sorry that there appear still to be issues 22 that concern you around the provision of advice by the 23 Joint Programme Lawyer. Given the need to get something 24 sorted out in time for us to put forward our respective 25 submissions to the Treasury this evening, we did not 51 1 have the opportunity to discuss what the continuing 2 concerns are. But I would be glad if you could take me 3 through them before too long, so that we can resolve 4 them once and for all. 5 "In the meantime, you suggested that a way through 6 for this particular work would be for DSS/BA to 7 commission work independently from Hamish. I agreed to 8 this, but pointing out that the basis for seeking his 9 advice is of course that he is the Joint Programme 10 Lawyer with the expertise that goes with that, and it is 11 in that capacity that we are seeking such advice." 12 Can you explain that at all? 13 A. I don't think I can. It seems to be somewhat 14 contradictory. 15 Q. Why is this correspondence taking place with you in 16 particular? 17 A. I think I was the -- I don't know -- I think I was in 18 a position where I was being used as a sort of front 19 person, in a way, for Post Office Counters for issuing 20 letters like this. 21 Q. You received a lot of legal advice as part -- it is the 22 Treasury board -- where it says "Joint Programme 23 Lawyer", is that linked, presumably, to the Treasury 24 board? 25 A. No. The joint programme lawyer is the PDA. The BA/POCL 52 1 programme, he was the lawyer for that, separate from the 2 Treasury Review. 3 Q. We have seen a lot of legal correspondence in November 4 and December 1998. I'm not going to take you to those 5 documents but, just for the record and so that they are 6 in evidence, they include POL00039924, POL00039902 7 POL00039928. 8 At some point, it seems Bird & Bird were separately 9 commissioned by the DSS to carry out some work. Do you 10 remember what that work was? 11 A. In my mind, although I do not think I ever saw it, was 12 the -- who were they, Project Mentors -- report? 13 Q. Perhaps we can go to POL00038829. This is the 14 December 1998 Project Mentors report and I think we have 15 seen "Dave" there was Dave Miller. 16 Can we go over the page to page 3, please. So you 17 are not a recipient of this particular document. We 18 know, I think, the page has Mena Rego's name on it as 19 well. Do you remember seeing this at all? 20 A. I don't. 21 Q. You don't? 22 A. I don't, no. 23 Q. Can we go to page 5, please. Again, it is consistent, 24 certainly with the kinds of correspondence you were 25 receiving at the time, because it is from Hamish 53 1 Sandison at Bird & Bird, but at this period you are not 2 copied in. Did something happen in November/December 3 for you to no longer be a recipient of this kind of 4 correspondence? 5 A. Well, this is moving towards when I was moving off the 6 role of network director. I'm not sure that had 7 happened though in December 1998. Am I right in 8 thinking that in the -- if you scroll up -- this was 9 such a confidential document that it was not to be 10 shared with anybody else? Did it say that? 11 Q. It certainly says, if we go to page 3, paragraph 3, it 12 is "legally privileged" and has been communicated: 13 "... to us as the Joint Programme Lawyers. 14 Accordingly it should be given the most limited possible 15 circulation on a need to know basis." 16 A. I probably didn't need to know. 17 Q. Can we look at page 5, please. I don't know if you have 18 been watching the Inquiry and seen this document brought 19 up on screen before. It is in your bundle, so you 20 probably have considered it since. There is a quote 21 from the Project Mentors team, and they say they are: 22 "... deeply concerned that their findings show 23 a serious problem with the way in which ICL Pathway have 24 developed the system. The impact of this is likely to 25 be that there will be failures to meet central user 54 1 requirements, causing the need for extensive before the 2 system can be accepted and, potentially, operational 3 problems if the system is rolled out." 4 Then, can we look at the report itself which is at 5 page 8., and over to page 11, please, which is where the 6 report begins. At the bottom of that page we have 7 "Scope", paragraph 1.3. It says, at the very bottom of 8 this page: 9 "We have to date considered only the BPS system. 10 Further work has recently started to perform a similar 11 assessment of the approach adopted for other elements of 12 the system, such as EPOSS. Nevertheless our findings 13 are, in our view, sufficiently serious to bring into 14 question the whole of Pathway's design process." 15 I'll only take you to a couple more brief extracts 16 from this report. Page 14, please, 2.3.4. It says 17 there they have: 18 "... grave concerns that the same lack of 19 professional analysis will be apparent in other areas as 20 [they] come to review them." 21 The final paragraph expresses concerns in the EPOSS 22 system. Over the page, to paragraph 2.4: 23 "Our experience of systems where requirements have 24 not been analysed satisfactorily is that the system 25 fails to meet the users' needs. An effective acceptance 55 1 test will identify many such failings necessitating 2 considerable rework." 3 I know you say you didn't see this or don't recall 4 seeing this document. Were you aware of those concerns 5 at that time? 6 A. I must admit, I don't recall -- and they are pretty 7 explicit and, you know, serious criticisms and I feel 8 sure, had I known about them, I would have remembered 9 them. 10 But I must admit I do not remember seeing this 11 report, and the extent of what this is saying in this 12 report, I do not recall that sort of registering with 13 me, as I feel it would have done had I seen it. 14 Q. You have given evidence about the dispute with the 15 instruction of Hamish Sandison and those concerns that 16 you had. In what way, if any, did they feed into the 17 seriousness with which this kind of report would have 18 been taken? 19 A. I can't answer that. I think you would need to ask that 20 question of those to whom this report was addressed. 21 Q. We have heard evidence that suggested that it wasn't 22 thought to be an impartial report, that it was, in many 23 ways, supporting the Benefits Agency perspective. 24 Were you aware, at that stage, of those kinds of 25 allegations being made about independence? 56 1 A. As we said, I was aware of the correspondence with Jeff 2 Triggs questioning whether Hamish Sandison actually had 3 a conflict of interest in this. I was certainly aware 4 of that which I suppose therefore would have cast doubt 5 on the work that he had been commissioned to do, in 6 terms of its independence and, if you like, 7 bipartisanship. But as I say, I was not aware until 8 I read this recently, of the extent to which the Project 9 Mentors' report was criticising him. So whether that 10 was, in a way -- had an element of discounting against 11 it because of the way it had been commissioned, may have 12 been the case but I can't really comment on that. 13 Q. Given your involvement to date and the involvement we 14 have seen this morning, do you think that that should 15 have been shared with you? 16 A. Well, I had confidence in those who were dealing with 17 these issues and I'm not sure that I would have had 18 anything new to contribute to it. 19 Q. It expresses some significant concerns about the Horizon 20 system? 21 A. Yes. 22 Q. Who should have known about these concerns? 23 A. Well, who is this report sent to? 24 Q. Perhaps we can look back again at page 5. Page 5 is the 25 original distribution list, so that is Paul Rich from 57 1 POCL. But then if we go to page 3 it seems to have made 2 its way -- 3 A. -- to the same people. 4 Q. -- to the same people but then page 1 we have the 5 message from Mena Rego to Dave Miller? 6 A. Yes. 7 Q. Do you think that was raising it sufficiently high 8 within the company? 9 A. Well, I think you have hit on a point that may have 10 influenced whether people were seeing this as 11 an objective independent view. Whether that incorrectly 12 resulted in the comments that had been made in the 13 report, not being surfaced, I don't know. Given that 14 there may have been the assumption that this was 15 a slanted report, rightly or wrongly, was that therefore 16 discounted too quickly? I don't know. 17 Looking at it now, of course, I would have wanted to 18 have explored, a bit more, exactly what they were 19 saying. I doubt that we had the time at the moment, 20 when all this was happening, to do that. But I can only 21 agree that it does raise some important questions. 22 Q. Knowing what you know now about what ultimately 23 happened, do you think that there was certainly some 24 substance in Project Mentors' concerns? 25 A. It would be hard to say no to that, wouldn't it? 58 1 Q. As at that period, so 1998, were you aware of those 2 kinds of concerns about how the system had been 3 developed? 4 A. I don't think I was, other than in general, if you like, 5 unease about how ICL was performing. 6 Q. There are comments in that report about meeting users' 7 needs and the need for testing. Those, in many ways, 8 echo what Don Grey was saying back in 1997 and this is 9 a year later. 10 Do you think that the Post Office, at that stage, 11 was placing sufficient emphasis on the need for live 12 testing and meeting users' needs? 13 A. You know I think you can only answer a question like 14 that with the benefit of hindsight. At the time, were 15 the right views and weight being given to issues? 16 I have no reason to query that but, as I say, with 17 hindsight you may come to a different view. 18 Q. At this stage was the Post Office management's focus 19 more on securing automation than on those kinds of 20 issues? 21 A. I think that would be probably true. That was the 22 big -- as I said earlier -- prize which we were not 23 wanting to let go. 24 Q. I'm going to move to January 1999. Can we look at 25 POL00031230, please. This is what we know as the Tabor 59 1 review. Mr Tabor, he was on your steering group we saw 2 at the beginning of today? 3 A. He is the finance director of Post Office Counters. 4 Q. Do you remember reading this report at the time? 5 A. I must admit I don't but I think I almost certainly 6 would have done. But until you sent it to me in the 7 papers, I didn't have a recollection. 8 Q. When did you become -- take over as leading Shaping for 9 Competitive Success. This is January 1999? 10 A. I have been asking myself that question. I think it 11 would have been around March time, something like that. 12 I took that -- I first of all joined the Shaping for 13 Competitive Success team then took over from the 14 director of it, Vanessa Leeson, who was there at the 15 time -- because she went off into hospital for 16 a prolonged spell -- and that would certainly have seen 17 me into September. So I think I was there from March to 18 September 1999. 19 Q. I'm going to deal briefly with this report. Can we look 20 at the first paragraph there. He explains that he has: 21 "... been asked, as a member of the POCL team not 22 closely involved with recent negotiations, to 'stand 23 back' from the deal and review it (as independently as 24 possible for a CEC member) to confirm that the chosen 25 direction remains sensible." 60 1 Over the page please. I'm going to just read out 2 2.4 to 2.6. At 2.4 it says: 3 "The conclusion of negotiations with a firm decision 4 to proceed should put an end to a protracted period of 5 uncertainty, permitting a fresh start with renewed focus 6 not only for the Horizon project but for the POCL 7 business. Unfortunately, many uncertainties, unanswered 8 questions and doubts about the future remain, so that 9 the benefits of such a fresh start seem unlikely to be 10 obtained without a concerted, focused and single minded 11 leadership effort by both POCL and ICL teams to 12 emphasise the positive." 13 We can see what's there at 2.5, I think I will just 14 read 2.6. 2.6 says: 15 "Several senior managers, close to the project, but 16 not principal negotiators, whose judgment I respect, 17 express significant reservations about the risks of 18 proceeding. These centre on their continuing doubt 19 about the ability of ICL to deliver a satisfactory 20 product; the absence of transparency in the PFI 21 contract; the risk that ICL's financial fragility will 22 endure throughout the project, with the possibility of 23 repeated claims on the Post Office for extra 24 contributions (which, by then having no alternative, it 25 will be unable to resist); and doubts about POCL's own 61 1 ability to give it the focus essential for success. 2 Observation of the track record so far offers reasonable 3 foundation for such views." 4 Did you know who those senior managers were, who are 5 referred to there? 6 A. I don't but I think I would claim to be in sympathy with 7 what that is saying. 8 Q. With that expression, "senior managers close to the 9 project but not principal negotiators", what kind of 10 person would that be? What would their job description 11 be in terms of a manager? Are we talking regional 12 managers or are we talking something higher up? 13 A. It could be regional managers. I do not think it would 14 be anybody higher up because the only higher up from 15 Roger would have been Stuart Sweetman, who was obviously 16 involved in this. They would be -- there were other 17 directors of Post Office Counters who were not directly 18 involved in the negotiations of ICL. And yes, senior 19 people could have been regional general managers. 20 Perhaps those like Don Grey who had been -- who had got 21 first hand experience of the live trial. I don't know. 22 I think he does list, doesn't he, who he has spoken to, 23 further down? 24 Q. I do not think he names the people who have said that 25 they had those concerns. 62 1 A. Okay. 2 Q. Were you aware at that stage, January 1999, of 3 significant reservations about the risks involved? 4 A. Yes. I mean there was -- I think I put somewhere, what 5 we were dealing with here was finding, what is the least 6 bad deal to go with. In fact I think Roger may have put 7 it like that. Which therefore implies there was some 8 unease about proceeding the way that we were. Because 9 the project had got so late -- we were having to 10 renegotiate -- there was big question marks over the 11 financial numbers and so on. So, sure, people were not 12 gung ho saying, "This is all going to be fantastic". 13 There was some doubt. But, to go ahead with the deal 14 seemed to be the best route. 15 Q. If we look at page 6 of this report and it's 2.24, the 16 "Summary" there seems to be the same as your evidence, 17 now which is: 18 "In summary, there are drawbacks and uncertainties 19 with going ahead, but they are not greater than those 20 associated with termination. Going ahead will require 21 very heavy, single minded commitment to Horizon and to 22 the partnership with ICL in order to minimise the 23 drawbacks." 24 It moves on to recommendations, and the first 25 recommendation, it says: 63 1 "It is of great importance for the credibility of 2 The Post Office (not just POCL) that it should be seen 3 to have judged the debate correctly and made the right 4 decision." 5 Could we go on to the next recommendation as well, 6 3.2: 7 "Furthermore, POCL's commercial success will now 8 depend heavily on Horizon. It will not have the funds 9 for alternatives." 10 It says at the end there: 11 "Shaping for Competitive Success will need to ensure 12 that organisation boundaries facilitate effective 13 operation of Horizon and the ICL partnership, and not 14 make it gratuitously more difficult." 15 Now, as someone responsible for Shaping for 16 Competitive Success, are you able to explain what that 17 means to us? 18 A. Yes. Shaping for Competitive Success was a very 19 far-reaching reorganisation of the whole Post Office 20 Group. Prior to SCS, the business was split into Royal 21 Mail Letters, Parcels and Counters. What Shaping for 22 Competitive Success was doing was, effectively, creating 23 a series of market-facing business units and subservice 24 delivery units. It was a model that was in vogue at the 25 time for organising businesses, which actually resulted 64 1 in, as far as POCL was concerned, the business unit that 2 was previously called Counters being split into, 3 I think, at least three units: Post Office Network, 4 a market facing unit, I think and one for cash handling 5 and distribution, something like that. I can't remember 6 the exact detail. 7 What Roger was saying here was, in the process of 8 splitting the business up like that, let us not lose 9 sight of the importance of making effective use of 10 Horizon and the ICL partnership, because SCS also 11 brought with it, inevitably, a considerable change of 12 personnel. There was a lot of people finding new jobs. 13 I think you have already heard Dave Miller moved onto 14 something else and Paul Rich moved onto something else, 15 and so on. So in the middle of all of that 16 reorganisation activity, Roger was making a very fair 17 point of "Let's not drop the baton". 18 Q. The thrust of those recommendations in the summary, 19 would it be fair to describe them as pinning significant 20 hopes on Horizon at that stage? 21 A. I think he was really saying "Look, chaps, this is now 22 the only game in town, we've got to make it work. Okay 23 we've all had a go at 'We are concerned about this, we 24 are concerned about that', but now we've got to make 25 this work and, therefore, let's single-mindedly try and 65 1 do that". 2 Q. Can we look at POL00069088, please. This is 3 11 February 1999, so it is a month on and we are back 4 into certain political discussions. By this stage, 5 there is another option in play, which is the smartcard 6 option and a benefit account. What I want to understand 7 is the relationship between yourselves and the DTI at 8 this stage. Perhaps we can look at the last paragraph 9 on that page. It says: 10 "While we were there, David [that is David Sibbick, 11 I think] spoke to John Bennett. The proposal had been 12 put to ICL a fortnight ago. ICL had felt very 13 constrained about replying because they were unable to 14 talk to POCL; they valued the emerging strategic 15 partnership with us, and didn't want us to do anything 16 to damage it. They had only replied to HMT on a factual 17 basis of what might be possible technically. They would 18 want protecting on all their costs sunk into the BPC if 19 this change of tack were to be followed. The main 20 upside they saw was getting BA out of the picture. 21 "David expects next steps to be some ministerial 22 discussion possibly over the weekend/into next week. 23 Crucial will be the view from No 10. 24 "PLEASE REMEMBER we are not supposed to know any of 25 this!" 66 1 By that stage, you had told government that the 2 cancellation would have dire implications and you had 3 also emphasised the importance of Horizon. 4 Was it usual for the DTI, at this stage, to be 5 acting as some sort of back channel between yourselves 6 and ICL? 7 A. I think I mentioned earlier that I sort of developed 8 into the role of being the conduit between Post Office 9 Counters and DTI with David Sibbick. 10 This was an example of that, where he was very good 11 in terms of trying to keep us in the picture about what 12 was going on because, at this time, I think it is fair 13 to say that the Treasury Working Group, if it was 14 continuing -- I do not think I was any longer involved 15 in it, because I think they had now gone into the, if 16 you like, the A team who was working on it -- David was 17 giving us just a bit of intelligence about what was 18 going on. And he used me as that conduit. So, yes, 19 this is an example of a communication through a back 20 channel. 21 Q. Looking at this document, at that stage, was the 22 commercial protection of both the Post Office and ICL 23 the main focus of discussions with government? 24 A. What was the date of this? 25 Q. Sorry, can we go back to the first page? It is 67 1 11 February 1999. 2 A. I can't remember what stage things are at, at that 3 point. I mean, I think we have seen from other 4 correspondence, that I think I noticed, the involvement 5 of Number 10 with other government departments in 6 formulating the way that ministers wanted the outcome to 7 be. Where that was all at as at 11 February, I don't 8 know. I think you need to cross-check it with that. 9 What you have here, though, is just the output of where 10 David saw things currently were. 11 Q. Would it be fair to describe it, at February 1999, the 12 Post Office and the Department for Trade and Industry 13 combining their efforts to try and salvage Horizon 14 together? 15 A. I think there is an element of that, yes. DTI 16 recognised the threat to the Post Office Network as much 17 as we did. 18 Q. We read over the page, "Crucial would be the view from 19 No 10". What was your understanding of that? 20 A. I think David was telling me that, really, now, 21 because -- I think you are aware, or I think I put it in 22 my witness statement, that there had been a ministerial 23 reshuffle and getting a clear ministerial direction was 24 proving difficult for them and that they then involved 25 Number 10 in trying to get guidance on what should be 68 1 the way. So, I think that's what this is referring to. 2 Q. As somebody who, by that stage, had spent several years 3 building up a picture of, for example, the impact on 4 subpostmasters and the more technical matters, did you 5 think it was right, at that stage, for Number 10 to be 6 having a say in something that was ultimately, 7 technically quite complex? 8 A. I think it was inevitable that that was happening. It 9 had become a highly political issue. The two main 10 departments were obviously finding it difficult to agree 11 with each other as to what should be the course of 12 action. So what else do they do but put it up the line? 13 Q. Can we go to POL00028603, please. Similar theme, 14 23 February 1999. It says: 15 "Our latest intelligence is that an agreed way 16 forward was being put to No 10 yesterday afternoon. 17 This followed Byers agreeing the line that the parties 18 should be given three weeks to negotiate the alternative 19 proposal that emerged a week or so ago. His line was 20 that if after three weeks agreement did not emerge then 21 we reverted to option 1." 22 Staying with that, at the bottom of the page here, 23 it says: 24 "As an executive team we will clearly need to keep 25 close during a period of intensive activity and to keep 69 1 the non-execs fully in the picture and on side." 2 That is an email from Stuart Sweetman that was sent 3 to yourself and I think it was originally an email from 4 Stuart Sweetman to Neville Bain, John Roberts, Richard 5 Close and Jerry Cope. 6 There is one bit that I didn't read, which is: 7 "We understand from DTI officials that one thing 8 that might happen is that the Prime Minister may phone 9 Neville or John to explain the situation!" 10 Would it have been unusual for the Prime Minister to 11 be phoning the chairman or chief executive? 12 A. In my experience, it was -- it would have been 13 unprecedented. 14 Q. Do you know if that conversation happened at all? 15 A. I don't know. I was not aware of it happening. 16 Q. What was your view, at that time, of the Prime Minister 17 getting personally involved? 18 A. I think, as I just said, in a way it was inevitable 19 because, in a way -- my reading now is that I think the 20 government was deadlocked as to what is the best way 21 forward and, therefore, it needed a steer from Number 10 22 as to how to take it forward. 23 Q. Would it have been a steer from Number 10 or a direction 24 from Number 10? 25 A. I think that is a subtle difference that I can't quite 70 1 determine. 2 Q. Would it have been possible to resist what Number 10 3 said? 4 A. You would have to ask government ministers about that, 5 not me. 6 Q. I mean, looking back at your view at that time -- 7 A. I think -- okay, you know, if the Prime Minister of the 8 country is going to give a view as to what should 9 happen, I think that would carry quite a bit of weight, 10 whether you see it as a steer or a direction. 11 Q. Can we look at NFSP00000187, please. This is a document 12 I have been asked to ask you about and it is a joint ICL 13 Post Office report. Is this a kind of document that you 14 would have seen in May 1999? 15 A. I don't recall seeing that at all or even one like it. 16 Q. I will see where we get to on this document, if 17 anywhere, because there are certain things in that 18 document that you may or may not have been aware of at 19 the time. Let's look at them. 20 Can we look at pages 18 and 19, please. This seems 21 to be feedback in respect of North Wales and the 22 North West/North East. The highlighted paragraph says: 23 "The weekly balancing of offices operating Live 24 Trial NR2 systems has caused a high level of problems, 25 with subpostmasters experiencing difficulty in achieving 71 1 their balance. This has been coupled with confusion and 2 difficulty in reaching the appropriate support desks." 3 One of the solutions is: 4 "Additional support from both POCL & ICL Pathway has 5 been utilised in supporting NR2 post office balancing, 6 both centrally and in specific outlets. This has helped 7 resolve and reduce the number of issues, however, the 8 underlying causes must still be addressed at the volume 9 of problems cannot be sustained." 10 Over the page. South Wales and South West/Midlands, 11 "Issues & Concerns" the second one there: 12 "The major operational difficulties that have been 13 experienced relate to office balance. 14 "Trends": 15 "The number of training related issues for the 103 16 live trial offices has reduced significantly from that 17 experienced with the 204." 18 That's seen as a training issue. I know you say you 19 didn't see this particular document but were you aware, 20 in that period, of operational difficulties relating to 21 the subpostmasters' ability to balance? 22 A. I think I must have been because, although I don't 23 recall seeing this report, I see it is dated May, so 24 I think I would have gone off to Group at this stage, 25 having done the SCS job. But I think, prior to then, 72 1 I would have been aware of that there were issues in the 2 trial offices, yes, and not just in this sort of report 3 but also, as I think we have seen earlier, getting it 4 from feedback from subpostmasters, the Federation, and 5 so on. I do not think this would have been -- 6 Q. How was that kind of information fed back to you in that 7 period? 8 A. I can't remember the, sort of, formal way in which it 9 happened. It would certainly have been fed back into 10 the Horizon team, who were dealing with all these 11 issues. In fact, this would have been prepared by them. 12 They would be working on it. 13 Q. This was before the rollout period and, in fact, before 14 the Benefits Agency even pulled out. 15 A. About a fortnight before, wasn't it? 16 Q. Yes. Given the concerns that were raised, for example, 17 even in that 1997 note that we saw at the beginning 18 today, about gathering subpostmasters' views, was the 19 impression that you got at that period that there still 20 needed to be quite a bit more live trialling at that 21 stage? 22 A. I couldn't say that I had that feeling, as you've just 23 described it, other than there being just a sense of 24 unease and that recognising that there was -- this is 25 not, at this stage, a perfect system and that there were 73 1 things that needed to be corrected in it. I was aware 2 of that. Now, knowing what I do know, in terms of what 3 has come out, particularly what was going on in ICL that 4 I think we were unaware of, had I known that at the 5 time, then I think I would have been more concerned than 6 I was. 7 Q. The Benefits Agency then pulled out and you have said in 8 your statement that this left you with an army tank when 9 all you needed was a car. Is that your analogy or -- 10 A. That was someone else's analogy. In fact, I quoted two 11 analogies, which people -- I'm not exactly sure now who 12 they were but they were close to the action, as it were. 13 There was, on the one hand, "Well, now the Benefit 14 Payment Card has gone, it will be easier to do with 15 Horizon what we need it to do, because that complexity 16 is gone". The other view was, we were building a tank 17 because of the Benefit Payment Card and the sheer weight 18 of cash that needed to go through the system, and the 19 security arrangements on it. That bit has been ripped 20 out of it but we are still left with the, sort of, 21 skeleton of the tank. 22 So which was right? There were, sort of, prevailing 23 really differing views as to what was going on. 24 Q. What was your view? 25 A. I think my view was, back to the point that, even if we 74 1 were left with a tank, it was better than having no 2 vehicle at all. So it is back to the least bad option. 3 It is like starting to build a house and you discover 4 halfway through that part of what you've been designing, 5 you no longer need. Do you make the best of where you 6 got to with the house or do you say "Scrap that lot", 7 buy a new piece of land and build another house on it. 8 We were trying to make the best of what we'd got. For 9 the reasons, financial and political, that I mentioned, 10 that's where we ended up. 11 Q. In terms of the tank analogy, was it your view that it 12 was too technically complex for Post Office's needs? 13 A. I don't know what the person who described it as a tank 14 was actually getting at. I did hear it described 15 probably a couple of years or so later by -- I won't 16 name him -- somebody who came into the business afresh, 17 at a senior level, who said when he had seen what 18 Horizon was like and what it was doing, that it was 19 highly overspecified. But that's not to say it couldn't 20 have done the job that it was needed to do. 21 I think it was saying that, had we known where we 22 ended up, that we would have gone for a less 23 sophisticated system. I say that not really knowing 24 what I mean by "sophisticated" but the sense was that we 25 bought into an original system with the Benefit Payment 75 1 Card in it. That was at a much higher level of security 2 specification and other facets than would have been 3 needed had we known we were going to end up where we 4 did. 5 Q. Was that reflected, in any way, in conversations that 6 you had with subpostmasters at that stage? 7 A. I don't recall it. I have got some recollection though 8 of -- did we touch on earlier -- I called it the 9 "Michael Jackson" system. The whatever-it-was Jackson 10 system. 11 Q. Yes. 12 A. There were some subpostmasters who were still, I think, 13 saying "Why haven't we gone for something simpler, we 14 could just have had a simple thing now". I think my 15 response to that would have been, and probably was, 16 "Actually, just a simple EPOS terminal on your counter, 17 just thinking it through, this isn't just selling 18 different types of baked beans and you need a system 19 just to cope with that". This is actually dealing with 20 how do you cope with BBC licences, how do you cope with 21 bill payments, how do you cope with all the other range 22 of more complicated products of what we have got. 23 It was not a question simply of introducing 24 an off-the-shelf EPOS system. There was more to it than 25 that. Whether it required what we ended up with, 76 1 I don't know. 2 Q. Your evidence earlier was about also commercial 3 advantages that could be obtained by having such 4 a complex system. 5 A. Yes, absolutely. 6 Q. Was that still at the forefront -- 7 A. Of course, that was the way -- I think I mentioned to 8 you, the way the Post Office Counters vision was going 9 was to certainly harness the capabilities that the 10 automated platform would give us and which clearly 11 a simple EPOS system that the subpostmaster perhaps had 12 in mind wouldn't do that. 13 Q. I'm going to move on to the topic of board meetings. 14 Now, in 1999 you became secretary. Can we look at 15 POL00000353, please. Thank you very much. This is 16 a meeting of the Post Office board on 14 September 1999. 17 You can see there at the bottom of the page it says: 18 "Jonathan Evans, secretary designate." 19 So you were present at that board meeting but you 20 weren't yet secretary; is that right? 21 A. Yes. 22 Q. Now, where it says "secretary designate" it doesn't say 23 "company secretary designate", were you a company 24 secretary in the ordinary understanding? 25 A. The Post Office at that time, in 1999, was still 77 1 a nationalised industry. It was a public corporation. 2 It was not a company. Therefore the title of the role 3 that the person would have had -- had it been a company, 4 ie company secretary -- in a way for slightly quaint, 5 historical reasons, was still called the secretary to 6 the Post Office. A title that had existed for centuries 7 before, although at one stage it was actually chief 8 executive. So that was my title. Now when we 9 incorporated and became -- switched immediately to being 10 Consignia Plc, then I became company secretary of that. 11 But I was doing effectively a similar-ish sort of 12 job, although clearly, when you are company secretary of 13 a Companies House company, then you do have different 14 roles to play. 15 Q. At that stage did you consider yourself to have a role, 16 for example, to keep the company legally compliant? 17 A. That was part of the role yes. 18 Q. And a governance role as well? 19 A. Yes. 20 Q. What would that involve typically? 21 A. It would have involved making sure that, particularly 22 for Post Office board meetings, the directors were 23 properly informed about the decisions they needed to 24 take, any changes to the structure of the Post Office 25 itself, you know, would have come under my team. But 78 1 also the job was, I would say, mainly about dealing on 2 behalf of the chairman and particularly the chief 3 executive of, if you like, current issues. 4 So what I would have been doing at this time, in the 5 lead up to incorporation, would have been working with 6 the lawyers on, how is Consignia Plc going to work, what 7 would it involve and so on because there was a lot of 8 activity on that front. 9 Q. We have seen some minutes from the Post Office Counters 10 Limited board. I'm going to come back to this meeting 11 but can we look at POL00090836, please. You were 12 a director of Post Office Counters Limited as well; is 13 that right? 14 A. I must have been at that point yes. 15 Q. Do you remember when you were at all? 16 A. I became a director of Post Office Counters when 17 I became network director, whenever that was -- in 1995 18 and would have continued as a director until shortly 19 after this, I think. 20 Q. This is, I think, effectively the dissolution of Post 21 Office Counters Limited. 22 A. Yes. 23 Q. We heard from John Roberts that the POCL board met 24 rarely and it was effectively just to sign-off the 25 accounts. Was that your recollection? 79 1 A. Yes. Actually it was quite an important point if you 2 want to pursue it just a little? 3 Q. Absolutely. 4 A. Post Office Counters, as a business unit, was created in 5 the early 80s -- prior to then, the thing we now call 6 Post Office Counters was just part of the -- adjunct of 7 the Mail's operation. It was Ron Dearing, who was 8 chairman at the time, who saw -- had clear vision that, 9 actually, here was a retail business that really needed 10 gouging out of the Royal Mail business and creating 11 a unit on it's own and that was when the Counter's 12 business was made. 13 But the creation of Post Office Counters Limited, as 14 a company, was done for two reasons: (1) it did give 15 a bit more focus to it being a separate business unit. 16 But it was actually done to give Post Office Counters 17 more powers to do more types of business because, 18 somewhat adversely, under the terms of, I think, the 19 Post Office Act '69, the Post Office itself couldn't do 20 types of business that Post Office Limited wanted to do, 21 but it could as a subsidiary. 22 So it was created as a legal means of extending the 23 amount of business that could be done. But it operated 24 as a -- in a way, a bit of a shell. Nobody who worked 25 for Post Office Counters was an employee of Post Office 80 1 Counters. Everybody remained an employee of the Post 2 Office. So it went on like that and yes, there were 3 board meetings rarely held but really for, as this one 4 really, for sort of statutory purposes. 5 Q. These are the only minutes that we have been able to 6 find. Were minutes taken of those other meetings? 7 A. Yes. 8 Q. Would they have been similarly brief? 9 A. Perhaps not quite as brief as this one. There would 10 have been signing off of the accounts. Reappointment of 11 the auditors. There probably would be not much 12 discussion about the -- what was going actually on POCL. 13 Q. The kinds of things that we have talked about already 14 today, those kind of discussions about automation, about 15 Horizon, about problems with Horizon, would those have 16 been discussed at the board level of Post Office 17 Counters Limited? 18 A. I do not think they would. They would have been 19 discussed within, the whatever it was then called, the 20 counters executive committee, which was the senior 21 people within the business. I think the directors of 22 Post Office Counters Limited were probably the same -- 23 I think it was whittled down here to not very many -- 24 but they would have been the same people as in the 25 counters executive committee, plus probably John 81 1 Roberts, somebody from group but there were no 2 non-executives, there was no non-executive chairman, it 3 didn't play the role that it then turned into when it 4 did have non-executives and a proper chairman and so on. 5 Q. We see only three names in terms of this meeting: John 6 Roberts, yourself and Stuart Sweetman. It says: 7 "The chairman noted a quorum was present and ... 8 notice of the meeting had been given ..." 9 Were there more than just the three of you or was 10 that it? 11 A. I would have to check. It would be easy to find out. 12 I do not remember who were the directors then. One 13 thing I can tell you about these set of minutes, they 14 were not prepared by us. I can tell -- because of the 15 typeface and all the rest of it and the layout of 16 them -- these were minute prepared by Slaughters who 17 were, no doubt enacting what needed to be enacted and 18 said, "Here's the minutes of the meeting that needs to 19 take place". I'm sure we met to do it even though it 20 was 8.00 am but it was a bit of formal business that 21 just needed to be put on the record. 22 Q. Was it more usual for meetings to be informal? 23 A. I would not say they were informal. Because there were 24 no other meetings of POCL. The meetings of the Counters 25 Executive Committee were formal and minuted. 82 1 Q. Sorry. Were there or were there not, further minutes of 2 Post Office Counters Limited? 3 A. There were. I mean, we had to -- clearly we had to 4 sign-off the accounts each year and they would be 5 minuted discussions. 6 Q. Would you take the minutes or would somebody else take 7 the minutes? 8 A. At the time I can't remember who was -- I know it wasn't 9 me who was then secretary of Post Office Counters 10 Limited. It would have been somebody else. I was one 11 of the directors then. But as I say, you know, the 12 meetings were six monthly and short and formal like 13 this. 14 Q. And not substantive when it came to issues such as 15 Horizon -- 16 A. No, that was all done elsewhere. 17 Q. Can we go back to the Post Office board minutes, that's 18 POL00000353, please. That is the meeting on 19 14 September. Can we look at page 3. This is -- the 20 chief executive has reported and this is where it 21 addresses Horizon. 22 It says there: 23 "When the board last met in July ... POCL's Horizon 24 Programme Director [that's David Miller] had been 25 confident that system acceptance would occur as planned 83 1 on 18th August. Unfortunately, three high priority 2 acceptance Incidents around training, stability of the 3 system (lockups and screen freezes) and quality of 4 accounting data, remained unresolved and whilst ICL did 5 not accept the categorisation of these incidents, they 6 had nevertheless resulted in acceptance being deferred 7 until 24th September." 8 Can we look at paragraph (v) there, it says: 9 "Progress on training had gone well and the incident 10 had now been downgraded to medium priority. However 11 system stability and accounting was still being analysed 12 and rectification was not expected before December." 13 If we could scroll down a little bit. It says 14 there, it's paragraph 7, second half -- I will read the 15 whole of (vii): 16 "The continued rollout of the system to a limited 17 number of offices was at no cost to Counters who would 18 not make any payments to ICL until the system had been 19 accepted. However, the logic behind this approach was 20 questioned as serious doubts over the reliability of the 21 software remained. It was also felt that by continuing 22 unchecked it might also be harder ultimately to refuse 23 to accept the system." 24 Were you aware at that stage, or perhaps prior to 25 that meeting, about incidents around training, stability 84 1 of the system and quality of accounting data? Were 2 those familiar to you? 3 A. Do you mean me personally. 4 Q. Yes. 5 A. I think I probably would have been. 6 Q. Were they consistent with what you were being told in 7 the past, all of those discussions we have already had 8 this morning? 9 A. I can't now recall how I would have known that. In the 10 role that I was, I got to hear lots of things and that 11 would have been in my consciousness that those issues 12 were around. 13 Q. At the top of the page currently it says: 14 "However system and accounting were still being 15 analysed." 16 As company secretary would you be particularly 17 focused on matters such as the accuracy of accounting? 18 A. No. 19 Q. Why not? 20 A. It wasn't in my remit that was not what I was there to 21 do. 22 Q. The presentation, by the company, of their accounts for 23 example, was something you would have oversight of as 24 company secretary or not? 25 A. I think the validity of the financial statements was the 85 1 responsibility of the finance director. 2 Q. Did you see the role of company secretary though, having 3 an overall governance view of concerns such as 4 accounting issues? 5 A. I would have seen my role in that, very much as 6 subordinate to the role of the finance director. 7 Q. Can we look at POL00090839, please. Can we look at the 8 second page of this. This is before that meeting, so 9 this is August 1999. We know that David Miller had 10 received this. You are not a name recipient on that 11 document. Were you informed by that September meeting 12 about these issues with accounting integrity? 13 A. I have no recollection of being, no. 14 Q. If I could read the first paragraph. 15 "As auditors of The Post Office ..." 16 This is a letter from Ernst & Young: 17 "... we have been asked by Post Office Counters Ltd 18 to provide you with our views in respect of certain 19 accounting integrity issues arising from tests performed 20 by POCL on Horizon data in the live trial." 21 Near the both of the current page it says: 22 "The following issue, as described to us by POCL 23 gives us concern as to the ability of POCL to produce 24 statutory accounts to a suitable degree of integrity. 25 We understand that POCL has attributed a severity rating 86 1 of 'High' to this matter." 2 Were you aware of those issues at the time? 3 A. Not in that detail. I think this letter -- it is 4 interesting it is dated August. So the auditors would 5 not have been auditing the accounts at that point. 6 I think this letter is what, perhaps, politicians would 7 call a planted question. Can you go back to the top of 8 the page again? 9 Q. We could perhaps go the page before as well. It seems 10 to be sent to Jeff Triggs at Slaughter and May in 11 September 1999, if that assists? 12 A. Yeah, I don't know what they'd have done with it. So 13 Dave Miller is saying -- he is passing on from Bruce 14 McNiven and Keith Baines: 15 "Please ensure that these issues are fully addressed 16 during the remaining acceptance process. Keep me in 17 touch." 18 I mean I think -- well, a letter like this, if it 19 was effectively saying to the Post Office, "Look here 20 Post Office, you have got a real problem in the accounts 21 that are coming up and we are likely to qualify them". 22 this would not have been sent to Dave Miller. It would 23 have been sent to it the finance director if not the 24 chief executive. In fact they would have already known 25 about it before they sent the letter. The fact that it 87 1 was sent in August, which is, as I say, a quiet time for 2 auditing. The fact that it was sent to Dave Miller and 3 not obviously copied to anybody else in the finance 4 community who might have wanted to know about it, 5 I think this was a means of using this letter to help 6 with the discussions with ICL about getting their act 7 together. I think. I'm supposing a bit here -- 8 Q. You may be relieved to know that you are not the only 9 witness who has said that. 10 A. That's what it reeks to me of, let's put it that way. 11 Q. Nevertheless, the issues raised there, however hyped up 12 they may be, are pretty significant issues for the 13 board, aren't they? 14 A. They would have been, had they continued. When are we 15 talking about here, '99? The proof of the pudding would 16 be, come the accounts for 1999/2000, were they qualified 17 and I think the answer is no. I'm 100 per cent certain 18 they weren't. So whatever the issue that was being 19 described here, clearly, in the auditors minds, went 20 away by the time that the accounts came to be completed. 21 Q. You, by this period -- so let's say, September 1999 -- 22 had, for a couple of years, been building up a picture 23 of problems with Horizon that we heard about this 24 morning. That September meeting talked about accounting 25 still being analysed -- issues with accounting. As 88 1 company secretary do you think that you were 2 sufficiently informed of those kinds of problems? 3 A. I think -- I believe the board was and I don't think I, 4 in any way, was less informed than the board was. So 5 I think the answer is yes. 6 Q. Do you recall the board being told of the contents of 7 this letter? 8 A. No, I don't think they would have been, if my fear is 9 right, that it was a bit of a device. 10 Q. Would Ernst & Young have written it if it wasn't true? 11 A. I am sure they wouldn't have done. I am sure it is -- 12 they would not have signed it had it not been true. 13 Q. So was it not of sufficient concern do you think for 14 somebody to have brought to the board's attention? 15 A. Well, again, it is all in the positioning of it. It may 16 well have been that the finance director at the time 17 knew this was happening. In fact, I would be pretty 18 confident that he would. A letter from the auditors 19 saying this sort of thing, probably he had been told 20 about this. If I am right that this letter was being 21 used for those purposes, then there would not have been 22 the need, unless the finance director saw the need, to 23 raise this at board level. I'm doing a lot of 24 supposition here. So please be aware of that but that's 25 how I'm seeing it. 89 1 Q. Can we look at POL00000354, please. These are minutes 2 of the Post Office board of 26 October and is this your 3 first meeting as secretary? 4 A. Yes. 5 Q. If we look at page 3, that number 6 there talks about 6 Horizon and it talks about the system having been 7 accepted with implementation proceeding at a rate of 8 200 offices per week, et cetera. 9 Can I just clarify, would you have taken these 10 minutes, would these be your minutes that you wrote or 11 was there somebody else who was actually -- 12 A. There was somebody listed back then taking the notes. 13 He would have done the first draft for me then to look 14 at and make any amendments. 15 Q. Would it be fair to say then that, at this stage, 16 certainly in the context overall of those minutes, 17 Horizon would have been quite a small issue that the 18 board was dealing with? Perhaps we could scroll through 19 the document itself. There are quite a few passages 20 that we have redacted as irrelevant and that potentially 21 contain some sensitive information. 22 But ignoring the boxes, if we keep on scrolling, how 23 long are they? They are ten pages, or so, in length and 24 that is one paragraph on Horizon. Do you think that, by 25 that stage, the board was sufficiently confident in 90 1 Horizon, that it didn't need to be addressing it at 2 length? 3 A. Well, perhaps there was nothing new to address at that 4 meeting and, really, to make that judgement, you would 5 need to understand what on these copies is marked as 6 irrelevant because they may have been -- at the time, 7 the Post Office was dealing with some other very 8 difficult issues, one of which was the potential merger 9 with the Dutch Post Office. 10 I don't know -- I mean, I would have known what is 11 behind "Irrelevant". 12 Q. It looks as though there were other significant topics 13 that were being discussed at more length, shall we say? 14 A. Yes. Can I just say one thing on this, the minutes are 15 one thing and clearly an important record of a meeting. 16 The papers under which the discussions took place would 17 in my view, be even more important to see and to 18 understand what was actually put in front of the board 19 on which the discussions took place and, therefore, the 20 minutes were raised. 21 The papers themselves, okay, you were saying the 22 Horizon bit is down to eight lines. It would be 23 interesting to know what in the -- I think this was all 24 in the chief executive's report -- what he was actually 25 saying about Horizon in his report. That would give you 91 1 a more rounded picture as to what was going on at the 2 board. 3 Q. Absolutely. We do have some of these, I won't take you 4 to them today because I don't think there is a need to. 5 What I would like to deal with today is your 6 recollection of the board in that period. In fact, 7 let's move to 11 January 2000, so even further on. It 8 is POL00000336, please. 9 These are the minutes of 11 January and it is 10 page 10 that there is a brief mention of Horizon. 11 I appreciate everything you have said about that not 12 necessarily being all of the picture but it certainly 13 seems as though -- and tell me if this is your 14 recollection -- that, by January 2000, the board had 15 effectively moved onto issues of more commercial 16 importance with Horizon and the marketing of Horizon. 17 I think it is over the page, actually. 18 Is your recollection that, in early 2000, the focus 19 was then very much on the commercial opportunities from 20 Horizon? 21 A. I think it would have been, yes. Again, if you just go 22 back, you will see the reference to a paper. There, 23 "POB(00)7x". That's really what you ought to look at. 24 Q. Can we look at POL00021476, please, this is the summer 25 of 2001. There is a brief mention of Horizon in the 92 1 minutes, page 4. Again, I absolutely get the point 2 about the underlying documents. This is contained in 3 the chief executive's report. But do you remember, by 4 the summer of 2001, essentially, the position of the 5 board being congratulating itself on a successful 6 rollout programme. 7 A. I think they were congratulating the Horizon programme 8 team, rather than themselves, but I suspect the sense of 9 your question is right. Horizon was now, I wouldn't say 10 'sorted', but it was no longer on the watch list of the 11 board, there were other pressing things emerging. 12 I notice en passant -- I don't know whether you do -- 13 but the membership of the board was beginning to 14 significantly change at this point. 15 Q. Can we look at page 1. 16 A. So we have a new finance director, Marisa Cassoni, and 17 a new finance director, Allan Leighton, who both 18 became -- if you wound on to not many future board 19 meetings, you would see they played a prominent role 20 then in the company and I think, probably, within a year 21 or two time, that whole dramatis personae would have 22 changed apart from me and Marisa and Allan Leighton. 23 Q. Do you think that caused any issue with regards to 24 knowledge of the history of Horizon? 25 A. Clearly, there would have been some corporate memory 93 1 lost, inevitably, but whether it was crucial at that 2 level is an interesting question. I know Allan 3 Leighton, in particular, made himself very visible 4 within the business and wanted to really understand what 5 was going on and would have himself looked at the 6 Horizon system because his background in retail, in Asda 7 and so on, would have -- he would have known what he was 8 talking about. 9 They would have come at it all from a different 10 perspective but would have acknowledged that Horizon now 11 was what they were dealing with and it was, at this 12 stage, it was well rolled out. 13 Q. The things we talked about, '97, '98 and '99, do you 14 think the board was sufficiently aware of that history? 15 A. The history of? 16 Q. The histories of the problems with Horizon that we 17 discussed today? The background to the accounting 18 issues, stability issues? 19 A. I think '97, '98, '99, I think they would have been. 20 I do not think anybody was as informed as they would 21 have been had they heard what some of the evidence 22 that's been coming out here. But I think the evidence 23 shows it, that they were informed of the problems that 24 were -- 25 Q. Sorry, you have said that there was a significant change 94 1 around 2001 in the board. 2 A. Yes. 3 Q. Do you think the knowledge you had, for example, from 4 those earlier days, do you think that kind of knowledge 5 was passed on in any way to those board members? 6 A. I don't know. I can't answer that. I don't know 7 whether it was or not, in detail. Do you remember what 8 happened in 1997? I need to tell you about that because 9 of this, I don't know. 10 Q. Do you think the instability of Horizon, for example, 11 was something that they would have been aware of -- 12 A. I think -- I mean, new directors had extensive briefing 13 with all the business units and I would be surprised if, 14 in the middle of all that, the core system within 15 counters was not something that they would want to spend 16 some time looking at. 17 I mentioned earlier that somebody had said to me 18 that the system had been over specified. This was 19 actually one of the new directors of the board. So, 20 I mean, it shows that there was an interest clearly in 21 Horizon and its history. 22 Q. I'm sorry to push you on that because I know you said 23 you wouldn't name the individual, but I think it would 24 help us if you felt able to name which individual on the 25 board said that it had been overspecified? 95 1 A. I'm not going to because I'm not absolutely sure which 2 one it was. 3 Q. Would it have been a non-executive director or one of 4 the executives? 5 A. A non-executive. 6 Q. Do you remember any discussions at board level, in these 7 early days, so from when you joined as company secretary 8 at rollout and early stage into 2001, anything about 9 prosecuting subpostmasters based on Horizon data? 10 A. What that issue coming up at the board? 11 Q. Yes. 12 A. I have no recollection of that at all. 13 Q. You narrowed the question to just the board, which was 14 my question, but, outside of the board, were you aware 15 of that? 16 A. Not connected with Horizon. Obviously, the whole focus 17 of this Inquiry, I was not aware at all that 18 subpostmasters were being prosecuted on the strength of 19 Horizon data, wrongly, until I read about it in the 20 papers a few years ago. 21 SIR WYN WILLIAMS: Leave out the word "wrongly", Mr Evans, 22 were you aware that they were being prosecuted on the 23 basis of data produced by Horizon? 24 A. No. 25 SIR WYN WILLIAMS: No? 96 1 A. No. 2 SIR WYN WILLIAMS: I'm sorry if I express surprise but, 3 before 1999, inevitably, the accounting trail was 4 a paper trail and, in most prosecutions of postmasters 5 for fraud or theft, the paper trail would be important, 6 I guess. So now we have Horizon. So I'm not quite sure 7 how you would not be aware of that? 8 A. Well, okay. I was no more aware of it than I would have 9 been of the paper trail. It would have been -- I would 10 have been thinking that there is some, if you like, 11 business as usual activity going on, where it was not 12 unusual for subpostmasters to be prosecuted under the 13 old system and that would have been going on under the 14 new system, but there was no mention that I can remember 15 of prosecutions of subpostmasters pre-Horizon or 16 post-Horizon actually. It wasn't -- if we talk about 17 conversations at board level here -- 18 SIR WYN WILLIAMS: I think Mr Blake was asking about your 19 personal knowledge rather than conversations at board 20 level but, if he wasn't, I am. 21 A. Okay. As I think I said earlier, when I was at lower 22 levels of the organisation, I was very aware of 23 prosecutions taking place. The higher up I went, 24 I don't think I was aware of individual prosecutions 25 that were taking place. 97 1 SIR WYN WILLIAMS: Can I ask you the direct question: did 2 you personally consider whether prosecutions based upon 3 a paper audit trail were likely to be different in the 4 evidential trail, compared with prosecutions based upon 5 a computer system? 6 A. I don't think that thought -- perhaps wrongly, but 7 I don't think that thought crossed my mind. 8 SIR WYN WILLIAMS: All right, that's fine. Thank you. 9 MR BLAKE: I'm near the end. Sir, I see it is 12.55 pm. 10 SIR WYN WILLIAMS: Let me take stock of who wants to ask 11 Mr Evans questions and for how long, so we can decide 12 how best to proceed. 13 Mr Stein, do you have questions? 14 MR STEIN: Sir, maximum of ten minutes. 15 SIR WYN WILLIAMS: Ms Page? 16 MS PAGE: No, sir, you just asked the question I had. 17 SIR WYN WILLIAMS: So 10 minutes from Mr Stein, none from 18 Mr Moloney. So could we, rather than have a traditional 19 lunch break, have a 10-minute break, so that Mr Evans 20 can draw breath, so to speak, and then we will complete 21 all the questioning and pack in for the day. 22 Is that fair enough, Mr Blake? 23 MR BLAKE: Yes, I can either finish before that 10-minute 24 break in about five minutes or -- 25 SIR WYN WILLIAMS: No, let's have a ten-minute break now, 98 1 we've been going for a while and we have got to think 2 about the transcribers as well. Then we will finish in 3 the way I have described. 4 ( 12.57 pm) 5 (A short break) 6 (1.07 pm) 7 SIR WYN WILLIAMS: Yes, Mr Blake. 8 MR BLAKE: Thank you very much. Can we look at POL00021485, 9 please. Now, these are some board minutes from 10 October 2004. So we are moving on quite a few years and 11 I only have a couple of questions to ask about this 12 period. 13 If we look at the final page of this document. 14 There is, at the top there, discussions of human 15 resources, and it says: 16 "The board agreed that in situations where fraud had 17 been perpetrated against the company, the appropriate 18 civil orders would be used immediately and in advance of 19 any criminal proceedings. This would help recovery 20 efforts by ensuring that the assets of those involved in 21 criminal activity were quickly secured. David Miller 22 would verify the current procedures and report back to 23 the board." 24 So, there is at least some discussion in 2004 of 25 matters relating to criminal proceedings. You were on 99 1 the board for nine years or so, and this may well be 2 something we need to revisit later down the line, in 3 later phases. But while you were on the board, was the 4 link ever discussed between prosecutions and the 5 problems with Horizon? 6 A. I have no recollection at all of that happening. 7 Q. Knowing the background that you have told us today and 8 the things that you knew about, throughout the period 9 that we have discussed, why do you think that link 10 wasn't made at a high level? 11 A. The link between prosecutions and Horizon, you mean? 12 Q. Yes. 13 A. I think it must have been because it wasn't obvious. 14 There was no upward reporting to suggest that. 15 Q. We know, that there was an article in Computer Weekly in 16 2009. That perhaps is towards the end of your time on 17 the board. Do you remember that being discussed at all? 18 A. What date was that, again? 19 Q. 2009. 20 A. I don't remember that. I'm aware of the Computer Weekly 21 articles. I don't recall it being mentioned at the 22 board, I don't think. Can I just say something on these 23 minutes? 24 Q. Absolutely. 25 A. When I read this, when you sent it to me, I was there at 100 1 the meeting and would have had these minutes passed to 2 me, what is curious to me now is why the board took that 3 decision -- in fact, why it was brought up to them. 4 On the face of it, I'm sure not sure it needed 5 a board decision because it is not a major decision to 6 take, so I would be really curious to know the contents 7 of POLB(0489). What was the context of this? Why had 8 this arisen? Because just as a self-standing paragraph 9 it just, to me now, raises more questions than it 10 answers. 11 Q. No doubt we will be looking at that at some later phase. 12 But, taking that into account, presumably it was pretty 13 rare for issues of criminal proceedings to be raised at 14 board level? 15 A. Well, in my -- I didn't start doing this when I became 16 company secretary, but at some stage I introduced 17 a company secretary report to the main board which 18 included in it major items of issues around regulation 19 that needed to just -- made the board aware of. If 20 there was any litigation against the Post Office, 21 I would report that. Now, whether if in the middle of 22 all those reports, there was something around 23 prosecutions, there could be but I can't remember it. 24 But if there was, that would be where to look. 25 Q. But your recollection is that the link between those 101 1 prosecutions and problems with Horizon was simply not 2 made in your -- 3 A. I can't remember that link being made, no. 4 Q. Finally, can we turn to POL00039876, please. The 5 contents of this particular document don't really matter 6 but it is an email from yourself and what I want to draw 7 to your attention is some advice that you gave to Sarah 8 Mullen at Her Majesty's Treasury, and it is in that 9 first substantive paragraph. It says: 10 "All I can say is that if I were recommending 11 a course of action to the Post Office Board, I would 12 want to expose all the main upsides and downsides of 13 each option as accurately as possible. I would receive 14 no thanks for attempting to smooth over differences of 15 view, or indeed to downplay significant facts, by means 16 of some clever presentational fudge." 17 Having heard what you have heard of the evidence, do 18 you think that the Post Office board were sufficiently 19 exposed to the downsides of Horizon and that that kind 20 of advice was actually followed within the board itself? 21 A. Well, this is really getting at, if you like, the 22 suppression of information and I must have been eating 23 some red meat that day because that is not the sort of 24 comments I would normally make. So there was something 25 winding me up about how this was going on with the 102 1 Treasury Review. But having said that, I do not believe 2 that the Post Office board, as far as I was aware -- 3 there was any information deliberately withheld from it. 4 I mean, I can't completely vouch for that because 5 there was a variety of people who were putting up 6 information to the board but I was saying here that, for 7 me personally, if I was saying something to the board 8 and was withholding information that I thought would be 9 relevant, then that would be a serious offence, as far 10 as I would be concerned. 11 Q. In respect of Horizon -- and I only go to this because 12 this is your way of working and your advice -- do you 13 think that there was some presentational fudge of some 14 sort, at some period, to the board? 15 A. Not that I'm aware of. I really don't think that 16 happened. I think people were as -- I mean, I can't 17 guarantee this but I would like to think that people 18 were as honest and as open as there could be. Because, 19 in the end, there was no mileage in trying to cover 20 something up. 21 Q. Where, therefore, do you think that the problem lay? 22 Was it not enough information going to the board, 23 insufficient channels of communication between those on 24 the ground and the board? I mean, you were the regional 25 manager at some earlier stage, do you think the messages 103 1 from regional managers or others were being sufficiently 2 raised at board level, in relation to problems with 3 Horizon? 4 A. Well, this is where hindsight, of course, comes in. At 5 the time, I would probably have thought messages are 6 being elevated as much as they need be, probably. Now 7 I know what I know, then I probably wouldn't think that. 8 But you can only judge these things by what was the 9 prevailing circumstances at the time. 10 And I don't believe that there was any -- certainly 11 any deliberate attempt to keep from the board what they 12 ought to have known. I mean, as I say, I can't 13 100 per cent vouch for that because it is reliant on 14 other people to play the game properly. But the culture 15 that we were in at the time really didn't lend itself to 16 that sort of behaviour. 17 Q. The Chair has to make recommendations, in due course. 18 What do you think went wrong then with the lack of 19 information that was passing to the board? You said 20 that you don't think it was deliberate. So where do you 21 think the problem lay? 22 A. Which problem are we talking about? 23 Q. The lack of information getting to the board about 24 problems with Horizon? 25 A. I can only think that it was not seen with the degree of 104 1 significance and seriousness that, in hindsight, it 2 should have been. What other conclusion can I come to, 3 if I don't think it was deliberate withholding of 4 information. 5 Q. Where should that message have been received from, to 6 the board? Where would the natural line of 7 communication have been from? 8 A. It would have gone up through the line, you know, from 9 subpostmasters up the managerial line to the managing 10 directors and the chief executive to the board. I mean, 11 that is the line. And where things -- I mean, clearly 12 it was a large organisation, it is a large organisation 13 and messages can get crowded out with other messages 14 that are going on. 15 But I repeat that, with hindsight, I am sure things 16 would have been done differently but I can't believe 17 that, at the time, there was some convoluted way for 18 people to persuade themselves that they didn't need to 19 release information to the board. 20 MR BLAKE: Thank you, Mr Evans. I have no further 21 questions. I'm going to hand you over to Mr Stein. 22 Questioned by MR STEIN 23 MR STEIN: Mr Evans, I ask questions on behalf of 24 153 subpostmasters, mistresses and managers. I'm 25 instructed by Howe+Co Solicitors in relation to this 105 1 Inquiry. I set myself a target of no more than 2 10 minutes earlier. That's normally a trap for any 3 barrister like me but I will see how I go. 4 You have just been asked a series of questions by my 5 learned friend Mr Blake and he has been asking you about 6 questions of governance, who reports to who, how the 7 board gets information. 8 Now, let's wind the clock back to just before the 9 year 2000. Charlotte Churchard was head of litigation 10 at that time. Who did she report to? 11 A. You haven't quite got her name right, Catherine 12 Churchard. She reported to me. 13 Q. So there was a mechanism for reporting from head of 14 litigation, which handled prosecutions to you; is that 15 correct? 16 A. Yes, there was, and -- 17 Q. Were you copied in yearly reports, monthly reports, 18 weekly reports, what were they? 19 A. I don't recall but I did mention that we did instigate 20 a report to the board on key items of litigation. 21 Q. Right. Mr Evans, you have been told by Mr Blake that 22 there may be a need to consider potentially further 23 questions that relate to board meetings. From our point 24 of view, on behalf of the people I represent, we may, in 25 fact, ask for your return later on in this Inquiry by 106 1 making an application to the Chair if further disclosure 2 provides further documents we wish to ask you about. 3 A. Okay. 4 Q. But that would be a matter for the Chair, Sir Wyn 5 Williams to decide. 6 Let's remain back in time, if we can, please. Can 7 we have on the screen FUJ00000071. Thank you. 8 Now, Mr Evans, as you can see on the screen, it is 9 the Post Office Counters, ICL Pathway. You see it is 10 a codified agreement, and you will see if we can, 11 Frankie -- and when I say Frankie, she is the document 12 handler over there, which is why I'm using her first 13 name. 14 Can we go, Frankie, to page 65 of 914 on the 15 internal pagination within the document handling system. 16 Page 65 of 914. That is the signature of the 17 parties in relation to this codified agreement. Do you 18 understand? 19 A. Yes. 20 Q. Now, we are looking here at about July 1999, so that is 21 where the sort of timing of this document is. 22 If I can take you now to 91 of 914. So on page 91, 23 as we have it here, is dealing with an introduction and 24 this concerns, at this particular page: 25 "The policies and standards defined in this Schedule 107 1 shall apply to all relevant aspects of POCL Services 2 unless amended in accordance with Schedule A5." 3 We are now going to look at a couple of the 4 references that appear under "Policies and standards". 5 Moving on now to page 97 of 914, please. If we can 6 concentrate under "Prosecution support", and highlight 7 that aspect, please. 8 Under "Prosecution support" 4.1.8. Now, Mr Evans, 9 I will just go through this, so that you can see what it 10 is and so that you understand what it says. So far, we 11 have identified this as the codified agreement. We are 12 talking about a date in 1999. We can see this comes 13 under "Policies and standards" within that codified 14 agreement that has been signed by the parties. 4.1.8: 15 "The Contractor shall ensure that all relevant 16 information produced by the POCL Service Infrastructure 17 at the request of POCL shall be evidentially admissible 18 and capable of certification in accordance with the 19 Police and Criminal Evidence Act 1984", and it deals 20 with equivalent legislation in Northern Ireland and 21 Scotland. 22 4.1.9: 23 "At the direction of POCL, audit trail and other 24 information necessary to support live investigations and 25 prosecutions shall be retained for the duration of the 108 1 investigation and prosecution irrespective of the normal 2 retention period of that information." 3 In short, you can see that, within this codified 4 agreement, there is direct reference to prosecution 5 support under "Policies and standards"; do you agree? 6 A. Yes. 7 Q. The timing of this was going back to 1999, so we are 8 going pre-going live of Horizon, I think, and we are 9 talking about what is going to be required of the 10 contractor, which is the supplier of Horizon; do you 11 agree? 12 A. Yes. 13 Q. Having jogged your memory by looking at that, can you 14 help please with these questions: 15 What systems of oversight were put in place to 16 ensure that the contractor was compliant with this 17 particular policy in relation to prosecution support? 18 A. I'm afraid I can't answer that question. 19 Q. What was done to ensure that Pathway understood this 20 particular section, in other words understood, as 21 an example, what should be evidently admissible and 22 capable of certification in accordance with the Police 23 and Criminal Evidence Act, what was done to ensure the 24 contractor was able to comply with that? 25 A. I can't answer that either. 109 1 Q. Let's see if you can help further. You mentioned 2 already that Ms Churchard reported to you. Did you 3 direct that an opinion should be sought from 4 an experienced criminal lawyer as to what this meant? 5 A. I didn't do that, no. 6 Q. Did Ms Churchard say to you it might not be a bad idea 7 if someone actually gets an opinion from an experienced 8 criminal lawyer as to what this means? 9 A. I don't recall that but I don't think that would have 10 been necessary because -- 11 Q. Why not? 12 A. Well, Post Office Counters was already needing to get 13 relevant information from its existing systems in order 14 to conduct prosecutions. So I think the need for that 15 material to meet these requirements would already have 16 been known. 17 Q. Let's understand that, Mr Evans. Let's work out what 18 happened. Sir Wyn Williams has asked you some questions 19 today about the fact that there was a movement from 20 a paper-based system, in relation to prosecution, to 21 a computer-based system. Yes? 22 So, by the time you move over to Horizon, Horizon is 23 the prosecution game in town, isn't it? It is the only 24 thing that you can go to to get information to prosecute 25 people; do you agree? 110 1 A. For subpostmasters -- the kind of misdemeanors we are 2 talking about, yes. 3 Q. Are you saying that the prosecution under the old paper 4 system is exactly the same as the prosecutions under 5 a Horizon computer system? 6 A. I'm not saying it is exactly the same. But I think some 7 documentation would have been needed in prosecution 8 cases which would have needed to satisfy the 9 admissibility characteristics required. 10 Q. Yes. So was an advice sought as to how to do that, what 11 certification was required, who should provide such 12 certification and who is qualified to give it? 13 A. I am supposing here, because I do not have exact 14 knowledge, but all I am saying is that because 15 prosecutions pre-Horizon were not uncommon, and they 16 were being dealt with in a way that I think needed to 17 comply with these -- the requirements of PACE, and so 18 on. So I think what constitutes an evidentially 19 admissible document, I think, would have been known. 20 Q. So you are guessing that somewhere within the system, 21 someone would have had some understanding about what on 22 earth this means and how to comply with it; is that 23 roughly what you're saying, Mr Evans? 24 A. I think I would be doing more than guessing. I think 25 I'm -- 111 1 Q. Who are you relying upon to get that right within the 2 system that prosecutes? Who? 3 A. It would have been the legal community. 4 Q. Legal community being, within Post Office, who? 5 A. I -- 6 Q. Ms Churchard and her team? 7 A. Yes, because they were the lawyers that we -- the 8 in-house lawyers. 9 Q. So do you recall, now that I have jogged your memory in 10 relation to the timing that we have got here and who was 11 involved, whether there were any discussions with 12 Ms Churchard about what can be done to make sure that we 13 are compliant, the Post Office prosecution system, with 14 these requirements? 15 A. I have no recollection of a conversation like that. 16 Q. You have been asked a number of questions by Mr Blake 17 concerning the question of what went to the board and 18 what didn't go to the board. Can we now please look at 19 page 250 of 914. 20 Now, if you just scroll up the page a little bit, 21 please. (Pause) 22 So we are seeing the bottom of page 54. You can 23 see, looking at this -- if we hold it there, please. 24 If we look at this particular document here, you can 25 see that we are looking at the internal pagination on 112 1 the document, which I will use in the middle of the 2 page, 54 of 95, and this is 1.133.1., "prosecution 3 support": 4 "The Contractor shall ensure that all relevant 5 information produced by POCL Service Infrastructure at 6 the request of POCL shall be evidentially 7 admissible ..." 8 This is the same provision we just looked at? 9 A. Yes. 10 Q. But this is produced under "Requirements", as you will 11 see, bottom left-hand corner. 12 A. Yes. 13 Q. You can see this is 1.133, "Requirement [B29] -- 14 General -- Security: Prosecution support"? 15 A. Yes. 16 Q. You can see there, there is a replication of the 17 prosecution requirements that we have looked at further 18 in the document -- 19 A. Yes. 20 Q. -- and they are the same? 21 A. Yes. 22 Q. If we now piece this back together again, we can see 23 that this codified agreement has a reference under 24 "Policies and standards" to the prosecution requirement 25 and also it is directly a requirement in relation to 113 1 this agreement. Who was in charge of ensuring 2 requirements under these contracts in this agreement are 3 complied with? 4 A. I don't know. 5 Q. Is it a board matter? 6 A. I can't -- honestly, I can't give you a good answer to 7 that question. 8 Q. These are contractual requirements, Mr Evans? 9 A. Yes. 10 Q. Somebody has got to be going around saying, "Well, hang 11 on, has Horizon actually complied with some of these 12 contractual requirements or not?" 13 A. Yes. 14 Q. Who would that have been, Mr Evans? 15 A. I can't now think, 23 years later, who was actually 16 doing that role. 17 Q. Would somebody, whoever did this, have reported to the 18 board in relation to compliance with requirements on the 19 contract? 20 A. I don't remember that happening but I would need to jog 21 my memory a lot more on this than my memory currently 22 contains. 23 Q. Give me one moment, please, sir. 24 Mr Evans, I'm very nearly finished. One last 25 question, do you not consider that subpostmasters, 114 1 mistresses and managers might be a little dismayed by 2 your evidence which appears to provide no link between 3 the board and what is the governance of a prosecution 4 system that did them so much wrong? 5 A. I think it is wrong to say that there's no link. 6 Q. You have not provided any evidence of a link, Mr Evans? 7 A. Well, I couldn't provide you with hard documentation, at 8 least I don't think I could. I mentioned it to Mr Blake 9 that there were reports made to the board of legal -- 10 major legal issues and I would need to review what's in 11 those to see the content of what was in them. 12 So it could -- there could be something in there 13 that answers your question, and I think that's, at the 14 moment, the best answer I can give you. 15 Q. Do you have anything to say to the subpostmasters, 16 mistresses that have been harmed in this matter? 17 A. I have a lot to say. 18 Q. Do you want to say that now? 19 A. Is this the end of the questions? 20 SIR WYN WILLIAMS: Not quite, I have a few, so you can say 21 what you want to say at that point. 22 Have you finished? 23 MR STEIN: I think so, sir. I'm assured that I was roughly 24 within time. 25 Questioned by SIR WYN WILLIAMS 115 1 SIR WYN WILLIAMS: As near as makes no odds, as they say 2 where I come from. I would like to take you back to 3 what you volunteered to Mr Blake right at the beginning 4 about the ultimate decision maker in prosecutions 5 between '87 and '99 -- forget Horizon now, we haven't 6 got there -- and you used the expression "line manager" 7 and given that the subpostmasters were contractors, 8 could you just be a bit -- give me a bit more detail 9 about who would fit the description of "line manager"? 10 Say I was the subpostmaster of a branch in Cardiff, who 11 would be my line manager for these purposes? 12 A. Okay. You would have had -- let me say, from '92 13 onwards you would have someone called a retail network 14 manager, who would have looked after, probably, a city 15 in Wales, perhaps there was a retail network manager for 16 Cardiff. I'm making it up. 17 Beneath him, there would have been people called 18 visiting officers who typically would have looked after 19 or helped/supported probably 20 to 30 subofficers. So 20 the line management of subpostmasters, the retail 21 network manager would have been the key person. There 22 would be then a number of retail network managers in the 23 region, who would have reported to a body called the 24 head of retail network, and there would typically two or 25 three of those in the region who would have reported to 116 1 the general manager. That was the line. 2 SIR WYN WILLIAMS: So, in that line, if I, as the 3 subpostmaster of a branch in Cardiff was suspected of 4 criminal behaviour, which of those persons would be the 5 ultimate decision-maker? 6 A. I think it -- I suppose it would depend on the severity 7 of it. What would normally have happened -- I say 8 "normally", these things were not normal -- there would 9 have been an auditing office, it would have shown 10 a shortfall, there could then be a judgement made at 11 that point: was this just an innocent mistake? Often -- 12 this was one of the problems, actually, with running 13 post offices -- 14 SIR WYN WILLIAMS: Sorry, to cut you short. So is the 15 answer to my question: it would probably depend upon the 16 seriousness of what was alleged and so it could be any 17 one of those persons within that line, depending on -- 18 A. Yes, I think that is right. I can remember when I was 19 general manager -- I think I mentioned the case -- 20 SIR WYN WILLIAMS: All right. So what if any guidance 21 existed for those persons to make a decision about 22 prosecution? There is no secret why I ask this 23 question. The criminal lawyers here will put me wrong 24 if I got it right, but from at least 1985, the Crown 25 Prosecution Service had a code of conduct for 117 1 prosecutors -- or a Prosecutor's Code, rather -- with 2 a twofold test as to whether or not someone should be 3 prosecuted. Was there any kind of similar written or, 4 for that matter, oral guidance given to these decision 5 makers about how they should approach their task? 6 A. Well, the decision that a line manager would have taken 7 would have been informed by the legal team who were -- 8 who had been called in to take -- to look at that 9 particular case. 10 SIR WYN WILLIAMS: But, as far as you were aware, if the 11 manager had said, "Well, actually, in this case, I find 12 it particularly tricky, do you have any published 13 documents or policy documents or guidance that I can 14 look at to help me", would there have been anything? 15 A. I'm not sure, is the answer to that. 16 SIR WYN WILLIAMS: That answers that. 17 Then just one question about 1999. You gave me the 18 impression -- this may be a wrong impression -- that 19 that decision-making process changed in 1999. Now, that 20 may be a false impression I gained from the way you 21 answered Mr Blake. Were you aware of any changes in 22 1999? 23 A. I think if I didn't make this clear, I'm sorry. I could 24 only really vouch for it until that point. 25 SIR WYN WILLIAMS: That's all you were saying. 118 1 A. Yes. 2 SIR WYN WILLIAMS: Let me put it another way. When Horizon 3 became a potential evidential tool, are you aware of any 4 specific changes that took place to cater for that fact? 5 A. I'm not aware of any but, just to flag up that, at the 6 same time, the major reorganisation that I was talking 7 about, I think, as well, altered the line management 8 arrangements within Post Office so -- 9 SIR WYN WILLIAMS: I will delve into that -- 10 A. -- there are two issues going on there. 11 SIR WYN WILLIAMS: I can delve into that later in the 12 Inquiry but I wanted a kind of base to start from. So 13 thank you very much. 14 So please make the statement you wish to make now. 15 A. I was really just wanting to make the point, at the risk 16 of understatement, that this is a huge disappointment, 17 I am sure, to everybody here and matter of great regret 18 that -- and certainly to me personally -- that the 19 events have played out as they have, which has made this 20 Inquiry necessary. 21 And, for my part, and I believe the same will be 22 true of everybody who I worked with in the '80s and 23 '90s, when we were really setting up Post Office 24 Counters, that we were doing all we could to maintain 25 the business's reputation for an organisation that 119 1 people could place their trust in. And this was vital 2 for us, not just in our relationships with customers, 3 but it was even more so in our relationship with staff 4 and subpostmasters. 5 Now, as network director -- and I think you heard me 6 say this -- and before that as subpostmasters manager, 7 I got to know many of our subpostmasters and 8 mistresses -- in fact, I had a family member who was 9 a subpostmaster -- and they were all salt of the earth 10 and the real ambassadors for the business. But we now 11 confront the fact that over 700 of them have been put 12 through this horrific ordeal and I can only offer my 13 profound sympathies for what's happened to them. 14 None of us in those days would have dreamt of this 15 sort of thing happening and, if we had known whatever 16 was leading to it, we would have wanted to have stopped 17 it. I think it has brought great shame on the 18 organisation that I once used to be proud to work for. 19 So, Chairman, if there is more -- any more I can do 20 to help, I stand ready to do so. 21 SIR WYN WILLIAMS: Thank you very much. 22 All right. So we will adjourn until 10.00 on 23 Tuesday. 24 You may be coming back, as you have heard but thank 25 you, to date, for your written and oral evidence. 120 1 (1.40 pm) 2 (The Inquiry adjourned until 10.00 am on Tuesday, 3 8 November 2022) 4 MR JONATHAN EVANS (sworn) ............................1 5 Questioned by MR BLAKE ...........................1 6 Questioned by MR STEIN .........................105 7 Questioned by SIR WYN WILLIAMS .................116 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 121